Document:

exv10w54

    Exhibit 10.54

 

     

 

    EIGHTH
    MODIFICATION AGREEMENT

 

    (Loan Agreement)

 

    This Eighth Modification Agreement (the “Modification
    Agreement”), dated as of December 31, 2010,
    for reference purposes only, is made by and between
    GREENHILL & CO., INC., a Delaware
    corporation (“Borrower”), and FIRST REPUBLIC BANK
    (“Lender”), with reference to the following facts:

 

    A. Lender has previously entered into a Loan Agreement
    (“Loan Agreement”) dated as of January 31,
    2006, pursuant to which Lender has provided to Borrower a
    revolving line of credit loan (“Loan”) in the current
    principal amount of Seventy-Five Million and 00/100 Dollars
    ($75,000,000.00).

 

    B. The Loan Agreement was amended pursuant to the terms of:

 

    1. that certain First Modification Agreement dated as of
    August 1, 2006;

 

    2. that certain Second Modification Agreement dated as of
    March 14, 2007;

 

    3. that certain Third Modification Agreement dated as of
    May 2, 2007;

 

    4. that certain Fourth Modification Agreement dated
    December 13, 2007;

 

    5. that certain Fifth Modification Agreement dated
    December 18, 2008;

 

    6. that certain Sixth Modification Agreement dated
    December 22, 2009; and

 

    7. that certain Seventh Modification Agreement dated
    April 30, 2010.

 

    C. In connection with the Loan Agreement, Borrower has
    executed one original note and five amended and restated notes
    as set forth below, the most current note is referred to as the
    “Existing Note.” The Existing Note supersedes and
    replaces the prior notes set forth below.

 

    1. that certain Promissory Note dated January 31,
    2006, executed by Borrower payable to Lender in the original
    principal sum of $20,000,000.00;

 

    2. that certain Amended and Restated Promissory Note dated
    March 14, 2007, executed by Borrower payable to Lender in
    the original principal sum of $50,000,000.00;

 

    3. that certain Amended and Restated Promissory Note dated
    May 2, 2007, executed by Borrower payable to Lender in the
    original principal sum of $75,000,000.00;

 

    4. that certain Amended and Restated Promissory Note dated
    December 13, 2007, executed by Borrower payable to Lender
    in the original principal sum of $90,000,000.00;

 

    5. that certain Amended and Restated Promissory Note dated
    December 18, 2008, executed by Borrower payable to Lender
    in the original principal sum of $90,000,000.00; and

 

    6. that certain Fifth Amended and Restated Promissory Note
    dated April 30, 2010, executed by Borrower payable to
    Lender in the original principal sum of 75,000,000.

    

    E-1

 

    D. The Loan Agreement and the Existing Note are secured by
    the terms of:

 

    1. A Third-Party Security Agreement dated May 2, 2007,
    executed by Greenhill Capital Partners, LLC which was later
    replaced by an Amended and Restated Third-Party Security
    Agreement dated as of December 22, 2009, executed by
    Greenhill Capital Partners, LLC (“Greenhill Capital
    Security Agreement”). Said security agreement was
    reaffirmed by the terms of Reaffirmation of Third Party Security
    Agreement dated as of April 30, 2010, executed by Greenhill
    Capital Partners LLC.

 

    2. A Third-Party Security Agreement dated December 13,
    2007, executed by Greenhill Venture Partners, LLC which was
    later replaced by an Amended and Restated Third-Party Security
    Agreement dated December 22, 2009, executed by Greenhill
    Venture Partners LLC (“Greenhill Ventures Security
    Agreement”). Said security agreement was reaffirmed by the
    terms of Reaffirmation of Third Party Security Agreement dated
    as of April 30, 2010, executed by Greenhill Venture
    Partners, LLC.

 

    3. A Third-Party Security Agreement dated December 22,
    2009, executed by Greenhill Capital Partners II LLC
    (“Greenhill Capital II Security Agreement”). Said
    security agreement was reaffirmed by the terms of Reaffirmation
    of Third Party Security Agreement dated as of April 30,
    2010, executed by Greenhill Capital Partners II LLC.

 

    4. A Security Agreement (LLC Distributions) dated
    April 30, 2010, executed by Greenhill & Co., Inc.
    (“Greenhill Security Agreement”). (The Greenhill
    Capital Security Agreement, the Greenhill Ventures Security
    Agreement, the Greenhill Capital II Security Agreement and
    the Greenhill Security Agreement, as reaffirmed, are
    collectively referred to as the “Security Agreements.”)

 

    E. The Loan Agreement, the Existing Note and the Security
    Agreements are referred to collectively as the “Existing
    Loan Documents.” The Existing Note and any Amended and
    Restated Note to be executed and delivered as provided below are
    referred to collectively as the “Note.” The Existing
    Loan Documents and all documents to be executed and delivered as
    provided below, including the Note, are referred to collectively
    as the “Loan Documents,” Capitalized terms which are
    not defined herein shall have the meanings provided in the Loan
    Agreement or the other Loan Documents or, if not defined
    therein, in the California Commercial Code.

 

    NOW THEREFORE, for valuable consideration the receipt and
    adequacy of which is hereby acknowledged, Lender and Borrower
    agree as follows.

 

    1. Adoption of Recitals.  The
    recitals set forth above are adopted as a part of the agreement
    of the parties, and the facts set forth therein are acknowledged
    and agreed to be true, accurate and complete.

 

    2. Acknowledgment of Loan
    Documents.  Borrower hereby acknowledges and
    agrees that as of the date of this Modification Agreement the
    Loan Agreement as modified and all other Existing Loan Documents
    remain in full force and effect.

 

    3. UCC Lien  Borrower hereby
    acknowledges and agrees that pursuant to the terms of the
    Security Agreements, all Obligations owed to Lender under the
    Loan Agreement and the Existing Note are secured by the assets
    referred to therein (“Collateral”); and Borrower has
    not granted and is not aware of any other lien on such
    Collateral other than the lien of Lender.

 

    4. Release of Collateral for
    Loan.  Concurrently with the execution and
    delivery of this Modification Agreement, the Greenhill
    Capital II Security Agreement shall be deemed terminated.
    Lender shall be deemed to have released the lien granted
    thereunder on the assets specified as collateral therein. Lender
    shall thereafter promptly file a UCC-3 lien release on the
    assets specified as collateral therein to the extent that the
    assets are encumbered only by virtue of said security agreement.

    

    E-2

 

    5. Modification of Loan Documents.

 

    5.1 No Change in Loan Amount and Promissory
    Note.

 

    (a) Section 5.3 of the Seventh Modification Agreement
    is here by deleted in its entirety.

 

    (b) Currently with the execution and delivery of this
    Modification Agreement, the maximum principal amount of the Loan
    is SEVENTY-FIVE MILLION AND NO/100THS DOLLARS
    ($75,000,000,00); and it shall remain at such amount until
    the Maturity Date, absent further agreement between Lender and
    Borrower or default under the Loan Agreement unless otherwise
    provided in the Loan Agreement as amended.

 

    6. Representations and
    Warranties.  As a material inducement to
    Lender’s execution of this Modification Agreement, Borrower
    makes the following warranties and representations to Lender.

 

    6.1 Authority.  This Modification
    Agreement and each other document delivered to Lender in
    connection with this Modification Agreement have been duly
    authorized, and upon execution and delivery will constitute
    legal, valid and binding agreements and obligations of such
    party enforceable in accordance with their respective terms,
    except, in each case, as enforcement thereof may be limited by
    bankruptcy, insolvency or other laws relating to or affecting
    enforcement of creditors’ rights or by general equity
    principles.

 

    6.2 Financial Information.  All
    financial and other information that has been or will be
    supplied to Lender is sufficiently complete to give Lender
    accurate knowledge of such party’s financial condition as
    of the time of the delivery of same to Lender and is a true
    statement of such party’s financial condition and reflects
    any and all material contingent liabilities as of the time of
    the delivery of same to Lender.

 

    6.3 No Defaults.  There currently
    exist no fact or occurrence which would constitute an Event of
    Default under the Loan Agreement.

 

    6.4 Other Encumbrances.  There are
    no encumbrances or liens affecting all or part of the Collateral
    provided by Borrower except for the liens and security interests
    in favor of Lender and the Permitted Liens.

 

    6.5 Lawsuits.  There is no lawsuit,
    tax claim or adjustment or other dispute pending, or, to the
    knowledge of such party, threatened against such party, his, her
    or its property, his, her or its business or the Collateral as
    to which there is a significant probability of an adverse
    decision that, after taking into account any insurance coverage
    for such matter, reasonably would be expected to have a material
    adverse effect on the business or the financial condition of
    Borrower, the Collateral or Lender’s right and remedies
    under this Modification Agreement,

 

    7. No Other Modification of Loan
    Documents.  Nothing contained in this
    Modification Agreement shall be construed to obligate Lender to
    extend the time for payment of the Existing Note issued in
    connection with the Loan Agreement or otherwise modify any of
    the Loan Documents in any respect, except as expressly set forth
    in this Modification Agreement.

 

    8. Conditions Precedent.  The
    following are conditions precedent to Lender’s obligations
    under this Modification Agreement:

 

    8.1 Receipt by Lender of the executed originals of:
    (i) this Modification Agreement; (ii) a Reaffirmation
    Agreement to be executed by Greenhill Capital Partners, LLC
    consenting to the transaction provided for herein in form and
    substance acceptable to Lender; and (iii) a Reaffirmation
    Agreement to be executed by Greenhill Venture Partners, LLC
    consenting to the transaction provided for herein in form and
    substance acceptable to Lender.

 

    8.2 Reimbursement to Lender by Borrower of Lender’s
    costs and expenses incurred in connection with this Modification
    Agreement and the transactions contemplated hereby, including,
    without limitation, the fees set forth in Section 9 below,
    whether such services are furnished by Lender’s employees
    or agents or by independent contractors.

    

    E-3

 

    8.3 The representations and warranties contained in this
    Modification Agreement and the other Loan Documents are true and
    correct.

 

    8.4 All payments due and owing to Lender under the Loan
    Documents have been paid current as of the effective date of
    this Modification Agreement.

 

    8.5 Any UCC, tax lien, litigation, judgment and other
    searches, fictitious business name statement filings, insurance
    certificates, notices or other similar documents which Lender
    may reasonably require and in such form as Lender may reasonably
    require, in order to reflect Lender’s first priority
    security interest in the Collateral, or to terminate the lien as
    specified in Section 4 above and in order to fully
    consummate all of the transactions contemplated hereunder

 

    8.6 Such other documents as Lender may require under any
    other section of this Amendment.

 

    9. Fees,  Borrower shall pay to
    Lender upon the execution of this Modification or upon
    Lender’s request the following:

 

    9.1 Modification Fee.  A
    Modification Fee of Twenty-five Thousand Dollars
    ($25,000,00). Said amount shall be owed whether or not the
    maximum loan amount is advanced for whatever reason; and said
    amount shall be deemed fully earned upon execution of this
    Modification Agreement regardless whether the Loan is later
    accelerated upon the occurrence of an Event of Default.

 

    9.2 Expenses and Attorneys
    Fees.  All of Lender’s costs, charges and
    expenses paid or incurred by Lender in connection with the
    preparation of this Modification Agreement and the transactions
    contemplated hereby, including all reasonable attorneys fees and
    costs and all filing fees.

 

    9.3 Method of Payment.  Such
    amounts may be debited by Lender from any account maintained in
    the name of Borrower.

 

    10. Events of Default and Remedies.

 

    10.1 Events.  The occurrence and
    continuance of any of the following events shall constitute an
    Event of Default hereunder at the option of Lender:

 

    (a) Failure to make any payment provided for under this
    Modification Agreement.

 

    (b) Failure to take any action or comply with any condition
    provided for under this Modification Agreement.

 

    (c) The occurrence and continuance of an Event of Default
    under the (i)’Loan Agreement as modified or any related
    documents, (ii) this Modification Agreement, (iii) the
    Existing Note, or (iv) any documents executed in connection
    herewith,

 

    10.2 Remedies.  Upon the occurrence
    of an Event of Default, Lender may declare an Event of Default
    under the Loan Agreement
    and/or any
    other Loan Document and exercise the remedies under the Loan
    Agreement, the Existing Note and any other Loan Document,
    including (without limitation) the imposition of default
    interest under the Note).

 

    11. Indemnification.  Borrower
    hereby agrees to indemnify and hold Lender and its officers,
    directors, agents, employees, representatives, shareholders,
    affiliates, participating lenders, successors and assigns
    harmless from and against any and all claims, demands, damages,
    liabilities, actions, causes of action, suits, costs and
    expenses, including attorneys’ fees and costs, directly or
    indirectly arising out of or relating to the transactions
    contemplated by this Modification Agreement.

 

    12. NO CLAIMS.  BORROWER
    ACKNOWLEDGES AND AGREES THAT TO THE BEST OF ITS PRESENT
    KNOWLEDGE (A) IT HAS NO OFFSETS OR DEDUCTIONS OF ANY KIND
    AGAINST ANY OR ALL OF THE OBLIGATIONS; AND (B) IT HAS NO
    DEFENSES OR OTHER CLAIMS OR CAUSES OF ACTION OF ANY KIND AGAINST
    LENDER IN CONNECTION WITH THE LOAN OR THE COLLATERAL,

    

    E-4

 

    13. Waiver and Release.

 

    13.1 In further consideration of Borrower and Lender
    entering into this Modification Agreement, Borrower and Pledgors
    and Borrower’s and Pledgors’ past and present
    employees and agents (collectively referred to as the
    “Releasing Parties”) hereby waive and release
    any and all claims, rights and defenses, causes of action,
    damages, debts and offsets of any nature whatsoever whether
    heretofore or now existing (known or unknown, liquidated or
    unliquidated, whether based in tort, contract, or other legal or
    equitable theory) which each of them now has (or might have)
    against Lender, all of its past and present officers, directors,
    employees, agents, attorneys or representatives (“Released
    Claims”). This waiver and release includes, but is not
    limited to, claims, defenses, offsets and causes of action
    arising from or in any way related to any of the Loan Documents
    and any promissory notes executed in connection and all
    modifications, supplements and extensions thereto, all the
    advances thereunder and Lender’s actions in connection
    therewith.

 

    13.2 The Releasing Parties each understand (a) that it
    is possible that unknown losses or claims may exist, or
    (b) that past known losses have been underestimated;
    nevertheless each of the Releasing Parties is taking this risk
    into account in determining the consideration it is to receive
    for this release through this Modification Agreement.
    Consequently, each of the Releasing Parties expressly waives all
    rights and benefits conferred by Section 1542 of the
    California Civil Code which provides as follows:

 

    “A general release does not extend to claims which the
    creditor does not know or suspect to exist in his or her favor
    at the time of executing the release, which if known by him or
    her must have materially affected his or her settlement with the
    debtor.”

 

    13.3 Each person signing below on behalf of Borrower or
    Pledgor hereunder acknowledges that he or she has read each of
    the provisions of this Release. Each such person fully
    understands that this Release has important legal consequences,
    and each such person realizes that they are releasing any and
    all Released Claims that Borrower or any such guarantor may have
    as of the Release Date. Borrower and each guarantor hereunder
    hereby acknowledge that each of them has had an opportunity to
    obtain a lawyer’s advice concerning the legal consequences
    of each of the provisions of this Release.

 

    14. Continuing Effect of Loan
    Documents.  The Loan Agreement, the Note and
    other Loan Documents, as modified by this Modification
    Agreement, shall remain in full force and effect in accordance
    with their terms and are affirmed by Borrower.

 

    15. Miscellaneous.

 

    15.1 Controlling Provisions.  To
    the extent that there is any inconsistency or conflict between
    the terms, conditions and provisions of the Loan Documents, this
    Modification Agreement and any document executed in connection
    herewith, the terms, conditions and provisions of this
    Modification Agreement will prevail.

 

    15.2 Modifications of
    Agreement.  This Modification Agreement may be
    modified only by a written agreement signed by Lender and the
    other party who is affected by such modification.

 

    15.3 Entire Agreement.  This
    Modification Agreement shall be included within the meaning of
    the term “Loan Documents” under the Loan Agreement.
    This Modification Agreement and the other Loan Documents contain
    the entire agreement and understanding among the parties
    concerning the matters covered by this Modification Agreement
    and the other Loan Documents and supersede all prior and
    contemporaneous agreements, statements, understandings, terms,
    conditions, negotiations, representations and warranties,
    whether written or oral, made by Lender and any of the other
    parties to this Modification Agreement concerning the matters
    covered by this Modification Agreement and the other Loan
    Documents.

 

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

 

    15.5 Descriptive Headings;
    Interpretation.  The headings to sections of
    this Modification Agreement are for convenient reference only
    and shall not be used in interpreting this Modification

    

    E-5

 

    Agreement. For purposes of this Modification Agreement, the term
    “including” shall be deemed to mean “including
    without limitation.”

 

    15.6 No Waiver.  No waiver by
    Lender of any of its rights or remedies in connection with the
    Loan shall be effective unless such waiver is in writing and
    signed by Lender. No waiver of any breach or default shall be
    deemed a waiver of any breach or default thereafter occurring.

 

    15.7 Rights
    Cumulative.  Lender’s rights and remedies
    under this Modification Agreement are cumulative with and in
    addition to any and all other legal and equitable rights and
    remedies which Lender may have in connection with the Loan.

 

    15.8 Time of the Essence.  Time is
    of the essence with respect to each provision of this
    Modification Agreement.

 

    15.9 Counterparts.  This
    Modification Agreement may be executed in counterparts, each of
    which shall constitute an original, and all of which together
    shall constitute one and the same agreement.

 

    15.10 Successors and Assigns.  This
    Modification Agreement shall bind and inure to the benefit of
    the parties hereto and their respective successors and assigns.
    Lender may assign its rights under this Modification Agreement;
    however, any party to this Modification Agreement may not assign
    this Modification Agreement or any rights and duties or
    obligations of them hereunder without the prior written consent
    of Lender.

 

    15.11 Controlling Law.  This
    Modification Agreement and any instrument or agreement executed
    in connection with this Modification Agreement shall be governed
    by and construed under the laws of the State of California.

 

    15.12 Attorneys’ Fees.  Lender
    shall be entitled to recover all costs and expenses, including
    attorneys’ fees and costs, incurred by Lender in enforcing
    any of the terms of this Modification Agreement or the other
    Loan Documents, from any party against whom this Modification
    Agreement is sought to be enforced whether or not any legal
    proceedings are instituted by Lender. Without limiting the
    generality of the Immediately preceding sentence, upon
    Lender’s demand, Lender shall be reimbursed for all costs
    and expenses, including attorneys’ fees and costs, which
    are incurred by Lender in connection with any action by Lender
    for relief from the automatic stay arising under Bankruptcy Code
    Section 362(a), 11 U.S.C. § 362(a).

 

    15.13 Authorization.  Borrower
    hereby authorizes Lender to file any appropriate financing
    statements to reflect any and all modifications to the Loan
    Documents set forth in this Modification Agreement and to
    perfect any liens grated in connection herewith.

 

    15.14 No Third Party
    Beneficiaries.  This Modification Agreement is
    entered into for the sole benefit of Lender and the other
    parties executing this Modification Agreement, and no other
    party shall have any right of action under this Modification
    Agreement.

 

    16. REVIEW WITH INDEPENDENT
    COUNSEL.  EVERY PARTY WHO EXECUTES THIS
    MODIFICATION AGREEMENT ACKNOWLEDGES AND AGREES THAT (A) IT
    HAS CAREFULLY READ ALL OF THE TERMS AND CONDITIONS OF THIS
    MODIFICATION AGREEMENT AND THE DOCUMENTS CONTEMPLATED BY THIS
    MODIFICATION AGREEMENT AND UNDERSTANDS SUCH TERMS AND
    CONDITIONS; AND (B) IT HAS ENTERED INTO THIS MODIFICATION
    AGREEMENT FREELY AND VOLUNTARILY, AFTER HAVING CONSULTED WITH
    ITS INDEPENDENT LEGAL COUNSEL OR AFTER HAVING HAD AN OPPORTUNITY
    TO CONSULT WITH ITS INDEPENDENT LEGAL COUNSEL.

 

    [SIGNATURE
    PAGE FOLLOWS]
    

    

    E-6

 

	 	 	 
	

    BORROWER:

	
 
	
    LENDER:

	
 
	
 
	
 

	
    GREENHILL & CO., INC., 

    a Delaware corporation
	
 
	
    FIRST REPUBLIC BANK

	
 
	
 
	
 

	
    By: /s/  Harold
    J. Rodriguez, Jr.

    

	
 
	
    By: 

    

	
    Name: Harold J. Rodriguez, Jr.
	
 
	
    Name:

	
    Title: Chief Administrative Officer
	
 
	
    Title:

 

    PLEDGORS:

 

    The undersigned Pledgors hereby agree to the

    terms of, and are bound by, Section 13 of this

    Agreement.

 

    Greenhill Capital Partners, LLC,

    a Delaware limited liability company

 

			
	    By: 
	
    /s/  Harold
    J. Rodriguez, Jr.

	 

    Name: Harold J. Rodriguez, Jr.

    Title: Chief Financial Officer

 

    Greenhill Venture Partners, LLC, a

    Delaware limited liability company

 

			
	    By: 
	
    /s/  Harold
    J. Rodriguez, Jr.

	 

    Name: Harold J. Rodriguez, Jr.

    Title: Chief Financial Officer

 

    Greenhill Capital Partners II LLC,

    a Delaware limited liability company

 

			
	    By: 
	
    /s/  Harold
    J. Rodriguez, Jr.

	 

    Name: Harold J. Rodriguez, Jr.

    Title: Chief Financial Officer

    

    E-7exv10w38

EXHIBIT 10.38

Annual Incentive Plan (AIP)

Summary Document

	 	 	 	 

	Purpose

	 	 	THE FERRO ANNUAL INCENTIVE PLAN (AlP) provides participants with an opportunity to earn additional
cash compensation based upon the achievement of the Company’s business goals. The AlP is an
important element of the total competitive compensation package provided to participants and is
subject to oversight by the Board Compensation Committee as provided in the Compensation Committee
Charter.

	 
	 	 	 
	 

	 	 	The AlP is intended to provide a strong linkage between the financial rewards received by
participants and the achievement of the Company’s annual financial and business goals for the plan
year. The financial reward is an “at risk” component of participants’ compensation and must be
re-earned each year based on the achievement of defined performance goals.

	 
	 	 	 
	Plan 

Administration

	 	 	The Vice President of Human Resources administers the AlP and, with agreement from the Chief
Executive Officer (CEO) of the Company, has the authority to make or revise rules in connection
with the AlP. The Vice President of Human Resources also may adopt administrative procedures in
connection with the AlP and has discretion to interpret situations or conditions not specifically
covered in this Summary Document so as to maintain consistency with the overall purpose of the
plan.

	 
	 	 	 
	 

	 	 	It is the responsibility of the Corporate and Group Human Resource Directors to ensure that all
additions and changes to AlP participants, including removal from the plan, are documented and
approved in a timely manner. This includes obtaining the required signatures from the applicable
SMC executive, Vice President of Human Resources and the CEO, and submitting the original document
to Corporate Compensation.

	 
	 	 	 
	Eligibility

	 	 	Eligible participants include key business leaders and managers who are full-time employees of the
Company, at a minimum U.S. salary grade of 17, or at an equivalent level outside the U.S.
Additional eligibility criteria for management participation may include responsibility for profit
and loss, departmental budgets, global scope of responsibility, degree of financial impact,
decision-making authority and market pay practices for the position.

	 
	 	 	 
	 

	 	 	In addition, AlP participants may include sales managers and other sales-related professionals as
deemed appropriate by the Operating Vice President(s) in order to maintain a strong linkage
between their efforts and achievement of MBU financial goals.

	 
	 	 	 
	 

	 	 	The responsible Vice President, the Vice President of Human Resources and the CEO must approve new
participants in the AlP. Additionally, new hires must be employed on or before October
1st to be eligible to participate in the current plan year. Any award will be prorated
accordingly.

	 
	 	 	 
	 

	 	 	Approved participants will receive written notification from the Company each year, confirming
their participation, incentive target level, and applicable performance metrics.

	 
	 	 	 
	AIP Goals

	 	 	Each year, goals for the Company and its business units are determined by the CEO and Board of
Directors based on the Company’s most critical operating priorities and the approved operating
budget. A range of performance is established for each AlP

	 
	 	 	 
	 	 	 	 

 

 

	 	 	 	 

	

AIP Goals 

Continued

	 	 	goal including Target, Threshold and
Maximum performance levels. AlP goals for all or part of the year are communicated to participants
near the beginning of each year. If AlP goals for only part of the year are initially provided,
AIP goals for later parts of the year will be provided subsequently, near the beginning of the
relevant period. Goals and weightings may change from year to year or within a year to reflect the
operating priorities of the business. Personal Performance Objectives (PPOs) may be included as an
AlP goal if inclusion of PPOs is approved by the CEO or the Board Compensation Committee.

	 
	 	 	 
	Incentive 

Target

	 	 	Each participant in the AlP has a designated incentive target. The incentive target is the
percentage of base salary that is earned based upon the attainment of AlP Goals.

	 
	 	 	 
	Threshold, 

Target,

& Maximum

	 	 	•    At Threshold performance, an individual’s incentive guideline would be 25% of his/her target incentive.

•    At Target, the incentive guideline would be 100% of the target incentive.

•    At Maximum, the incentive guideline would be 200% of the target incentive.

	 
	 	 	 
	Calculation of
Individual
Incentives &
the
Performance
Modifier

	 	 	A participant’s actual incentive award will be determined based upon the attainment for each
metric as described above. For financial goals, “Management” participants’ calculated score may be
increased or decreased by up to 20%, based on assessment of individual performance and achievement
of goals. For “Sales” participants, the calculated amount may be increased or decreased by up to
50%, based upon assessment of personal performance and achievement of individual sales targets and
goals, as established and assessed by management. If a Personal Performance Objective (PPO)
component is included in the AlP goals for a particular year, the goal will be scored by the
Manager based upon the individual’s achievement of the PPO’s, without further adjustment.

	 
	 	 	 
	 

	 	 	Although individual incentives may be adjusted as described above, the total amount of the
incentives paid from each incentive pool cannot exceed the amount funded by AlP attainment for the
Company or applicable business unit.

	 
	 	 	 
	 

	 	 	Except for employees who retire prior to the end of the year, incentive payments will be
calculated based upon the employees’ annual base salary as of December 31st of the plan
year (see Retirement),

	 
	 	 	 
	Performance 

Metrics May Be 

Modified

	 	 	The corporate or MBU performance metric(s) and/or PPOs may be modified throughout the plan year to
incorporate unplanned events beyond the reasonable control of the Company or participants.

	 
	 	 	 
	Assessment and
Payout

	 	 	Final assessment of results calibrated against performance metrics will be determined following
the completion of the plan year (December 31st) and will be based on audited financial
results.

	 
	 	 	 
	 

	 	 	Payouts, if achieved, will be made to participants by March 15th following the end of
the plan year. No interest accrues on incentives between the date earned and the date paid.

	 
	 	 	 
	Performance 

Period

	 	 	The AlP performance period is January 1st through December 31st of each year.

	 
	 	 	 
	Mid-Year Plan 

Participation

	 	 	If an employee is hired into a position included in the AlP, either as a new-hire or internal
promotion, the employee’s participation will begin with the effective date of the new position,
provided it is on or before October 1st of the plan year. Management must establish
PPOs for the remainder of the plan year upon which the employee will

			
	 	 	 
	Revised January, 2011
	 	2

 

 

	 	 	 	 

	 

	 	 	later be assessed. The
employee’s AlP award will be calculated on a prorated basis.

	 
	 	 	 
	Mid-Year Plan 

Participation 

Continued

	 	 	An employee entering a covered position on or after October 2nd of the plan year is not
eligible to participate until the following plan year. If a newly eligible participant has been
employed by the Company in another position, the employee may be eligible for a payout under
another approved Ferro incentive plan (i.e., USIP). If the employee is new to the Company, the
employee will begin participation on January 1st of the following year and will receive
no AlP incentive payout for the remainder of the current plan year.

	 
	 	 	 
	Other Prorated 

Participation

	 	 	Employees who are on unpaid leave for greater than 30 days will not be eligible for an incentive
for the period during which they are on such leave.

	 
	 	 	 
	 

	 	 	If a participant dies prior to the end of the plan year and an incentive is paid out for that
year, the employee’s estate will receive a prorated award based upon his/her annual rate of base
salary at the time of death provided the employee has worked a minimum of three months during the
plan year. Assessment of results calibrated against corporate performance measurement metrics will
be conducted after the completion of the plan year (December 31st).

	 
	 	 	 
	Retirement

	 	 	If a participant retires prior to the end of the plan year and an incentive is paid out for that
year, the employee will receive a prorated award based on his/her annual rate of base salary at
retirement provided the employee has worked a minimum of three months during the plan year.
Assessment of results calibrated against corporate performance measurement metrics will be
conducted after the completion of the plan year (December 31st).

	 
	 	 	 
	Forfeiture

	 	 	Participants who are actively employed with the Company at the end of the plan year (December
31st) will be eligible for an incentive payment for that plan year, if an incentive was
achieved under the terms of the plan. A participant’s right to be considered for a payout will be
forfeited if, prior to the end of the plan year, the participant is no longer in the employment of
the Company for reasons other than retirement or divestiture as described below.

	 
	 	 	 
	No Right to
Employment or
Award

	 	 	Nothing in this AlP Summary Document shall be construed to limit in any way the right of Ferro,
any affiliates or subsidiaries to terminate a participant’s employment at any time; nor shall it
be evidence of any agreement or understanding, expressed or implied, that Ferro, any affiliates or
subsidiaries will employ an employee in any particular position, for any particular period of
time, ensure participation in any incentive plans, or grant awards from such plans, as they may
from time to time exist.

	 
	 	 	 
	 

	 	 	Ferro reserves the right to modify, amend or terminate the AlP at any time, or from time to time
make changes to or revise the metrics, targets, financial charts or MBU threshold designations,
figures or other information, target percentages and other aspects of the AlP due to errors,
revisions of financial results or estimates, or otherwise.

	 
	 	 	 
	Divestiture

	 	 	In the case of divestitures, performance assessments may be adjusted for participants within and
outside the divested business as deemed appropriate by management to reflect the timing and
circumstances of the divestiture in relationship to the established goals for the period. For
participants not in the divested unit, calculations may include assumed budgeted performance by
the divested unit for the post-divestiture period in addition to the actual performance of the
divested unit up to and including the date of divestiture. For participants in the divested unit,
generally

			
	 	 	 
	Revised January, 2011
	 	3

 

 

	 	 	 	 

	 

	 	 	only actual performance through the date of divestiture will be considered.
	 
	 	 	 
	Other Terms,
Rules and
Conditions

	 	 	•    All incentive payments will be prorated to reflect time in position.

•    An employee cannot receive incentive compensation payments under other Company incentive
plans for the same covered time period unless otherwise approved by the Vice President of Human
Resources and the CEO.

•    Individuals who have been on a personal improvement plan at any time during the plan year
may be ineligible to receive incentive compensation under this plan.

•    Not all eligible employees may receive an award. Individual awards may be greater or
lesser than the calculated amount.

•    All incentive payments are subject to applicable taxes and with holdings.

 Approvals:

	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	   /s/ James F. Kirsch
	 	1/17/2011
	 	 
	 	 	 	 	 
	 

	 	James F. Kirsch, Chairman, President and Chief Executive Officer
	 	Date	 	 
	 
	 	 	 	 	 	 
	 

	 	   /s/ Ann E. Killian
	 	1/14/2011	 	 
	 	 	 	 	 
	 

	 	Ann E. Killian, Vice President, Human Resources
	 	Date	 	 
	 
	 	 	 	 	 	 
	 

	 	   /s/ Thomas R. Miklich
	 	1/14/2011	 	 
	 	 	 	 	 
	 

	 	Thomas R. Miklich, Vice President & Chief Financial Officer
	 	Date	 	 
	 
	 	 	 	 	 	 

			
	 	 	 
	Revised January, 2011
	 	4

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