Exhibit 10.5

 

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TERMS OF NONSTATUTORY STOCK OPTION GRANTS

 

1. Generally. This document sets forth the terms and conditions under which
nonstatutory stock options (the “NSO Options”) are granted under Section 4(a) of
the 2013 Omnibus Incentive Plan (the “Plan”), which was approved by Ferro
Corporation shareholders on May 22, 2013. (The recipient of an NSO Option grant
is called the “NSO Optionee” below. The term “Ferro” below includes Ferro
Corporation and its subsidiary and affiliated companies.)

 

2. Precedence of the Plan. The terms of this document are in all events subject
to the terms and conditions of the Plan. If there is any inconsistency between
this document and the Plan, then the Plan, and not this document, will govern.
The Compensation Committee of the Board of Directors (or such other committee as
the Board may from time to time designate) (the “Committee”) administers awards
under the Plan and has the authority to determine the terms and conditions, not
inconsistent with the provisions of the Plan, of any Award granted under this
Plan. In this capacity, the Committee also has the authority to construe and
interpret the provisions of the Plan and all awards under the Plan and to
establish, amend, and rescind rules and regulations for the administration of
the Plan, all of which will be binding on the NSO Optionee.

 

3. Basic Option Terms. The name of the NSO Optionee, the date of the NSO Option
grant, the aggregate number of shares of Ferro Common Stock that may be
purchased under the NSO Option, the option exercise price, and the expiration
date of the NSO Option (i.e., last date on which such NSO Option may be
exercised) are set forth separately in a grant letter from Ferro to the NSO
Optionee which refers expressly to this document.

 

4. Normal Exercise. Except as otherwise provided below, NSO Options will become
exercisable only if and after the NSO Optionee has remained employed by Ferro
for one year from the date of the NSO Option grant, whereupon such rights shall
become exercisable to the extent of one third of the aggregate number of shares
granted, which portion shall increase to two-thirds after two years, and will be
fully vested after three years of employment. Fractional shares will be rounded
to the nearest whole share.

 

5. Retirement. If an NSO Optionee is deemed by the Company to be terminating his
or her employment as a direct result of his or her retirement from the Company
at a time when he or she is age 55 or older and has 10 or more years of service
before an NSO Option has been exercised or expired, then the NSO Option will
become 100% exercisable when the NSO Optionee retires and the NSO Optionee will
then be entitled to exercise the NSO Option at any time on or before such NSO
Option expires.

 

6. Disability. If an NSO Optionee’s employment terminates due to the NSO
Optionee’s total and permanent disability before an NSO Option has been
exercised or expired, then the NSO Option will become 100% exercisable when the
NSO Optionee’s employment terminates and the NSO Optionee will then be entitled
to exercise the NSO Option at any time on or before such NSO Option expires.

 

7. Death. If an NSO Optionee dies before an NSO Option has been exercised or
expired, then the person who is entitled by will or the applicable laws of
descent and distribution may exercise the option rights (a) in full in the case
of an NSO Optionee who was employed by Ferro at the time of his or her death or
(b) in the case of an NSO Optionee not so employed, to the extent that the NSO
Optionee was entitled to exercise the same immediately before his or her death.

 

8. Change of Control. If a “Change of Control” (as defined in the Plan) occurs
before an NSO Option has been exercised or expired, the provisions of Section 9
of the Plan shall apply to this Award.

 

9. Other Termination of Employment. If the NSO Optionee’s employment with Ferro
terminates before an NSO Option has been exercised or expired for any reason
other than those stated in paragraphs 5-8 above, the NSO Optionee may exercise
the option rights at any time within the three-month period after his or her
termination of employment (but before the expiration of the NSO Option) to the
extent he or she was entitled to exercise the same immediately before the
termination of employment.

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10. Exercise. An NSO Option may be exercised by delivering to Ferro at the
office of its Treasurer a written notice signed by the person entitled to
exercise the option, of the election to exercise the option and stating the
number of shares to be purchased, together will full payment of the option
exercise price of the shares then to be purchased. Payment of the option
exercise price may be made, at the election of the NSO Optionee, (a) in cash,
(b) in Ferro Common Stock, or (c) in any combination of cash and Ferro Common
Stock. Shares of Ferro Common Stock used in payment of the purchase price will
be valued at their closing price on the New York Stock Exchange on the trading
day immediately preceding the date of exercise. Upon the proper exercise of an
NSO Option, Ferro will issue the appropriate number of shares of Ferro Common
Stock in the name of the person exercising the NSO Option and deliver to him or
her a certificate or certificates for the shares purchased. The NSO Optionee
will either pay in cash, within the time period specified by Ferro, the amount
(if any) required to be withheld for Federal, state or local tax purposes on
account of the exercise of an NSO Option or to make arrangements to satisfy such
withholding requirements in a manner satisfactory to Ferro.

 

11. Legal Restrictions on Exercise. No NSO Option will be exercisable if and to
the extent such exercise would violate:

 

  A. Any applicable state securities law;

 

  B. Any applicable registration or other requirements under the Securities Act
of 1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934, as
amended, or the listing requirements of any stock exchange; or

 

  C. Any applicable legal requirement of any other government authority.

Ferro will make reasonable efforts to comply with the foregoing laws and
requirements so as to permit the exercise of NSO Options. Furthermore, if a
Registration Statement with respect to the shares to be issued upon the exercise
of an NSO Option is not in effect or if counsel for Ferro deems it necessary or
desirable in order to avoid possible violation of the 1933 Act, Ferro may
require, as a condition to its issuance and delivery of certificates for the
shares, the delivery to Ferro of a commitment in writing by the person
exercising the option that at the time of such exercise it is his or her
intention to acquire such shares for his or her own account for investment only
and not with a view to, or for resale in connection with, the distribution
thereof; that such person understands the shares may be “restricted securities”
as defined in Rule 144 of the Securities and Exchange Commission; and that any
resale, transfer or other disposition of said shares will be accomplished only
in compliance with Rule 144, the 1933 Act, or the other Rules and Regulations
there under. Ferro may place on the certificates evidencing such shares an
appropriate legend reflecting the aforesaid commitment and the Company may
refuse to permit transfer of such certificates until it has been furnished
evidence satisfactory to it that no violation of the 1933 Act or the Rules and
Regulations there under would be involved in such transfer.

 

12. Forfeiture. The NSO Optionee will forfeit the NSO Option if, from the date
the NSO Option is granted until the date the NSO Option has been fully exercised
or expired, he or she —

 

  A. Directly or indirectly, engages in, or assists or has a material ownership
interest in, or acts as agent, advisor or consultant of, for, or to any person,
firm, partnership, corporation or other entity that is engaged in the
manufacture or sale of any products manufactured or sold by Ferro or any
products that are logical extensions, on a manufacturing or technological basis,
of such products;

 

  B. Discloses to any person any proprietary or confidential business
information concerning Ferro, its subsidiaries, or affiliates or any of the
officers, Directors, employees, agents, or representatives of Ferro, its
subsidiaries or affiliates, which the Participant obtained or which came to his
or her attention during the course of his or her employment with Ferro;

 

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  C. Takes any action likely to disparage or have an adverse effect on Ferro,
its subsidiaries, or affiliates or any of Ferro’s officers, Directors,
employees, agents, or representatives;

 

  D. Induces or attempts to induce any Ferro employee to leave the employ of
Ferro or otherwise interferes with the relationship between Ferro and any of
Ferro’s employees, or hires or assists in the hiring of any person who was a
Ferro employee, or solicits, diverts or otherwise attempts to take away any
customers, suppliers, or co-venturers of Ferro, either on the NSO Optionee’s own
behalf or on behalf of any other person or entity; or

 

  E. Otherwise performs any act or engages in any activity which in the opinion
of the Committee is inimical to the best interests of Ferro.

 

13. Clawback Policy. The NSO Option and any Common Stock acquired or proceeds
received from the sale thereof will be subject to any Ferro policy relating to
recovery of incentive-based compensation that is, or may be, adopted by the
Board of Directors or a committee thereof.

 

14. Taxes and Withholding. All amounts paid to or on behalf of the NSO Optionee
in respect of an NSO Option will be subject to withholding as required by law.

 

15. Transferability. Subject only to the exceptions stated in Section 8 of the
Plan, an NSO Option is not transferable by the NSO Optionee other than by will
or by the laws of descent and distribution. An NSO Option will be exercisable
during the lifetime of the NSO Optionee only by the NSO Optionee and/or his or
her guardian or legal representative.

 

16. Adjustments on Changes in Capitalization. If at any time before an NSO
Option is exercised or expires, the shares of Ferro Common Stock are changed or
Ferro makes an “extraordinary distribution” or effects a “prorata repurchase” of
Common Stock as described in Section 7 of the Plan or takes any other action
described in that section, then the shares of Common Stock issuable pursuant to
such NSO Option will be appropriately adjusted as provided in such section.

 

17. No Rights as a Shareholder. The NSO Optionee acknowledges that as holder of
an NSO Option the NSO Optionee has no rights as a shareholder or otherwise in
respect of any of the shares as to which the NSO Option has not been effectively
exercised.

 

18. Employment at Will. Nothing in this NSO Option grant affects in any way the
NSO Optionee’s status as an employee at will of Ferro.

 

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