Document:

EX-10.21

EXHIBIT 10.21

TERMS OF NONSTATUTORY STOCK OPTION GRANTS

	1.	 	Generally. This document sets forth the terms and conditions under which nonstatutory stock
options (the “NSO Options”) are granted under paragraph 4(a) of the 2006 Long-Term Incentive
Plan (the “Plan”), which was approved by Ferro Corporation shareholders on November 3, 2006.
(The recipient of an NSO Option grant is called the “NSO Optionee” below. The term “Ferro”
below includes Ferro Corporation and its subsidiary and affiliated companies.)
	 
	2.	 	Precedence of the Plan. The terms of this document are in all events subject to the terms
and conditions of the Plan. If there is any inconsistency between this document and the Plan,
then the Plan, and not this document, will govern. The Governance, Nomination and
Compensation Committee of the Board of Directors (or such other committee as the Board may
from time to time designate) (the “Committee”) administers awards under the Plan and has the
authority to determine the terms and conditions, not inconsistent with the provisions of the
Plan, of any Award granted under this Plan. In this capacity, the Committee also has the
authority to construe and interpret the provisions of the Plan and all awards under the Plan
and to establish, amend, and rescind rules and regulations for the administration of the Plan,
all of which will be binding on the NSO Optionee.
	 
	3.	 	Basic Option Terms. The name of the NSO Optionee, the date of the NSO Option grant, the
aggregate number of shares of Ferro Common Stock that may be purchased under the NSO Option,
the option exercise price, and the expiration date of the NSO Option (i.e., last date on which
such NSO Option may be exercised) are set forth separately in a grant letter from Ferro to the
NSO Optionee which refers expressly to this document.
	 
	4.	 	Normal Exercise. Except as otherwise provided below, NSO Options will become exercisable
only if and after the NSO Optionee has remained employed by Ferro for one year from the date
of the NSO Option grant, whereupon such rights shall become exercisable to the extent of 25%
of the aggregate number of shares granted, which percentage shall increase to 50% after two
years, 75% after three years and to 100% after four years of employment.
	 
	5.	 	Retirement. If an NSO Optionee retires from his or her employment with Ferro under a Ferro
retirement plan or policy (including early retirement) before an NSO Option has been exercised
or expired, then the NSO Option will become 100% exercisable when the NSO Optionee retires and
the NSO Optionee will then be entitled to exercise the NSO Option at any time on or before
such NSO Option expires.
	 
	6.	 	Disability. If an NSO Optionee’s employment terminates due to the NSO Optionee’s total and
permanent disability before an NSO Option has been exercised or expired, then the NSO Option
will become 100% exercisable when the NSO Optionee’s employment terminates and the NSO
Optionee will then be entitled to exercise the NSO Option at any time on or before such NSO
Option expires.
	 
	7.	 	Death. If an NSO Optionee dies before an NSO Option has been exercised or expired, then the
person who is entitled by will or the applicable laws of descent and distribution may exercise
the option rights (a) in full in the case of an NSO Optionee who was employed by Ferro at the
time of his or her death or (b) in the case of an NSO Optionee not so employed, to the extent
that the NSO Optionee was entitled to exercise the same immediately before his or her death.
	 
	8.	 	Change of Control. If a “Change of Control” occurs before an NSO Option has been exercised
or expired, then the NSO Option will become 100% exercisable immediately upon the “Change of
Control” provided that the NSO Optionee is then employed by Ferro. (For purposes of this
document, the term “Change of Control” has the meaning given to that term in paragraph 9 of
the Plan.)

 

 

	9.	 	Other Termination of Employment. If the NSO Optionee’s employment with Ferro terminates
before an NSO Option has been exercised or expired for any reason other than those stated in
clauses 5-8 above, the NSO Optionee may exercise the option rights at any time within the
three-month period after his or her termination of employment (but before the expiration of
the NSO Option) to the extent he or she was entitled to exercise the same immediately before
the termination of employment.
	 
	1.	 	Liquidation, Dissolution and Merger. If at any time before an NSO Option is exercised or
expires Ferro is liquidated or dissolved, or becomes a party to a plan of merger or
consolidation with respect to which Ferro is not the surviving corporation, then the following
will apply:

	 	A.	 	Ferro will give the NSO Optionee at least 30 days’ prior written notice that
such event will occur.
	 
	 	B.	 	If the NSO Optionee is then employed by Ferro, then the NSO Option will
immediately become 100% exercisable provided that the NSO Optionee exercises the NSO
Option before it expires and within 30 days after the notice.
	 
	 	C.	 	If the NSO Optionee is not then employed by Ferro, then the NSO Option will be
exercisable to the extent it was exercisable of the date of such notice provided that
the NSO Optionee exercises the NSO Option before it expires and within 30 days after
the notice.

If an NSO Option has not been exercised on or before the effective date of any such
liquidation, dissolution, merger or consolidation, then notwithstanding the provisions of
clauses 5-8 above, the NSO Option will terminate on such date, unless another corporation
assumes the NSO Option.

	11.	 	Exercise. An NSO Option may be exercised by delivering to Ferro at the office of its
Treasurer a written notice signed by the person entitled to exercise the option, of the
election to exercise the option and stating the number of shares to be purchased, together
will full payment of the option exercise price of the shares then to be purchased. Payment of
the option exercise price may be made, at the election of the NSO Optionee, (a) in cash, (b)
in Ferro Common Stock, or (c) in any combination of cash and Ferro Common Stock. Shares of
Ferro Common Stock used in payment of the purchase price will be valued at their closing price
on the New York Stock Exchange on the trading day immediately preceding the date of exercise.
Upon the proper exercise of an NSO Option, Ferro will issue the appropriate number of shares
of Ferro Common Stock in the name of the person exercising the NSO Option and deliver to him
or her a certificate or certificates for the shares purchased. The NSO Optionee will either
pay in cash, within the time period specified by Ferro, the amount (if any) required to be
withheld for Federal, state or local tax purposes on account of the exercise of an NSO Option
or to make arrangements to satisfy such withholding requirements in a manner satisfactory to
Ferro.
	 
	12.	 	Legal Restrictions on Exercise. No NSO Option will be exercisable if and to the extent such
exercise would violate:

	 	A.	 	Any applicable state securities law;
	 
	 	B.	 	Any applicable registration or other requirements under the Securities Act of
1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934, as amended, or
the listing requirements of any stock exchange; or
	 
	 	C.	 	Any applicable legal requirement of any other government authority.

Ferro will make reasonable efforts to comply with the foregoing laws and requirements so as
to permit the exercise of NSO Options. Furthermore, if a Registration Statement with
respect to the shares to be issued upon the exercise of an NSO Option is not in effect or if
counsel for Ferro deems it necessary or desirable in order to avoid possible violation of
the 1933 Act, Ferro may require, as a condition to its issuance and delivery of certificates
for the shares, the delivery to Ferro of a commitment in writing by the person exercising
the option that at the time of such exercise it is his or her intention to acquire such shares for his
or her own account for

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investment only and not with a view to, or for resale in connection
with, the distribution thereof; that such person understands the shares may be “restricted
securities” as defined in Rule 144 of the Securities and Exchange Commission; and that any
resale, transfer or other disposition of said shares will be accomplished only in compliance
with Rule 144, the 1933 Act, or the other Rules and Regulations there under. Ferro may
place on the certificates evidencing such shares an appropriate legend reflecting the
aforesaid commitment and the Company may refuse to permit transfer of such certificates
until it has been furnished evidence satisfactory to it that no violation of the 1933 Act or
the Rules and Regulations there under would be involved in such transfer.

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

	 	A.	 	Directly or indirectly, engages in, or assists or has a material ownership
interest in, or acts as agent, advisor or consultant of, for, or to any person, firm,
partnership, corporation or other entity that is engaged in the manufacture or sale of
any products manufactured or sold by Ferro or any products that are logical extensions,
on a manufacturing or technological basis, of such products;
	 
	 	B.	 	Discloses to any person any proprietary or confidential business information
concerning Ferro, its subsidiaries, or affiliates or any of the officers, Directors,
employees, agents, or representatives of Ferro, its subsidiaries or affiliates, which
the Participant obtained or which came to his or her attention during the course of his
or her employment with Ferro;
	 
	 	C.	 	Takes any action likely to disparage or have an adverse effect on Ferro, its
subsidiaries, or affiliates or any of Ferro’s officers, Directors, employees, agents,
or representatives;
	 
	 	D.	 	Induces or attempts to induce any Ferro employee to leave the employ of Ferro
or otherwise interferes with the relationship between Ferro and any of Ferro’s
employees, or hires or assists in the hiring of any person who was a Ferro employee, or
solicits, diverts or otherwise attempts to take away any customers, suppliers, or
co-venturers of Ferro, either on the NSO Optionee’s own behalf or on behalf of any
other person or entity; or
	 
	 	E.	 	Otherwise performs any act or engages in any activity which in the opinion of
the Committee is inimical to the best interests of Ferro.

	14.	 	Withholding. All amounts paid to or on behalf of the NSO Optionee in respect of an NSO
Option will be subject to withholding as required by law.
	 
	15.	 	Transferability. Subject only to the exceptions stated in paragraph 8 of the Plan, an NSO
Option is not transferable by the NSO Optionee other than by will or by the laws of descent
and distribution. An NSO Option will be exercisable during the lifetime of the NSO Optionee
only by the NSO Optionee and/or his or her guardian or legal representative.
	 
	16.	 	Adjustments on Changes in Capitalization. If at any time before an NSO Option is exercised
or expires, the shares of Ferro Common Stock are changed or Ferro makes an “extraordinary
distribution” or effects a “prorata repurchase” of Common Stock as described in paragraph 8 of
the Plan or takes any other action described in that paragraph, then the shares of Common
Stock issuable pursuant to such NSO Option will be appropriately adjusted as provided in such
paragraph.
	 
	17.	 	No Rights as a Shareholder. The NSO Optionee acknowledges that as holder of an NSO Option
the NSO Optionee has no rights as a shareholder or otherwise in respect of any of the shares
as to which the NSO Option has not been effectively exercised.
	 
	18.	 	Employment at Will. By countersigning and returning to Ferro a copy of the grant letter, the
NSO Optionee acknowledges and agrees that, as in the past, he or she is an employee at will of
Ferro.

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EXHIBIT 10.22

TERMS OF PERFORMANCE SHARE AWARDS

	1.	 	Generally. This document sets forth the terms and conditions under which an award (an
“Award”) of forfeitable shares of Ferro Common Stock (“Performance Shares”) are made under
paragraph 4(d) of the 2006 Long-Term Incentive Plan (the “Plan”), which was approved by Ferro
Corporation shareholders on November 3, 2006. (The recipient of an Award is called the
“Performance Share Recipient” below. The term “Ferro” below includes Ferro Corporation and
its subsidiary and affiliated companies.)
	 
	2.	 	Precedence of the Plan. The terms of this document are in all events subject to the terms
and conditions of the Plan. If there is any inconsistency between this document and the Plan,
then the Plan, and not this document, will govern. The Compensation Committee of the Board
of Directors (or such other committee as the Board may from time to time designate) (the
“Committee”) administers awards under the Plan and has the authority to determine the terms
and conditions, not inconsistent with the provisions of the Plan, of any Award granted under
this Plan. In this capacity, the Committee also has the authority to construe and interpret
the provisions of the Plan and all awards under the Plan and to establish, amend, and rescind
rules and regulations for the administration of the Plan, all of which will be binding on the
Performance Share Recipient.
	 
	3.	 	Basic Award Terms. The name of the Performance Share Recipient, the date of the Award, the
number of Performance Shares being awarded, the period over which the Performance Shares will
mature (the “Performance Period”), and the targets which must be achieved in order to earn the
Performance Shares (the “Performance Targets”) are set forth separately in Exhibit A to an
award letter from Ferro to the Performance Share Recipient which refers expressly to this
document.
	 
	4.	 	Performance Shares. The Performance Shares are represented by shares of Ferro Common Stock
that will be converted into nonforfeitable shares of Ferro Common Stock at the end of the
Performance Period if Performance Targets have been met (as further explained below). The
Performance Shares are subject to forfeiture if the Performance Targets have not been achieved
at the end of the Performance Period. During the Performance Period, however, the Performance
Share Recipient will be entitled to receive dividends on the shares of Ferro Common Stock that
represent the Performance Shares and to exercise all other rights pertaining to such shares
except the right to assign, encumber or transfer such shares.
	 
	5.	 	Performance Targets. The Committee establishes the Performance Targets that apply to a given
Award. When determining whether Performance Targets have been attained, the Committee will
have the discretion to make adjustments to take into account extraordinary or nonrecurring
items or events, or unusual nonrecurring gains or losses identified in Ferro’s financial
statements, provided such adjustments are (to the extent applicable) made in a manner
consistent with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).
Awards of Performance Shares made to Participants subject to Section 162(m) of the Code are
intended to qualify under Section 162(m) and the Committee will interpret the terms of such
Awards in a manner consistent with that intent to the extent appropriate.
	 
	6.	 	Conversion. As soon as practicable after Ferro’s independent auditors have issued their
report on Ferro’s financial results for the Performance Period, Ferro will calculate and
deliver to the Performance Share Recipient the value of the Award. The value of the Award will
be determined by multiplying (a) the number of Performance Shares covered by the Award times
(b) a Conversion Rate set forth in Exhibit A to the award letter times (c) the average closing
price for Ferro Common Stock during the first ten calendar days of the last month of the
Performance Period.
	 
	7.	 	Payment. Ferro will pay one-half of the value of the Award in nonforfeitable shares of Ferro
Common Stock and the remaining one-half in cash. (At that time, the forfeitable shares of
Ferro Common Stock issued in respect of such Award will be cancelled.) Any fractional share
will be rounded down to the nearest whole number.

 

 

	8.	 	Retirement. If a Performance Share Recipient retires from his or her employment with Ferro
under a Ferro retirement plan or policy (including early retirement) during the Performance
Period, then a pro rata share of the forfeitable shares of Ferro Common Stock representing the
Performance Shares will be forfeited. In such case, however, the Performance Share Recipient
will remain eligible to receive a payment at the end of the Performance Period in respect of
the Award based on the remaining unforfeited shares of Ferro Common Stock. The pro rata share
of forfeited shares will be measured by a fraction the numerator of which is the number of
full calendar months in the Performance Period after Performance Share Recipient’s retirement
and the denominator of which is the number of full calendar months in the Performance Period.
	 
	9.	 	Disability. If a Performance Share Recipient’s employment terminates due to the Performance
Share Recipient’s total and permanent disability during the Performance Period, then a pro
rata share of the forfeitable shares of Ferro Common Stock representing the Performance Shares
will be forfeited. In such case, however, the Performance Share Recipient will remain
eligible to receive a payment at the end of the Performance Period in respect of the Award
based on the remaining unforfeited shares of Ferro Common Stock. The pro rata share of
forfeited shares will be measured by a fraction the numerator of which is the number of full
calendar months in the Performance Period after Performance Share Recipient’s termination of
employment and the denominator of which is the number of full calendar months in the
Performance Period.
	 
	10.	 	Death. If a Performance Share Recipient dies during a Performance Period, then a pro rata
share of the forfeitable shares of Ferro Common Stock representing the Performance Shares will
be forfeited. In such case, however, the person who is entitled by will or the applicable
laws of descent and distribution will be eligible to receive a payment at the end of the
Performance Period in respect of the Award based on the remaining unforfeited shares of Ferro
Common Stock (a) in full in the case of a Performance Share Recipient who was employed by
Ferro at the time of his or her death or (b) in the case of a Performance Share Recipient not
so employed, to the extent that the Performance Share Recipient would have been entitled to
exercise the same immediately before his or her death. The pro rata share of forfeited
 shares will be measured by a fraction the numerator of which is the number of full calendar
months in the Performance Period after Performance Share Recipient’s death and the denominator
of which is the number of full calendar months in the Performance Period.
	 
	11.	 	Other Termination of Employment. If the Performance Share Recipient’s employment with Ferro
terminates before the end of the Performance Period for any reason other than those stated in
clauses 8-10 above, then all of the forfeitable shares of Ferro Common Stock representing the
Performance Shares will be forfeited and the Performance Share Recipient will not be eligible
to receive any payment in respect of the Award at the end of the Performance Period.
	 
	12.	 	Legal Restrictions on Issuance of Shares. No shares of Ferro Common Stock will be issued in
respect of an Award if and to the extent such issuance would violate:

	 	A.	 	Any applicable state securities law;
	 
	 	B.	 	Any applicable registration or other requirements under the Securities Act of
1933 (the “1933 Act”), as amended, the Securities Exchange Act of 1934, as amended, or
the listing requirements of any stock exchange; or
	 
	 	C.	 	Any applicable legal requirement of any other government authority.

Ferro will make reasonable efforts to comply with the foregoing laws and requirements so as
to permit the issuance of shares of Ferro Common Stock in respect of Awards. Furthermore,
if a Registration Statement with
respect to the shares to be issued in respect of an Award is not in effect or if counsel for
Ferro deems it necessary or desirable in order to avoid possible violation of the 1933 Act,
then Ferro may require, as a condition to its issuance and delivery of certificates for the
shares, the delivery to Ferro of a commitment in

- 2 -

 

writing by the person to whom the shares
are being issued that at the time of such exercise it is his or her intention to acquire
such shares for his or her own account for investment only and not with a view to, or for
resale in connection with, the distribution thereof; that such person understands the shares
may be “restricted securities” as defined in Rule 144 of the Securities and Exchange
Commission; and that any resale, transfer or other disposition of said shares will be
accomplished only in compliance with Rule 144, the 1933 Act, or the other Rules and
Regulations there under. Ferro may place on the certificates evidencing such shares an
appropriate legend reflecting the aforesaid commitment and the Company may refuse to permit
transfer of such certificates until it has been furnished evidence satisfactory to it that
no violation of the 1933 Act or the Rules and Regulations there under would be involved in
such transfer.

	13.	 	Forfeiture. The Performance Share Recipient will forfeit his or her Performance Shares if,
during the Performance Period, he or she —

	 	A.	 	Directly or indirectly, engages in, or assists or has a material ownership
interest in, or acts as agent, advisor or consultant of, for, or to any person, firm,
partnership, corporation or other entity that is engaged in the manufacture or sale of
any products manufactured or sold by Ferro or any products that are logical extensions,
on a manufacturing or technological basis, of such products;
	 
	 	B.	 	Discloses to any person any proprietary or confidential business information
concerning Ferro or any Ferro officers, Directors, employees, agents, or
representatives which the Performance Share Participant obtained or which came to his
or her attention during the course of his or her employment with Ferro;
	 
	 	C.	 	Takes any action likely to disparage or have an adverse effect on Ferro, its
subsidiaries, or affiliates or any of Ferro’s officers, Directors, employees, agents,
or representatives;
	 
	 	D.	 	Induces or attempts to induce any Ferro employee to leave the employ of Ferro
or otherwise interferes with the relationship between Ferro and any of Ferro’s
employees, or hires or assists in the hiring of any person who was a Ferro employee, or
solicits, diverts or otherwise attempts to take away any customers, suppliers, or
co-venturers of Ferro, either on the Performance Share Recipient’s own behalf or on
behalf of any other person or entity; or
	 
	 	E.	 	Otherwise performs any act or engages in any activity which in the opinion of
the Committee is inimical to the best interests of Ferro.

	14.	 	Withholding. All amounts paid to or on behalf of the Performance Share Recipient in respect
of Performance Shares will be subject to withholding as required by law.
	 
	15.	 	Transferability. No Performance Shares are transferable by the Performance Share Recipient
other than by will or by the laws of descent and distribution, and is exercisable during the
lifetime of the Performance Share Recipient.
	 
	16.	 	Adjustments on Changes in Capitalization. If at any time before the end of the Performance
Period, the shares of Ferro Common Stock are changed or Ferro makes an “extraordinary
distribution” or effects a “prorata repurchase” of Common Stock as described in paragraph 7 of
the Plan or takes any other action described in that paragraph, then the shares issuable in
respect of an Award will be appropriately adjusted as provided in such paragraph.
	 
	17.	 	Employment at Will. By countersigning and returning to Ferro a copy of the grant letter, the
Performance
Share Recipient acknowledges and agrees that, as in the past, he or she is an employee at
will of Ferro.

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