Employment Transition Agreement

Employment Transition Agreement

This document is an Employment Transition Agreement (this “Employment Transition Agreement”) and is between Ferro Corporation (“Ferro”) and Thomas M. Gannon (“Mr. Gannon”).

For good and valuable consideration, and intending to be legally bound, Ferro and Mr. Gannon hereby agree as follows:

1. Background

2. Transition

3. Standby Severance Package

If Mr. Gannon becomes entitled to receive the Standby Severance Package, then the Standby Severance Package would consist of the following:

The “Severance Period” would be the period beginning January 3, 2007, and ending December 31, 2007.

Ferro would pay Mr. Gannon as severance -

Ferro would pay the employer’s portion of Mr. Gannon’s premium costs under Ferro’s group health (i.e., medical, dental, and vision) plans in accordance with his current elections, through January 2, 2007, and Ferro would reimburse Mr. Gannon for premiums paid by him for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) up to the amount of Ferro’s current employer contributions for his group health coverage throughout the Severance Period and for the first six months following the end of the Severance Period.

On or before January 31, 2007, Mr. Gannon will be entitled to purchase his company automobile in accordance with normal Ferro policy. Mr. Gannon will be entitled to the use of such automobile (together with gasoline, normal maintenance, and insurance) until such date.

Mr. Gannon will be entitled to the continued use of his company cellular telephone until January 3, 2007. Ferro will cooperate with Mr. Gannon in transferring his company cellular telephone number to a personal cellular telephone service of Mr. Gannon’s choosing.

4. Annual Incentive Plan

5. Stock Options

Ferro will make no further awards to Mr. Gannon under the Performance Share Plan and Mr. Gannon will be eligible for no further distributions or payments with respect to such as-yet-unmatured Performance Shares.

7. Non-Competition and Confidentiality

Mr. Gannon will not disclose this Employment Transition Agreement or its terms to anyone other than his spouse or his personal tax advisor, financial advisor, or attorney, who will similarly maintain it in confidence.

In addition, in consideration of the Severance Package, if Mr. Gannon incurs a Qualifying Termination on January 3, 2007 Mr. Gannon promises that:

In addition, Mr. Gannon hereby reaffirms the commitments he made to Ferro in paragraphs 1-4 of his Confidentiality Agreement.

Ferro will cause its senior management to refrain from making any statements or disclosing any information concerning Mr. Gannon which is likely to disparage Mr. Gannon or which is likely to damage his reputation or employment prospects, unless required to do so by law or a court of competent jurisdiction.

8. Waiver

Mr. Gannon acknowledges that the benefits provided under this Employment Transition Agreement will be paid only if he provides Ferro, as soon as administratively practicable following his Qualifying Termination on January 3, 2007:

9. Release

In consideration of the rights provided under this Agreement, Mr. Gannon releases Ferro, as well as all employees, officers, directors, parents, subsidiaries, affiliates, agents, representatives, successors, and assigns of Ferro, from any and all claims, demands, actions, causes of action, suits, damages, losses, costs, attorneys’ fees, and or expenses, known or unknown, which Mr. Gannon has or may claim to have against any of the foregoing arising from his employment or as a result of his termination of employment with Ferro, except as specifically provided for under this Agreement. Ferro, in turn, hereby releases Mr. Gannon from any and all claims, demands, actions, causes of action, suits, damages, losses, costs, attorneys’ fees, and or expenses, known or unknown, which Ferro has or may claim to have against Mr. Gannon arising from Mr. Gannon’s employment with Ferro, except with respect to intentional wrongdoing or illegal conduct by Mr. Gannon in connection with his employment with Ferro.

Mr. Gannon covenants to Ferro that, in consideration of the rights provided under this Agreement, he will not assert any such claims, demands, actions, or causes of action.

Mr. Gannon acknowledges that the foregoing release includes (but is not limited to) claims arising under Federal, state, or local law in the United States prohibiting employment discrimination, such as the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Employee Retirement Income Security Act, the Equal Pay Act, 42 U.S.C. §1981, Section 1981 of the Civil Rights Act of 1866, the Vietnam Era Veterans Readjustment Assistance Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Family and Medical Leave Act, and all claims under any other Federal or state laws, local ordinances or common law and other laws restricting an employer’s right to terminate the employment relationship. Mr. Gannon further acknowledges that such release includes (but is not limited to) any claims Mr. Gannon may have for unemployment compensation or may have under any internal grievance procedure at Ferro.

The foregoing release will not, however, apply to any claims, demands, actions, or causes of action arising after the date Mr. Gannon executes this Agreement.

10. Voluntary Election

Mr. Gannon acknowledges that:

11. Withholding

All payments under this Employment Transition Agreement will be subject to withholding, deductions and contributions as required by law. Ferro may withhold from any payment made by it under this Agreement amounts as may be required to comply with the tax withholding or other provisions of the Internal Revenue Code of 1986, as amended, 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 under this Employment Transition Agreement.

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If Mr. Gannon dies on or before January 3, 2007 while still employed at Ferro, then notwithstanding anything to the contrary provided in this Employment Transition Agreement, Ferro will pay Mr. Gannon’s beneficiary (as designated by Mr. Gannon in writing to Ferro) or, failing such designation, to Mr. Gannon’s estate the lump sum severance payment described in paragraph 3.B(2) above and provide Mr. Gannon’s family with the severance benefits described in paragraph 3.C above through December 31, 2007. In such case, Ferro will make the lump sum payment as soon as administratively practicable following the date of Mr. Gannon’s death, and in any event shall be made no later than the 15^th day of the third calendar month following the close of the calendar year containing the date of death.

14. Not in Substitution

Mr. Gannon and Ferro herby certify that none of the benefits provided under this Agreement are in substitution for, or in replacement of, amounts to which Mr. Gannon would otherwise be entitled to receive as deferred compensation.

15. Governing Law

This Employment Transition Agreement will be governed by the internal substantive laws of the State of Ohio, the state in which Mr. Gannon was employed at the time his employment was terminated.

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To evidence their agreement and intention to be bound legally by this document, Thomas M. Gannon and Ferro Corporation have signed and dated this Employment Transition Agreement.

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