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 an