Exhibit 10.5

Change in Control Agreement

This document is a Change in Control Agreement (this “Agreement”), is dated as
of March     , 2013, and is by and between Peter T. Thomas (“Mr. Thomas”) and
Ferro Corporation (the “Company”), an Ohio corporation.

Background

 

  A. The Board of Directors (the “Board”) of the Company recognizes that, as is
the case with many publicly-held corporations, the possibility of a change in
control exists;

 

  B. The Board also recognizes any such change in control could engender
uncertainty among members of the Company’s management team that could result in
distraction or departure of key management personnel at a time when the services
of such management team members are particularly critical to the Company and its
shareholders;

 

  C. The Board has determined that it is in the best interests of the Company
and its shareholders to foster the continued employment of key management
personnel during such periods of possible uncertainty;

 

  D. Mr. Thomas is a key member of the Company’s management team and is a party
to that certain Change in Control Agreement, dated as of January 1, 2009 (the
“Prior Agreement”), with the Company;

 

  E. On November 12, 2012, Mr. Thomas assumed the role of the Interim President
and Chief Executive Officer of the Company and entered into that certain letter
agreement, dated as of November 12, 2012 (the “Letter Agreement”), with the
Company pursuant to which, among other things, Mr. Thomas and the Company agreed
that certain changes would be made to the Prior Agreement; and

 

  F. The Company and Mr. Thomas desire to enter into this Agreement to
accomplish the objective of fostering the continued employment of key management
personnel during such periods of possible uncertainty in connection with a
change in control and to implement certain changes as contemplated by the Letter
Agreement.

Agreement

NOW, THEREFORE, in consideration of the matters stated above and other good and
valuable consideration, and intending to be legally bound by this Agreement,
Mr. Thomas and the Company hereby agree as follows:

Article 1- General Provisions

 

1.1 Overview of the Agreement. The purpose of this Agreement is to reinforce and
encourage Mr. Thomas’ continued attention and dedication to his assigned duties
in the face of potential distractions arising from a Potential Change in Control
(as defined in Section 2.1 below) and/or a Change in Control (as defined in
Section 3.1 below). In order to achieve this purpose, in this Agreement the
Company undertakes to make or provide Mr. Thomas certain payments and benefits,
and to take certain actions in connection with, a Potential Change in Control
and/or Change in Control. By this Agreement, however, the parties do not intend
to create, and have not created, a contract of employment, express or implied,
between Mr. Thomas and the Company and Mr. Thomas’ employment remains “at will.”

 

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1.2 Definitions. Appendix A sets forth the definitions of certain terms used in
this Agreement. Those terms shall have the meanings set forth on Appendix A
where used in this Agreement and identified with initial capital letters.

 

1.3 Construction. For purposes of this Agreement:

 

  A. The term “parties” means Mr. Thomas and Ferro.

 

  B. The term “today” means the date written in the Preamble to this Agreement.

 

  C. All currency amounts stated in this Purchase Agreement are in United States
Dollars

 

  D. All references to sections of statutes, such as the Exchange Act or the
Internal Revenue Code, also refer to any successor provisions to such sections.

 

1.4 Term. The term of this Agreement (the “Term”) is the period beginning today
and ending on December 31, 2013; provided, however, that, beginning December 31,
2012, and on each anniversary of such date (such date and each annual
anniversary thereof being called the “Renewal Date” below), the Term will
automatically be extended so as to terminate two years from such Renewal Date,
unless, at least 90 days before a Renewal Date, the Company has given Mr. Thomas
written notice that the Term will not be so extended; and provided further that,
if a Change in Control occurs during the Term, then the Term will automatically
be extended and will not terminate earlier than the last day of the 24th month
after the month in which such Change in Control occurred. Notwithstanding any
other provision of this Agreement, but except as otherwise provided in
Section 2.3 below, the Term will expire immediately if Mr. Thomas’ employment
terminates for any reason before a Change in Control occurs.

Article 2 – Potential Change in Control

 

2.1 Meaning of “Potential Change in Control.” For purposes of this Agreement, a
“Potential Change in Control” shall have occurred if and when any of the
following occurs:

 

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  A. Accumulation of Ownership. Any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 20% or more of
either the then outstanding shares of common stock of the Company or the
combined voting power of the Company’s then outstanding securities; or

 

  B. Proxy Solicitation. Any Person commences a solicitation (as defined in Rule
14a-1 of the General Rules and Regulations under the Exchange Act) of proxies or
consents which has the purpose of effecting or would (if successful) result in a
Change in Control; or

 

  C. Tender or Exchange Offer. A tender or exchange offer for voting securities
of the Company, made by a Person, is first published or sent or given (within
the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act); or

 

  D. Change in Control Agreement. The Company enters into an agreement, the
consummation of which would result in a Change in Control; or

 

  E. Public Announcement. The Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control; or

 

  F. Board Determination. The Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.

 

2.2 Actions on Potential Change in Control. Within five business days after a
Potential Change in Control occurs, the Company will deposit into an irrevocable
trust account (the “Trust Account”) funds necessary to satisfy the requirements
of this Section 2.2 to secure the payments and benefits provided Mr. Thomas
under this Agreement.

 

  A. Trustee. The trustee (the “Trustee”) will be The Bank of New York Mellon
Corporation (or its successor in interest). (If for any reason The Bank of New
York Mellon Corporation (or its successor in interest) cannot or will not serve
as Trustee, then the parties will choose another financial institution
satisfactory to both the Company and Mr. Thomas (or Mr. Thomas’ executor or
other personal representative) or, if the parties cannot agree on such Trustee,
then a financial institution appointed by a court of competent jurisdiction.)

 

  B. Trust Agreement. The Company and The Bank of New York Mellon Corporation
have previously executed and delivered to each other a Trust Agreement (the
“Trust Agreement”) in connection with this Agreement and corresponding
agreements between the Company and other key Ferro executives. Ferro reserves
the right to negotiate from time to time amendments, modifications,
restatements, and clarifications of the Trust Agreement, so long as, after
giving effect to each such amendment, modification, restatement or
clarification, the security provided to Mr. Thomas under this Article 2 would
not be materially or adversely affected thereby. Ferro will make available to
Mr. Thomas a copy of the Trust Agreement (as so amended, modified, restated, or
clarified) upon request. Mr. Thomas hereby consents to the Trust Agreement (as
the same may be so amended, modified, restated, or clarified from time to time
in accordance with this Section 2.2.B) and acknowledges that the Trustee and its
successors and assigns will have the right to rely, and will rely, upon such
consent. The Company will pay all fees and expenses of the Trustee.

 

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  C. Trust Account. As provided in the Trust Agreement, the Company intends the
Trust Account to be a “Rabbi Trust,” meaning that, upon deposit of funds into
the Trust Account, the Company will have no right to request or demand the
return of funds in the Trust Account (except as provided in Section 2.2.G below)
but that such funds will be available to satisfy valid claims of the Company’s
general creditors in the event of the Company’s bankruptcy. Mr. Thomas will have
no right to accelerate any payments from the Trust Account in the event of the
Company’s bankruptcy. The Company has agreed in the Trust Agreement to notify
the Trustee immediately in the event of the Company’s insolvency or bankruptcy.
Under no circumstances, however,

 

  (1) will the Company fund or be obligated to fund the Trust, solely to the
extent that and solely for so long as, doing so would result in taxable income
to Mr. Thomas by reason of Section 409A(b) of the Internal Revenue Code, or

 

  (2) will any Trust assets at any time be located or transferred outside of the
United States (within the meaning of Section 409A(b) of the Internal Revenue
Code).

For the avoidance of doubt, if funding the Trust is prohibited under clause
(1) above at the time of the Potential Change in Control, the Company shall fund
the Trust at the earliest such time after the Potential Change in Control, if
any, that funding the Trust would not result in taxable income to Mr. Thomas by
reason of Section 409A(b) of the Internal Revenue Code.

 

  D. Deposit into Trust. Within five business days after a Potential Change in
Control occurs, the Company will deposit into the Trust Account an amount (the
“Trust Amount”) equal to –

 

  (1) 18 times Mr. Thomas’ base salary at the time the Potential Change in
Control occurs (the “Base Trust Amount”), or

 

  (2) If less than the Base Trust Amount, such amount as may have been
determined by a final arbitral award rendered in accordance with this Agreement
determining that a specific lesser amount fully secures the Company’s
obligations to Mr. Thomas under this Agreement, or

 

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  (3) If less than the Base Trust Amount, such other amount as to which the
Company and Mr. Thomas have agreed in writing.

The Company will maintain the Trust Amount on deposit with the Trustee until the
Company has fully performed its obligations under this Agreement.

 

  E. Investment of Funds in the Trust Account. The Company will have the right
to instruct the Trustee to invest all or any part of the funds in the Trust
Account in time deposits or certificates of deposit with, or repurchase or other
obligations of, the Trustee, in its individual corporate capacity, or any of its
domestic or foreign branches, or any other bank (as determined by the Company),
or obligations issued or guaranteed by the United States or any of its agencies
or instrumentalities, provided that no such investment will be for a period in
excess of 90 days. The Trustee will have no liability whatsoever for following
the instructions of the Company regarding any such investment, or for any loss
in value of the Trust Account as a consequence of any such investment or the
liquidation thereof.

 

  F. Alternative Forms of Trust Funds. The Company may, if it so chooses, meet
its obligation to keep amounts on deposit in the Trust Account through –

 

  (1) Deposits of cash or liquid assets;

 

  (2) One or more letters of credit deposited in the Trust Account; or

 

  (3) Any combination of the foregoing.

The Company shall have the right, at any time and from time to time, to
substitute one form of permitted deposit in the Trust Account for another form
of permitted deposit in the Trust Account.

 

  G. Disbursement of Trust Funds. Generally, The Trustee will disburse funds
from the Trust Account only as follows:

 

  (1) If both parties deliver to the Trustee a joint instruction to disburse
funds from the Trust Account to the Company and/or Mr. Thomas, then the Trustee
will disburse funds from the Trust Account as so instructed.

 

  (2) If Mr. Thomas delivers to the Trustee a certificate stating that the
Company is in default of its obligations to Mr. Thomas under this Agreement,
then the Trustee will disburse from the Trust Account to Mr. Thomas the amount
that Mr. Thomas certifies is owing to him under this Agreement.

 

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  (3) If either party delivers to the Trustee a final arbitral award rendered in
accordance with this Agreement, then the Trustee will disburse funds from the
Trust Account as prescribed in such arbitral award.

 

  (4) If a Potential Change in Control has occurred but a Change in Control did
not occur within 12 months thereafter, then Trustee will disburse the entire
balance, as the same may have increased or decreased as a consequence of the
investments described in Section 2.2.E above, of the Trust Account to the
Company.

 

  (5) If either party delivers to the Trustee a signed waiver and release from
Mr. Thomas waiving any further claim to the funds held in the Trust Account,
then Trustee will disburse the entire balance, as the same may have increased or
decreased as a consequence of the investments described in Section 2.2.E above,
of the Trust Account to the Company.

 

2.3 Termination After a Potential Change of Control But Before a Change of
Control. In order to protect Mr. Thomas if his employment with the Company is
terminated after a Potential Change in Control occurs but before a Change in
Control occurs, the following provisions will apply:

 

  A. If the Company terminates Mr. Thomas’ employment Without Cause (as defined
in Section 3.2.B below) after a Potential Change in Control occurs but before a
Change in Control occurs (whether or not such Change in Control ever actually
occurs), and such termination was at the request or direction of a Person who
has entered into an agreement with the Company the consummation of which would
constitute a Change in Control, then such termination will be deemed to be, and
will be treated as if it were, a termination by the Company Without Cause after
a Change in Control and will be governed by Section 3.2.B below.

 

  B. If Mr. Thomas terminates his employment for Good Reason (as defined in
Section 3.2.C below) after a Potential Change in Control occurs but before a
Change in Control occurs (whether or not such Change in Control ever actually
occurs) and the circumstance or event which constitutes Good Reason occurs at
the request or direction of a Person who has entered into an agreement with the
Company the consummation of which would constitute a Change in Control, then
such termination will be deemed to be, and will be treated as if it were, a
termination by Mr. Thomas for Good Reason after a Change in Control and will be
governed by Section 3.2.C below.

Article 3 – Change in Control

 

3.1 Meaning of “Change in Control.” For purposes of this Agreement, a “Change in
Control” will be deemed to have occurred if and when any of the following
occurs:

 

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  A. Accumulation of Ownership. Any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 25% or more of
either

 

  (1) The then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”), or

 

  (2) The combined voting power of the Company’s then-outstanding securities
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”);

provided, however, that, for purposes of this Section 3.1.A, the following
acquisitions shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliated Company or (iv) any acquisition
pursuant to a transaction that satisfies the conditions set forth in Sections
3.1.C(1), 3.1.C(2), and 3.1.C(3) below; or

 

  B. Certain Changes in Board Membership. The following individuals (the
“Incumbent Board”) cease for any reason to constitute a majority of the number
of Directors then serving:

 

  (1) Individuals who are Directors today, and

 

  (2) New Directors (other than a Director whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders was approved or recommended by a vote of at least two-thirds
(2/3) of the Directors then still in office who either were Directors as of
today or whose appointment, election, or nomination for election was previously
so approved or recommended; or

 

  C. Merger or Consolidation; Sale of Assets. Consummation of a reorganization,
merger, statutory share exchange or consolidation or similar transaction
involving the Company or any of its subsidiaries, a sale or other disposition of
all or substantially all of the assets of the Company, or the acquisition of
assets or stock of another entity by the Company or any of its subsidiaries
(each, a “Business Combination”), in each case unless, following such Business
Combination,

 

  (1) All or substantially all of the individuals and entities that were the
Beneficial Owners of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately before such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock (or, for a non-corporate entity, equivalent securities)
and the combined voting power of the then-outstanding voting securities entitled
to vote generally in the election of directors (or, for a non-corporate entity,
equivalent governing body), as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity that, as a
result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately before such
Business Combination of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be,

 

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  (2) No Person (other than a corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 25% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination, and

 

  (3) At least a majority of the members of the board of directors (or, for a
non-corporate entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing for
such Business Combination; or

 

  D. Liquidation; Dissolution. Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.

 

3.2 The Company’s Obligations Generally. If Mr. Thomas’ employment terminates
after a Change in Control occurs, then the Company will pay or provide
Mr. Thomas payments and benefits described in this Article 3, depending upon the
circumstances under which his employment terminates as follows:

 

  A. Termination With Cause. Within two years following a Change in Control, the
Company will have the right to terminate Mr. Thomas’ employment with or without
Cause. For purposes of this Agreement, “Cause” shall mean any of the following
reasons:

 

  (1) Mr. Thomas has been convicted of a felony or Mr. Thomas has entered a plea
of guilty or nolo contendere to a felony); or

 

  (2) Mr. Thomas is guilty of dishonesty resulting or intended to result
directly or indirectly in significant gain or personal enrichment to Mr. Thomas
that is materially and demonstrably injurious to the Company; or

 

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  (3) Mr. Thomas fails willfully and on a continuing basis substantially to
perform his duties with the Company (other than any such failure resulting from
incapacity due to mental or physical illness) after the Applicable Board demands
in writing that Mr. Thomas perform such duties, which demand must specifically
identify the manner in which the Applicable Board believes that Mr. Thomas has
not substantially performed his duties, and such failure results in demonstrably
material injury to the Company.

 

  B. Termination Without Cause. The Company will have the right to terminate
Mr. Thomas’ employment at any time after a Change in Control but, unless such
termination meets the requirements of Section 3.2.A above, such termination will
constitute a termination “Without Cause.”

 

  C. Termination for Good Reason. At any time within two years after a Change in
Control, Mr. Thomas will have the right to terminate his employment with the
Company for any of the following reasons (such reasons constituting “Good
Reason” under this Agreement) to which Mr. Thomas has not given his prior
written consent:

 

  (1) The assignment to Mr. Thomas of any duties inconsistent with Mr. Thomas’
status as a senior executive officer of the Company, a change in Mr. Thomas’
title or a substantial adverse alteration in the nature or status of Mr. Thomas’
responsibilities or reporting relationship (whether or not occurring solely as a
result of the Company’s ceasing to be a publicly traded entity), in each case
from those in effect immediately before the Change in Control; or

 

  (2) The removal of Mr. Thomas from or failure to re-elect Mr. Thomas to any
positions held by Mr. Thomas immediately before the Change in Control (except in
connection with termination of Mr. Thomas’ employment for Cause, Disability or
Retirement or as a result of Mr. Thomas’ death or voluntary termination without
Good Reason); or

 

  (3) A reduction by the Company in Mr. Thomas’ annual base salary and/or annual
incentive target as in effect immediately before the Change in Control or as the
same may be increased from time to time; or

 

  (4) The relocation of Mr. Thomas’ principal place of employment to a location
which increases Mr. Thomas’ one-way commuting distance by more than 25 miles
over Mr. Thomas’ one-way commuting distance immediately before the Change in
Control, except for required travel on the Company’s business to an extent
substantially consistent with Mr. Thomas’ business travel obligations
immediately before the Change in Control; or

 

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  (5) The failure by the Company to pay to Mr. Thomas any portion of Mr. Thomas’
current compensation, or to pay to Mr. Thomas any portion of an installment of
deferred compensation under any deferred compensation program of the Company,
within five business days of the date such compensation is due; or

 

  (6) The failure by the Company to continue in effect any Benefit Plan in which
Mr. Thomas participates immediately before the Change in Control unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such Benefit Plan, or the failure by the Company
to continue Mr. Thomas’ participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amount or timing of payment of benefits provided and the level of Mr. Thomas’
participation relative to other participants, as existed immediately before the
Change in Control; provided, however, that the Company may make modifications in
such Benefit Plans so long as such modifications are required by law or are
generally applicable to all salaried employees of the Company who participate in
such plans and to all salaried employees of any Person in control of the Company
who participate in such plans and do not discriminate against highly-paid
employees of the Company.

 

  (7) The failure by the Company to provide Mr. Thomas with the number of paid
vacation days to which Mr. Thomas is entitled in accordance with the Company’s
normal vacation policy in effect immediately before the Change in Control (or
pursuant to a special vacation agreement or arrangement then in effect with
respect to Mr. Thomas);

 

  (8) Any purported termination of Mr. Thomas’ employment which is not effected
pursuant to a Termination Notice satisfying the requirements of Section 8.1
below (and for purposes of this Agreement, no such purported termination shall
be effective); or

 

  (9) Any failure of the Company to obtain assumption of this Agreement, as set
forth in Section 10.1 below.

For purposes of determining whether Good Reason exists, the following will
apply:

 

  (i) Any claim by Mr. Thomas that Good Reason exists shall be presumed to be
correct unless the Company establishes to the Board by clear and convincing
evidence that Good Reason does not exist.

 

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  (ii) Mr. Thomas’ right to terminate his employment for Good Reason will not be
affected by his incapacity due to physical or mental illness.

 

  (iii) Mr. Thomas’ death following delivery of a notice of termination for Good
Reason will not affect Mr. Thomas’ estate’s entitlement to severance payments
benefits provided hereunder upon a termination of employment for Good Reason.

 

  (iv) Mr. Thomas’ continued employment will not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason.

 

3.3 Salary and Benefit Continuation on Termination After a Change in Control. If
Mr. Thomas’ employment is terminated for any reason within two years following a
Change in Control and during the Term, then the Company will –

 

  A. Pay Mr. Thomas through the Termination Date his full unreduced salary
(i.e., his salary immediately before the Termination Date) or, if higher,
Mr. Thomas’ highest base salary rate in effect at any time during the calendar
year immediately preceding the Change in Control, and

 

  B. Provide Mr. Thomas through the Termination Date with all compensation and
benefits to which he would otherwise have been entitled under the terms of the
applicable compensation and benefit plans, programs, or arrangements of the
Company or any Affiliate of the Company as in effect immediately before the
Termination Date or, if more favorable to Mr. Thomas, as in effect immediately
before the Change in Control.

 

3.4 Severance Payments. In addition to any payments or benefits Mr. Thomas may
be entitled to receive under Section 3.3 above and Article 4 below, if a Change
in Control occurs and Mr. Thomas’ employment is terminated during the Term
(i) by the Company Without Cause (other than by reason of Mr. Thomas’ death),
(ii) by the Company by reason of Mr. Thomas’ Disability or (iii) by Mr. Thomas
for Good Reason, then the Company will pay Mr. Thomas the following amounts, and
provide Mr. Thomas the following benefits (collectively, the “Severance
Payments”):

 

  A. Annual Incentive Plan. Within five business days after the Termination
Date, the Company will pay Mr. Thomas a lump sum amount, in cash, equal to–

 

  (1) the pro rata portion of Mr. Thomas’ annual incentive compensation under
the Annual Incentive Plan for the calendar year in which the Termination Date
occurs, such amount to be determined by multiplying Mr. Thomas’ targeted annual
incentive compensation amount by a fraction, the numerator of which is the
number of days in such calendar year which had elapsed as of the Termination
Date and the denominator of which is 365; plus

 

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  (2) if Mr. Thomas has not then been paid his annual incentive compensation
under the Annual Incentive Plan for the calendar year immediately preceding his
Termination Date, Mr. Thomas’ targeted annual incentive compensation amount for
that preceding year.

 

  B. Termination Payment. Within five business days after the Termination Date,
the Company will pay Mr. Thomas a lump sum termination payment, in cash, equal
to the product of –

 

  (1) The sum of –

 

  (a) Mr. Thomas’ annual base salary (including the annual amount of any
periodic cash allowances to which Mr. Thomas is entitled) as in effect
immediately before the Termination Date (without giving effect to any reduction
in base salary, which reduction constitutes an event of Good Reason) or, if
higher, the highest base salary rate in effect with respect to Mr. Thomas at any
time during the calendar year immediately preceding the Change in Control (the
applicable amount being referred to herein as the “Base Salary”), and

 

  (b) Mr. Thomas’ target annual incentive compensation amount under the
Company’s Annual Incentive Plan for the fiscal year in which occurs the
Termination Date (without giving effect to any reduction in targeted annual
incentive compensation caused by an adverse change in Mr. Thomas’ Annual
Incentive Plan participation) or, if higher, for the fiscal year in which occurs
the Change in Control (or, if no such target annual incentive compensation
amount was determined for the fiscal year(s) in which occurs the Termination
Date or the Change in Control, the target annual incentive compensation amount
for the fiscal year prior to the fiscal year(s) in which occurs the Termination
Date or the Change in Control, respectively),

times

 

  (2) Three.

 

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  C. Welfare Plan Benefit Continuation. The Company will provide Mr. Thomas
(and, if applicable, his dependents) with welfare benefits substantially similar
to, and at the same after-tax cost to Mr. Thomas (and, if applicable, his
dependents), those provided to Mr. Thomas (and, if applicable, his dependents)
under the Welfare Plans in which Mr. Thomas is participating or to which he is
entitled immediately before the Termination Date or, if more favorable to
Mr. Thomas, those provided to Mr. Thomas (and, if applicable, his dependents)
under the Welfare Plans immediately before the Change in Control. The Company
will provide such benefits for 36 months after the Termination Date in such a
manner that such benefits (and the costs and premiums thereof) are excluded from
the Mr. Thomas’ income for Federal income tax purposes and, if the Company
reasonably determines that providing continued coverage under one or more of its
Welfare Plans contemplated herein could be taxable to Mr. Thomas, the Company
shall provide such benefits at the level required hereby through the purchase of
individual insurance coverage at no greater cost to Mr. Thomas than the cost to
Mr. Thomas immediately before such date. Such welfare benefits shall immediately
cease if Mr. Thomas becomes re-employed with another employer and is eligible to
receive such welfare benefits under another employer-provided plan as of the
commencement of such applicable period of eligibility.

 

  D. Defined Benefit Retirement Plans. Within five business days after the
Termination Date or, if later, the earliest time or times permitted under
Internal Revenue Code Section 409A and related Federal regulations, if
Mr. Thomas is a participant in the Ferro Corporation Retirement Plan and/or the
Ferro Corporation Supplemental Defined Benefit Plan for Executive Employees,
then the Company will pay Mr. Thomas an amount equal to the present value of the
excess of –

 

  (1) the benefits Mr. Thomas that would have been paid or payable under such
plans if Mr. Thomas had continued his employment for 36 months after the
Termination Date and such later date were the date of employment termination
under such plans, assuming for this purpose that –

 

  (a) Mr. Thomas’ age is increased by 36 months, and

 

  (b) Mr. Thomas’ “Credited Basic Compensation” (as defined in such plan) for
purposes of such plans is Mr. Thomas’ Credited Basic Compensation determined as
of March 31, 2006, over

 

  (2) the benefits paid or payable to Mr. Thomas under such plans as of the
Termination Date (if any).

For purposes of calculating such amount, the provisions of such plans and the
assumptions, including, without limitation, interest rate and mortality
assumptions used for calculating lump sum distributions, in effect as of
Termination Date will apply or, if more favorable to Mr. Thomas, the provisions
and assumptions existing immediately before the Change in Control, will apply.

 

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  E. Defined Contribution Retirement Plans. Within five business days after the
Termination Date or, if later, the earliest time or times permitted under
Internal Revenue Code Section 409A and related Federal regulations, the Company
will pay Mr. Thomas an amount equal to the amount of the Company’s contributions
(and specifically not including any pre-tax or other contributions commonly
considered to made by an employee) that would have been added to Mr. Thomas’
accounts under the Company’s qualified defined contribution plans and any excess
or supplemental defined contribution plans in which Mr. Thomas participates at
the Termination Date (or if more favorable to Mr. Thomas, the plans as in effect
immediately prior to the Change in Control) if Mr. Thomas had continued his
employment for 36 months after the Termination Date and such later date were the
date of employment termination under such plans, assuming for this purpose that
–

 

  (1) Mr. Thomas’ compensation in each of the three years is that required by
Sections 3.4.B payable in equal monthly installments over such three-year
period;

 

  (2) Mr. Thomas’ benefits under such plans are vested to the extent that they
would have been vested had his employment terminated at such later date;

 

  (3) The rate of any such employer contribution is equal to the maximum rate
provided under the terms of the applicable plans for the year in which the
Termination Date occurs (or, if more favorable to Mr. Thomas, or in the event
that as of the Termination Date the rate of any such contribution for such year
is not determinable, the rate of contribution under the plans for the plan year
ending immediately prior to the date of the Change in Control); and

 

  (4) To the extent that the Company’s contributions are determined based on the
contributions or deferrals of Mr. Thomas, that Mr. Thomas’ contribution or
deferral elections, as appropriate, are those in effect immediately prior to the
Termination Date.

For purposes of calculating such amount, the provisions of the applicable plans
in effect as of the date of the Change in Control will apply.

 

  F. Outplacement. The Company will provide Mr. Thomas, at the Company’s sole
cost and expense as incurred, with the reasonable services of an outplacement
firm mutually agreed upon between the Company and Mr. Thomas and suitable to
Mr. Thomas’ position until the first acceptance by Mr. Thomas of an offer of
employment; provided, however, that the cost of such outplacement shall not
exceed $50,000; provided, further, that the Company will not be required to
provide such services to Mr. Thomas beyond December 31st of the second calendar
year following the calendar year in which the Termination Date occurs.

 

  G. Indemnification Insurance. The Company will continue to maintain officers’
indemnification insurance for Mr. Thomas for a period of not less than four
years after the Termination Date, the terms and conditions of which shall be no
less favorable than the terms and conditions of the officers’ indemnification
insurance maintained by the Company for Mr. Thomas immediately before the date
on which the Change in Control occurs.

 

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3.5 Payment in Respect of Performance Shares. If a Change in Control occurs
during the Term, and whether or not Mr. Thomas’ employment thereafter
terminates, within five business days after the Change in Control the Company
will pay Mr. Thomas an amount in cash with respect to each grant of Performance
Shares (as defined in the Company’s Long-Term Incentive Plan) previously awarded
to Mr. Thomas under the Long-Term Incentive Plan (or any predecessor or
successor plan) in respect of, and in full satisfaction of, as-yet-uncompleted
performance periods (the “Outstanding Performance Shares”) equal to (but not
less than zero):

Payment = (A) – (B)

where:

(A) = The product of

 

  (1) The number of Outstanding Performance Shares awarded to Mr. Thomas in
respect of the applicable Performance Period, times

 

  (2) The “fair market value of the Common Stock” (as defined in the Performance
Share Plan), times

 

  (3) A fraction (not to exceed one)

 

  (a) The numerator of which is the sum of

 

  (i) the number of days which had elapsed in the applicable Performance Period
as of the date of such Change in Control plus

 

  (ii) 1095, and

 

  (b) The denominator of which is the number of days in such applicable
Performance Period, and where

 

  (B) = the value that is actually paid to Mr. Thomas under the Long-Term
Incentive Plan in respect of such Outstanding Performance Shares in connection
with the Change in Control.

For purposes of this Section 3.5, if Mr. Thomas’ employment terminates after a
Potential Change in Control but before a Change in Control under the
circumstances described in Section 2.3 above, then the determination of the
number of Outstanding Performance Shares which had not expired immediately
before the Change in Control will, instead, be determined as of the date which
is immediately before the date of occurrence of the Potential Change in Control.

 

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Notwithstanding anything in this Section 3.5 to the contrary, if such
Performance Shares constitute deferred compensation within the meaning of
Section 409A of the Internal Revenue Code, if and to the extent that the Change
in Control is not a “change in control event” within the meaning of Section 409A
of the Internal Revenue Code, the Company cash payment pursuant to this
Section 3.5 shall be made at the time that the Outstanding Performance Shares
would be settled in accordance with the terms thereof as set forth in the
applicable award agreements and shall be in full satisfaction of the Company’s
obligations under, and Mr. Thomas’ rights in respect of, such Outstanding
Performance Shares.

 

3.6 Death. If a Change in Control occurs during the Term and Mr. Thomas’
employment is thereafter terminated by reason of his death, then the Company
will pay to Mr. Thomas’ legal representatives or estate, or as may be directed
by the legal representatives of his estate, as the case may be, a cash lump sum
equal to the amounts determined under Sections 3.4.A and 3.4.B above. Such
payment will be in addition to any payments and benefits to which Mr. Thomas is
entitled under Article 4 below.

Article 4 – Additional Tax Provisions

 

4.1 Modified Cutback Due to Additional Taxes. Anything in this Agreement to the
contrary notwithstanding and except as set forth below, if any payment or
distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code) to or for the benefit of
Mr. Thomas, whether paid or payable pursuant to this Agreement or otherwise (a
“Payment”), would be subject to the Additional Tax, then the Payment will be
reduced to one dollar ($1.00) less than the amount above which the Payment would
be subject to the Additional Tax, but only to the extent that such reduction
provides Mr. Thomas with a greater after-tax economic value, taking into account
all federal, state and local taxes, including any Additional Tax, than the
Payment without such reduction. Any reduction pursuant to this Section 4.1 shall
be applied against the Payment in the manner that minimizes the economic loss to
Mr. Thomas as a result of such reduction and shall be made consistent with the
requirements of Section 409A of the Internal Revenue Code.

 

4.2 Accounting Firm. All determinations required to be made under this Article 4
and the assumptions to be utilized in arriving at such determination, shall be
made by Deloitte & Touche, or such other nationally recognized certified public
accounting firm as may be designated by Mr. Thomas (the “Accounting Firm”). The
Company will direct the Accounting Firm to provide detailed supporting
calculations both to the Company and Mr. Thomas within 15 business days after
receipt of notice from Mr. Thomas that there has been a Payment or such earlier
time as is requested by the Company. If the Accounting Firm is then serving as
accountant, auditor, or consultant for the individual, entity or group effecting
the Change in Control, then Mr. Thomas will have the right to appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder).

 

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4.3 Access to Records. Mr. Thomas and the Company will each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or Mr. Thomas, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determination
contemplated by this Article 4.

 

4.4 Accounting Firm’s Fees and Expenses. The Company will pay the fees and
expense of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by this Article 4.

 

4.5 Adjustments. If the Payment is reduced as described in Section 4.1 and the
Internal Revenue Service (“IRS”) subsequently and finally determines that the
Payment, even after the reduction applied by Section 4.1, will result in a loss
of deduction to the Company under Section 280G of the Internal Revenue Code and
the Company could avoid such loss of deduction by causing Mr. Thomas to return
an additional amount of the Payment to the Company, the Company may request that
Mr. Thomas remit an additional amount to the Company equal to the difference
between the amount previously paid and the minimum amount necessary to avoid
such loss of deduction, which amount shall be remitted by Mr. Thomas within five
business days after notification by the Company.

 

4.6 IRS Claims. Mr. Thomas will notify the Company in writing of any claim by
the IRS that, if successful, would result in the imposition of Additional Tax
after the reduction (if any) applied by Section 4.1. Mr. Thomas will give the
Company such notice as promptly as practicable but no later than ten business
days after Mr. Thomas actually receives notice of such claim. Mr. Thomas will
further apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid (in each case, to the extent known by
Mr. Thomas). Mr. Thomas agrees not to pay such claim before the earlier of
(a) the expiration of the 30-calendar-day period following the date on which
Mr. Thomas gives such notice to the Company and (b) the date that any payment
with respect to such claim is due. If the Company notifies Mr. Thomas in writing
at least five business days before the expiration of such period that it desires
to contest such claim, then Mr. Thomas will –

 

  (A) Provide the Company with any written records or documents in Mr. Thomas’
possession relating to such claim reasonably requested by the Company;

 

  (B) Take such action in connection with contesting such claim as the Company
reasonably requests in writing from time to time, including without limitation,
accepting legal representation with respect to such claim by an attorney
competent in respect of the subject matter and reasonably selected by the
Company;

 

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  (C) Cooperate with the Company in good faith in order effectively to contest
such claim; and

 

  (D) Permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and defend Mr. Thomas and hold Mr. Thomas harmless,
on an after-tax basis, from and against any Additional Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without limiting the
foregoing provisions of this Section 4.6, the Company will control all
proceedings taken in connection with the contest of any claim contemplated by
this Section 4.6 and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim; provided, however, that Mr. Thomas may
participate therein at Mr. Thomas’ own cost and expense. The Company may, at its
option, either direct Mr. Thomas to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Mr. Thomas will prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
direct; provided, however, that if the Company directs Mr. Thomas to pay the tax
claimed and sue for a refund, the Company will indemnify and defend Mr. Thomas
and hold Mr. Thomas harmless, on an after-tax basis, from such Additional Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such payment; and provided further that any extension of the statute
of limitations relating to payment of taxes for Mr. Thomas’ taxable year with
respect to which the contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company’s control of any such contested
claim will be limited to issues with respect to which the Additional Tax would
be payable hereunder and Mr. Thomas will be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

Article 5 – Mr. Thomas’ Commitments

 

5.1 Continuation of Employment. Mr. Thomas affirms that, if a Potential Change
in Control occurs during the Term, Mr. Thomas intends to remain in the employ of
the Company at least until a Change in Control occurs or such Change in Control
is abandoned.

 

5.2 Noncompetition Covenant. Whether or not a Change in Control occurs during
the Term, Mr. Thomas will not, at any time during the Restricted Period (as
defined below), accept employment with, own an interest in, form a partnership
or joint venture with, consult with or otherwise assist any person or enterprise
that manufactures or sells products (“Competitive Products”) similar to, or
competitive with, the products manufactured or sold by the Company on the
Termination Date. For purposes of this Section 5.2, the term “Restricted Period”
means

 

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  A. 24 months after the Termination Date; and

 

  B. An additional 12 months thereafter (the “Additional Noncompetition Period”)
if:

 

  (1) The Company has not terminated Mr. Thomas’ employment because of
Disability;

 

  (2) The Company elects to impose the Additional Noncompetition Period by
providing to Mr. Thomas written notice of such election not later than two
months after the termination of Mr. Thomas’ employment; and

 

  (3) The Company pays Mr. Thomas, in 12 monthly installments during the
Additional Noncompetition Period, an aggregate amount equal to Mr. Thomas’ Base
Salary for the calendar year in which Mr. Thomas’ employment terminated or, if
higher, Mr. Thomas’ Base Salary immediately before the Change in Control.

The restrictions of this Section 5.2 will, however, cease to apply and have no
further force or effect from and after the occurrence of a Change in Control and
will not apply if the relevant person or enterprise acquires a business or
product line that manufactures or sells Competitive Products after the
commencement of Mr. Thomas’ employment or other relationship with such person or
enterprise (and the relevant person or enterprise has not manufactured or sold
such Competitive Products previously) and Mr. Thomas does not participate in any
way in the business of the Competitive Products for 24 months after the
termination of Mr. Thomas’ employment and, at the request of the Company,
Mr. Thomas and the relevant person or enterprise certify to the Company in
writing that Mr. Thomas has and will comply with the restrictions of this
Section 5.2.

 

5.3 Non-Disparagement. Mr. Thomas agrees that during his employment and at all
times thereafter, Mr. Thomas will not, unless compelled by a court or
governmental agency, make, or cause to be made, any statement, observation or
opinion, or communicate any information (whether oral or written) regarding the
Company, or its Affiliates, together with their respective directors, partners,
officers or employees (such entities, collectively, the “Ferro Related
Persons”), which disparages the reputation or business of the Company or the
Ferro Related Persons; provided, however, that such restriction shall not apply
to statements, observations, opinions or communications made in good faith in
the fulfillment of Mr. Thomas’ duties with the Company and provided further that
such restriction shall cease to apply and shall be of no further force and
effect from and after the occurrence of a Change in Control.

 

5.4 Qualification. Nothing in this Article 5 eliminates or affects any right to
payments or benefits that Mr. Thomas otherwise has under other provisions of
this Agreement and nothing in this Article 5 gives Mr. Thomas the right to any
payment or benefit under other provisions of this Agreement that he does not
otherwise have.

 

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Article 6 – Employment at Will

 

6.1 Employment at Will. The parties acknowledge and confirm that Mr. Thomas’
employment by the Company is employment-at-will, and is subject to termination
by Mr. Thomas or by the Company at any time with Cause or Without Cause.
Mr. Thomas acknowledges that such employment-at-will status cannot be modified
except in a specific writing that has been authorized or ratified by the Board.

 

6.2 Employment Actions. This Agreement is not intended to create, and will not
be construed as creating, an express or implied contract of employment. Nothing
contained in this Agreement will prevent the Company at any time from
terminating Mr. Thomas’ right and obligation to perform service for the Company
or prevent the Company from removing Mr. Thomas from any position which
Mr. Thomas holds in the Company, provided, however, that no such action shall
affect the obligation of the Company to make payments and provide benefits if
and to the extent required under this Agreement. The payments and benefits
provided in this Agreement will be full and complete liquidated damages for any
such employment action taken by the Company.

Article 7 – Mitigation

 

7.1 No Obligation to Seek Other Employment. If Mr. Thomas’ employment with the
Company terminates during the Term, Mr. Thomas will not be required to seek
other employment or to attempt in any way to reduce any amounts payable to
Mr. Thomas by the Company pursuant to this Agreement.

 

7.2 No Reduction in Payments or Benefits. The Company’s obligation to make
payments and provide benefits under this Agreement will not be reduced or offset
by any compensation earned by Mr. Thomas as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by Mr. Thomas to the Company, or otherwise.

Article 8 – Termination Procedures

 

8.1 Termination Notice. If either party desires that Mr. Thomas’ employment be
terminated after a Change in Control and during the Term, then such party will
deliver to the other party a written notice (a “Termination Notice”) in the
manner provided in Section 10.3 below. For purposes of this Agreement, a
Termination Notice must indicate the specific termination provision in this
Agreement relied upon and must set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated. Further, if the Company proposes to deliver to Mr. Thomas a
Termination Notice for Cause, then the Company must first convene a meeting of
the Board to consider that action, provide Mr. Thomas with reasonable notice of
such meeting and the specific conduct of Mr. Thomas that the Company believes
gives rise to Cause, and afford Mr. Thomas with opportunity, together with his
counsel, to be heard by the Board. If, after having complied with the
requirements of the preceding sentence, the Company nonetheless desires to
provide Mr. Thomas with a Termination Notice for Cause, then such Termination
Notice must include a certified copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths (3/4) of the entire membership
of the Board at a meeting of the Board after the Board has made a finding, in
the good faith opinion of the Board, that Mr. Thomas was guilty of conduct
constituting Cause and specifying the particulars thereof in detail.

 

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8.2 Termination Date. The “Termination Date,” with respect to any purported
termination of Mr. Thomas’ employment after a Change in Control and during the
Term, will be determined as follows:

 

  A. Termination for Disability. If Mr. Thomas’ employment is terminated for
Disability, then the Termination Date will be 30 days after Termination Notice
is given (provided that Mr. Thomas shall not have returned to the full-time
performance of Mr. Thomas’ duties during such 30-day period), and

 

  B. Termination for Any Other Reason. If Mr. Thomas’ employment is terminated
for any other reason, then the Termination Date will be the date specified in
the Termination Notice (which, in the case of a termination by the Company,
shall not be less than 30 days (except in the case of a termination for Cause)
and, in the case of a termination by Mr. Thomas, shall not be less than 15 days
nor more than 120 days, respectively, from the date such Termination Notice is
given).

Notwithstanding the foregoing, in no event will the Termination Date occur until
the Mr. Thomas experiences a “separation from service” within the meaning of
Section 409A of the Code, and notwithstanding anything contained in this
Agreement to the contrary, the date on which such separation from service takes
place shall be deemed to be the “Termination Date.”

 

8.3 Dispute Concerning Termination. If within 15 days after any Termination
Notice is given, or, if later, before the Termination Date (as determined
without regard to this Section 8.3), the party receiving such Termination Notice
notifies the other party that a dispute exists concerning the termination, then
the Company’s obligation to make payments or provide benefits pursuant to
Section 3.4 shall be extended until the date on which the dispute is finally
resolved, either by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected); provided, however, that such
obligations shall be extended by a notice of dispute given by Mr. Thomas only if
such notice is given in good faith and Mr. Thomas pursues the resolution of such
dispute with reasonable diligence; provided, further, that the Company’s
obligation to make payments or provide benefits shall be satisfied, to the
extent required, no later than the end of the first calendar year in which such
mutual written agreement is executed or such final judgment is rendered.

 

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Article 9 — Disputes

 

9.1 Agreement to Arbitrate. The parties will resolve any further dispute or
controversy arising under or in connection with this Agreement exclusively by
arbitration in Cleveland, Ohio, in accordance with the rules of the American
Arbitration Association then in effect. The evidentiary standards set forth in
this Agreement shall apply to such arbitration. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. Notwithstanding any
provision of this Agreement to the contrary, Mr. Thomas will be entitled to seek
specific performance of Mr. Thomas’ right to be paid until the Termination Date
during the pendency of any dispute or controversy arising under or in connection
with this Agreement. The Company will be solely responsible for paying the costs
and expenses incurred by both parties in connection with such arbitration.

 

9.2 Injunctive Relief. Notwithstanding the provisions of Section 9.1 above, the
Company will be entitled, in addition to any other remedy or remedies available
to the Company at law or in equity, to injunctive relief, without the necessity
of proving the inadequacy of monetary damages or the posting of any bond or
security, enjoining or restraining Mr. Thomas from any violation of threatened
violation of the covenants contained in Section 5.2.

 

9.3 Legal Expenses. The Company will pay or reimburse Mr. Thomas all legal fees
and expenses incurred by Mr. Thomas in disputing in good faith any issue
(regardless of the outcome thereof) under this Agreement relating to the
termination of Mr. Thomas’ employment at any time from the date of a Change in
Control through the Mr. Thomas’ remaining lifetime (or, if longer, through the
20th anniversary of the date of a Change in Control) to the full extent
permitted by law, in seeking in good faith to obtain or enforce any benefit or
right provided by this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of §409A(a)(1)(B) or
§4999 of the Internal Revenue Code to any payment or benefit provided under this
Agreement. The Company will pay or reimburse such amounts within five business
days after Mr. Thomas’ delivers a written request for payment accompanied by
such evidence of fees and expenses incurred as the Company reasonably may
require, provided that Mr. Thomas submits an invoice for such fees and expenses
at least 10 days before the end of the calendar year next following the calendar
year in which such fees and expenses were incurred. The amount of such legal
fees and expenses that the Company is obligated to pay in any given calendar
year shall not affect the legal fees and expenses that the Company is obligated
to pay in any other calendar year, and Mr. Thomas’ right to have the Company pay
such legal fees and expenses may not be liquidated or exchanged for any other
benefit.

 

9.4 No Waiver. The provisions of the Article 9 do not constitute a waiver by the
Company of any rights to damages or other remedies which it may have pursuant to
this Agreement or otherwise. Mr. Thomas acknowledges that, due to the uniqueness
of Mr. Thomas’ services and confidential nature of the information Mr. Thomas
will possess the covenant set forth in Section 5.2 is reasonable and necessary
for the protection of the business and goodwill of the Company.

 

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Article 10 — Miscellaneous

 

10.1 Binding Agreement. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
before the effectiveness of any such succession shall be a breach of this
Agreement and will entitle Mr. Thomas to compensation from the Company in the
same amount and on the same terms as Mr. Thomas would be entitled to under this
Agreement if Mr. Thomas were to terminate Mr. Thomas’ employment for Good Reason
after a Change in Control, provided, however, that in such case the date on
which any such succession becomes effective shall be deemed to be the
Termination Date.

 

10.2 Successors. This Agreement shall inure to the benefit of and be enforceable
by Mr. Thomas’ personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If Mr. Thomas dies
while any amount would still be payable to Mr. Thomas under this Agreement
(other than amounts which, by their terms, terminate upon the death of
Mr. Thomas) if Mr. Thomas had continued to live, then all such amounts, unless
otherwise provided in this Agreement, will be paid in accordance with the terms
of this Agreement to the executors, personal representatives or administrators
of Mr. Thomas’ estate. Whether or not any Change in Control of the Company has
occurred, any successor to the Company’s business and/or assets by operation of
law or otherwise will automatically succeed to the rights and obligations of the
Company under this Agreement.

 

10.3 Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to
Mr. Thomas, to the last home address Mr. Thomas has provided the Company’s human
resources department and, if to the Company, to the address set forth below, or
to such other address as either party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon actual receipt:

 

  To the Company: Ferro Corporation

6060 Parkland Avenue

Mayfield Heights, Ohio 44124

Attention: Lead Director

 

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10.4 Waivers. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Mr. Thomas and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

 

10.5 Withholding. Any payments provided for hereunder shall be reduced to the
extent necessary so that the Company may satisfy any applicable withholding
required under Federal, state or local law and any additional withholding to
which Mr. Thomas has agreed.

 

10.6 Survival. The obligations of the Company and Mr. Thomas under this
Agreement which by their nature may require either partial or total performance
after the expiration of the Term (including, without limitation, those under
Articles 3, 4 and 5 above) will survive such expiration.

 

10.7

Compliance with §409A of the Internal Revenue Code. This Agreement is intended
to comply with the requirements of §409A of the Internal Revenue Code or an
exemption or exclusion therefrom and shall in all respects be administered so as
to be in compliance with such §409A. Each payment under this Agreement shall be
treated as a separate payment for purposes of Section 409A of the Code. In no
event may Mr. Thomas, directly or indirectly, designate the calendar year of any
payment to be made under this Agreement. All reimbursements and in-kind benefits
provided under this Agreement that constitute deferred compensation within the
meaning of Section 409A of the Code shall be made or provided in accordance with
the requirements of Section 409A of the Code, including, without limitation,
that (i) in no event shall reimbursements by the Company under this Agreement be
made later than the end of the calendar year next following the calendar year in
which the applicable fees and expenses were incurred, provided, that Mr. Thomas
shall have submitted an invoice for such fees and expenses at least 10 days
before the end of the calendar year next following the calendar year in which
such fees and expenses were incurred; (ii) the amount of in-kind benefits that
the Company is obligated to pay or provide in any given calendar year shall not
affect the in-kind benefits that the Company is obligated to pay or provide in
any other calendar year; (iii) Mr. Thomas’ right to have the Company pay or
provide such reimbursements and in-kind benefits may not be liquidated or
exchanged for any other benefit; and (iv) in no event shall the Company’s
obligations to make such reimbursements or to provide such in-kind benefits
apply later than the Mr. Thomas’ remaining lifetime (or if longer, through the
20th anniversary of the date of a Change in Control). Within the time period
permitted by the applicable Treasury Regulations, the Company may, in
consultation with Mr. Thomas, modify this Agreement, in the least restrictive
manner necessary and without any diminution in the value of the payments to
Mr. Thomas, in order to cause the provisions of the Agreement to comply with the
requirements of such §409A , so as to avoid the imposition of taxes and
penalties on Mr. Thomas pursuant to §409A. Notwithstanding anything in this
Agreement to the contrary, if any amount or benefit that

 

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  would constitute non-exempt “deferred compensation” for purposes of §409A
would otherwise be payable or distributable under this Agreement by reason of
Mr. Thomas’ separation from service during a period in which Mr. Thomas is a
Specified Employee, then subject to any permissible acceleration of payment by
the Company under Treas. Reg. §1.409A 3(j)(4)(ii) (domestic relations order),
(j)(4)(iii) (conflicts of interest) or (j)(4)(vi) (payment of employment taxes):

 

  (1) If the payment or distribution is payable in a lump sum, then Mr. Thomas’
right to receive payment or distribution of such non-exempt deferred
compensation will be delayed until the earlier of Mr. Thomas’ death or the first
day of the seventh month following Mr. Thomas’ separation from service; and

 

  (2) If the payment or distribution is payable over time, then the amount of
such non-exempt deferred compensation that would otherwise be payable during the
six-month period immediately following Mr. Thomas’ separation from service will
be accumulated and Mr. Thomas’ right to receive payment or distribution of such
accumulated amount will be delayed until the earlier of Mr. Thomas’ death or the
first day of the seventh month following Mr. Thomas’ separation from service,
whereupon the accumulated amount will be paid or distributed to Mr. Thomas and
the normal payment or distribution schedule for any remaining payments or
distributions will resume.

Whether and when Mr. Thomas is deemed to be a “Specified Employees” and the
application of the six-month delay rule of §409A(a)(2)(B)(i) to payments to
Mr. Thomas will be determined in accordance with methodology adopted by the
Board or a Committee thereof and such methodology will be applied consistently
with respect to all nonqualified deferred compensation arrangements of the
Company, including this Agreement.

 

10.8 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

 

10.9 Governing Law. This Agreement will be governed by the internal substantive
laws of the State of Ohio and will be enforced in courts sitting in the State of
Ohio.

 

10.10 Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

 

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10.11 Complete Agreement. This Agreement sets forth the entire understanding of
the parties hereto with respect to the subject matter of this Agreement and
supersedes all prior letters of intent, agreements, covenants, arrangements,
communications, representations, or warranties, whether oral or written, by any
officer, employee, or representative of the Company relating thereto, including,
without limitation, the Prior Agreement and the Letter Agreement. For the
avoidance of doubt, the rights and amount of benefits that Mr. Thomas will be
entitled to under this Agreement will not be reduced as indicated in the Letter
Agreement notwithstanding Mr. Thomas or another individual being elected as the
Company’s Chief Executive Officer. Mr. Thomas and the Company agree that the
entry into this Agreement satisfies the Company’s obligations under the heading
“Amendment to Change in Control Agreement” contained in the Letter Agreement and
supersedes the provisions contained therein under such heading.

 

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To evidence their agreement as stated above, Peter T. Thomas has executed and
delivered, and Ferro Corporation has caused its duly authorized representative
to execute and deliver, this Change in Control Agreement.

 

    FERRO CORPORATION LOGO [g508497g70x00.jpg]     LOGO [g508497g34u59.jpg]
Peter T. Thomas    

 

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Definitions

The following terms identified with initial capital letters are defined in the
following Sections of the Change in Control Agreement:

 

Term    Cross Reference

Accounting Firm.

   Section 4.2

Additional Noncompetition Period.

   Section 5.2.B

Agreement.

   Preamble

Base Salary.

   Section 3.4.B(1)(a)

Base Trust Amount.

   Section 2.2.D(1)

Board.

   Recital A

Cause.

   Section 3.2.A

Change in Control.

   Section 3.1

Company.

   Preamble

Competitive Products.

   Section 5.2

Ferro Related Persons.

   Section 5.3

Good Reason.

   Section 3.2.C

Incumbent Board.

   Section 3.1.B

IRS

   Section 4.5

Mr. Thomas.

   Preamble

Outstanding Performance Shares.

   Section 3.5

Payment.

   Section 4.1

Potential Change in Control.

   Section 2.1

Renewal Date.

   Section 1.4

Restricted Period.

   Section 5.2

Severance Payments.

   Section 3.4

Term.

   Section 1.4

Termination Date.

   Section 8.2

Termination Notice.

   Section 8.1

Trust Account.

   Section 2.2

Trust Agreement.

   Section 2.2.B

Trust Amount.

   Section 2.2.D

Trustee.

   Section 2.2.A

Without Cause.

   Section 3.2.B

 

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In addition, the following terms have the meanings set forth below where used in
the Change in Control Agreement and identified with initial capital letters:

 

Term    Meaning

Additional Tax

   Any excise tax imposed under Section 4999 of the Internal Revenue Code.

Affiliate

   As defined forth in Rule 12b-2 under §12 of the Exchange Act.

Annual Incentive Plan

  

The Company’s annual incentive plan, as the same had been and

may hereafter be amended, and any successor plan thereto.

Applicable Board

   The Board, or if the Company is not the ultimate parent corporation of the
Affiliated Companies and is not publicly-traded, the board of directors of the
ultimate parent of the Company.

Beneficial Owner

   As defined in Rule 13d-3 under the Exchange Act.

Benefit Plan

   Any perquisite, benefit, or compensation plan established or maintained by
the Company, including, without limitation, the plans described in Section
3.4.A-3.4.D and any plans that are successors to such plans, but excluding
awards under the Company’s Long-Term Incentive Plan.

Disability

   Mr. Thomas’ incapacity due to physical or mental illness resulting in Mr.
Thomas’ absence from the full-time performance of his duties with the Company
for a period of six consecutive months.

Exchange Act

   The Securities Exchange Act of 1934, as amended from time to time.

Internal Revenue Code

   The Internal Revenue Code of 1986, as amended from time to time.

Long-Term Incentive Plan

   The Company’s long-term incentive plan, including, without limitation, the
2006 Long-Term Incentive Plan as the same had been and may hereafter be amended
and any successor plan thereto.

Person

   As defined in Section 13(d)(3) and 14(d)(2) of the Exchange Act.

Retirement

   Termination of Mr. Thomas’ employment by retirement under a Company
retirement plan or policy (including early retirement).

 

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Specified Employee    Within the meaning of §409A of the Internal Revenue Code
and the final regulations thereunder, as determined in accordance with the
methodology adopted by the Board or a Committee thereof. Welfare Plan    Each
welfare benefit plan or program sponsored by the Company in existence
immediately before the Termination Date or Change in Control, as the case may
be, including, without limitation, medical, pharmacy, dental, vision, accidental
death and dismemberment, life insurance and long-term disability plans and
programs, which is then provided to Mr. Thomas or in which Mr. Thomas then
participates.

 

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