Document:

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into as of September 21,
2007, between Patterson-UTI Management Services, LLC, a limited liability company (the “Company”),
and Cloyce A. Talbott (“Employee”).

W I T N E S S E T H:

Whereas, Employee is employed by the Company as President and Chief Executive Officer
and is the President and Chief Executive Officer of Patterson-UTI Energy, Inc., the parent of the
Company, and of its subsidiaries and has elected to step down from positions with the Company, such
parent and its subsidiaries, except as contemplated hereby, at the close of business on September
30, 2007;

Whereas, Employee possesses business knowledge and expertise which may be of
substantial assistance to the Company and its affiliates based on his long tenure with the Company;
and

Whereas, the Company desires that Employee continue his employment with the Company
on a part-time basis, on the terms and conditions set forth below.

Now Therefore, in consideration of the foregoing and for other good and valuable
consideration, the parties hereto do hereby agree:

1. Employment. The Company hereby agrees to employ Employee as a part-time employee,
and Employee agrees to serve the Company in such capacity on the terms and subject to the
conditions set forth in this Agreement.

2. Term. Subject to the provision for earlier termination set forth in Section 5
hereof, the term of Employee’s employment under this Agreement shall begin on October 1, 2007 and
continue to, and including September 30, 2012.

3. Duties and Responsibilities.

(a) During the term of this Agreement, the Company shall employ the Employee with respect to
matters set forth in Section 3(b). The Employee shall make himself available to the Company for
approximately forty (40) hours each calendar month to render such advice and assistance regarding
the services as may be reasonably requested of Employee by the Company. While Employee and Company
agree that the circumstances might reasonably require Employee to work more than forty (40) hours
in any given calendar month, in no event shall the average number of hours required by the Company
to be worked by Employee during any calendar year during the term of this Agreement exceed an
average forty (40) hours per month without the Employee’s consent.

(b) Employee will report to the Chief Executive Officer of the Company and agrees to provide
such services to the Company as the Company may from time to time request during the term of this
Agreement, regarding (i) advising Chief Executive Officer with respect to the business affairs of
the Company; (ii) assisting particularly in reviewing oil and gas operations and reviewing and
verify joint interest billings related to such oil and gas operations, (iii) making presentations
and representing the Company and its affiliates at industry and investor conferences, and (iv) any
other matters reasonably requested by the Chief Executive Officer.

(c) Employee will comply with all applicable laws, corporate documents governing the conduct
of the business and affairs of the Company, and policies of the Company.

4. Compensation.

(a) Salary. As compensation for the services to be rendered by Employee during the
term of this Agreement, Employee shall be entitled to receive a salary at an annual rate of
$250,000 (the “Consulting Fee”), payable in accordance with the Company’s normal payroll practice.

(b) Reimbursement of Expenses. The Company agrees to promptly reimburse Employee for
all appropriately documented, reasonable travel and other business expenses incurred by Employee in
the course of providing services requested by the Company or otherwise incurred in his capacity as
an Employee.

5. Termination of Employment.

(a) Death or Disability. Employee’s employment under this Agreement shall terminate
automatically upon Employee’s death or permanent disability. For purposes of this Agreement,
Employee shall be deemed to be “permanently disabled” if Employee shall be considered to be
permanently and totally disabled in accordance with the Company’s disability plan, if any, for a
period of ninety (90) days or more. If there should be a dispute between the Company and Employee
as to Employee’s disability for purposes of this Agreement, the question shall be settled by the
opinion of an impartial reputable physician agreed upon by the parties or their representatives, or
if the parties cannot agree within ten (10) calendar days after a request for designation of such
party, then a physician shall be designated by Cooper Clinic in Dallas, Texas. The parties agree
to be bound by the final decision of such physician.

(b) By the Company. The Company may terminate Employee’s employment under this
Agreement at any time if such termination is “for cause”, as defined below, by delivering to
Employee written notice describing the cause of termination ten (10) days before the effective date
of such termination and by granting Employee at least ten (10) days to cure the cause (except with
regard to matters which are not able to be cured as to which no such period to cure shall be
required).

“For cause” shall be limited to the occurrence of the following events:

	 	(i)	 	Failure, or absence of a good faith effort, by
Employee to adhere to the terms of this Agreement after thirty (30)
days written notice and an opportunity to cure,

	 	(ii)	 	Gross negligence on the part of Employee,

	 	(iii)	 	Employee is involved in fraudulent acts
against the Company or is indicted for or convicted of a criminal act
that is injurious to the Company or its reputation, or

	 	(iv)	 	Employee shall knowingly and intentionally
disparage the Company or its executive management in a manner that is
injurious to Company or its reputation or adversely affects the
Company’s relationship with its customers or employees.

6. Proprietary Information.

(a) Confidential Treatment. Employee acknowledges and agrees that he has acquired,
and may in the future acquire as a result of his employment by the Company or otherwise,
“Proprietary Information” (as defined below) of the Company which is of a confidential or trade
secret nature, and all of which has a great value of the Company and is a substantial basis and
foundation upon which the Company’s business is predicated. Accordingly, Employee agrees to regard
and preserve as confidential at all times all Proprietary Information and to refrain from
publishing or disclosing any part of it and from using, copying or duplicating it in any way by any
means whatsoever. Employee further agrees that he will not use or disclose the Proprietary
Information to any person or entity without the prior written consent of the Company. “Proprietary
Information” includes all information and data in whatever form, tangible or intangible, pertaining
in any manner to any business interests of the Company or any affiliate thereof, unless the
information is or becomes publicly known through lawful means.

(b) Property of the Company. Upon the termination of Employee’s employment with the
Company, Employee shall surrender to the Company any and all work papers, reports, manuals,
documents and the like (including all originals and copies thereof) in his possession which contain
Proprietary Information relating to the business, prospects or plans of the Company or its
affiliates. Employee acknowledges that all Proprietary Information and other property of the
Company or any affiliate thereof which Employee accumulates during his engagement are the property
of the Company and shall be returned to the Company immediately upon termination of this Agreement.

(c) Cooperation. Employee agrees that following any termination of his employment
with the Company, he will not make or disclose or cause to be made or disclosed any negative,
adverse or derogatory comments or information of a substantial nature about the Company or its
affiliates, the management of the Company or its affiliates, any product or service provided by the
Company or its affiliates or the future prospects of the Company or its affiliates unless required
by court order. The Company may seek the assistance, cooperation or testimony of Employee
following any such termination in connection with any investigation, litigation or proceeding
arising out of matters within the knowledge of Employee and related to his engagement by the
Company, and in any instance, Employee shall provide such assistance, cooperation or testimony and
the Company shall pay Employee’s reasonable costs and expenses in connection therewith.

(d) Breach. In the event of a breach or a threatened breach of the terms of this
Section by Employee, the Company shall, in addition to all other remedies, be entitled to a
temporary or permanent injunction or a decree for specific performance, in accordance with the
provisions hereof, without showing any actual damage or that monetary damages would not provide
adequate remedy and without any bond or other security being required.

7. Non-Competition. Employee hereby covenants and agrees that, for so long as he is
employed under this Agreement and for three (3) years following the termination of his employment
hereunder, Employee will not compete with the Company in the United States or Canada with respect
to any business conducted by the Company during the term of this Agreement (the “Businesses”)
unless he has received prior written approval from the Company, which approval shall be in the sole
and absolute discretion of the Company. For purposes of this Agreement, the term “compete” shall
include (a) being a shareholder, member, owner, director, officer, employee, agent, consultant or
advisor of, with or to, any legal entity that engages in any one or more of the Businesses;
provided that the foregoing shall not prohibit the Employee from owning less than 1% of the common
stock of a publicly traded company that engages in one or more of the Businesses, (b) personally
engaging in one or more of the Businesses and (c) soliciting any employee, vendor or customer of
the Company to terminate or otherwise adversely change its business relationship with the Company.
In the event of a breach or a threatened breach of the terms of this Section by Employee, the
Company shall, in addition to all other remedies, be entitled to a temporary or permanent
injunction or a decree of specific performance, in accordance with the provisions hereof, without
showing any actual damage or that monetary damages would not provide an adequate remedy and without
any bond or other security being required. In the event of litigation to enforce this covenant,
the courts are hereby specifically authorized to reform this covenant as and to the extent, but
only to such extent, necessary in order to give full force and effect hereto to the maximum degree
permitted by law.

8. Prior Agreements. This Agreement supersedes all other agreements between the
Company and Employee relating to his employment by the Company, including the agreements relating
to payments upon a change of control; provided that it does not change or otherwise affect
agreements related to stock options or restricted stock or stock units granted to him or the
Company’s agreement, assuming and subject to compliance with the terms of this Agreement, that the
Employee will be entitled to participate in the Company’s 2007 annual cash bonus incentive plan for
certain executive officers based on earnings before interest, tax, depreciation and amortization as
implemented and administered by the Compensation Committee of the Board of Directors of the Company
in the same manner as he would have participated if he remained the Chief Executive Officer of the
Company through December 31, 2007.

9. Tag-along Rights. The Company on the one hand and the Employee and affiliates of
the Employee (the “Employee Investing Group”) on the other hand have acquired interests in the same
oil and gas mineral interest from time to time. As a result, at present and in the future, one or
more of the Employee Investing Group and the Company may own interest in the same oil and gas
properties. Employee agrees that in the event one or more of the Employee Investing Group intends
to sell all or part of its interest in an oil and gas property in which the Company has an
interest, the Employee will take all necessary actions so that the Company shall also have the
right to sell its interest, if it elects to do so, on the same terms as the member of the Employee
Investing Group.

10. Notice. All notices, requests, consents, directions and other instruments and
communications required or permitted to be given under this Agreement shall be in writing and shall
be deemed to have been duly given if (i) delivered personally, (ii) mailed first-class, postage
prepaid, registered or certified mail, or (ii) sent by overnight courier, telegram, telex,
facsimile, telecommunication or other similar form of communication (with receipt confirmed), as
follows:

	 	 	 	 	 
	To the Company:
	 	Patterson-UTI Management Services, LLC
	 
	 	Attention: General Counsel
	 
	 	4510 Lamesa Highway
	 
	 	Snyder, Texas 79549
	 
	 	Copy to:
	 
	 	Michael W. Conlon
	 
	 	Fulbright & Jaworski L.L.P.
	 
	 	1301 McKinney
	 
	 	Suite 5100
	 
	 	Houston, Texas  77010-3095
	To the Employee
	 	Cloyce A. Talbott
	 
	 	P.O Box 410
	 
	 	Snyder, Texas 79550

or to such other address and to the attention of such other person(s) or officer(s) as any party
may designate by written notice. Any notice mailed shall be deemed to have been given and received
on the third business day following the day of mailing. Any notice sent by overnight courier,
telegram, telex, facsimile, telecommunication or other similar form of communication (with receipt
confirmed) shall be deemed to have been given and received on the next business day following the
day such communication is sent.

11. References to the Company. References in this Agreement to the Company in the
context of providing services to the Company in Section 3, in Section 5(b)(iii) and (iv), in
Sections 6, 7, 8 and 9, shall include Patterson-UTI Energy Inc., the parent of the Company, and all
of Patterson-UTI Energy Inc.’s subsidiaries.

12. Nonassignment. This Agreement is personal to the Employee and to the Company and
shall not be assigned by either party without the other’s written consent.

13. Further Assurances. Each party hereto agrees to perform such further actions, and
to execute and deliver such additional documents, as may be reasonably necessary to carry out the
provisions of this Agreement.

14. Severability. In the event that any of the provisions, or portions thereof, of
this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the
validity and enforceability or the remaining provisions, or portions thereof, shall not be affected
thereby.

15. Governing Law. This Agreement shall be governed and construed under and
interpreted in accordance with the laws of the State of Texas without giving effect to the doctrine
of conflict of laws.

16. Entire Agreement; Interpretation. This Agreement constitutes the entire agreement
of the parties, and supersedes all prior agreements, oral or written, with respect to any
consulting arrangement between the Company and Employee. No change or modification of this
Agreement shall be enforceable unless contained in a writing signed by the party against whom
enforcement is sought. No presumption shall be construed against the party drafting this
Agreement.

17. Employee’s Representations. Employee represents and warrants that:

(a) he is free to enter into this Agreement and to perform each of the terms and covenants
contained herein;

(b) he has been advised by legal counsel as to the terms and provisions hereof and the effort
thereof and fully understands the consequences thereof;

18. Option to Convert Arrangement. The Company may, upon 30 days written notice to
Employee, convert his employment hereunder to a consulting arrangement subject to all of the other
terms set forth herein; provided that, under any stock option or restricted stock or restricted
stock unit award granted to Employee on or before the effective date of the conversion, Employee’s
services as an independent contractor following the conversion shall count for purposes of vesting
and the conversion shall not be considered as a severance of the employment relationship between
the Company and Employee for purposes of the stock option, restricted stock and restricted stock
unit awards granted to the Employee until Employee’s services as a consultant are terminated. The
Company shall not affect such a conversion if the conversion would result in a material increase in
the income taxes applicable to the salary paid to Employee hereunder.

19. Waiver. The failure of any party to insist, in any one or more instances, upon
strict performance of any one or more of the provisions, terms and conditions of this Agreement, or
to exercise any right or rights hereunder shall not be construed as a waiver thereof, and any and
all such provisions, terms, conditions and rights shall continue and remain in full force and
effect.

[SIGNATURES ON FOLLOWING PAGE]

1

IN WITNESS WHEREOF, the parties have caused this Agreement to be entered into as of the date
first written above.

PATTERSON-UTI MANAGEMENT SERVICES, LLC

By: _/s/ John E. Vollmer III     

John E. Vollmer III

Senior Vice President

EMPLOYEE

_/s/ Cloyce A. Talbott     

	 	 	Cloyce A. Talbott

2EX-10.1

	 
	Ferro Corporation

Deferred Compensation Plan

for Executive Employees

Amended and Restated

As of January 1, 2005

Ferro Corporation

Deferred Compensation Plan

for Executive Employees

Introduction

This document (this “Plan”) is the Ferro Corporation Deferred Compensation Plan for
Executive Employees. This Plan was originally adopted and effective as of January 1, 1998,
and was most recently amended and restated effective June 30, 2004.

This Plan is now amended and restated generally effective January 1, 2005, for the purpose of
complying with new Code Section 409A. Code Section 409A permits deferred compensation which is
earned and vested in taxable years beginning before January 1, 2005 to be exempt from Code Section
409A if the plan under which the deferral is made is not materially modified after October 3, 2004.

Ferro elects and intends to exempt from Code Section 409A the deferred compensation which was
earned and vested under the Plan as of December 31, 2004. Consistent with this election, the Plan,
as amended and restated effective January 1, 2005, is comprised of two parts:

	 	•	 	Part A, which contains the terms of the Plan as in effect on October 4, 2004
which govern deferred compensation which was earned and vested under the Plan as of
December 31, 2004 (the “Pre-2005 Plan”), and

	 	•	 	Part B, which contains the terms of the Plan which govern deferred compensation
which was earned and vested after December 31, 2004 (the “2005 Plan”).

1

 Table of Contents

Page

	 	 	 
	Part A:Pre-2005 Plan

	 	A-1
	Part B:2005 Plan

	 	B-1
	Execution Page

	 	C-1

2

Ferro Corporation

Deferred Compensation Plan

For Executive Employees

Part A: Pre-2005 Plan

Overview

Establishment of Component Plan

The terms of the Plan as it existed on October 4, 2004, and which have not been materially
modified thereafter, constitute the Pre-2005 Plan (the “Pre-2005 Plan”).

The Pre-2005 Plan is reproduced, as of January 1, 2005, in this Part A. It consists of the
Plan as it was amended and restated effective June 30, 2004. It has not been modified or amended
after that date.

Exempt from Code Section 409A

Deferred compensation which is earned and vested in taxable years beginning before January 1,
2005 is permitted to be exempt from Code Section 409A if the plan under which the deferral is made
is not materially modified after October 3, 2004.

Ferro elects and intends to exempt from Code Section 409A the deferred compensation which was
earned and vested under the Plan as of December 31, 2004, pursuant to the terms of the Pre-2005
Plan.

Governs Only Pre-2005 Amounts

The Pre-2005 Plan governs only those amounts that were earned and vested under the Plan as of
December 31, 2004 (the “Pre-2005 Amounts”).

Amounts under the Plan are fully vested at all times and deemed to be invested in Ferro Common
Stock, or in Treasury instruments yielding a rate of interest equal to three hundred (300) basis
points over the Ten-Year Constant Treasury Maturity Yield reported by the Federal Reserve Board, or
a combination of both, as elected by the Participant. A Participant’s Pre-2005 Amounts equal the
Participant’s account balance as of December 31, 2004 (i.e., the amount of the payment available if
the Participant exercised a right to distribution from the Plan on December 31, 2004 plus any
income attributable to that amount or to such income). Income includes increases after December
31, 2004 due to the interest earned on the portion invested in Treasury instruments, and the
appreciation and accrual of other earnings, such as dividends, on the underlying Ferro Stock.

Terminology

As used in the Pre-2005 Plan, the term “Plan” refers to the Pre-2005 Plan or to the Plan, as
appropriate.

3

	 
	Ferro Corporation

Deferred Compensation Plan

for Executive Employees

Part A: Pre-2005 Plan

As Amended and Restated

June 30, 2004

4

Ferro Corporation

Deferred Compensation Plan

for Executive Employees

Pre-2005 Plan

Introduction

This document (this “Plan”) is the Ferro Corporation Deferred Compensation Plan for
Executive Employees. This Plan was originally adopted and effective as of January 1, 1998.
This Plan was later amended by the adoption of First, Second and Third Amendments.

This Plan is now amended and restated effective June 30, 2004, as follows.

ARTICLE I

NAME AND PURPOSE

	1.1	 	Name. The name of this Plan is the “Ferro Corporation Deferred Compensation Plan for
Executive Employees.”

	1.2	 	Plan Sponsor. The sponsor of this Plan is Ferro Corporation (“Ferro”), an Ohio
corporation.

	1.3	 	Purpose. The purpose of this Plan is to provide unfunded deferred compensation to
certain management and highly compensated employees of the Ferro Group Companies under the
conditions set forth in this Plan.

	1.4	 	Plan for a Select Group. This Plan covers only employees of a Ferro Group Company
who are members of a “select group of management or highly compensated employees” as provided
in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA. Notwithstanding any
provision of this Plan to the contrary, this Plan will be administered and its benefits
limited in a manner to comply with the above cited sections of ERISA.

	1.5	 	Not a Funded Plan. Ferro intends that this Plan be deemed to be “unfunded” for tax
purposes as well as for purposes of Title I of ERISA. Notwithstanding any provision of this
Plan to the contrary, this Plan will be administered in a manner so that it is deemed
“unfunded.”

ARTICLE II

DEFINITIONS AND INTERPRETATION

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

	2.2	 	General Rules of Construction. For purposes of interpreting this Plan,

	 	(A)	 	the masculine gender will include the feminine and neuter, and vice versa, as
the context requires;

	 	(B)	 	the singular number will include the plural, and vice versa, as the context
requires;

	 	(C)	 	the present tense of a verb will include the past and future tenses, and vice
versa, as the context requires; and

	 	(D)	 	as provided under Article VII, the Administrator will retain the power and duty
to interpret this Plan and resolve ambiguities.

ARTICLE III

PARTICIPATION; DEFERRALS AND ACCOUNTS

	3.1	 	Eligibility. In order to be eligible to participate in this Plan, an individual must
–

	 	(A)	 	be an Executive Employee of a Ferro Group Company, and

	 	(B)	 	be selected by the Administrator to participate in this Plan for all or part of
an Election Year.

	3.2	 	Participation. Generally, an Eligible Employee may become a Participant and actively
participate for an Election Year only by completing and filing a Deferred Compensation
Agreement described in Section 3.3 below with his or her Ferro Group Company before January 1
of an Election Year. If, however, an employee first becomes an Eligible Employee after
January 1 of an Election Year, then that employee may become a Participant and actively
participate for a portion of the Election Year beginning on the first day of the month
coincident with or immediately after the date the Eligible Employee completes and files a
Deferred Compensation Agreement described in Section 3.3 below with his or her Ferro Group
Company.

	3.3	 	Deferral Elections. With respect to each Election Year, each Eligible Employee may
elect, under his or her Deferred Compensation Agreement for such Election Year, to make one or
more of the deferrals described below.

	 	(A)	 	Salary Deferral: Deferral of any whole percentage of up to 75% of his
or her Base Annual Salary for the Election Year which is payable each payroll period
commencing on or after the Eligible Employee’s Entry Date.

	 	(B)	 	Bonus Deferral: Deferral of any whole percentage up to 100% of the
Bonus which is earned on or after his or her Entry Date in the Election Year.

	 	(C)	 	Performance Share Award: Deferral of any whole percentage up to 100%
of payments with respect to Performance Shares which are earned on or after the
Eligible Employee’s Entry Date in the Election Year.

A Participant’s election to defer will be effective only for the Election Year(s) indicated
in his or her Deferred Compensation Agreement. The amount of a Participant’s Base Annual
Salary, Bonus and Performance Share Award will be determined in accordance with the
information contained in the payroll records of the Ferro Group Company.

	3.4	 	Salary Reductions and Deferral Amounts.

	 	(A)	 	A Participant’s election to defer pursuant to 3.3(A) above will cause an
equivalent reduction in the Participant’s Base Annual Salary at the time the Base
Annual Salary would otherwise be payable.

	 	(B)	 	A Participant’s election to defer pursuant to 3.3(B) above will cause an
equivalent reduction in the Participant’s Bonus at the time the Bonus would otherwise
be payable.

	 	(C)	 	A Participant’s election to defer in accordance with 3.3(C) above will cause an
equivalent reduction in the payment in respect of the Participant’s Performance Shares
at the time the Performance Share Award would otherwise be payable.

An amount equal to the reductions in a Participant’s Base Annual Salary, Bonus and
Performance Share Award pursuant to 3.1(A), 3.1(B) and 3.1(C) above will constitute an
Elective Amount and will be credited to the Participant’s Elective Account at the time of
the reductions.

	3.5	 	Alteration of Deferrals. A Participant’s deferral election made pursuant to Section
3.3 will be irrevocable except that, if the Participant receives a distribution on account of
a Financial Hardship, then the Administrator may, at its option, discontinue the Participant’s
deferral election for the remainder of the current Election Year, and preclude the Participant
from making any deferrals for all or part of the succeeding Election Year.

	3.6	 	Establishment of Accounts. Each Ferro Group Company will establish an Account in the
name of each Participant who is employed by it on the books and records of the Ferro Group
Company. All amounts credited to the Account of any Participant or former Participant will
constitute a general, unsecured liability of such Ferro Group Company to the Participant.

	3.7	 	Allocation of Elective Amounts. At the time a Participant’s Base Annual Salary,
Bonus or Performance Share Award are reduced pursuant to Section 3.4, the Ferro Group Company
employing the Participant will credit the Participant’s Account with the Participant’s
Elective Amount with respect to such Base Annual Salary, Bonus or Performance Share Award.

	3.8	 	Pre-1999 Elective Amounts. The Ferro Group Company will maintain separate Accounts
for the Elective Amounts deferred by the Participant before 1999 and after 1998, to enable the
Participant to elect for the deemed investment of the Elective Amounts as provided under
Section 5.4 below.

	3.9	 	Crediting of Earnings. The Ferro Group Company will credit the Account of each
Participant who is or was its employee with earnings, gains and losses in accordance with the
deemed investment of the Elective Amounts elected by the Participant under Section 5.4 below.

ARTICLE IV

BENEFITS; PAYMENT OF BENEFITS

	4.1	 	Date of Distribution. Distribution of the amounts credited to the Participant’s
Account will be made as soon as practicable after the earlier of:

	 	(A)	 	the date elected by the Participant in his or her Deferred Compensation
Agreement, or

	 	(B)	 	the Participant’s death, Disability, or Termination of Employment before the
Participant’s Retirement Date.

If the Participant has a Termination of Employment on or after the Participant’s Retirement
Date, the amounts credited to the Account will be distributed as soon as practicable after
the date elected by the Participant in the Deferred Compensation Agreement.

	4.2	 	Distribution on Change in Control. If the Participant has elected in his or her
Deferred Compensation Agreement to receive a distribution of the amounts credited to his or
her Account if a Change in Control occurs, then if a Change in Control occurs, the Ferro Group
Company will distribute to the Participant (or, in the event of the Participant’s death, the
Participant’s Beneficiary) a lump sum payment of the amount credited to the Participant’s
Account within thirty (30) days after the Change in Control. The amount credited to the
Participant’s Account will be determined as of the end of the calendar month immediately
preceding the month in which the Change in Control occurs, with such date being the Valuation
Date for purposes of the distribution. The lump sum payment will be made in the form of cash
as regards the portion of the Participant’s Account deemed to be invested in Treasury
instruments, and in the form of Ferro Common Stock as regards the portion of the Participant’s
Account deemed to be invested in Ferro Common Stock.

	4.3	 	Hardship Distribution. At any time before payment in full of the amounts credited to
a Participant’s Account, a Participant may submit a written request to the Administrator for
the distribution of all or a portion of the Participant’s Account because of a Financial
Hardship. In response, the Administrator has the authority to determine, in its sole
discretion, that payments should be made in any manner the Administrator deems appropriate, in
whole or in part, on any other date or dates in order to alleviate a Financial Hardship of a
Participant.

	4.4	 	Form of Distribution. Except as provided in Section 4.2 and 4.3, payment will be
made of the Participant’s Account as follows.

	 	(A)	 	Treasury Instruments. Unless the Participant elects otherwise in the
Deferred Compensation Agreement, the portion of the Participant’s Account deemed to be
invested in Treasury instruments will be distributed in the form of cash in a single
lump sum payment or installment payments, or a combination of both, as determined by
the Administrator.

	 	(B)	 	Ferro Common Stock. The portion of the Participant’s Account deemed to
be invested in Ferro Common Stock will be distributed in the form of Ferro Common Stock
in a single lump sum payment.

	4.5	 	Valuation of Distributions. All distributions under this Plan will be based upon the
amount credited to the Participant’s Account as of the Valuation Date immediately preceding
the date of distribution.

	4.6	 	Death Prior to Distribution. If the Participant dies before receiving complete
distribution of the Account under Section 4.1, 4.2 or 4.3 above, then the Beneficiary of the
deceased Participant will be entitled to a death benefit equal to the balance of the
Participant’s Account.

	 	(A)	 	Death Prior to Retirement Date. In the event the Participant has not
incurred a Termination of Employment and dies prior to his or her Retirement Date, the
Ferro Group Company will distribute the balance of the Participant’s Account to the
Beneficiary as soon as practicable after the Participant’s death in the form provided
in Section 4.4.

	 	(B)	 	Death After Retirement Date. In the event the Participant has incurred
a Termination of Employment after reaching his or her Retirement Date (or the
Participant has reached his or her Retirement Date and has not incurred a Termination
of Employment) and dies, the Ferro Group Company will distribute the balance of the
Participant’s Account to the Beneficiary at the time and in the form elected in the
Deferred Compensation Agreement or, if no form is elected, in the form provided under
Section 4.4.

	4.7	 	Change in Date or Form of Distribution. The Administrator, with the consent of the
Chief Executive Officer of Ferro, may establish procedures to permit some or all Participants
to request to change their prior Deferred Compensation Agreements regarding the date or form
in which all or a portion of the Account will be distributed. Any procedures to change the
elected date or form will require that the Participant’s request be made a reasonable period
of time before the portion of the Account affected by the request will otherwise be
distributed, or require a forfeiture of a significant percentage of the portion of the Account
affected by the request. In the case of a request to change the distribution date to a date
which is later than that elected in the Deferred Compensation Agreement, the procedures will
require that the Participant make such a request at least one year prior to the original
distribution date unless special circumstances apply. The Administrator may, but is not
required to, grant any such requests. The Administrator, with the consent of the Chief
Executive Officer of Ferro, may establish similar procedures to permit some or all
Beneficiaries of deceased Participants to request, where distribution to the Beneficiary is
deferred or to be made in installment payments, to accelerate all or a portion of the
distribution in the form of an immediate lump sum payment.

	4.8	 	Administration of Distributions. Distributions under this Plan will be made as soon
as administratively possible following receipt of notice by the Administrator of an event that
entitles a Participant or a Beneficiary to payments under this Plan and completion by the
Participant or Beneficiary of any forms required by the Administrator.

	4.9	 	Designation of Beneficiary. Subject to the rules and procedures promulgated by the
Administrator, a Participant may sign a document designating a Beneficiary or Beneficiaries.
If a Participant fails to designate any Beneficiary in accordance with the provisions of this
Section, then the Beneficiary will be deemed to be the Participant’s spouse, or if no spouse
is then living, the Participant’s estate.

	4.10	 	Protective Distributions. If the Administrator determines, in its sole discretion,
that a Participant is not, or may not be, a member of a “select group of management or highly
compensated employees” within the meaning of Section 201(2), 301(a)(3), 401(a)(1) or
4021(b)(6) of ERISA, then the Administrator may, in its sole discretion, terminate the
Participant’s participation in this Plan, and distribute all amounts credited to the
Participant’s Account in a single lump sum payment. Any distribution under this Section 4.10
will be made at the time the Administrator determines in its sole discretion.

	4.11	 	Tax Withholding. A Ferro Group Company may withhold, from any payment made by it
under this Plan, the amount or amounts as may be required for purposes of complying with the
tax withholding or other provisions of the Code or the Social Security Act or any state or
local income or employment tax act or for purposes of paying any estate, inheritance or other
tax attributable to any amounts payable hereunder.

	4.12	 	Inability to Locate Participant. If a Ferro Group Company or the Administrator
notifies a Participant or Beneficiary of an entitlement to an amount under this Plan and the
Participant or Beneficiary fails to claim the amount or to disclose the location of the
Participant or Beneficiary within three years thereafter, then, except as otherwise required
by law, if the location of one or more of the next of kin of the Participant or Beneficiary is
known to the Ferro Group Company or the Administrator, the Administrator may direct
distribution of the amount to any one or more or all of the next of kin, and in such
proportions as the Administrator, in its sole discretion, determines. If the location of none
of the foregoing persons can be determined, the Administrator will direct that the amount
payable to the Participant or Beneficiary be forfeited. If, after the forfeiture, the
Participant or Beneficiary later claims the benefit under this Plan, then the benefit will be
reinstated without interest or earnings from the date of forfeiture. If a benefit payable to
a Participant or Beneficiary that cannot be located is subject to escheat under state law,
then no further benefit will be payable with respect to any Participant for whom payment was
made by the Administrator according to the escheat provisions of state law.

ARTICLE V

RIGHTS OF PARTICIPANTS

	5.1	 	Creditor Status of Participants. The Elective Amounts of a Participant shall be
merely unfunded, unsecured promises of the Ferro Group Company (by which the Participant is
employed) to make benefit payments in the future and shall be liabilities solely against the
general assets of such Ferro Group Company. Except as provided in Section 5.6, Ferro and the
other Ferro Group Companies shall not be required to segregate, set aside or escrow the
Elective Amounts nor any earnings, gains and losses credited thereon. With respect to amounts
credited to any Account hereunder and any benefits payable hereunder, a Participant and
Beneficiary will have the status of general unsecured creditors of the Ferro Group Company (by
which the Participant is employed), and may look only to that Ferro Group Company and its
general assets for payment of the Account and benefits.

	5.2	 	Rights with Respect to the Trust. Any trust, and any assets held thereby to assist
Ferro or other Ferro Group Company in meeting its obligations under this Plan, will in no way
be deemed to controvert the provisions of Section 5.1 above.

	5.3	 	Investments. In Ferro’s sole discretion, the Ferro Group Companies may acquire
insurance policies, annuities or other financial vehicles for the purpose of providing future
assets of Ferro Group Companies to meet their anticipated liabilities under this Plan. Such
policies, annuities or other investments, shall at all times be and remain unrestricted
general property and assets of the Ferro Group Companies or property of a trust established
pursuant to Article VI of this Plan. Participants and Beneficiaries will have no rights,
other than as general creditors, with respect to any such policies, annuities or other
acquired assets.

	5.4	 	Method for Crediting Investment Return. As described in Section 3.8 above, the Ferro
Group Companies will maintain separate Accounts for the Elective Amounts deferred by the
Participant before 1999 and after 1998.

	 	(A)	 	Post-1998 Account. As elected by the Participant in his or her
Deferred Compensation Agreement, the Elective Amounts deferred after 1998 will, in the
portions specified by the Participant in the Deferred Compensation Agreement, be deemed
to be invested in either Ferro Common Stock or Treasury instruments, as described
below.

	 	(1)	 	Ferro Stock. The Elective Amounts will be deemed to be
invested in shares of Ferro Common Stock as of the date the Elective Amounts
would have been paid to the Participant if they were not deferred. The Account
will be deemed to receive all dividends (whether in stock or cash) and stock
splits which would be received if the Account was actually invested shares of
Ferro Common Stock, and such dividends and stock splits will be deemed to be
reinvested in shares of Ferro Common Stock as of the date of their receipt.
The investment in Ferro Common Stock will be deemed to be made at the closing
sale price of Ferro Common Stock on the New York Stock Exchange Composite Tape
(as reported in The Wall Street Journal) on the trading day of the deemed
investment.

	 	(2)	 	Treasury Instruments. The Elective Amounts will be
deemed to be invested in Treasury instruments yielding a rate of interest equal
to three hundred (300) basis points over the Ten-Year Constant Treasury
Maturity Yield as reported by the Federal Reserve Board.

	 	(B)	 	Pre-1999 Account. Each Participant with an Account credited with
Elective Amounts deferred before 1999 will be deemed to be invested in Treasury
instruments as described in Section 5.4(A)(2) above, except to the extent the
Participant elected, in writing during the special election period provided in 1999,
for all or a portion of the Account to be deemed to be invested in Ferro Common Stock.
Under any such election, the portion of the Account designated by the Participant to be
deemed invested in shares of Ferro Common Stock will be deemed invested as of the date
the Elective Amounts would have been paid to the Participant if they were not deferred,
and otherwise will be valued and credited with dividends and stock splits, in the same
manner as described in Section 5.4(A)(1) above.

	 	(C)	 	Periodic Adjustment of Accounts. As of each Valuation Date, the
Participant’s Account will be adjusted to reflect earnings and losses on the deemed
investments. To the extent the Account is deemed to be invested in Ferro stock, it
will be credited as of each Valuation Date with hypothetical appreciation and
depreciation and earnings, as computed and determined by the Administrator based on the
value of Ferro Common Stock and its dividends as provided in Section 5.4(A)(1) above.
To the extent the Participant’s Account is deemed to be invested in Treasury
instruments, it will be credited as of each Valuation Date with hypothetical earnings,
as computed and determined by the Administrator using a rate of interest equal to three
hundred (300) basis points over the Ten-Year Constant Treasury Maturity Yield as
provided in Section 5.4(A)(2) above. The Administrator will provide each Participant
annually with a statement showing the balance credited to the Participant’s Account as
of the last day of the preceding Election Year.

	5.5	 	Bookkeeping Account Only. A Participant’s Account is solely for the purpose of
measuring the amounts to be paid under this Plan. The Ferro Group Companies will not fund or
secure, and will not be permitted to fund or secure, the Account in any way, and the Ferro
Group Companies’ obligation to the Participants under this Plan is solely contractual.

	5.6	 	Escrow Upon a Change in Control. Notwithstanding any provision of this Plan to the
contrary, within five days after the occurrence of a Potential Change in Control, the Ferro
Group Companies will establish an irrevocable escrow account at a financial institution
satisfactory to Ferro and the Participants (or, in the case of death, the Participants’
Beneficiaries), determined by a majority vote of such Participants and Beneficiaries, to keep
on deposit in the escrow account an amount at least equal to the total balances of the
Accounts in the Plan determined as of the end of the calendar month immediately preceding the
occurrence of a Potential Change in Control, with such date being the Valuation Date for this
purpose. The amount required to be kept on deposit in the escrow account by the Ferro Group
Companies will be recalculated as of each Valuation Date. The escrow account will remain
subject to the claims of creditors of the Ferro Group Companies and will have the other
characteristics required to preserve the unfunded status of this Plan as provided under
Section 1.5. Subject to the later provisions of this Section, the escrow amount will be kept
on deposit at all times after the expiration of five days following the occurrence of a
Potential Change in Control, or a Change in Control, whichever occurs earlier.

If a Change in Control does not occur within twelve months after the occurrence of a
Potential Change in Control, Ferro may request the escrow agent to return to the Ferro Group
Companies the amounts in escrow. Otherwise, amounts deposited in the escrow account will be
paid out by the escrow agent only to:

	 	(A)	 	the Participant or Beneficiary, in such amounts as the Participant or
Beneficiary certify to the escrow agent as amounts that the Ferro Group Company is in
default in paying under the terms of this Plan or a related Deferred Compensation
Agreement; or

	 	(B)	 	the Ferro Group Companies, to the extent that the amount on deposit exceeds the
total balances of the Accounts in the Plan determined as of the end of the calendar
month immediately preceding the occurrence of a Potential Change in Control, reduced by
any payments made, and as specified in joint written instructions from the affected
Participants and Beneficiaries and Ferro to the escrow agent or in a final arbitral
award.

Ferro will have the right to instruct the escrow agent to invest all or any portion of the
escrow account in time deposits or certificates of deposit with, or repurchase or other
obligations of, any “bank” (as determined by Ferro), or obligations issued or guaranteed by
the United States or any of its agencies or instrumentalities, provided that no investment
will be for a period of more than ninety (90) days. The escrow agent will have no liability
for following the instructions of Ferro regarding any such investment, or for any loss in
the value of the escrow account as a consequence of any such investment or its liquidation.

The Ferro Group Companies may meet their obligation to keep amounts on deposit in the escrow
account through deposits of assets, one or more letters of credit deposited in escrow, any
combination of the foregoing. The Ferro Group Companies will have the right to substitute
one form of permitted deposit in the escrow account for another form of permitted deposit at
any time.

ARTICLE VI

TRUST

	6.1	 	Establishment of Trust. Notwithstanding any other provision or interpretation of
this Plan, Ferro may establish a Trust in which to hold cash, insurance policies or other
assets that may be used to make, or reimburse Ferro or any other Ferro Group Company for,
payments to the Participants or Beneficiaries of all or part of the benefits under this Plan.
Any Trust assets shall at all times remain subject to the claims of general creditors of Ferro
or any other Ferro Group Company in the event of the insolvency of Ferro or such other Ferro
Group Company as more fully described in the Trust.

	6.2	 	Obligation of the Ferro Group Companies. Notwithstanding the fact that a Trust may
be established under Section 6.1, the Ferro Group Companies shall remain liable for paying the
benefits under this Plan. However, any payment of benefits to a Participant or Beneficiary
made by a Trust will satisfy the appropriate Ferro Group Company’s obligation to make payment
to such person under this Plan.

	6.3	 	Trust Terms. A Trust established under Section 6.1 may contain any terms as Ferro
may determine to be necessary or desirable. Ferro may terminate or amend a Trust established
under Section 6.1 at any time, and in any manner it deems necessary or desirable, subject to
the terms of any agreement under which any Trust is established or maintained.

ARTICLE VII

ADMINISTRATION AND CLAIMS PROCEDURE

	7.1	 	Administrator. The Administrator will be Ferro, acting by and through Ferro’s
Corporate Human Resources Department, unless the Board of Directors, acting itself or through
an appropriate committee, designates otherwise.

	7.2	 	General Rights, Powers, and Duties of Administrator. The Administrator will be the
Plan administrator under ERISA. The Administrator will be responsible for the general
administration of this Plan and will have all powers as may be necessary to carry out the
provisions of this Plan and may, from time to time, establish rules for the administration of
this Plan and the transaction of this Plan’s business. In addition to any powers, rights and
duties set forth elsewhere in this Plan, it will have the following powers and duties:

	 	(A)	 	To enact rules, regulations, and procedures and to prescribe the use of such
forms as it deems advisable;

	 	(B)	 	To appoint or employ agents, attorneys, actuaries, accountants, assistants or
other persons (who may also be Participants in this Plan or be employed by or represent
a Ferro Group Company) at the expense of the Ferro Group Companies, as it deems
necessary to keep its records or to assist it in taking any other action authorized or
required under this Plan;

	 	(C)	 	To interpret this Plan, and to resolve ambiguities, inconsistencies and
omissions, to determine any question of fact, to determine the right to benefits of,
and the amount of benefits, if any, payable to, any person in accordance with the
provisions of this Plan and resolve all questions arising under this Plan;

	 	(D)	 	To administer this Plan in accordance with its terms and any rules and
regulations it establishes;

	 	(E)	 	To maintain records concerning this Plan as it deems sufficient to prepare
reports, returns and other information required by this Plan or by law; and

	 	(F)	 	To direct a Ferro Group Company to pay benefits under this Plan, and to give
other directions and instructions as may be necessary for the proper administration of
this Plan.

Any decision, interpretation or other action made or taken by the Administrator arising out
of or in connection with this Plan, will be within the absolute discretion of the
Administrator, and will be final, binding and conclusive on Ferro, all other Ferro Group
Companies, and all Participants and Beneficiaries and their respective heirs, executors,
administrators, successors and assigns. The Administrator’s determinations under this Plan
need not be uniform, and may be made selectively among Participants, whether or not they are
similarly situated.

	7.3	 	Information to Be Furnished to the Administrator. A Ferro Group Company will furnish
the Administrator with such data and information as it may reasonably require. The records of
a Ferro Group Company will be determinative of each Participant’s period of employment,
termination of employment, personal data, and data regarding Base Annual Salary, Bonus and
Performance Share Award, and all deferrals under this Plan. Participants and their
Beneficiaries will furnish to the Administrator such evidence, data or information and execute
such documents as the Administrator requests.

	7.4	 	Claim for Benefits. A Participant or Beneficiary will make all claims for payment
under his Plan in writing to the Administrator in the manner prescribed by the Administrator.
The Administrator will process each claim and determine entitlement to benefits within 90 days
after the Administrator receives a completed application for benefits. If the Administrator
needs an extension of time for processing, then the Administrator will notify the claimant
before the end of the initial 90-day period. The extension notice will indicate the special
circumstances requiring an extension of time and the date as of which the Administrator
expects to render the final decision. In no event will such an extension exceed 90 days from
the end of the initial period.

	7.5	 	Denial of Benefit. If a claim is wholly or partially denied by the Administrator,
then the Administrator will notify the claimant of the denial of the claim in a writing
delivered in person or mailed by first class mail to the claimant’s last known address. The
notice of denial will contain:

	 	(A)	 	the specific reason or reasons for denial of the claim;

	 	(B)	 	a reference to the relevant Plan provisions upon which the denial is based;

	 	(C)	 	a description of any additional material or information necessary for the
claimant to perfect the claim, together with an explanation of why the material or
information is necessary; and

	 	(D)	 	an explanation of this Plan’s claim review procedure.

If no notice is provided, the claim will be deemed denied. The interpretations,
determinations and decisions of the Administrator will be final and binding upon all persons
with respect to any right, benefit and privilege hereunder, subject to the review procedures
set forth in this Article.

	7.6	 	Request for Review of a Denial of a Claim for Benefits. Any claimant or any
authorized representative of the claimant whose claim for benefits under this Plan has been
denied or deemed denied, in whole or in part, may upon written notice to the Appeals Committee
request a review by the Appeals Committee of the denial of the claim. The claimant will have
60 days from the date the claim is deemed denied or 60 days from receipt of the notice denying
the claim, as the case may be, in which to request a review by written application delivered
to the Appeals Committee, which must specify the relief requested and the reason such claimant
believes the denial should be reversed.

	7.7	 	Appeals Procedure. The Appeals Committee will review the facts and relevant
documents including this Plan, and interpret the facts and relevant documents including this
Plan to render a decision on the claim. The review may be of written briefs submitted by the
claimant, or at a hearing, or by both, as deemed necessary or appropriate by the Appeals
Committee. Any hearing will be held in the main office of Ferro, or such other location as
the Appeals Committee may select, on the date and at the time as the Appeals Committee
designates by giving at least 15-days’ notice to the claimant, unless the claimant accepts
shorter notice. The notice will specify that the claimant must indicate in writing, at least
five days in advance of the hearing, the claimant’s intention to appear at the appointed time
and place, or the hearing will be automatically cancelled. The reply will specify any other
persons who will accompany the claimant to the hearing, or such other persons will not be
admitted to the hearing. The Appeals Committee will make every effort to schedule the hearing
on a day and at a time that is convenient to both the claimant and the Appeals Committee. The
claimant, or his duly authorized representative, may review all pertinent documents relating
to the claim in preparation for the hearing and may submit issues and comments in writing
before or during the hearing.

	7.8	 	Decision Upon Review of Denial of Claim for Benefits. In making its decision, the
Appeals Committee will have full power and discretion to interpret this Plan, to resolve
ambiguities, inconsistencies and omissions, to determine any question of fact, and to
determine the right to benefits of, and the amount of benefits, if any, payable to, any person
in accordance with the provisions of this Plan. The Appeals Committee will render a decision
on the claim reviewed no more than 60 days after the receipt of the claimant’s request for
review, unless special circumstances (such as the need to hold a hearing) require an extension
of time, in which case the 60-day period may be extended up to 120 days. The Appeals
Committee will provide written notice of its decision to the claimant within the time frame
specified. The notice will include the specific reasons for the decision and contain specific
references to the relevant Plan provisions upon which the decision is based. If notice of the
decision is not provided within the time frame specified, the claim will be deemed denied on
review. The decision of the Appeals Committee will be final and binding in all respects on
the Administrator, the Ferro Group Company and claimant involved.

	7.9	 	Establishment of Appeals Committee. The Chief Executive Officer of Ferro will
appoint three or more persons to serve as members of the Appeals Committee. The Chief
Executive Officer may appoint one Appeals Committee to hear all appeals of denied benefits
that arise under this Plan, or may appoint a new Appeals Committee each time an Appeals
Committee is needed to hear an appeal of denied benefits that arises under this Plan. The
members of the Appeals Committee will remain in office at the will of the Chief Executive
Officer, and the Chief Executive Officer may remove any of the members with or without cause.
A member of the Appeals Committee may resign upon written notice to the remaining member or
members of the Appeals Committee and to the Chief Executive Officer, respectively. The fact
that a person is a Participant or a former Participant or a prospective Participant will not
disqualify that person from acting as a member of the Appeals Committee. No member of the
Appeals Committee will be disqualified from acting on any question because of the member’s
interest in the question, except that no member of the Appeals Committee may act on any claim
which the member has brought as a Participant, former Participant, or Beneficiary under this
Plan. In case of the death, resignation or removal of any member of the Appeals Committee,
the remaining members will act until a successor-member is appointed by the Chief Executive
Officer. At the Administrator’s request, the Chief Executive Officer will notify the
Administrator in writing of the names of the members of the Appeals Committee, of any and all
changes in the membership of the Appeals Committee, of the member designated as Chairman, and
the member designated as Secretary, and of any changes in either office. Until notified of a
change, the Administrator will be protected in assuming that there has been no change in the
membership of the Appeals Committee or the designation of Chairman or of Secretary since the
last notification was filed with it. The Administrator will be under no obligation at any
time to inquire into the membership of the Appeals Committee or its officers. All
communications to the Appeals Committee will be addressed to its Secretary at the address of
the Company.

	7.10	 	Operation of the Appeals Committee. On all matters and questions, the decision of a
majority of the members of the Appeals Committee will govern and control. A meeting need not
be called or held to make any decision. The Appeals Committee will appoint one of its members
to act as its Chairman and another member to act as Secretary. The terms of office of these
members will be determined by the Appeals Committee, and the Secretary and/or Chairman may be
removed by the other members of the Appeals Committee for any reason which such other members
may deem just and proper. The Secretary will do all things directed by the Appeals Committee.
Although the Appeals Committee will act by decision of a majority of its members as provided
above, in the absence of written notice to the contrary, every person may deal with the
Secretary and consider the Secretary’s acts as having been authorized by the Appeals
Committee. Any notice served or demand made on the Secretary will be deemed to have been
served or made upon the Appeals Committee.

	7.11	 	Limitation of Duties. Ferro, the other Ferro Group Companies, the Administrator, the
Appeals Committee, and their respective officers, members, employees and agents will have no
duty or responsibility under this Plan other than the duties and responsibilities expressly
assigned or delegated to them pursuant to this Plan. None of them will have any duty or
responsibility with respect to those duties or responsibilities assigned or delegated to
another.

	7.12	 	Agents. The Administrator and the Appeals Committee may hire any attorneys,
accountants, actuaries, agents, clerks, and secretaries as it may deem desirable in the
performance of its duties, any of whom may also be advisors to any Ferro Group Company or any
subsidiary or affiliated company.

	7.13	 	Expenses of Administration. No fee or compensation will be paid to the Administrator
or any member of the Appeals Committee for their performance of services as such. Ferro will
bear all other expenses incurred in the administration of this Plan except to the extent Ferro
determines that the expenses are allocable to, and should be paid by, one or more of the Ferro
Group Companies.

	7.14	 	Indemnification. In addition to whatever rights of indemnification any member or
employee of the Administrator, the Appeals Committee, Ferro or other Ferro Group Company under
this Plan may be entitled to under the articles of incorporation, regulations or bylaws of the
Ferro Group Companies, under any provision of law or under any other agreement, the Ferro
Group Companies will satisfy any liability actually incurred by any member or employee
including reasonable expenses and attorneys’ fees, and any judgments, fines, and amounts paid
in settlement, in connection with any threatened, pending or completed action, suit or
proceeding which is related to the exercise or failure to exercise by any member or employee
any powers, authority, responsibilities or discretion provided under this Plan or reasonably
believed by a member or employee to be provided under this Plan, and any action taken by a
member or employee in connection with such exercise or failure to exercise. This
indemnification for all such acts taken or omitted is intentionally broad, but will not
provide indemnification for embezzlement or diversion of Plan funds for the benefit of any
member or employee. This indemnification will not be provided for any claim by a Ferro Group
Company or a subsidiary or affiliated company thereof against any member or employee. No
indemnification will be provided to any person who is not an individual.

	7.15	 	Limitation of Administrative Liability. Neither Ferro, any Ferro Group Company, the
Administrator, the Appeals Committee, nor any of their members or employees will be liable for
any act taken by such person or entity pursuant to any provision of this Plan except for gross
abuse of the discretion given them under this Plan. No member of the Administrator or Appeals
Committee will be liable for the act of any other member. No member of the Board of Directors
will be liable to any person for any action taken or omitted in connection with the
administration of this Plan.

	7.16	 	Limitation of Sponsor Liability. Any right or authority exercisable by Ferro or
Board of Directors pursuant to any provision of this Plan will be exercised in Ferro’s
capacity as sponsor of this Plan, or on behalf of Ferro in such capacity, and not in a
fiduciary capacity, and may be exercised without the approval or consent of any person in a
fiduciary capacity. Neither Ferro, nor the Board of Directors, nor any of their respective
officers, members, employees, agents and delegates, will have any liability to any party for
its exercise of any such right or authority.

ARTICLE VIII

AMENDMENT AND TERMINATION

	8.1	 	Amendment, Modification and Termination. Subject to Section 8.4 below, this Plan may
be amended, modified or terminated by Ferro at any time, or from time to time, by action of an
appropriate Ferro officer authorized or ratified by the Board of Directors. No amendment,
modification or termination will be effective if it:

	 	(A)	 	causes this Plan to be for a purpose other than the exclusive benefit of the
Participants, or

	 	(B)	 	reduces the amounts credited to any Participant’s Account or adversely affects
the right of any Participant or Beneficiary to receive payment of the Account as
provided under this Plan, determined as of the date of the amendment.

The prior provisions notwithstanding, this Plan may be amended to:

	 	(1)	 	reduce or eliminate the ability for Participants to defer
future Elective Amounts under this Plan;

	 	(2)	 	reduce or eliminate the future deemed interest or earnings
credited to the amounts held in a Participant’s Account;

	 	(3)	 	comply with any law; or

	 	(4)	 	preserve the intended deferral of taxation for the benefit of
all Participants Accounts.

	8.2	 	Effect of Amendment on Distributions. If this Plan is amended to prohibit future
Elective Amounts, then the amounts credited to Participants’ Accounts will be distributed as
provided in Article IV above. If this Plan is terminated, then the Participants will receive
distribution of the amounts credited to their Accounts:

	 	(A)	 	in a single lump sum cash payment with respect to the portion of the Account
deemed to be invested in Treasury instruments, and

	 	(B)	 	in a single lump sum distribution of shares of Ferro Common Stock with respect
to the portion of the Account deemed to be invested in Ferro Common Stock.

If this Plan is terminated, then the amounts credited to the Participant’s Accounts will be
determined as of the Valuation Date on or immediately preceding the date of Plan
termination.

	8.3	 	Actions Binding on Ferro Group Companies. Any amendments made to this Plan will be
binding on all the Ferro Group Companies without the approval or consent of the Ferro Group
Companies other than Ferro. Ferro may, by amendment, also terminate this Plan on behalf of
all or any one of the other Ferro Group Companies in its sole discretion.

	8.4	 	Termination or Amendment After Change in Control. If a Change in Control occurs,
then, for a period of two (2) calendar years following such Change in Control, Ferro may not
amend or terminate this Plan without the prior written consent of all Participants.

ARTICLE IX

FERRO GROUP COMPANIES

	9.1	 	List of Ferro Group Companies. The Ferro Group Companies as of the Amendment and
Restatement Date are Ferro and the subsidiaries and affiliates of Ferro listed on Appendix B
to this Plan. Ferro may from time to time add or remove Ferro subsidiaries and affiliates
from the list of Ferro Group Companies by written action of its Chief Executive Officer. The
addition or deletion will not require a formal amendment to this Plan.

	9.2	 	Delegation of Authority. Ferro is fully empowered to act on behalf of itself and the
other Ferro Group Companies as it may deem appropriate in maintaining this Plan and any Trust.
The adoption by Ferro of any amendment to this Plan or any Trust, or the termination of this
Plan or any Trust, will constitute and represent, without any further action on the part of
any Ferro Group Company, the approval, adoption, ratification or confirmation by each Ferro
Group Company of any amendment or termination. In addition, the appointment of or removal by
Ferro of any Administrator, any trustee or other person under this Plan or any Trust will
constitute and represent, without any further action on the part of any Ferro Group Company,
the appointment or removal by each Ferro Group Company of such person.

ARTICLE X

MISCELLANEOUS

	10.1	 	No Implied Rights. Neither the establishment of this Plan nor any amendment of this
Plan will be construed as giving any Participant, Beneficiary or any other person any legal or
equitable right unless the right is specifically provided for in this Plan or conferred by
specific action of Ferro in accordance with the terms and provisions of this Plan. Except as
expressly provided in this Plan, neither Ferro nor any other Ferro Group Company will be
required or be liable to make any payment under this Plan.

	10.2	 	No Right to Ferro Group Company Assets. Neither the Participant nor any other person
will acquire by reason of this Plan any right in or title to any assets, funds or property of
a Ferro Group Company whatsoever including, without limitation, any specific funds, assets or
other property which a Ferro Group Company, in its sole discretion, may set aside in
anticipation of a liability hereunder. Any benefits which become payable under this Plan will
be paid from the general assets of the appropriate Ferro Group Company. No assets of the
Ferro Group Companies will be held in any way as collateral security for the fulfilling of the
obligations of the Ferro Group Companies under this Plan. No assets of the Ferro Group
Companies will be pledged or otherwise restricted in order to meet the obligations of this
Plan. The Participant will have only a contractual right to the amounts, if any, payable
hereunder unsecured by any asset of a Ferro Group Company. Nothing contained in this Plan
constitutes a guarantee by a Ferro Group Company that the assets of a Ferro Group Company will
be sufficient to pay any benefit to any person.

	10.3	 	No Employment Rights Created. This Plan will not be deemed to constitute a contract
of employment between any of the Ferro Group Companies and any Participant, or to confer upon
any Participant or employee the right to be retained in the service of any Ferro Group Company
for any period of time, nor shall any provision of this Plan restrict the right of any Ferro
Group Company to discharge or otherwise deal with any Participant or other employees, with or
without cause. Nothing in this Plan will be construed as fixing or regulating the Base Annual
Salary, Bonus or Performance Share Award payable to any Participant or other employee of a
Ferro Group Company.

	10.4	 	Offset. If at the time payment is to be made under this Plan the Participant or the
Beneficiary or both are indebted or obligated to a Ferro Group Company, then the payment to be
made to the Participant or the Beneficiary or both may, at the discretion of the Administrator
at the request of the Ferro Group Company, be reduced by the amount of the indebtedness or
obligation, provided, however, that an election by the Ferro Group Company not to request a
reduction will not constitute a waiver of the Ferro Group Company’s claim for such
indebtedness or obligation.

	10.5	 	No Assignment. Neither the Participant nor any other person will have any voluntary
or involuntary right to commute, sell, assign, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey, in advance of actual receipt of the amount, if any,
payable under this Plan, or any part of the amount payable from this Plan, and any attempt to
do so will be void. All benefits or amounts credited to Accounts under this Plan are
expressly declared to be unassignable and non-transferable. No part of the benefits or
amounts credited to Accounts under this Plan will be, before actual payment, subject to
seizure or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by the Participant or any other person, or be transferable by operation of
law in the event of the Participant’s or any other person’s bankruptcy or insolvency.

	10.6	 	Notice. Any notice required or permitted to be given under this Plan will be
sufficient if in writing and hand delivered, or sent by registered or certified mail or by
overnight delivery service, and:

	 	(A)	 	if given to a Ferro Group Company, delivered to the principal office of Ferro,
directed to the attention of the General Counsel; or

	 	(B)	 	if given to a Participant or Beneficiary, delivered to the last post office
address as shown on the Ferro Group Company’s or the Administrator’s records.

Notice will be deemed given as of the date of delivery or, if delivery is made by mail, as
of the date shown on the postmark or the receipt for registration or certification.

	10.7	 	Governing Laws. This Plan will be construed and administered according to the
internal substantive laws of the State of Ohio to the extent not preempted by the laws of the
United States of America.

	10.8	 	Incapacity. If the Administrator determines that any Participant or Beneficiary
entitled to payment under this Plan is a minor, a person declared incompetent or a person
incapable of handling his or her property, the Administrator may direct any payment to the
guardian, legal representative or person having the care and custody of the minor, incompetent
or incapable person. The Administrator may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate before making any payment. The
Administrator will have no obligation thereafter to monitor or follow the application of
amounts so paid. Payments made pursuant to this Section will completely discharge this Plan,
any Trust, the Administrator, and the Ferro Group Companies with respect to the payments.

	10.9	 	Court Ordered Distributions. The Administrator is authorized to make any payments
directed by court order in any action in which this Plan or the Administrator is named as a
party. In addition, if a court determines that a spouse or former spouse or dependent or
former dependent of a Participant has an interest in the Participant’s Account under this Plan
in connection with a property settlement or otherwise, the Administrator, in its sole
discretion, will have the right, notwithstanding any election made by a Participant, to
immediately distribute the spouse’s or former spouse’s or dependent’s or former dependent’s
interest in the Participant’s Account under this Plan to that spouse or former spouse or
dependent or former dependent.

	10.10	 	Administrative Forms. All applications, elections and designations in connection
with this Plan made by a Participant or Beneficiary will become effective only when duly
executed on forms provided by the Administrator and filed with the Administrator.

	10.11	 	Independence of Plan. Except as otherwise expressly provided, this Plan will be
independent of, and in addition to, any other employee benefit agreement or plan or any rights
that may exist from time to time under any other agreement or plan.

	10.12	 	Responsibility for Legal Effect. Neither Ferro, any other Ferro Group Company, the
Administrator, nor any officer, member, delegate or agent of any of them, makes any
representations or warranties, express or implied, or assumes any responsibility concerning
the legal, tax, or other implications or effects of this Plan.

	10.13	 	Successors. The terms and conditions of this Plan will inure to the benefit of and
bind Ferro, the Ferro Group Companies, the Administrator and its members, the Participants,
their Beneficiaries, and the successors, assigns, and personal representatives of any of them.

	10.14	 	Headings and Titles. The Section headings and titles of Articles used in this Plan
are for convenience of reference only and are not to be considered in construing this Plan.

	10.15	 	Appendices. The Appendices to this Plan constitute an integral part of this Plan
and are hereby incorporated into this Plan by this reference.

	10.16	 	Severability. If any provision or term of this Plan, or any agreement or instrument
required by the Administrator, is determined by a judicial, quasi-judicial or administrative
body to be void or not enforceable for any reason, all other provisions or terms of this Plan
or the agreement or instrument will remain in full force and effect and will be enforceable as
if the void or nonenforceable provision or term had never been a part of this Plan, or the
agreement or instrument.

	10.17	 	Actions by Ferro. Except as otherwise provided in this Plan, all actions of Ferro
under this Plan will be taken by the Board of Directors, and be evidenced in a writing
executed by an appropriate officer duly authorized.

	10.18	 	Spousal Consent and Release. If, in the opinion of Ferro, any present, former or
future spouse of an employee entitled to benefits from this Plan shall by reason of law appear
to have any interest in the Plan benefits that may be or become payable hereunder to such
employee, Ferro may as a condition precedent to the making of a benefit payment hereunder,
require such written consent or release as in its discretion it shall determine to be
necessary, desirable or appropriate either to prevent or avoid any conflict or multiplicity of
claims, or to protect the rights of any such present, former or future spouse with respect to
the payment of any benefits under this Plan.

	10.19	 	Overpayments and Repayments. In the event that Ferro determines that the benefits
actually paid under this Plan exceed the benefits that were properly payable to a Participant
or Beneficiary pursuant to this Plan, Ferro may exercise any legal remedies available.

	10.20	 	References to Sections of Law. References herein to the Code are to the Internal
Revenue Code of 1986, as heretofore and hereafter amended, and to similar provision of
subsequent federal law. References herein to ERISA are to the Employee Retirement Income
Security Act of 1974, as heretofore and hereafter amended, and to similar provisions of
subsequent law.

5

Definitions

For purposes of this Plan, the following terms have the meanings set forth below where
used in this Plan and identified with initial capital letters:

	 	 	 
	Term	 	Meaning
	Account or Elective Account

	 	For each Participant the bookkeeping account maintained by the

Ferro Group Company to reflect the Participant’s Elective Amounts

for an Election Year and all earnings, gains and losses thereon. A

Participant’s Account shall not constitute or be treated as a trust

fund of any kind.
	Administrator

	 	As defined in Section 7.1 of this Plan.
	Amendment and

Restatement Date

	 	

June 30, 2004.
	Base Annual Salary

	 	For any Participant the gross base salary payable during an

Election Year by a Ferro Group Company, unreduced by any amounts

deferred under the Ferro Corporation Savings and Stock Ownership

Plan, this Plan, or any other plan maintained by the Ferro Group

Company. “Base Annual Salary” does not include bonuses,

commissions, incentive compensation, any extraordinary compensation

of a recurring or nonrecurring nature, compensation paid in a form

other than cash, or contributions, accruals, or benefits under the

Ferro Corporation Savings and Stock Ownership Plan, this Plan, or

any other plan maintained by the Ferro Group Company (other than

amounts elected to be deferred by the Participant).
	Beneficial Owner

	 	“Beneficial owner” within the meaning of Rule 13d-3 under the

Exchange Act.
	Beneficiary

	 	As defined in 4.9 of this Plan.
	Board of Directors

	 	Ferro’s Board of Directors.
	Bonus

	 	The gross monies awarded and payable to a Participant during an

Election Year under the Ferro Annual Incentive Compensation Plan,

as it may be amended from time to time, unreduced by any amounts

deferred under the Ferro SSOP, this Plan, or any other plan

maintained by the Ferro Group Company.
	Change in Control

	 	A change in the control of Ferro that is required to be reported in

response to Item 6(e) of Schedule 14A of Regulation 14A promulgated

under the Exchange Act. For purposes of this definition, a Change

in Control will be deemed to have occurred if and when:
	
 
	 	(a) any “person” (as such term is used in Sections 13(d)(3) and

14(d)(2) of the Exchange Act) is or becomes the beneficial owner,

directly or indirectly, of securities of Ferro representing

twenty-five percent (25%) or more of the combined voting power of

Ferro’s outstanding voting securities; or
	
 
	 	(b) during any period of two consecutive years, the individuals set

forth below in sub-paragraph (1) and (2) cease for any reason to

constitute at least a majority of the Board of Directors:
	
 
	 	(1) the individuals who at the beginning of such period constituted

the Board of Directors, and
	
 
	 	(2) any new director (other than a director designated by a person

who has entered into an agreement or arrangement with Ferro to

effect a transaction described in clause (a) or (c) of this

definition) whose appointment, election, or nomination for election

by Ferro’s shareholders, was approved by a vote of at least

two-thirds of the directors then still in office who either were

directors at the beginning of the period or whose appointment,

election or nomination for election was previously so approved; or
	
 
	 	(c) a merger or consolidation of Ferro or one of its subsidiaries

is consummated with or into any other corporation, other than a

merger or consolidation which would result in the holders of the

voting securities of Ferro outstanding immediately prior thereto

holding securities which represent immediately after such merger or

consolidation more than 50% of the combined voting power of the

voting securities of either Ferro or the other entity which

survives such merger or consolidation or the parent of the entity

which survives such merger or consolidation; or
	
 
	 	(d) a sale or disposition by Ferro of all or substantially all

Ferro’s assets is consummated.
	Code

	 	The Internal Revenue Code of 1986, as amended, and any lawful

regulations or other pronouncements promulgated under that Code.
	Deferred Compensation

Agreement

	 	An agreement executed between a Participant and the Ferro Group

Company whereby a Participant agrees to defer a portion of the

Participant’s Base Annual Salary, Bonus or Performance Share Award

as provided under this Plan, and the Ferro Group Company agrees to

make benefit payments in accordance with the provisions of this

Plan.
	Dependent

	 	Any of the following persons who receives over half of their

financial support from the Participant: a spouse, a son or

daughter (or the descendent of either); a stepson or stepdaughter;

a brother, sister, stepbrother or stepsister; a father or mother

(or ancestor of either); a stepfather or stepmother; a nephew or

niece; an uncle or aunt; a son-in-law, daughter-in-law,

father-in-law, mother-in-law, brother-in-law or sister-in-law; or

any other person whose principal place of residence is the

Participant’s home and who is a member of the household.
	Disability

	 	Any disability that qualifies a Participant for payment of benefits

under a Ferro Group Company long-term disability plan. The

determination of whether a Participant suffers a Disability will be

made by the Ferro Group Company long-term disability plan.
	Election Year

	 	A calendar year in respect of which a Participant makes an election

under this Plan.
	Elective Amount

	 	An amount equal to the amount by which a Participant’s Base Annual

Salary, Bonus or Performance Share Award are reduced pursuant to

Section 3.4 of this Plan in respect of a given Election Year.
	Eligible Employee

	 	An Executive Employee of a Ferro Group Company who has satisfied

the eligibility requirement of Section 3.1 of this Plan.
	Entry Date

	 	With respect to a given Election Year, January 1 of such Election

Year or, with respect to an employee who first becomes an Eligible

Employee after January 1 of that Election Year, the first day of

the month on or after the date the Eligible Employee completes a

Deferred Compensation Agreement pursuant to Section 3.2 of this

Plan.
	ERISA

	 	The Employee Retirement Income Security Act of 1974, as amended,

and any lawful regulations or pronouncements issued under that Act.
	Exchange Act

	 	The Securities Exchange Act of 1934, as amended, and any lawful

regulations or pronouncements issued under that Act.
	Executive Employee

	 	A management employee of a Ferro Group Company who is in Grade 22

or higher in the Executive Payroll Group and who is eligible to

participate in the Ferro Annual Incentive Compensation Plan.
	Ferro

	 	As defined in Section 1.2 of this Plan. Such term also includes

any successor corporation or business organization that

subsequently assumes Ferro’s duties and obligations under this

Plan.
	Ferro Common Stock

	 	The Common Stock of Ferro, par value $1.00, per share.
	Ferro Group Companies

	 	As defined in Section 9.1 of this Plan.
	Ferro SSOP

	 	Ferro’s Savings and Stock Ownership Plan.
	Financial Hardship

	 	A severe financial hardship and unexpected need for cash resulting

from:
	
 
	 	(a) a sudden and unexpected illness or accident of the Participant

or a Dependent of the Participant,
	
 
	 	(b) loss of the Participant’s property due to casualty, or
	
 
	 	(c) such other similar extraordinary and unforeseeable

circumstances or emergencies arising as a result of events beyond

the control of the Participant, as determined in the sole

discretion of the Administrator.
	Long-Term Incentive

Compensation Plan

	 	Ferro’s 2003 Long-Term Incentive Compensation Plan, as the same may

be amended from time to time.
	Participant

	 	An Executive Employee of a Ferro Group Company who is designated to

be an Eligible Employee pursuant to Section 3.2 of this Plan, who

enters into a Deferred Compensation Agreement, and who has

commenced Base Annual Salary, Bonus or Performance Share Award

reductions pursuant to that Deferred Compensation Agreement. A

Participant will cease to be a Participant, and shall become a

former Participant, upon the earliest of the following:
	
 
	 	(a) Termination of Employment,
	
 
	 	(b) the date the employee ceases to be an Eligible Employee, or
	
 
	 	(c) the date the employee’s participation in this Plan is

terminated by the Administrator pursuant to Section 4.10 of this

Plan or otherwise.
	Performance Share Award

	 	The gross monies awarded and payable to a Participant during an

Election Year in respect of Performance Shares awarded under the

Long-Term Incentive Compensation Plan or the prior Performance

Share Plan, unreduced by any amounts deferred under the Ferro SSOP,

this Plan, or any other plan maintained by the Ferro Group Company.
	Performance Share Plan

	 	Ferro’s 1997 Performance Share Plan, as amended.
	Person

	 	A “person” as defined under Section 3(a)(9) of the Exchange Act as

modified and used in Sections 13(d) and 14(d) of the Exchange Act,

excluding:
	
 
	 	(a) Ferro or any of its subsidiaries;
	
 
	 	(b) a trustee or other fiduciary holding securities under an

employee benefit plan of the Company (or of any of its affiliates

as defined under Rule 12b-2 under Section 12 of the Exchange Act);
	
 
	 	(c) an underwriter temporarily holding securities pursuant to an

offering of such securities; or
	
 
	 	(d) a corporation owned, directly or indirectly, by the

shareholders of Ferro in substantially the same proportion as their

ownership of the stock of Ferro.
	this Plan

	 	As defined in the Introduction to this Plan.
	Potential Change in Control

	 	The occurrence of any of the following events:
	
 
	 	(a) Ferro enters into an agreement which, if consummated, would

result in a Change in Control;

(b) Ferro or any Person publicly announces an intention to take, or

to consider taking, actions which, if consummated, would constitute

a Change in Control;

(c) any Person becomes the Beneficial Owner, directly or

indirectly, of securities of Ferro representing 20% or more of the

then outstanding shares of Ferro Common Stock or the combined

voting power of Ferro’s then outstanding securities;

(d) any Person commences a solicitation (as defined under Rule

14a-1 of the Exchange Act) of proxies or consents which has the

purpose of effecting or would, if successful, result in a Change in

Control;

(e) a tender or exchange offer for voting securities of Ferro, made

by a Person, is first published or sent or given (within the

meaning of Rule 14d-2(a) of the Exchange Act); or

(f) the Board of Directors adopts a resolution that a

Potential Change in Control has occurred.
	Retirement Date

	 	The date a Participant first becomes eligible for an early

retirement benefit or a normal retirement benefit as defined under

the Ferro Corporation Retirement Plan. Alternatively, in the case

of a Participant who is not covered under the Ferro Corporation

Retirement Plan, “Retirement Date” means the date a Participant

would first become eligible for an early retirement benefit or a

normal retirement benefit if the Participant were covered under the

Ferro Corporation Retirement Plan.
	Termination of Employment

	 	A Participant’s cessation of service with Ferro and the other Ferro

Group Companies, including subsidiaries and affiliates of the

foregoing, for any reason whatsoever, whether voluntarily or

involuntarily, including by reason of retirement, death, or

Disability.
	Trust

	 	The trust, if any, established pursuant to Section 7.1 of this Plan.
	Valuation Date

	 	The last day of each quarter in the Election Year and any other

date or dates Ferro, in its sole discretion, designates from time

to time.

6

Ferro Group Companies

The following are the Ferro Group Companies:

Ferro Corporation

FEM Inc.

Ferro Glass & Color Corporation

Ferro International Services, Inc.

7

Ferro Pfanstiehl Laboratories, Inc.

Ferro Corporation

Deferred Compensation Plan

For Executive Employees

Part B: 2005 Plan 

Overview

Establishment of 2005 Plan 

The provisions of the 2005 Plan are set forth in this Part B (the “2005 Plan”), which is
adopted and made a part of the Plan generally effective January 1, 2005.

Governs benefits Subject to Code Section 409A

The 2005 Plan governs all amounts under the Plan which are not pre-2005 benefits (the “409A
Benefits”). Generally, this means that the 2005 Plan governs amounts earned and/or vested as of
December 31, 2004, plus any earnings with respect to such amounts.

The 409A Benefits are subject to the requirements of Code Section 409A, and Ferro intends for
the 2005 Plan to comply with Code Section 409A. The 2005 Plan shall be interpreted and
administered so as to comply with Code Section 409A.

Terminology

As used in the 2005 Plan, the term “Plan” refers to the 2005 Plan or to the Plan, as
appropriate.

8

	 
	Ferro Corporation

Deferred Compensation Plan

for Executive Employees

Part B: 2005 Plan

Effective January 1, 2005

9

Ferro Corporation

Deferred Compensation Plan

for Executive Employees

2005 Plan 

Introduction

This 2005 Plan is the portion of the Ferro Corporation Deferred Compensation Plan for
Executive Employees which governs 409A Benefits. The purpose for the adoption of this 2005
Plan is to comply with the requirements of Code Section 409A.

The 2005 Plan is hereby added to the Plan generally effective January 1, 2005, as follows:

ARTICLE I

NAME AND PURPOSE

	1.1	 	Name. The name of this Plan is the “Ferro Corporation Deferred Compensation Plan for
Executive Employees.”

	1.2	 	Plan Sponsor. The sponsor of this Plan is Ferro Corporation (“Ferro”), an Ohio
corporation.

	1.3	 	Purpose. The purpose of this Plan is to provide unfunded deferred compensation to
certain management and highly compensated employees of the Ferro Group Companies under the
conditions set forth in this Plan.

	1.4	 	Plan for a Select Group. This Plan covers only employees of a Ferro Group Company
who are members of a “select group of management or highly compensated employees” as provided
in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA. Notwithstanding any
provision of this Plan to the contrary, this Plan will be administered and its benefits
limited in a manner to comply with the above cited sections of ERISA.

	1.5	 	Not a Funded Plan. Ferro intends that this Plan be deemed to be “unfunded” for tax
purposes as well as for purposes of Title I of ERISA.

	1.6	 	409A Compliance. It is the intention and purpose of Ferro and the Participants that
this Plan shall be deemed to be at all relevant times in compliance with Section 409A of the
Code and all other applicable laws in order to have the Federal income tax effect sought for
such plans, and this Plan shall be so interpreted and is intended to be so administered.

ARTICLE II

DEFINITIONS AND INTERPRETATION

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

	2.2	 	General Rules of Construction. For purposes of interpreting this Plan,

	 	(A)	 	the masculine gender will include the feminine and neuter, and vice versa, as
the context requires;

	 	(B)	 	the singular number will include the plural, and vice versa, as the context
requires;

	 	(C)	 	the present tense of a verb will include the past and future tenses, and vice
versa, as the context requires; and

	 	(D)	 	as provided under Article VII, the Administrator will retain the power and duty
to interpret this Plan and resolve ambiguities.

ARTICLE III

PARTICIPATION; DEFERRALS AND ACCOUNTS

	3.1	 	Eligibility. In order to be eligible to participate in this Plan, an individual must
–

	 	(A)	 	be an Executive Employee of a Ferro Group Company, and

	 	(B)	 	be selected by the Administrator to participate in this Plan for all or part of
an Election Year.

	3.2	 	Participation. Generally, an Eligible Employee may become a Participant and actively
participate for an Election Year only by completing and filing a Deferred Compensation
Agreement described in Section 3.3 below with his or her Ferro Group Company before January 1
of an Election Year.

	3.3	 	Deferral Elections. With respect to each Election Year, each Eligible Employee may
elect, under his or her Deferred Compensation Agreement for such Election Year, to make one or
more of the deferrals described below.

	 	(A)	 	Salary Deferral: Deferral of any whole percentage of up to 75% of his
or her Base Annual Salary for the Election Year which is payable each payroll period
commencing on or after the Eligible Employee’s Entry Date.

	 	(B)	 	Bonus Deferral: Deferral of any whole percentage up to 100% of the
Bonus which is earned on or after his or her Entry Date in the Election Year.

	 	(C)	 	Performance Share Award: Deferral of any whole percentage up to 100%
of payments with respect to Performance Shares which are earned for a performance
period commencing on or after the Eligible Employee’s Entry Date in the Election Year.

	3.4	 	Salary Reductions and Deferral Amounts.

	 	(A)	 	A Participant’s election to defer pursuant to 3.3(A) above will cause an
equivalent reduction in the Participant’s Base Annual Salary at the time the Base
Annual Salary would otherwise be payable.

	 	(B)	 	A Participant’s election to defer pursuant to 3.3(B) above will cause an
equivalent reduction in the Participant’s Bonus at the time the Bonus would otherwise
be payable.

	 	(C)	 	A Participant’s election to defer in accordance with 3.3(C) above will cause an
equivalent reduction in the payment in respect of the Participant’s Performance Shares
at the time the Performance Share Award would otherwise be payable.

An amount equal to the reductions in a Participant’s Base Annual Salary, Bonus and
Performance Share Award pursuant to 3.4(A), 3.4(B) and 3.4(C) above will constitute an
Elective Amount and will be credited to the Participant’s Elective Account at the time of
the reductions.

	3.5	 	Alteration of Deferrals. A Participant’s deferral election made pursuant to Section
3.3 will be irrevocable except as provided in this Section. In the event a Participant
receives a hardship distribution from a qualified cash or deferred arrangement maintained by
Ferro or its Affiliates under Code Section 401(k), and the distribution is made under the
“deemed necessary to satisfy immediate and heavy financial need” standards set forth under
Treasury Regulation Section 1.401(k)-1(d)(3)(iv)(E), the Participant’s deferral election made
pursuant to Section 3.3 shall be cancelled as of the date the hardship distribution is
received. Provided that the employee remains an Eligible Employee under the Plan, the
Eligible Employee may again become a Participant beginning with the Election Year that
commences immediately after the six-month anniversary of the date of the hardship distribution
(or any subsequent Election Year) if a timely Deferred Compensation Agreement is completed and
filed prior to the January 1 of such Election Year pursuant to Section 3.2.

	3.6	 	Establishment of Accounts. Each Ferro Group Company will establish an Account in the
name of each Participant who is employed by it on the books and records of the Ferro Group
Company. All amounts credited to the Account of any Participant or former Participant will
constitute a general, unsecured liability of such Ferro Group Company to the Participant.

	3.7	 	Allocation of Elective Amounts. At the time a Participant’s Base Annual Salary,
Bonus or Performance Share Award are reduced pursuant to Section 3.4, the Ferro Group Company
employing the Participant will credit the Participant’s Account with the Participant’s
Elective Amount with respect to such Base Annual Salary, Bonus or Performance Share Award.

	3.8	 	Separate Accounting for Certain Elective Amounts. The Ferro Group Company will
maintain separate Accounts for the Elective Amounts deferred by the Participant (i) before
1999; (ii) after 1998 and before 2005; and (iii) after 2004, to enable the Participant to
elect for the deemed investment of the Elective Amounts as provided under Section 5.4 below.

	3.9	 	Crediting of Earnings. The Ferro Group Company will credit the Account of each
Participant who is or was its employee with earnings, gains and losses in accordance with the
deemed investment of the Elective Amounts elected by the Participant under Section 5.4 below.

ARTICLE IV

BENEFITS; PAYMENT OF BENEFITS

	4.1	 	Date of Distribution. In general, distribution of the amounts credited to the
Participant’s Account under this Part B will be made or begin on the earlier of:

	 	(A)	 	the date elected by the Participant in his or her Deferred Compensation
Agreement; or

	 	(B)	 	the date which is six (6) months following the Participant’s Termination of
Employment and in any event the Time Required By Law.

Notwithstanding the foregoing, in the event of the Participant’s death (either as the cause
for the Termination of Employment or following Termination of Employment), or Total and
Permanent Disability, distribution shall be made on the date of death or Total and Permanent
Disability and in any event by the Time Required By Law.

	4.2	 	Distribution on Change in Control. If the Participant has elected in his or her
Deferred Compensation Agreement to receive a distribution of the amounts credited to his or
her Account if a Change in Control occurs, then if a Change in Control occurs, the Ferro Group
Company will distribute to the Participant (or, in the event of the Participant’s death, the
Participant’s Beneficiary) a lump sum payment of the amount credited to the Participant’s
Account within thirty (30) days after the Change in Control. The amount credited to the
Participant’s Account will be determined as of the end of the calendar month immediately
preceding the month in which the Change in Control occurs, with such date being the Valuation
Date for purposes of the distribution. The lump sum payment will be made in the form of cash.

	4.3	 	Distribution upon Unforeseeable Emergency. At any time before payment in full of the
amounts credited to a Participant’s Account, a Participant may submit a written request to the
Administrator for the distribution of all or a portion of the Participant’s Account because of
an Unforeseeable Emergency. In response, the Administrator has the authority to determine, in
its sole discretion, that distribution should be made in any manner the Administrator deems
appropriate, in whole or in part, on any other date or dates in order to alleviate the
emergency need of such Participant, provided, however, that the Administrator shall not
authorize distribution of any amount in excess the amount reasonably necessary to satisfy the
emergency need (which amount may include amounts necessary to pay Federal, state or local
income taxes or penalties reasonably anticipated as a result of the distribution).

	4.4	 	Form and Method of Distribution. Except as provided in Sections 4.2 and 4.3, payment
will be made of the Participant’s Account under this Part B as follows.

	 	(A)	 	Form of Distribution. A Participant’s Account shall be paid in a
single lump sum payment. However, the Administrator, in its sole discretion, pursuant
to uniform and nondiscriminatory procedures, may allow a Participant to elect in his or
her annual Deferred Compensation Agreement, to have his Elective Amount for such
Election Year be distributed in the form of installment payments providing for the
payment in substantially equal annual installments over a period of five (5) years.
Such an election shall be made in a writing filed with the Administrator at the time of
the Deferred Compensation Agreement. In the event no election is made at the time the
Participant’s Deferred Compensation Agreement is filed, a Participant shall be deemed
to have elected at that time a single lump sum payment. A Participant may have in
effect, for each Election Year, one election regarding the form of payment of the
amounts deferred with respect to such Election Year.

	 	(B)	 	Method of Distribution. The Participant’s Account under this Part B
will be distributed in the form of cash.

	4.5	 	Valuation of Distributions. All distributions under this Part B will be based upon
the Amount credited to the Participant’s Account as of the last day of the month in which
occurs the Participant’s Termination of Employment, death or commencement of long-term
disability benefits on account of a determination of Total and Permanent Disability under a
Ferro Group Company long-term disability plan. Such date shall be the Valuation Date for this
purpose. No adjustment shall be made for any delay in payment, including the six (6) month
delay set forth in Section 4.1.

	4.6	 	Death Prior to Distribution. If the Participant dies before receiving complete
distribution of the Account under Sections 4.1, 4.2 or 4.3 above, then the Beneficiary of the
deceased Participant will be entitled to a death benefit equal to the balance of the
Participant’s Account. The Ferro Group Company will distribute the balance of the
Participant’s Account to the Beneficiary as soon as practicable after the Participant’s death
in the form provided in Section 4.4.

	4.7	 	Change in Date or Form of Distribution. [Intentionally blank.]

	4.8	 	Administration of Distributions. Distributions under this Plan will be made as soon
as administratively possible following receipt of notice by the Administrator of an event that
entitles a Participant or a Beneficiary to payments under this Plan and completion by the
Participant or Beneficiary of any forms required by the Administrator, subject to the time
restrictions described in Section 4.1 above.

	4.9	 	Designation of Beneficiary. Subject to the rules and procedures promulgated by the
Administrator, a Participant may sign a document designating a Beneficiary or Beneficiaries.
If a Participant fails to designate any Beneficiary in accordance with the provisions of this
Section, then the Beneficiary will be deemed to be the Participant’s spouse, or if no spouse
is then living, the Participant’s estate.

	4.10	 	Protective Distributions. If the Administrator determines that a Participant is not
a member of a “select group of management or highly compensated employees” within the meaning
of Section 201(2), 301(a)(3), 401(a)(1) or 4021(b)(6) of ERISA, then the Administrator may, as
it deems necessary to satisfy the exclusions from ERISA coverage contemplated by Section 1.4,
terminate the Participant’s participation in this Plan, and forfeit any amounts erroneously
credited under this Part B with respect to a Participant.

	4.11	 	Tax Withholding and Acceleration of Payment for Payment of Taxes. A Ferro Group
Company may withhold, from any payment made by it under this Plan, the amount or amounts as
may be required for purposes of complying with the tax withholding or other provisions of the
Code, the Social Security Act, or any state or local income or employment tax act or for
purposes of paying any estate, inheritance or other tax attributable to any amounts payable
hereunder. Further, distribution shall be made from the Plan at such time or times as the
Administrator, in its sole discretion pursuant to uniform and nondiscriminatory procedures,
shall determine that amounts are due for the payment of Federal Insurance Contributions Act
taxes imposed under Code Sections 3101, 3121(a), or 3121(v)(2) on the 409A Benefits. Such
distribution, if any, shall be made for the exclusive purpose of paying such Federal Insurance
Contributions Act taxes. In addition, distribution shall be made from the Plan at such time
or times as the Administrator, in its sole discretion pursuant to uniform and
nondiscriminatory procedures, shall determine that amounts are due for the payment of income
tax at source on wages imposed under Code Section 3401 (or the corresponding withholding
provisions of applicable state, local or foreign tax laws) as a result of the payment of the
Federal Insurance Contributions Act taxes, or are due for the payment of additional income tax
at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. Such
distribution, if any, shall be made for the exclusive purpose of paying such taxes. In no
event shall the amounts distributed pursuant to this Section exceed the amounts owed for the
payment of Federal Insurance Contribution Act taxes and the income tax withholding related to
such amounts.

	4.12	 	Lost or Uncooperative Participant. If a Ferro Group Company or the Administrator
notifies a Participant or Beneficiary of an entitlement to an amount under this Plan and the
Participant or Beneficiary fails to request payment, to provide information or to take any
other action to receive payment of such amount, the Administrator shall, to the extent
administratively possible, direct distribution to be made on an involuntary basis to such
person or persons by the Time Required by Law. If the location of a Participant or
Beneficiary cannot be determined after a prompt, reasonable good faith effort by the
Administrator, the Administrator will direct that the amount payable to the Participant or
Beneficiary be forfeited by the Time Required by Law, and no further benefit will be payable
with respect to any Participant or Beneficiary.

	4.13	 	Distribution upon Income Inclusion under Code Section 409A and Other Acceleration
Events. The prior provisions of this Article IV notwithstanding, in the event the Plan
fails to meet the requirements of Code Section 409A, a Participant’s 409A Benefits shall be
distributed in an amount equal to the amount which is included in income on account of the
failure to comply with Code Section 409A.

	4.14	 	General Restriction on Distribution and Acceleration of Payment. Notwithstanding any
provision of the Plan to the contrary, a Participant’s 409A Benefits shall not be distributed
earlier than the time permitted under Code Section 409A. Consistent with Code Section 409A,
this Part B provides that distribution shall not be made before the earliest of Termination of
Employment, death or Total and Permanent Disability, and imposes a restriction on
distributions made on account of Termination of Employment by which no distribution is made
until the six (6) month anniversary of the Termination of Employment.

ARTICLE V

RIGHTS OF PARTICIPANTS

	5.1	 	Creditor Status of Participants. The Elective Amounts of a Participant shall be
merely unfunded, unsecured promises of the Ferro Group Company (by which the Participant is
employed) to make benefit payments in the future and shall be liabilities solely against the
general assets of such Ferro Group Company. Except as provided in Section 5.6, Ferro and the
other Ferro Group Companies shall not be required to segregate, set aside or escrow the
Elective Amounts nor any earnings, gains and losses credited thereon. With respect to amounts
credited to any Account hereunder and any benefits payable hereunder, a Participant and
Beneficiary will have the status of general unsecured creditors of the Ferro Group Company (by
which the Participant is employed), and may look only to that Ferro Group Company and its
general assets for payment of the Account and benefits.

	5.2	 	Rights with Respect to the Trust. Any trust, and any assets held thereby to assist
Ferro or other Ferro Group Company in meeting its obligations under this Plan, will in no way
be deemed to controvert the provisions of Section 5.1 above.

	5.3	 	Investments. In Ferro’s sole discretion, the Ferro Group Companies may acquire
insurance policies, annuities or other financial vehicles for the purpose of providing future
assets of Ferro Group Companies to meet their anticipated liabilities under this Plan. Such
policies, annuities or other investments, shall at all times be and remain unrestricted
general property and assets of the Ferro Group Companies or property of a trust established
pursuant to Article VI of this Plan. Participants and Beneficiaries will have no rights,
other than as general creditors, with respect to any such policies, annuities or other
acquired assets.

	5.4	 	Method for Crediting Investment Return. As described in Section 3.8 above, the Ferro
Group Companies will maintain separate Accounts for the Elective Amounts deferred by the
Participant before 1999 and after 1998.

	 	(A)	 	Post-1998 Account. As elected by the Participant in his or her
Deferred Compensation Agreement, the Elective Amounts deferred after 1998 will, in the
portions specified by the Participant in the Deferred Compensation Agreement, be deemed
to be invested in either Ferro Common Stock or Treasury instruments, as described
below.

	 	(1)	 	Ferro Stock. The Elective Amounts will be deemed to be
invested in shares of Ferro Common Stock as of the date the Elective Amounts
would have been paid to the Participant if they were not deferred. The Account
will be deemed to receive all dividends (whether in stock or cash) and stock
splits which would be received if the Account was actually invested shares of
Ferro Common Stock, and such dividends and stock splits will be deemed to be
reinvested in shares of Ferro Common Stock as of the date of their receipt.
The investment in Ferro Common Stock will be deemed to be made at the closing
sale price of Ferro Common Stock on the New York Stock Exchange Composite Tape
(as reported in The Wall Street Journal) on the trading day of the deemed
investment.

	 	(2)	 	Treasury Instruments. The Elective Amounts will be
deemed to be invested in Treasury instruments yielding a rate of interest equal
to three hundred (300) basis points over the Ten-Year Constant Treasury
Maturity Yield as reported by the Federal Reserve Board.

	 	(B)	 	Pre-1999 Account. Each Participant with an Account credited with
Elective Amounts deferred before 1999 will be deemed to be invested in Treasury
instruments as described in Section 5.4(A)(2) above, except to the extent the
Participant elected, in writing during the special election period provided in 1999,
for all or a portion of the Account to be deemed to be invested in Ferro Common Stock.
Under any such election, the portion of the Account designated by the Participant to be
deemed invested in shares of Ferro Common Stock will be deemed invested as of the date
the Elective Amounts would have been paid to the Participant if they were not deferred,
and otherwise will be valued and credited with dividends and stock splits, in the same
manner as described in Section 5.4(A)(1) above.

	 	(C)	 	Periodic Adjustment of Accounts. As of each Valuation Date, the
Participant’s Account will be adjusted to reflect earnings and losses on the deemed
investments. To the extent the Account is deemed to be invested in Ferro stock, it
will be credited as of each Valuation Date with hypothetical appreciation and
depreciation and earnings, as computed and determined by the Administrator based on the
value of Ferro Common Stock and its dividends as provided in Section 5.4(A)(1) above.
To the extent the Participant’s Account is deemed to be invested in Treasury
instruments, it will be credited as of each Valuation Date with hypothetical earnings,
as computed and determined by the Administrator using a rate of interest equal to three
hundred (300) basis points over the Ten-Year Constant Treasury Maturity Yield as
provided in Section 5.4(A)(2) above. The Administrator will provide each Participant
annually with a statement showing the balance credited to the Participant’s Account as
of the last day of the preceding Election Year.

	5.5	 	Bookkeeping Account Only. A Participant’s Account is solely for the purpose of
measuring the amounts to be paid under this Plan. The Ferro Group Companies will not fund or
secure, and will not be permitted to fund or secure, the Account in any way, and the Ferro
Group Companies’ obligation to the Participants under this Plan is solely contractual.

	5.6	 	Escrow Upon a Change in Control. Notwithstanding any provision of this Plan to the
contrary, within five days after the occurrence of a Potential Change in Control, the Ferro
Group Companies will establish an irrevocable escrow account at a financial institution
satisfactory to Ferro and the Participants (or, in the case of death, the Participants’
Beneficiaries), determined by a majority vote of such Participants and Beneficiaries, to keep
on deposit in the escrow account an amount at least equal to the total balances of the
Accounts in the Plan determined as of the end of the calendar month immediately preceding the
occurrence of a Potential Change in Control, with such date being the Valuation Date for this
purpose. The amount required to be kept on deposit in the escrow account by the Ferro Group
Companies will be recalculated as of each Valuation Date. The escrow account will remain
subject to the claims of creditors of the Ferro Group Companies and will have the other
characteristics required to preserve the unfunded status of this Plan as provided under
Section 1.5. Subject to the later provisions of this Section, the escrow amount will be kept
on deposit at all times after the expiration of five days following the occurrence of a
Potential Change in Control, or a Change in Control, whichever occurs earlier.

If a Change in Control does not occur within twelve months after the occurrence of a
Potential Change in Control, Ferro may request the escrow agent to return to the Ferro Group
Companies the amounts in escrow. Otherwise, amounts deposited in the escrow account will be
paid out by the escrow agent only to:

	 	(A)	 	the Participant or Beneficiary, in such amounts as the Participant or
Beneficiary certify to the escrow agent as amounts that the Ferro Group Company is in
default in paying under the terms of this Plan or a related Deferred Compensation
Agreement; or

	 	(B)	 	the Ferro Group Companies, to the extent that the amount on deposit exceeds the
total balances of the Accounts in the Plan determined as of the end of the calendar
month immediately preceding the occurrence of a Potential Change in Control, reduced by
any payments made, and as specified in joint written instructions from the affected
Participants and Beneficiaries and Ferro to the escrow agent or in a final arbitral
award.

Ferro will have the right to instruct the escrow agent to invest all or any portion of the
escrow account in time deposits or certificates of deposit with, or repurchase or other
obligations of, any “bank” (as determined by Ferro), or obligations issued or guaranteed by
the United States or any of its agencies or instrumentalities, provided that no investment
will be for a period of more than ninety (90) days. The escrow agent will have no liability
for following the instructions of Ferro regarding any such investment, or for any loss in
the value of the escrow account as a consequence of any such investment or its liquidation.

The Ferro Group Companies may meet their obligation to keep amounts on deposit in the escrow
account through deposits of assets, one or more letters of credit deposited in escrow, any
combination of the foregoing. The Ferro Group Companies will have the right to substitute
one form of permitted deposit in the escrow account for another form of permitted deposit at
any time.

ARTICLE VI

TRUST

	6.1	 	Establishment of Trust. Notwithstanding any other provision or interpretation of
this Plan, Ferro may establish a Trust in which to hold cash, insurance policies or other
assets that may be used to make, or reimburse Ferro or any other Ferro Group Company for,
payments to the Participants or Beneficiaries of all or part of the benefits under this Plan.
Any Trust assets shall at all times remain subject to the claims of general creditors of Ferro
or any other Ferro Group Company in the event of the insolvency of Ferro or such other Ferro
Group Company as more fully described in the Trust.

	6.2	 	Obligation of the Ferro Group Companies. Notwithstanding the fact that a Trust may
be established under Section 6.1, the Ferro Group Companies shall remain liable for paying the
benefits under this Plan. However, any payment of benefits to a Participant or Beneficiary
made by a Trust will satisfy the appropriate Ferro Group Company’s obligation to make payment
to such person under this Plan.

	6.3	 	Trust Terms. A Trust established under Section 6.1 may contain any terms as Ferro
may determine to be necessary or desirable; provided, however, that, no terms shall provide
for or permit funding that would result in income inclusion under Code Section 409A(b)
including, but not limited to, terms that allow for the transfer or set aside of assets
offshore in a Trust, or which provide for assets to become restricted to the provision of
benefits in connection with a change in the financial health of Ferro and Affiliates, and any
terms which so provide shall be deemed null and void. Consistent with the foregoing, Ferro
may terminate or amend a Trust established under Section 6.1 at any time, and in any manner it
deems necessary or desirable, subject to the terms of any agreement under which any Trust is
established or maintained.

ARTICLE VII

ADMINISTRATION AND CLAIMS PROCEDURE

	7.1	 	Administrator. The Administrator will be Ferro, acting by and through Ferro’s
Corporate Human Resources Department, unless the Board of Directors, acting itself or through
an appropriate committee, designates otherwise.

	7.2	 	General Rights, Powers, and Duties of Administrator. The Administrator will be the
Plan administrator under ERISA. The Administrator will be responsible for the general
administration of this Plan and will have all powers as may be necessary to carry out the
provisions of this Plan and may, from time to time, establish rules for the administration of
this Plan and the transaction of this Plan’s business. In addition to any powers, rights and
duties set forth elsewhere in this Plan, it will have the following powers and duties:

	 	(A)	 	To enact rules, regulations, and procedures and to prescribe the use of such
forms as it deems advisable;

	 	(B)	 	To appoint or employ agents, attorneys, actuaries, accountants, assistants or
other persons (who may also be Participants in this Plan or be employed by or represent
a Ferro Group Company) at the expense of the Ferro Group Companies, as it deems
necessary to keep its records or to assist it in taking any other action authorized or
required under this Plan;

	 	(C)	 	To interpret this Plan, and to resolve ambiguities, inconsistencies and
omissions, to determine any question of fact, to determine the right to benefits of,
and the amount of benefits, if any, payable to, any person in accordance with the
provisions of this Plan and resolve all questions arising under this Plan;

	 	(D)	 	To administer this Plan in accordance with its terms and any rules and
regulations it establishes;

	 	(E)	 	To maintain records concerning this Plan as it deems sufficient to prepare
reports, returns and other information required by this Plan or by law; and

	 	(F)	 	To direct a Ferro Group Company to pay benefits under this Plan and to give
other directions and instructions as may be necessary for the proper administration of
this Plan.

Any decision, interpretation or other action made or taken by the Administrator arising out
of or in connection with this Plan, will be within the absolute discretion of the
Administrator, and will be final, binding and conclusive on Ferro, all other Ferro Group
Companies, and all Participants and Beneficiaries and their respective heirs, executors,
administrators, successors and assigns. Except as may be required for compliance with Code
Section 409A, the Administrator’s determinations under this Plan need not be uniform, and
may be made selectively among Participants, whether or not they are similarly situated.

	7.3	 	Information to Be Furnished to the Administrator. A Ferro Group Company will furnish
the Administrator with such data and information as it may reasonably require. The records of
a Ferro Group Company will be determinative of each Participant’s period of employment,
termination of employment, personal data, and data regarding Base Annual Salary, Bonus and
Performance Share Award, and all deferrals under this Plan. Participants and their
Beneficiaries will furnish to the Administrator such evidence, data or information and execute
such documents as the Administrator requests.

	7.4	 	Claim for Benefits. A Participant or Beneficiary must make a claim for payment under
this Plan in writing to the Administrator in the manner prescribed by the Administrator as
soon as administratively practicable following the distribution event. The Administrator will
process each claim and determine entitlement to benefits within 90 days after the
Administrator receives a completed application for benefits (or within such shorter period as
may be required to ensure that payment is made by the Time Required by Law). If the
Administrator needs an extension of time for processing because calculation of the benefit
amount is not administratively practicable, then the Administrator will notify the claimant
before the end of the initial period. The extension notice will indicate the special
circumstances requiring an extension of time and the date as of which the Administrator
expects to render the final decision. In no event will such an extension exceed 90 days from
the end of the initial period.

	7.5	 	Denial of Benefit. If a claim is wholly or partially denied by the Administrator,
then the Administrator will notify the claimant of the denial of the claim in a writing
delivered in person or mailed by first class mail to the claimant’s last known address. The
notice of denial will contain:

	 	(A)	 	the specific reason or reasons for denial of the claim;

	 	(B)	 	a reference to the relevant Plan provisions upon which the denial is based;

	 	(C)	 	a description of any additional material or information necessary for the
claimant to perfect the claim, together with an explanation of why the material or
information is necessary; and

	 	(D)	 	an explanation of this Plan’s claim review procedure.

If no notice is provided, the claim will be deemed denied. The interpretations,
determinations and decisions of the Administrator will be final and binding upon all persons
with respect to any right, benefit and privilege hereunder, subject to the review procedures
set forth in this Article.

	7.6	 	Request for Review of a Denial of a Claim for Benefits. Any claimant or any
authorized representative of the claimant whose claim for benefits under this Plan has been
denied or deemed denied, in whole or in part, may upon written notice to the Appeals Committee
request a review by the Appeals Committee of the denial of the claim. The claimant will have
60 days from the date the claim is deemed denied or 60 days from receipt of the notice denying
the claim, as the case may be, in which to request a review by written application delivered
to the Appeals Committee, which must specify the relief requested and the reason such claimant
believes the denial should be reversed.

	7.7	 	Appeals Procedure. The Appeals Committee will review the facts and relevant
documents including this Plan, and interpret the facts and relevant documents including this
Plan to render a decision on the claim. The review may be of written briefs submitted by the
claimant, or at a hearing, or by both, as deemed necessary or appropriate by the Appeals
Committee. Any hearing will be held in the main office of Ferro, or such other location as
the Appeals Committee may select, on the date and at the time as the Appeals Committee
designates by giving at least 15-days’ notice to the claimant, unless the claimant accepts
shorter notice. The notice will specify that the claimant must indicate in writing, at least
five days in advance of the hearing, the claimant’s intention to appear at the appointed time
and place, or the hearing will be automatically cancelled. The reply will specify any other
persons who will accompany the claimant to the hearing, or such other persons will not be
admitted to the hearing. The Appeals Committee will make every effort to schedule the hearing
on a day and at a time that is convenient to both the claimant and the Appeals Committee. The
claimant, or his duly authorized representative, may review all pertinent documents relating
to the claim in preparation for the hearing and may submit issues and comments in writing
before or during the hearing.

	7.8	 	Decision Upon Review of Denial of Claim for Benefits. In making its decision, the
Appeals Committee will have full power and discretion to interpret this Plan, to resolve
ambiguities, inconsistencies and omissions, to determine any question of fact, and to
determine the right to benefits of, and the amount of benefits, if any, payable to, any person
in accordance with the provisions of this Plan. The Appeals Committee will render a decision
on the claim reviewed no more than 60 days after the receipt of the claimant’s request for
review, unless special circumstances (such as the need to hold a hearing) require an extension
of time, in which case the 60-day period may be extended up to 120 days. The Appeals
Committee will provide written notice of its decision to the claimant within the time frame
specified. The notice will include the specific reasons for the decision and contain specific
references to the relevant Plan provisions upon which the decision is based. If notice of the
decision is not provided within the time frame specified, the claim will be deemed denied on
review. The decision of the Appeals Committee will be final and binding in all respects on
the Administrator, the Ferro Group Company and claimant involved.

	7.9	 	Establishment of Appeals Committee. The Chief Executive Officer of Ferro will
appoint three or more persons to serve as members of the Appeals Committee. The Chief
Executive Officer may appoint one Appeals Committee to hear all appeals of denied benefits
that arise under this Plan, or may appoint a new Appeals Committee each time an Appeals
Committee is needed to hear an appeal of denied benefits that arises under this Plan. The
members of the Appeals Committee will remain in office at the will of the Chief Executive
Officer, and the Chief Executive Officer may remove any of the members with or without cause.
A member of the Appeals Committee may resign upon written notice to the remaining member or
members of the Appeals Committee and to the Chief Executive Officer, respectively. The fact
that a person is a Participant or a former Participant or a prospective Participant will not
disqualify that person from acting as a member of the Appeals Committee. No member of the
Appeals Committee will be disqualified from acting on any question because of the member’s
interest in the question, except that no member of the Appeals Committee may act on any claim
which the member has brought as a Participant, former Participant, or Beneficiary under this
Plan. In case of the death, resignation or removal of any member of the Appeals Committee,
the remaining members will act until a successor-member is appointed by the Chief Executive
Officer. At the Administrator’s request, the Chief Executive Officer will notify the
Administrator in writing of the names of the members of the Appeals Committee, of any and all
changes in the membership of the Appeals Committee, of the member designated as Chairman, and
the member designated as Secretary, and of any changes in either office. Until notified of a
change, the Administrator will be protected in assuming that there has been no change in the
membership of the Appeals Committee or the designation of Chairman or of Secretary since the
last notification was filed with it. The Administrator will be under no obligation at any
time to inquire into the membership of the Appeals Committee or its officers. All
communications to the Appeals Committee will be addressed to its Secretary at the address of
the Company.

	7.10	 	Operation of the Appeals Committee. On all matters and questions, the decision of a
majority of the members of the Appeals Committee will govern and control. A meeting need not
be called or held to make any decision. The Appeals Committee will appoint one of its members
to act as its Chairman and another member to act as Secretary. The terms of office of these
members will be determined by the Appeals Committee, and the Secretary and/or Chairman may be
removed by the other members of the Appeals Committee for any reason which such other members
may deem just and proper. The Secretary will do all things directed by the Appeals Committee.
Although the Appeals Committee will act by decision of a majority of its members as provided
above, in the absence of written notice to the contrary, every person may deal with the
Secretary and consider the Secretary’s acts as having been authorized by the Appeals
Committee. Any notice served or demand made on the Secretary will be deemed to have been
served or made upon the Appeals Committee.

	7.11	 	Limitation of Duties. Ferro, the other Ferro Group Companies, the Administrator, the
Appeals Committee, and their respective officers, members, employees and agents will have no
duty or responsibility under this Plan other than the duties and responsibilities expressly
assigned or delegated to them pursuant to this Plan. None of them will have any duty or
responsibility with respect to those duties or responsibilities assigned or delegated to
another.

	7.12	 	Agents. The Administrator and the Appeals Committee may hire any attorneys,
accountants, actuaries, agents, clerks, and secretaries as it may deem desirable in the
performance of its duties, any of whom may also be advisors to any Ferro Group Company or any
subsidiary or affiliated company.

	7.13	 	Expenses of Administration. No fee or compensation will be paid to the Administrator
or any member of the Appeals Committee for their performance of services as such. Ferro will
bear all other expenses incurred in the administration of this Plan except to the extent Ferro
determines that the expenses are allocable to, and should be paid by, one or more of the Ferro
Group Companies.

	7.14	 	Indemnification. In addition to whatever rights of indemnification any member or
employee of the Administrator, the Appeals Committee, Ferro or other Ferro Group Company under
this Plan may be entitled to under the articles of incorporation, regulations or bylaws of the
Ferro Group Companies, under any provision of law or under any other agreement, the Ferro
Group Companies will satisfy any liability actually incurred by any member or employee
including reasonable expenses and attorneys’ fees, and any judgments, fines, and amounts paid
in settlement, in connection with any threatened, pending or completed action, suit or
proceeding which is related to the exercise or failure to exercise by any member or employee
any powers, authority, responsibilities or discretion provided under this Plan or reasonably
believed by a member or employee to be provided under this Plan, and any action taken by a
member or employee in connection with such exercise or failure to exercise. This
indemnification for all such acts taken or omitted is intentionally broad, but will not
provide indemnification for embezzlement or diversion of Plan funds for the benefit of any
member or employee. This indemnification will not be provided for any claim by a Ferro Group
Company or a subsidiary or affiliated company thereof against any member or employee. No
indemnification will be provided to any person who is not an individual.

	7.15	 	Limitation of Administrative Liability. Neither Ferro, any Ferro Group Company, the
Administrator, the Appeals Committee, nor any of their members or employees will be liable for
any act taken by such person or entity pursuant to any provision of this Plan except for gross
abuse of the discretion given them under this Plan. No member of the Administrator or Appeals
Committee will be liable for the act of any other member. No member of the Board of Directors
will be liable to any person for any action taken or omitted in connection with the
administration of this Plan.

	7.16	 	Limitation of Sponsor Liability. Any right or authority exercisable by Ferro or
Board of Directors pursuant to any provision of this Plan will be exercised in Ferro’s
capacity as sponsor of this Plan, or on behalf of Ferro in such capacity, and not in a
fiduciary capacity, and may be exercised without the approval or consent of any person in a
fiduciary capacity. Neither Ferro, nor the Board of Directors, nor any of their respective
officers, members, employees, agents and delegates, will have any liability to any party for
its exercise of any such right or authority.

ARTICLE VIII

AMENDMENT AND TERMINATION

	8.1	 	Amendment, Modification and Termination. Subject to Sections 8.4 and 8.5 below, this
Plan may be amended, modified or terminated by Ferro at any time, or from time to time, by
action of an appropriate Ferro officer authorized or ratified by the Board of Directors. No
amendment, modification or termination will be effective if it:

	 	(A)	 	causes this Plan to be for a purpose other than the exclusive benefit of the
Participants, or

	 	(B)	 	reduces the amounts credited to any Participant’s Account or adversely affects
the right of any Participant or Beneficiary to receive payment of the Account as
provided under this Plan, determined as of the date of the amendment, unless an
equivalent benefit is provided under another plan or program sponsored by the Company
or an Affiliate. Furthermore, no amendment, modification or termination will be
effective prior to the date permitted under Code Section 409A, which, in certain
circumstances is twelve (12) months following the adoption of such amendment,
modification or termination.

The prior provisions notwithstanding, this Plan may be amended to:

	 	(1)	 	reduce or eliminate the ability for Participants to defer
future Elective Amounts under this Plan;

	 	(2)	 	reduce or eliminate the future deemed interest or earnings
credited to the amounts held in a Participant’s Account;

	 	(3)	 	comply with any law; or

	 	(4)	 	preserve the intended deferral of taxation for the benefit of
all Participants Accounts.

	8.2	 	Effect of Amendment on Distributions. If this Plan is amended to prohibit future
Elective Amounts, then the amounts credited to Participants’ Accounts will be distributed as
provided in Article IV above.

	8.3	 	Actions Binding on Ferro Group Companies. Any amendments made to this Plan will be
binding on all the Ferro Group Companies without the approval or consent of the Ferro Group
Companies other than Ferro. Ferro may, by amendment, also terminate this Plan on behalf of
all or any one of the other Ferro Group Companies in its sole discretion.

	8.4	 	Termination or Amendment After Change in Control. If a Change in Control occurs,
then, for a period of two (2) calendar years following such Change in Control, Ferro may not
amend or terminate this Plan without the prior written consent of all Participants.

	8.5	 	Distribution of Benefits on Plan Termination. In the event Ferro elects to amend,
modify or terminate the Plan as provided under Section 8.1, no liquidation and payment of
benefits shall occur as a result. The prior provisions notwithstanding, Ferro may, in its
discretion, provide by amendment to the Plan for the liquidation and termination of the Plan
where:

	 	(A)	 	the termination and liquidation does not occur proximate to a downturn in the
financial health of Ferro and Affiliates;

	 	(B)	 	the Plan and all arrangements required to be aggregated with the Plan under
Code Section 409A are terminated and liquidated;

	 	(C)	 	no payments, other than those that would be payable under the terms of the Plan
and the aggregated arrangements if the termination and liquidation had not occurred,
are made within twelve (12) months of the date Ferro takes all necessary action to
irrevocably terminate and liquidate the Plan;

	 	(D)	 	all payments are made within twenty-four (24) months of the date Ferro takes
all necessary action to irrevocably terminate and liquidate the Plan; and

	 	(E)	 	Ferro and Affiliates do not adopt a new arrangement that would be aggregated
with any terminated arrangement under Code Section 409A, at any time within three (3)
years following the date Ferro takes all necessary action to irrevocably terminate and
liquidate the Plan.

Similarly, Ferro may, in its discretion, provide by amendment to liquidate and terminate the
Plan where the termination and liquidation occur within twelve (12) months of a corporate
dissolution taxed under Code Section 331, or with the approval of a bankruptcy court
pursuant to 11 United States Code Section 503(b)(1)(A), provided that all amounts deferred
under the Plan are included in the Participants’ gross incomes in the latest of the
following years (or, if earlier, the taxable year in which the amount is actually or
constructively received):

	 	(1)	 	the calendar year in which the termination and liquidation
occur;

	 	(2)	 	the first calendar year in which the amount is no longer
subject to a substantial risk of forfeiture; or

	 	(3)	 	the first calendar year in which the payment is
administratively practicable.

ARTICLE IX

FERRO GROUP COMPANIES

	9.1	 	List of Ferro Group Companies. The Ferro Group Companies as of the Amendment and
Restatement Date are Ferro and the subsidiaries and affiliates of Ferro listed on Appendix B
to this Plan. Ferro may from time to time add or remove Ferro subsidiaries and affiliates
from the list of Ferro Group Companies by written action of its Chief Executive Officer. The
addition or deletion will not require a formal amendment to this Plan.

	9.2	 	Delegation of Authority. Ferro is fully empowered to act on behalf of itself and the
other Ferro Group Companies as it may deem appropriate in maintaining this Plan and any Trust.
The adoption by Ferro of any amendment to this Plan or any Trust, or the termination of this
Plan or any Trust, will constitute and represent, without any further action on the part of
any Ferro Group Company, the approval, adoption, ratification or confirmation by each Ferro
Group Company of any amendment or termination. In addition, the appointment of or removal by
Ferro of any Administrator, any trustee or other person under this Plan or any Trust will
constitute and represent, without any further action on the part of any Ferro Group Company,
the appointment or removal by each Ferro Group Company of such person.

ARTICLE X

MISCELLANEOUS

	10.1	 	No Implied Rights. Neither the establishment of this Plan nor any amendment of this
Plan will be construed as giving any Participant, Beneficiary or any other person any legal or
equitable right unless the right is specifically provided for in this Plan or conferred by
specific action of Ferro in accordance with the terms and provisions of this Plan. Except as
expressly provided in this Plan, neither Ferro nor any other Ferro Group Company will be
required or be liable to make any payment under this Plan.

	10.2	 	No Right to Ferro Group Company Assets. Neither the Participant nor any other person
will acquire by reason of this Plan any right in or title to any assets, funds or property of
a Ferro Group Company whatsoever including, without limitation, any specific funds, assets or
other property which a Ferro Group Company, in its sole discretion, may set aside in
anticipation of a liability hereunder. Any benefits which become payable under this Plan will
be paid from the general assets of the appropriate Ferro Group Company. No assets of the
Ferro Group Companies will be held in any way as collateral security for the fulfilling of the
obligations of the Ferro Group Companies under this Plan. No assets of the Ferro Group
Companies will be pledged or otherwise restricted in order to meet the obligations of this
Plan. The Participant will have only a contractual right to the amounts, if any, payable
hereunder unsecured by any asset of a Ferro Group Company. Nothing contained in this Plan
constitutes a guarantee by a Ferro Group Company that the assets of a Ferro Group Company will
be sufficient to pay any benefit to any person.

	10.3	 	No Employment Rights Created. This Plan will not be deemed to constitute a contract
of employment between any of the Ferro Group Companies and any Participant, or to confer upon
any Participant or employee the right to be retained in the service of any Ferro Group Company
for any period of time, nor shall any provision of this Plan restrict the right of any Ferro
Group Company to discharge or otherwise deal with any Participant or other employees, with or
without cause. Nothing in this Plan will be construed as fixing or regulating the Base Annual
Salary, Bonus or Performance Share Award payable to any Participant or other employee of a
Ferro Group Company.

	10.4	 	Offset. If at the time payment is to be made under this Plan the Participant or the
Beneficiary or both are indebted or obligated to a Ferro Group Company, then the payment of
the Participant’s 409A Benefits to be made to the Participant or the Beneficiary or both may,
at the discretion of the Administrator at the request of the Ferro Group Company, be reduced
by the amount of the indebtedness or obligation, but only if:

	 	(A)	 	such debt is incurred in the ordinary course of the service relationship
between the Participant and the Ferro Group Company,

	 	(B)	 	in any taxable year of Ferro and Affiliates the entire amount of reduction does
not exceed $5,000, and

	 	(C)	 	the reduction is made at the same time and in the same amount as the debt
otherwise would have been due and collected from the Participant.

	 	 	 	An election by the Ferro Group Company not to request any reduction will not
constitute a waiver of the Ferro Group Company’s claim for such indebtedness or
obligation.

	10.5	 	No Assignment. Neither the Participant nor any other person will have any voluntary
or involuntary right to commute, sell, assign, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey, in advance of actual receipt of the amount, if any,
payable under this Plan, or any part of the amount payable from this Plan, and any attempt to
do so will be void. All benefits or amounts credited to Accounts under this Plan are
expressly declared to be unassignable and non-transferable. No part of the benefits or
amounts credited to Accounts under this Plan will be, before actual payment, subject to
seizure or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by the Participant or any other person, or be transferable by operation of
law in the event of the Participant’s or any other person’s bankruptcy or insolvency.

	10.6	 	Notice. Any notice required or permitted to be given under this Plan will be
sufficient if in writing and hand delivered, or sent by registered or certified mail or by
overnight delivery service, and:

	 	(A)	 	if given to a Ferro Group Company, delivered to the principal office of Ferro,
directed to the attention of the General Counsel; or

	 	(B)	 	if given to a Participant or Beneficiary, delivered to the last post office
address as shown on the Ferro Group Company’s or the Administrator’s records.

Notice will be deemed given as of the date of delivery or, if delivery is made by mail, as
of the date shown on the postmark or the receipt for registration or certification.

	10.7	 	Governing Laws. This Plan will be construed and administered according to the
internal substantive laws of the State of Ohio to the extent not preempted by the laws of the
United States of America.

	10.8	 	Incapacity. If the Administrator determines that any Participant or Beneficiary
entitled to payment under this Plan is a minor, a person declared incompetent or a person
incapable of handling his or her property, the Administrator may direct any payment to the
guardian, legal representative or person having the care and custody of the minor, incompetent
or incapable person. The Administrator may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate before making any payment. The
Administrator will have no obligation thereafter to monitor or follow the application of
amounts so paid. Payments made pursuant to this Section will completely discharge this Plan,
any Trust, the Administrator, and the Ferro Group Companies with respect to the payments.

	10.9	 	Court Ordered Distributions. If a court issues a domestic relations order as defined
in Code Section 414(p)(1)(B) by which a spouse or former spouse or dependent or former
dependent of a Participant is provided an interest in the Participant’s Account under this
Plan in connection with a property settlement or otherwise, the Administrator shall,
notwithstanding any election made by the Participant or the Participant’s eligibility for
distribution, distribute the spouse’s or former spouse’s or dependent’s or former dependent’s
interest in the Participant’s Account under this Plan to that spouse or former spouse or
dependent or former dependent, as provided under such domestic relations order.

	10.10	 	Administrative Forms. All applications, elections and designations in connection
with this Plan made by a Participant or Beneficiary will become effective only when duly
executed on forms provided by the Administrator and filed with the Administrator.

	10.11	 	Independence of Plan. Except as otherwise expressly provided, this Plan will be
independent of, and in addition to, any other employee benefit agreement or plan or any rights
that may exist from time to time under any other agreement or plan.

	10.12	 	Responsibility for Legal Effect. Neither Ferro, any other Ferro Group Company, the
Administrator, nor any officer, member, delegate or agent of any of them, makes any
representations or warranties, express or implied, or assumes any responsibility concerning
the legal, tax, or other implications or effects of this Plan.

	10.13	 	Successors. The terms and conditions of this Plan will inure to the benefit of and
bind Ferro, the Ferro Group Companies, the Administrator and its members, the Participants,
their Beneficiaries, and the successors, assigns, and personal representatives of any of them.

	10.14	 	Headings and Titles. The Section headings and titles of Articles used in this Plan
are for convenience of reference only and are not to be considered in construing this Plan.

	10.15	 	Appendices. The Appendices to this Plan constitute an integral part of this Plan
and are hereby incorporated into this Plan by this reference.

	10.16	 	Severability. If any provision or term of this Plan, or any agreement or instrument
required by the Administrator, is determined by a judicial, quasi-judicial or administrative
body to be void or not enforceable for any reason, all other provisions or terms of this Plan
or the agreement or instrument will remain in full force and effect and will be enforceable as
if the void or nonenforceable provision or term had never been a part of this Plan, or the
agreement or instrument.

	10.17	 	Actions by Ferro. Except as otherwise provided in this Plan, all actions of Ferro
under this Plan will be taken by the Board of Directors, and be evidenced in a writing
executed by an appropriate officer duly authorized.

	10.18	 	Spousal Consent and Release. If, in the opinion of Ferro, any present, former or
future spouse of an employee entitled to benefits from this Plan shall by reason of law appear
to have any interest in the Plan benefits that may be or become payable hereunder to such
employee, Ferro may as a condition precedent to the making of a benefit payment hereunder,
require such written consent or release as in its discretion it shall determine to be
necessary, desirable or appropriate either to prevent or avoid any conflict or multiplicity of
claims, or to protect the rights of any such present, former or future spouse with respect to
the payment of any benefits under this Plan.

	10.19	 	Overpayments and Repayments. Benefits are provided only as set forth under the
terms of this Plan. Payments at a time or in an amount other than as set forth under the
terms of the Plan are not authorized, and Ferro will take all reasonable steps to ensure that
the amount and timing of benefit payments are in accordance with the Plan’s terms. In the
event Ferro determines that the benefits actually paid under this Plan to a Participant,
beneficiary or other person exceed the benefits that were properly payable, or were paid prior
to the proper time for payment, Ferro shall immediately demand repayment of such excess
amounts. The Participant, Beneficiary or other person is obligated to return such excess
amounts upon demand from Ferro. In the event the Participant, beneficiary or other person
fails to return the excess amounts, Ferro shall exercise any available legal remedies which
are consistent with the terms and purpose of the Plan

	10.20	 	References to Sections of Law. References herein to the Code are to the Internal
Revenue Code of 1986, as heretofore and hereafter amended, and to similar provision of
subsequent federal law. References herein to ERISA are to the Employee Retirement Income
Security Act of 1974, as heretofore and hereafter amended, and to similar provisions of
subsequent law.

10

Definitions

For purposes of this Plan, the following terms have the meanings set forth below where
used in this Plan and identified with initial capital letters:

	 	 	 
	Term	 	Meaning
	Account or Elective Account

	 	For each Participant the bookkeeping account maintained by the

Ferro Group Company to reflect the Participant’s Elective Amounts

for an Election Year and all earnings, gains and losses thereon. A

Participant’s Account shall not constitute or be treated as a trust

fund of any kind.
	Administrator

	 	As defined in Section 7.1 of this Plan.
	Affiliate

	 	Any corporation or business entity during any period during which

it would be treated, together with the Company, as a single

employer for purposes of Section 414(b) or (c).
	Amendment and

Restatement Date

	 	

January 1, 2005.
	Base Annual Salary

	 	For any Participant the gross base salary payable during an

Election Year by a Ferro Group Company, unreduced by any amounts

deferred under the Ferro Corporation Savings and Stock Ownership

Plan, this Plan, or any other plan maintained by the Ferro Group

Company. “Base Annual Salary” does not include bonuses,

commissions, incentive compensation, any extraordinary compensation

of a recurring or nonrecurring nature, compensation paid in a form

other than cash, or contributions, accruals, or benefits under the

Ferro Corporation Savings and Stock Ownership Plan, this Plan, or

any other plan maintained by the Ferro Group Company (other than

amounts elected to be deferred by the Participant).
	Beneficial Owner

	 	“Beneficial owner” within the meaning of Rule 13d-3 under the

Exchange Act.
	Beneficiary

	 	As defined in 4.9 of this Plan.
	Board of Directors

	 	Ferro’s Board of Directors.
	Bonus

	 	The gross monies awarded and payable to a Participant during an

Election Year under the Ferro Annual Incentive Compensation Plan,

as it may be amended from time to time, unreduced by any amounts

deferred under the Ferro SSOP, this Plan, or any other plan

maintained by the Ferro Group Company.
	Change in Control

	 	A change in the control of Ferro that is required to be reported in

response to Item 6(e) of Schedule 14A of Regulation 14A promulgated

under the Exchange Act. For purposes of this definition, a Change

in Control will be deemed to have occurred if and when:
	
 
	 	(a) any “person” (as such term is used in Sections 13(d)(3) and

14(d)(2) of the Exchange Act) is or becomes the beneficial owner,

directly or indirectly, of securities of Ferro representing

twenty-five percent (25%) or more of the combined voting power of

Ferro’s outstanding voting securities; or
	
 
	 	(b) during any period of two consecutive years, the individuals set

forth below in sub-paragraph (1) and (2) cease for any reason to

constitute at least a majority of the Board of Directors:
	
 
	 	(1) the individuals who at the beginning of such period constituted

the Board of Directors, and
	
 
	 	(2) any new director (other than a director designated by a person

who has entered into an agreement or arrangement with Ferro to

effect a transaction described in clause (a) or (c) of this

definition) whose appointment, election, or nomination for election

by Ferro’s shareholders, was approved by a vote of at least

two-thirds of the directors then still in office who either were

directors at the beginning of the period or whose appointment,

election or nomination for election was previously so approved; or
	
 
	 	(c) a merger or consolidation of Ferro or one of its subsidiaries

is consummated with or into any other corporation, other than a

merger or consolidation which would result in the holders of the

voting securities of Ferro outstanding immediately prior thereto

holding securities which represent immediately after such merger or

consolidation more than 50% of the combined voting power of the

voting securities of either Ferro or the other entity which

survives such merger or consolidation or the parent of the entity

which survives such merger or consolidation; or

(d) a sale or disposition by Ferro of all or substantially all

Ferro’s assets is consummated.
	
 
	 	Notwithstanding the foregoing, for purposes of triggering the

lump-sum distribution under Section 4.2, only the occurrence of an

above-listed event which also constitutes a “change in the

ownership or effective control of the corporation, or in the

ownership of a substantial portion of the assets of the

corporation” under Code Section 409A shall constitute a Change in

Control.
	Code

	 	The Internal Revenue Code of 1986, as amended, and any lawful

regulations or other pronouncements promulgated under that Code.
	Deferred Compensation

Agreement

	 	An agreement executed between a Participant and the Ferro Group

Company whereby a Participant agrees to defer a portion of the

Participant’s Base Annual Salary, Bonus or Performance Share Award

as provided under this Plan, and the Ferro Group Company agrees to

make benefit payments in accordance with the provisions of this

Plan.
	Dependent

	 	Any of the following persons who receives over half of their

financial support from the Participant: a spouse, a son or

daughter (or the descendent of either); a stepson or stepdaughter;

a brother, sister, stepbrother or stepsister; a father or mother

(or ancestor of either); a stepfather or stepmother; a nephew or

niece; an uncle or aunt; a son-in-law, daughter-in-law,

father-in-law, mother-in-law, brother-in-law or sister-in-law; or

any other person whose principal place of residence is the

Participant’s home and who is a member of the household.
	Disability

	 	See “Total and Permanent Disability.”
	Election Year

	 	A calendar year in respect of which a Participant makes an election

under this Plan.
	Elective Amount

	 	An amount equal to the amount by which a Participant’s Base Annual

Salary, Bonus or Performance Share Award are reduced pursuant to

Section 3.4 of this Plan in respect of a given Election Year.
	Eligible Employee

	 	An Executive Employee of a Ferro Group Company who has satisfied

the eligibility requirement of Section 3.1 of this Plan.
	Entry Date

	 	With respect to a given Executive Employee in a given Election

Year, the first day such Executive Employee becomes a Participant

in such Election Year.
	ERISA

	 	The Employee Retirement Income Security Act of 1974, as amended,

and any lawful regulations or pronouncements issued under that Act.
	Exchange Act

	 	The Securities Exchange Act of 1934, as amended, and any lawful

regulations or pronouncements issued under that Act.
	Executive Employee

	 	A management employee of a Ferro Group Company who is in Grade 22

or higher in the Executive Payroll Group and who is eligible to

participate in the Ferro Annual Incentive Compensation Plan.
	Ferro

	 	As defined in Section 1.2 of this Plan. Such term also includes

any successor corporation or business organization that

subsequently assumes Ferro’s duties and obligations under this

Plan.
	Ferro Common Stock

	 	The Common Stock of Ferro, par value $1.00, per share.
	Ferro Group Companies

	 	As defined in Section 9.1 of this Plan.
	Ferro SSOP

	 	Ferro’s Savings and Stock Ownership Plan, as the same may be

amended from time to time.
	409A Benefits

	 	All benefits under the Plan which are not Pre-2005 Benefits

(generally, amounts which are earned or vested under the Plan after

December 31, 2004, plus any earnings with respect to such amounts

or to such earnings).
	2005 Plan

	 	The provisions of the Plan as set forth in Part B, which govern

409A Benefits.
	Long-Term Incentive

Compensation Plan

	 	

Ferro’s 2003 Long-Term Incentive Compensation Plan, as amended.
	Participant

	 	An Executive Employee of a Ferro Group Company who is designated to

be an Eligible Employee pursuant to Section 3.2 of this Plan, who

enters into a Deferred Compensation Agreement, and who has

commenced Base Annual Salary, Bonus or Performance Share Award

reductions pursuant to that Deferred Compensation Agreement. A

Participant will cease to be a Participant, and shall become a

former Participant, upon the earliest of the following:
	
 
	 	(a) Termination of Employment,
	
 
	 	(b) the date the employee ceases to be an Eligible Employee, or
	
 
	 	(c) the date the employee’s participation in this Plan is

terminated by the Administrator pursuant to Section 4.10 of this

Plan or otherwise.
	Performance Share Award

	 	The gross monies awarded and payable to a Participant during an

Election Year in respect of Performance Shares awarded under the

Long-Term Incentive Compensation Plan or the prior Performance

Share Plan, unreduced by any amounts deferred under the Ferro SSOP,

this Plan, or any other plan maintained by the Ferro Group Company.
	Performance Share Plan

	 	Ferro’s 1997 Performance Share Plan, as amended.
	Person

	 	A “person” as defined under Section 3(a)(9) of the Exchange Act as

modified and used in Sections 13(d) and 14(d) of the Exchange Act,

excluding:
	
 
	 	(a) Ferro or any of its subsidiaries;

(b) a trustee or other fiduciary holding securities under an

employee benefit plan of the Company (or of any of its affiliates

as defined under Rule 12b-2 under Section 12 of the Exchange Act);

(c) an underwriter temporarily holding securities pursuant to an

offering of such securities; or

(d) a corporation owned, directly or indirectly, by the

shareholders of Ferro in substantially the same proportion as their

ownership of the stock of Ferro.
	Pre-2005 Benefits

	 	All benefits under the Plan that were earned and vested under the

Plan as of December 31, 2004, plus any earnings with respect to

such amounts or to such earnings.
	Pre-2005 Plan

	 	The provisions of the Plan set forth in Part A, which govern

Pre-2005 Benefits.
	this Plan

	 	The Ferro Corporation Deferred Compensation Plan for Executive

Employees, or a component plan, as appropriate.
	Potential Change in Control

	 	The occurrence of any of the following events:
	
 
	 	(a) Ferro enters into an agreement which, if consummated, would

result in a Change in Control;

(b) Ferro or any Person publicly announces an intention to take, or

to consider taking, actions which, if consummated, would constitute

a Change in Control;
	
 
	 	(c) any Person becomes the Beneficial Owner, directly or

indirectly, of securities of Ferro representing 20% or more of the

then outstanding shares of Ferro Common Stock or the combined

voting power of Ferro’s then outstanding securities;

(d) any Person commences a solicitation (as defined under Rule

14a-1 of the Exchange Act) of proxies or consents which has the

purpose of effecting or would, if successful, result in a Change in

Control;

(e) a tender or exchange offer for voting securities of Ferro, made

by a Person, is first published or sent or given (within the

meaning of Rule 14d-2(a) of the Exchange Act); or

(f) the Board of Directors adopts a resolution that a

Potential Change in Control has occurred.
	Retirement Date

	 	The date a Participant first becomes eligible for an early

retirement benefit or a normal retirement benefit as defined under

the Ferro Corporation Retirement Plan. Alternatively, in the case

of a Participant who is not covered under the Ferro Corporation

Retirement Plan, “Retirement Date” means the date a Participant

would first become eligible for an early retirement benefit or a

normal retirement benefit if the Participant were covered under the

Ferro Corporation Retirement Plan.
	Termination of Employment

	 	Effective Prior to January 1, 2008: A Participant’s cessation of

service with Ferro and the other Ferro Group Companies, including

subsidiaries and affiliates of the foregoing, for any reason

whatsoever, whether voluntarily or involuntarily, including by

reason of retirement, death, or becoming Totally and Permanently

Disabled. Notwithstanding the foregoing, for purposes of

triggering payment under Section 4.1, only such cessation of

service which constitutes a “separation from service” under Code

Section 409A shall constitute a Termination of Employment.

Effective January 1, 2008: With respect to any Participant:
	
 
	 	(a) the separation from service within the meaning of Section 409A

of the Code, of such Participant with the Company and all of its

Affiliates, for any reason, including without limitation, quit,

discharge, or retirement, or a leave of absence (including military

leave, sick leave, or other bona fide leave of absence such as

temporary employment by the government if the period of such leave

exceeds the greater of six months, or the period for which the

Participant’s right to reemployment is provided either by statute

or by contract), or

(b) a permanent decrease in the level of the Participant‘s service

to a level that is no more than twenty percent (20%) of its prior

level. For this purpose, whether a Termination of Employment has

occurred is determined based on whether it is reasonably

anticipated that no further services will be performed by the

Participant after a certain date or that the level of bona fide

services the Participant will perform after such date (whether as

an employee or as an independent contractor) would permanently

decrease to no more than twenty percent (20%) of the average level

of bona fide services performed (whether as an employee or an

independent contractor) over the immediately preceding 36-month

period (or the full period of services if the Participant has been

providing services less than 36 months).
	Time Required by Law

	 	The date designated for payment under the terms of the Plan or a

later date in the same calendar year or, if later, the fifteenth

(15th) day of the third calendar month following the date

designated for payment. (However, if the Participant’s taxable

year is not the calendar year, the date designated for payment

under the terms of the Plan or a later date in the Participant’s

taxable year or, if later, the fifteenth (15th) day of the third

calendar month following the date designated for payment.)

If calculation of the amount of the benefit is not administratively

practicable due to events beyond the control of the Participant (or

the Participant’s Beneficiary), any date within the first taxable

year of the Participant in which calculation of the payment is

administratively practicable.
	
 
	 	If making the payment on the date designated under the terms of the

Plan would jeopardize the ability of Ferro and Affiliates to

continue as a going concern, the first taxable year of the

Participant in which making the payment would not have such effect.

If there is a delay in payment by the Administrator other than with

the express or implied consent of the Participant, the first

taxable year of the Participant in which the dispute is resolved.

The dispute shall be deemed resolved on the earliest date upon

which: (a) the Participant and the Administrator or Ferro enter

into a legally binding settlement, (b) the Administrator or Ferro

concedes that an amount is payable, or (c) the Administrator or

Ferro is required to make payment pursuant to a final

non-appealable judgment or other binding decision. The foregoing

provisions shall apply only if, during the period of the dispute,

the Participant accepts any portion of the payment the

Administrator or Ferro willing to make (unless acceptance will

result in relinquishment of the claim to any remaining portion),

and makes prompt and reasonable good faith efforts to collect the

remaining portion of the payment which meet the requirements of

Code Section 409A (including the timely notice requirements).

In the event the payment fails to fails to comply with Federal

securities laws or other laws, the earliest date at which Ferro

reasonably anticipates that the making of the payment will not

cause such violation.

In the event the payment fails to be deductible under Code Section

162(m), or meets other conditions specified by the Commissioner of

the Internal Revenue Service, such later date as may be provided

under Code Section 409A.
	Total and Permanent Disability

	 	Any disability that qualifies a Participant for payment of benefits

under a Ferro Group Company long-term disability program, provided

that the definition of disability provided under such long-term

disability program meets one of the following requirements:
	
 
	 	(a) The Participant is unable to engage in any substantial gainful

activity by reason of any medically determinable physical or mental

impairment that can be expected to result in death or can be

expected to last for a continuous period of not less than 12

months; or
	
 
	 	(b) The Participant is, by reason of any medically determinable

physical or mental impairment that can be expected to result in

death or can be expected to last for a continuous period of not

less than 12 months, receiving income replacement benefits for a

period of not less than three months under an accident and health

plan covering employees of a Ferro Company Group.

The determination of whether a Participant suffers a Total and

Permanent Disability will be made by the Ferro Group Company

long-term disability plan.
	Trust

	 	The trust, if any, established pursuant to Section 7.1 of this Plan.
	Unforeseeable Emergency

	 	A severe financial hardship of the Participant resulting from (i)

an illness or accident of the Participant, his spouse, Beneficiary

or dependent; (ii) the loss of a Participant’s property due to

casualty (including the need to rebuild a home following damage to

a home not otherwise covered by insurance, for example, not as a

result of a natural disaster); or (iii) other similarly

extraordinary and unforeseeable circumstances arising as a result

of events beyond the control of the Participant.
	Valuation Date

	 	The last day of each quarter in the Election Year, as well as any

other dates specified in this Part B, and any other date or dates

Ferro, in its sole discretion, designates from time to time.

11

Ferro Group Companies

The following are the Ferro Group Companies:

Ferro Corporation

FEM Inc.

Ferro Color and Glass Corp. (formerly, Ferro Glass & Color Corporation)

Ferro International Services, Inc.

12

Ferro Pfanstiehl Laboratories, Inc.

Execution Page

To evidence this amended and restated Ferro Corporation Deferred Compensation Plan
for Executive Employees, Ferro Corporation, as Plan sponsor, has caused this document to be
executed by its duly authorized officer as of the 20th day of September, 2007.

	 	 	 
	
 
	 	Ferro Corporation
	By:

	 	

	
 
	 	James C. Bays

Vice President, General Counsel

& Secretary

13

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