Accounting Firm Information
ACCOUNTING FIRM INFORMATION
Appointment of Independent Registered Public Accounting Firm
The Audit Committee has sole responsibility for appointing the Companys independent registered public accounting firm, but will consider the outcome of the
shareholder vote on ratification of any appointment.
Deloitte & Touche LLP has served as the Companys independent registered public accounting firm
since 2006. In accordance with its responsibilities under its charter and the NYSE listing standards, the Audit Committee will assess periodically the advisability of rotating audit firms for audits in future years. In recommending to the Board of
Directors for submission to the shareholders at the 2018 Annual Meeting the ratification of Deloitte & Touche LLP (Deloitte) as the independent registered public accounting firm for the year ending December 31, 2018, the
Audit Committee took into consideration several factors, including Deloittes tenure, reports of the Public Company Accounting Oversight Board (PCAOB) on Deloitte and Deloittes fees and performance. Representatives of
Deloitte will attend the 2018 Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
Fees
The Audit
Committee has sole responsibility, in consultation with management, for approving the terms and fees for the engagement of the independent registered public accounting firm for audits of the Companys financial statements and internal control
over financial reporting. In addition, the Audit Committee has sole responsibility for determining whether and under what circumstances the Companys independent registered public accounting firm may be engaged to perform audit-related and
non-audit
services and must
pre-approve
any audit-related and
non-audit
services performed by the independent registered public
accounting firm consistent with applicable regulations. Under no circumstance is the Companys independent registered public accounting firm permitted to perform services of the nature described in Section 201 of the Sarbanes-Oxley Act.
For the years ended December 31, 2017 and 2016, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu Limited, and their respective
affiliates billed or will bill the Company fees as follows:
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Year
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|
Audit Fees
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|
|
Audit-
Related
Fees
|
|
|
Tax Fees
|
|
|
All Other
Services
|
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2017
|
|
$
|
4,319,000
|
|
|
$
|
164,000
|
|
|
$
|
213,000
|
|
|
$
|
15,000
|
|
2016
|
|
$
|
3,588,000
|
|
|
$
|
19,000
|
|
|
$
|
777,000
|
|
|
$
|
15,000
|
|
Fees noted in Audit Fees in 2017 and 2016 represent fees for the audits of the annual consolidated financial statements and
internal control over financial reporting as of and for the years ending December 31, 2017 and 2016; statutory audits of certain local subsidiary financial statements as of and for the years ended December 31, 2017 and 2016; and reviews of the
interim financial statements included in quarterly reports.
Fees noted in Audit-Related Fees in 2017 represent certification, reports and translation
services generally performed by local statutory auditors. Fees noted in 2016 include translation services generally performed by local statutory auditors.
Fees
noted in Tax Fees in 2017 represent tax compliance services, primarily related to international transfer pricing, of $28,000 and tax planning services, primarily related to intellectual property and service principle analysis, of
$185,000. Fees in 2016 represent tax compliance services, primarily related to international transfer pricing, of $25,000 and tax planning services, primarily related to the European Treasury Financing Project and Phase III of the Centralized IP
Alignment Project, of $752,000.
Fees noted in All Other Services in 2017 and 2016 represent fees for access to accounting research databases.
The Audit Committee has approved all audit-related and non-audit services described above and has concluded that the provision of these audit-related and non-audit
services is compatible with maintaining Deloitte & Touche LLPs independence.
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54
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Ferro Corporation 2018 Proxy Statement
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Recommendations and Nominations of Directors and Shareholder Proposals for 2019 Annual Meeting
RECOMMENDATIONS AND NOMINATIONS OF DIRECTORS
AND SHAREHOLDER PROPOSALS FOR 2019 ANNUAL MEETING
Recommending a Candidate for our Board of
Directors
The Governance & Nomination Committee will consider candidates for Director who are recommended by shareholders in accordance with the
advance notice provisions in the Companys Code of Regulations. Shareholder recommendations must be submitted in writing to: Secretary, Ferro Corporation, 6060 Parkland Boulevard, Suite 250, Mayfield Heights, Ohio 44124 USA. Shareholders may
recommend candidates to be considered by the Committee at any time; however, for a candidate to be considered for election at an annual shareholders meeting, the notice must be received not less than 90 or more than 120 calendar days prior to the
first anniversary of the date of the preceding years annual meeting of shareholders. Based on the currently scheduled date of the 2018 Annual Meeting, for a shareholders candidate to be considered for nomination for election at the 2019
Annual Shareholders Meeting, notice must be received no earlier than January 3, 2019 and no later than February 2, 2019 to be timely. The recommendation notice should include the information required by the Code of Regulations, including,
but not limited to, (a) certain biographical and share ownership information concerning the nominee and the shareholder proponent, (b) a description of any arrangements between the shareholder proponent (and certain affiliates) and any
other person or entity with respect to the nomination, including the nominee, and (c) a written consent of the nominee to serve as a Director of the Company, if elected, and a representation regarding the nominees voting commitments or
actions as a Director, as well as that the nominee will comply with the Companys corporate governance and other policies, principles and guidelines. The Company may also require a candidate to furnish additional information regarding his or
her eligibility and qualifications.
Nominating a Person for Election as a Director under our Proxy Access
Provisions
The Companys Code of Regulations contains a proxy access provision that permits an eligible shareholder who complies with
the provision to nominate one or more individuals for election to the Board of Directors at an annual shareholders meeting and to have the nomination included in the Companys proxy statement for that meeting. An eligible
shareholder is a record or beneficial owner (or group of up to 20 record and/or beneficial owners) who owns and has owned continuously for at least 3 years at least 3% of the outstanding shares of capital stock of the Company entitled to vote
generally for the election of Directors. A shareholder cannot be a part of more than one group nominating individuals for any particular annual meeting. The proxy access provision includes rules to determine whether a record or beneficial holder
owns the capital stock of the company for purposes of the proxy access provision and addresses the treatment of loaned shares and hedging transactions.
To nominate a nominee, among other requirements that are set forth in the Code of Regulations, an Eligible Shareholder must submit a nomination notice no earlier than
150 calendar days and no later than 120 calendar days prior to the anniversary of the date that the Company commenced mailing or otherwise sending its proxy statement for the preceding years annual meeting of shareholders. With respect to the
2019 Annual Meeting of Shareholders, the notice must be received no earlier than October 23, 2018 or later than November 22, 2018. For any nomination to be timely under the proxy access provision, the company must receive by the deadline
the shareholder nomination and all required information and documentation described in the proxy access provision, and any supporting statement of 500 words or less that the Eligible Shareholder wished to be included in the proxy statement.
Shareholder nominations and related documentation should be sent to the Secretary at our principal executive offices located at 6060 Parkland Boulevard, Suite 250, Mayfield Heights, Ohio 44124.
The proxy access provision has a number of limitations and requirements related to Director nominations by eligible shareholders, which can be found in our Code of
Regulations.
Making a Shareholder Proposal
Any shareholder who intends to present a proposal at the 2019 Annual Meeting of Shareholders for inclusion in the Proxy Statement and form of proxy relating to that
meeting may do so in accordance with Securities and Exchange
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56
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Ferro Corporation 2018 Proxy Statement
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Recommendations and Nominations of Directors and Shareholder Proposals for 2019 Annual Meeting
Commission Rule
14a-8.
Any such shareholder proposal must
delivered to the Company at our headquarters at 6060 Parkland Boulevard, Suite 250, Mayfield Heights, Ohio 44124, not later than November 22, 2018, and must otherwise comply with Rule
14a-8
under the
Securities Exchange Act of 1934, as amended, and the advance notice provisions in the Regulations.
Any shareholder who intends to present a proposal at the 2019
Annual Meeting other than for inclusion in Ferros proxy statement and form of proxy must comply with the advance notice provisions in the Regulations. Among other requirements, these provisions require that such shareholder deliver the
proposal to Ferro at our headquarters at 6060 Parkland Boulevard, Suite 250, Mayfield Heights, Ohio 44124, not less than 90 nor more than 120 calendar days prior to the first anniversary date of the preceding years annual meeting. Otherwise,
such proposal will be untimely. Based on the scheduled date of the 2018 Annual Meeting, a proposal for the 2019 Annual Meeting must be delivered no earlier than January 3, 2019 and no later than February 2, 2019 to be timely. Ferro
reserves the right to exercise discretionary voting authority on the proposal if a shareholder submits the proposal earlier than January 3, 2019 and no later than February 2, 2019.
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Ferro Corporation 2018 Proxy Statement
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57
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General Information
GENERAL INFORMATION
Who is soliciting my proxy with this Proxy Statement?
The Board of Directors of Ferro is soliciting your proxy in connection with Ferros 2018 Annual Meeting of Shareholders.
What if I wish to attend the meeting?
Attendance at the meeting is limited to the Companys shareholders and the Companys invited guests. If you hold shares in your name, please be prepared to
provide proper identification, such as a drivers license. If you hold your shares through a bank or broker (i.e., in street name), you also will need proof of ownership, such as a recent account statement or letter from your bank
or broker, along with proper identification.
Even if you wish to attend the meeting, we urge you to cast your vote prior to the meeting using the enclosed proxy
card, via the Internet or by telephone. If you choose to vote in person at the meeting, it will revoke any previous proxy submitted. If you hold your shares in street name and wish to vote in person at the meeting, you must provide a legal proxy
obtained from your bank or broker.
Please note that participants in the Ferro Corporation 401(k) Plan are not entitled to vote in person at the meeting by virtue
of participating in such Plan. Only the Trustee of such Plan is authorized to vote shares held by participants on their behalf. (Please see If I am a participant in the Ferro Corporation 401(k) Plan, how do I vote? below.)
Who is entitled to vote at the meeting?
The
record date for this meeting is March 15, 2018. On that date, Ferro had 84,393,988 shares of common stock (Common Stock) outstanding. Each of these shares will be entitled to one vote at the meeting. Shareholders may not cumulate
votes in the election of Directors.
If I am a shareholder of record of Common Stock, how do I vote?
If your shares are registered directly in your name with the Companys transfer agent, Computershare Investor Services, LLC, you are considered the shareholder of
record with respect to those shares and you may cast your vote in person at the meeting or by any one of the following ways:
By Telephone:
You may call the
toll-free number indicated on your proxy card. Follow the simple instructions and use the personalized control number specified on your proxy card to vote your shares. You will be able to confirm that your vote has been properly recorded. Your
telephone vote authorizes the named proxies to vote your shares in the same manner as if you had marked, signed and returned a proxy card.
Over the
Internet:
You may visit the website indicated on your proxy card. Follow the simple instructions and use the personalized control number specified on your proxy card to vote your shares. You will be able to confirm that your vote has been
properly recorded. Your Internet vote authorizes the named proxies to vote your shares in the same manner as if you had marked, signed and returned a proxy card.
By Mail:
You may mark, sign and date the enclosed proxy card and return it in the postage-paid envelope provided.
If I am a beneficial owner of shares held in street name, how do I vote?
If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares
held in street name. The organization holding your account is considered the shareholder of record for purposes of voting at the 2018 Annual Meeting. As a beneficial owner, you have the right to instruct that organization on how to vote
the shares held in your account. Notice of electronic availability of proxy materials, including voting instructions, should be forwarded to you by that organization. If you request printed copies of these proxy materials by mail, you will receive a
voting instruction form.
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58
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Ferro Corporation 2018 Proxy Statement
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General Information
If I am a participant in the Ferro Corporation 401(k) Plan, how do I vote?
If you are a participant in the Ferro Corporation 401(k) Plan (the Plan), you have the right to instruct Great-West Trust Company, LLC, as Trustee, to vote
the shares allocated to your Plan account. If you do not give voting instructions or if your voting instructions are not received by the deadline shown on the enclosed voting instruction form, the Trustee will vote the uninstructed shares in the
same proportion in which it has received timely voting instructions.
What if I want to change my vote?
If you want to change your vote, you may revoke your proxy by:
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Submitting your vote at a later time via the Internet or telephone;
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Submitting a properly signed proxy card with a later date that is received at or prior to the 2018 Annual Meeting;
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Attending the 2018 Annual Meeting and voting in person (if you do revoke your proxy during the meeting, it will not, of course, affect any vote that has already been taken); or
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Providing notice, either in writing before the meeting to: Secretary, Ferro Corporation, 6060 Parkland Boulevard, Suite 250, Mayfield Heights, Ohio 44124 USA or at the meeting itself.
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What if I submit a proxy without giving specific voting instructions?
If you properly submit a proxy without giving specific voting instructions, the individuals named as proxies on the proxy card will vote your shares:
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FOR
the election of the seven nominees for Director proposed by the Board.
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FOR
the approval of the 2018 Omnibus Incentive Plan.
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FOR
the approval of the compensation of the Companys named executive officers.
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FOR
the ratification of Deloitte & Touche LLP as the Companys independent registered public accounting firm for 2018.
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In accordance with the best judgment of the individuals named as proxies on the proxy card on any other matters properly brought before the 2018 Annual Meeting.
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Will my shares be voted if I do not provide my proxy?
If you are a registered shareholder and do not submit a proxy, you must attend the meeting in order to vote your shares.
If you hold shares in street name, your shares may be voted on certain matters even if you do not provide voting instructions to your bank or broker. Banks
and brokers have the authority under the rules of the New York Stock Exchange (NYSE) to vote shares for which their customers do not provide voting instructions on certain routine matters. The ratification of the appointment of
Deloitte & Touche LLP as the Companys independent registered public accounting firm is considered a routine matter for which banks and brokers may vote without specific instructions from their customers. You must provide voting
instructions to your bank or broker for your shares to be voted on all other matters presented at the 2018 Annual Meeting.
If you are a participant in the Plan and
do not instruct Great-West Trust Company, LLC, as Trustee, to vote the shares allocated to your Plan account, or if your voting instructions are not received by the deadline shown on the enclosed voting instruction form, the Trustee will vote the
uninstructed shares in the same proportion in which it has received timely voting instructions.
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Ferro Corporation 2018 Proxy Statement
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59
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General Information
What should I do if I have questions?
If you
have any questions or require any assistance with voting your shares of Common Stock, please contact our proxy solicitor, Innisfree M&A Incorporated, toll free at (888)
750-5834.
Banks and brokers may call
collect at (212)
750-5833.
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60
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Ferro Corporation 2018 Proxy Statement
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Miscellaneous
MISCELLANEOUS
Ferro
will bear the cost of preparing and mailing this statement, with the accompanying proxy and other instruments. Ferro will also pay the standard charges and expenses of brokerage houses, or other nominees or fiduciaries, for forwarding such
instruments to and obtaining proxies from security holders and beneficiaries for whose account they hold registered title to Ferro shares. Directors, officers and other employees of Ferro, acting on its behalf, may also solicit proxies, for which
they will not receive any additional compensation. Additionally, Innisfree M&A Incorporated, 501 Madison Avenue, New York, New York 10022, (Innisfree) has been retained at an estimated cost not to exceed $15,000 plus customary costs
and expenses, to aid in the solicitation of proxies for the 2018 Annual Meeting. Proxies may be solicited personally, by mail, by telephone, by email or via the Internet. This Proxy Statement and the accompanying proxy will be sent to shareholders
by mail on or about March 22, 2018.
The Company knows of no other matters to be submitted to the shareholders at the 2018 Annual Meeting. If any other matters
properly come before the shareholders at the 2018 Annual Meeting or any adjournments or postponements thereof, it is the intention of the persons named in the proxies to vote the shares represented thereby on such matters in accordance with their
best judgment.
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FERRO CORPORATION
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/s/ MARK H. DUESENBERG
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By:
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MARK H. DUESENBERG,
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Secretary
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March 22, 2018
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|
Ferro Corporation 2018 Proxy Statement
|
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61
|
|
Ferro Corporation and Subsidiaries
Reconciliation of Reported to Adjusted Financials
For the Twelve Months Ended December 31, 2017, 2016, 2015, 2014 and 2013
(Unaudited)
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|
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|
|
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|
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|
|
|
|
|
|
|
|
Net Sales
|
|
|
Gross Profit
|
|
|
|
|
|
Gross
Margin
|
|
(Dollars in millions)
|
|
PCG
|
|
|
CS
|
|
|
PC
|
|
|
Ferro
Total
|
|
|
PCG
|
|
|
CS
|
|
|
PC
|
|
|
Other
|
|
|
Ferro
Total
|
|
|
|
|
|
Ferro
Total
|
|
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|
2017
|
|
As Reported from Continuing Operations (GAAP)
|
|
$
|
444.7
|
|
|
$
|
358.1
|
|
|
$
|
594.0
|
|
|
$
|
1,396.7
|
|
|
$
|
157.5
|
|
|
$
|
113.7
|
|
|
$
|
145.8
|
|
|
$
|
(0.8
|
)
|
|
$
|
416.2
|
|
|
|
|
|
|
|
29.8
|
%
|
Special Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|
|
2.8
|
|
|
|
3.1
|
|
|
|
0.2
|
|
|
|
8.2
|
|
|
|
|
|
|
|
|
|
Total Special Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|
|
2.8
|
|
|
|
3.1
|
|
|
|
0.2
|
|
|
|
8.2
|
|
|
|
|
|
|
|
|
|
Constant Currency FX Impact
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted from Continuing Operations (Non-GAAP
measure)
|
|
$
|
444.7
|
|
|
$
|
358.1
|
|
|
$
|
594.0
|
|
|
$
|
1,396.7
|
|
|
$
|
159.6
|
|
|
$
|
116.5
|
|
|
$
|
148.9
|
|
|
$
|
(0.6
|
)
|
|
$
|
424.4
|
|
|
|
|
|
|
|
30.4
|
%
|
|
|
|
|
2016
|
|
As Reported from Continuing Operations (GAAP)
|
|
$
|
371.5
|
|
|
$
|
246.8
|
|
|
$
|
527.0
|
|
|
$
|
1,145.3
|
|
|
$
|
133.7
|
|
|
$
|
84.3
|
|
|
$
|
139.5
|
|
|
$
|
(6.2
|
)
|
|
$
|
351.2
|
|
|
|
|
|
|
|
30.7
|
%
|
Special Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
|
0.2
|
|
|
|
|
|
|
|
5.5
|
|
|
|
8.3
|
|
|
|
|
|
|
|
|
|
Total Special Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
|
0.2
|
|
|
|
|
|
|
|
5.5
|
|
|
|
8.3
|
|
|
|
|
|
|
|
|
|
Constant Currency FX Impact
2
|
|
|
2.6
|
|
|
|
1.2
|
|
|
|
(4.7
|
)
|
|
|
(0.8
|
)
|
|
|
0.8
|
|
|
|
0.1
|
|
|
|
(0.6
|
)
|
|
|
(0.0
|
)
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
As Adjusted from Continuing Operations (Non-GAAP
measure)
|
|
$
|
374.1
|
|
|
$
|
248.1
|
|
|
$
|
522.3
|
|
|
$
|
1,144.4
|
|
|
$
|
137.1
|
|
|
$
|
84.6
|
|
|
$
|
138.9
|
|
|
$
|
(0.7
|
)
|
|
$
|
359.9
|
|
|
|
|
|
|
|
31.4
|
%
|
|
|
|
|
2015
|
|
As Reported from Continuing Operations (GAAP)
|
|
$
|
376.8
|
|
|
$
|
165.2
|
|
|
$
|
533.4
|
|
|
$
|
1,075.3
|
|
|
$
|
128.2
|
|
|
$
|
45.7
|
|
|
$
|
126.9
|
|
|
$
|
0.8
|
|
|
$
|
301.7
|
|
|
|
|
|
|
|
28.1
|
%
|
Special Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold Business Venezuela
|
|
|
|
|
|
|
|
|
|
|
(8.4
|
)
|
|
|
(8.4
|
)
|
|
|
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
Nubiola Purchase Price Adj (PPA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.8
|
)
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
|
|
Total Special Items
|
|
|
|
|
|
|
|
|
|
|
(8.4
|
)
|
|
|
(8.4
|
)
|
|
|
|
|
|
|
5.8
|
|
|
|
0.7
|
|
|
|
(1.8
|
)
|
|
|
4.7
|
|
|
|
|
|
|
|
|
|
Constant Currency FX Impact
2
|
|
|
(2.3
|
)
|
|
|
1.0
|
|
|
|
(32.6
|
)
|
|
|
(33.9
|
)
|
|
|
(0.9
|
)
|
|
|
0.2
|
|
|
|
(6.2
|
)
|
|
|
(0.0
|
)
|
|
|
(6.9
|
)
|
|
|
|
|
|
|
|
|
As Adjusted from Continuing Operations (Non-GAAP
measure)
|
|
$
|
374.4
|
|
|
$
|
166.2
|
|
|
$
|
492.3
|
|
|
$
|
1,033.0
|
|
|
$
|
127.3
|
|
|
$
|
51.7
|
|
|
$
|
121.4
|
|
|
$
|
(1.0
|
)
|
|
$
|
299.5
|
|
|
|
|
|
|
|
29.0
|
%
|
|
|
|
|
2014
|
|
As Reported from Continuing Operations (GAAP)
|
|
$
|
407.7
|
|
|
$
|
115.4
|
|
|
$
|
588.5
|
|
|
$
|
1,111.6
|
|
|
$
|
135.0
|
|
|
$
|
28.5
|
|
|
$
|
131.0
|
|
|
$
|
(9.4
|
)
|
|
$
|
285.1
|
|
|
|
|
|
|
|
25.6
|
%
|
Special Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold Business Venezuela
|
|
|
|
|
|
|
|
|
|
|
(19.8
|
)
|
|
|
(19.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(3.4
|
)
|
|
|
|
|
|
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.7
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
Total Special Items
|
|
|
|
|
|
|
|
|
|
|
(19.8
|
)
|
|
|
(19.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(3.4
|
)
|
|
|
5.7
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
|
Constant Currency FX Impact
2
|
|
|
(37.1
|
)
|
|
|
(4.9
|
)
|
|
|
(98.0
|
)
|
|
|
(140.0
|
)
|
|
|
(11.9
|
)
|
|
|
(1.0
|
)
|
|
|
(20.8
|
)
|
|
|
(0.1
|
)
|
|
|
(33.7
|
)
|
|
|
|
|
|
|
|
|
As Adjusted from Continuing Operations (Non-GAAP
measure)
|
|
$
|
370.6
|
|
|
$
|
110.5
|
|
|
$
|
470.7
|
|
|
$
|
951.8
|
|
|
$
|
123.1
|
|
|
$
|
27.6
|
|
|
$
|
106.9
|
|
|
$
|
(3.8
|
)
|
|
$
|
253.7
|
|
|
|
|
|
|
|
26.6
|
%
|
|
|
|
|
2013
|
|
As Reported from Continuing Operations (GAAP)
|
|
$
|
390.0
|
|
|
$
|
198.2
|
|
|
$
|
600.4
|
|
|
$
|
1,188.6
|
|
|
$
|
112.8
|
|
|
$
|
36.2
|
|
|
$
|
134.1
|
|
|
$
|
(5.5
|
)
|
|
$
|
277.7
|
|
|
|
|
|
|
|
23.4
|
%
|
Special Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold Business Venezuela and Metal Powders & Solar product lines
|
|
|
|
|
|
|
(83.0
|
)
|
|
|
(19.0
|
)
|
|
|
(102.0
|
)
|
|
|
|
|
|
|
(6.0
|
)
|
|
|
(3.6
|
)
|
|
|
|
|
|
|
(9.6
|
)
|
|
|
|
|
|
|
|
|
Non GAAP
Adjustments
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.0
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
Total Special Items
|
|
|
|
|
|
|
(83.0
|
)
|
|
|
(19.0
|
)
|
|
|
(102.0
|
)
|
|
|
|
|
|
|
(6.0
|
)
|
|
|
(3.6
|
)
|
|
|
4.0
|
|
|
|
(5.6
|
)
|
|
|
|
|
|
|
|
|
Constant Currency FX Impact
2
|
|
|
(43.6
|
)
|
|
|
(5.5
|
)
|
|
|
(109.3
|
)
|
|
|
(158.4
|
)
|
|
|
(11.5
|
)
|
|
|
(0.6
|
)
|
|
|
(21.8
|
)
|
|
|
(0.1
|
)
|
|
|
(34.0
|
)
|
|
|
|
|
|
|
|
|
As Adjusted from Continuing Operations (Non GAAP
measure)
|
|
$
|
346.4
|
|
|
$
|
109.7
|
|
|
$
|
472.1
|
|
|
$
|
928.2
|
|
|
$
|
101.3
|
|
|
$
|
29.7
|
|
|
$
|
108.7
|
|
|
$
|
(1.6
|
)
|
|
$
|
238.1
|
|
|
|
|
|
|
|
25.7
|
%
|
1.
|
Non-GAAP adjustments are associated with several different types of non-recurring items that were recorded in Cost of Sales during the five years covered in the table above. For 2017 and 2016, the
adjustments to Cost of Sales primarily include the amortization of purchase accounting adjustments related to our recent acquisitions , other acquisition costs, and pension and other post-retirement mark-to-market adjustments and
settlements. For 2015, 2014 and 2013, the adjustments to Cost of Sales primarily relate to pension and other post-retirement mark-to-market adjustments and settlements.
|
2.
|
Reflects the remeasurement of 2016, 2015, 2014 and 2013 reported and adjusted results using 2017 average exchange rates, resulting in a constant currency comparative figures to 2017 reported and adjusted results.
|
A-1
It should be noted that adjusted net sales and adjusted gross profit referred to above are financial
measures not required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the
financial measures prepared in accordance with U.S. GAAP and a reconciliation of these financial measures to the most comparable U.S. GAAP financial measures is presented. We believe this data provides investors with additional information on
the underlying operations and trends of the business and enables period-to-period comparability of financial performance.
A-2
Ferro Corporation and Subsidiaries
Reconciliation of Adjusted EBITDA from Continuing Operations
For the Twelve Months Ended December 31, 2017, 2016, 2015, 2014 and 2013
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Net income (loss) attributable to Ferro Corporation common shareholders (GAAP)
|
|
$
|
57.1
|
|
|
$
|
(20.8
|
)
|
|
$
|
64.1
|
|
|
$
|
86.1
|
|
|
$
|
71.9
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
0.7
|
|
|
|
0.9
|
|
|
|
(1.0
|
)
|
|
|
0.2
|
|
|
|
0.5
|
|
Loss (income) from discontinued operations, net of income taxes
|
|
|
|
|
|
|
64.5
|
|
|
|
36.8
|
|
|
|
(94.8
|
)
|
|
|
(8.5
|
)
|
Restructuring and impairment charges
|
|
|
11.4
|
|
|
|
15.9
|
|
|
|
9.7
|
|
|
|
8.8
|
|
|
|
40.9
|
|
Other expense, net
|
|
|
7.9
|
|
|
|
9.6
|
|
|
|
5.2
|
|
|
|
16.0
|
|
|
|
(12.4
|
)
|
Interest expense
|
|
|
27.8
|
|
|
|
21.5
|
|
|
|
15.2
|
|
|
|
16.3
|
|
|
|
20.2
|
|
Income tax expense (benefit)
|
|
|
52.8
|
|
|
|
17.9
|
|
|
|
(45.1
|
)
|
|
|
(34.2
|
)
|
|
|
14.3
|
|
Depreciation and amortization
|
|
|
53.6
|
|
|
|
48.2
|
|
|
|
42.2
|
|
|
|
34.3
|
|
|
|
37.7
|
|
Less: interest amortization expense and other
|
|
|
(3.5
|
)
|
|
|
(1.4
|
)
|
|
|
(1.1
|
)
|
|
|
(3.1
|
)
|
|
|
(2.9
|
)
|
Cost of sales Non-GAAP adjustments
|
|
|
8.2
|
|
|
|
4.7
|
|
|
|
0.8
|
|
|
|
5.7
|
|
|
|
4.0
|
|
SG&A Non-GAAP adjustments
|
|
|
18.3
|
|
|
|
33.6
|
|
|
|
28.1
|
|
|
|
94.6
|
|
|
|
(62.4
|
)
|
Sold Business Venezuela
|
|
|
|
|
|
|
|
|
|
|
(1.8
|
)
|
|
|
(1.7
|
)
|
|
|
(2.4
|
)
|
Adjusted EBITDA (Non-GAAP measure) from continuing
operations
1
|
|
$
|
234.2
|
|
|
$
|
194.6
|
|
|
$
|
152.9
|
|
|
$
|
128.1
|
|
|
$
|
100.8
|
|
1.
|
Adjusted EBITDA from continuing operations is net income (loss) attributable to Ferro Corporation common shareholders before the effects of income (loss) attributable to noncontrolling interest, loss (income) from
discontinued operations, net of income taxes, restructuring and impairment charges, other expense net, interest expense, income tax expense (benefit), depreciation and amortization, non-GAAP adjustments to cost of sales and non-GAAP adjustments to
SG&A.
|
It should be noted that Adjusted EBITDA from continuing operations is a financial measure not required by, or presented in
accordance with, accounting principles generally accepted in the United States (U.S. GAAP). This non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, the financial measures prepared in accordance with U.S.
GAAP and a reconciliation of this financial measure to the most comparable U.S. GAAP financial measure is presented. We believe this data provides investors with additional information on the underlying operations and trends of the business and
enables period-to-period comparability of financial performance.
A-3
Ferro Corporation and Subsidiaries
Reconciliation of Adjusted Cash Flow from Continuing Operations
For the Twelve Months Ended December 31, 2017, 2016, 2015, 2014 and 2013
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Net income (loss) attributable to Ferro Corporation common shareholders (GAAP)
|
|
$
|
57.1
|
|
|
$
|
(20.8
|
)
|
|
$
|
64.1
|
|
|
$
|
86.1
|
|
|
$
|
71.9
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
0.7
|
|
|
|
0.9
|
|
|
|
(1.0
|
)
|
|
|
0.2
|
|
|
|
0.5
|
|
Loss (income) from discontinued operations, net of income taxes
|
|
|
|
|
|
|
64.5
|
|
|
|
36.8
|
|
|
|
(94.8
|
)
|
|
|
(8.5
|
)
|
Restructuring and impairment charges
|
|
|
11.4
|
|
|
|
15.9
|
|
|
|
9.7
|
|
|
|
8.8
|
|
|
|
40.9
|
|
Other expense, net
|
|
|
7.9
|
|
|
|
9.6
|
|
|
|
5.2
|
|
|
|
16.0
|
|
|
|
(12.4
|
)
|
Interest expense
|
|
|
27.8
|
|
|
|
21.5
|
|
|
|
15.2
|
|
|
|
16.3
|
|
|
|
20.2
|
|
Income tax expense (benefit)
|
|
|
52.8
|
|
|
|
17.9
|
|
|
|
(45.1
|
)
|
|
|
(34.2
|
)
|
|
|
14.3
|
|
Depreciation and amortization
|
|
|
53.6
|
|
|
|
48.2
|
|
|
|
42.2
|
|
|
|
34.3
|
|
|
|
37.7
|
|
Less: interest amortization expense and other
|
|
|
(3.5
|
)
|
|
|
(1.4
|
)
|
|
|
(1.1
|
)
|
|
|
(3.1
|
)
|
|
|
(2.9
|
)
|
Cost of sales Non-GAAP adjustments
|
|
|
8.2
|
|
|
|
4.7
|
|
|
|
0.8
|
|
|
|
5.7
|
|
|
|
4.0
|
|
SG&A Non-GAAP adjustments
|
|
|
18.3
|
|
|
|
33.6
|
|
|
|
28.1
|
|
|
|
94.6
|
|
|
|
(62.4
|
)
|
Adjusted EBITDA (Non-GAAP measure)
|
|
|
234.2
|
|
|
|
194.6
|
|
|
|
154.7
|
|
|
|
129.8
|
|
|
|
103.2
|
|
Capital expenditures
|
|
|
(34.2
|
)
|
|
|
(24.0
|
)
|
|
|
(20.3
|
)
|
|
|
(14.1
|
)
|
|
|
(22.3
|
)
|
Working capital
|
|
|
(42.8
|
)
|
|
|
(33.3
|
)
|
|
|
(5.4
|
)
|
|
|
(4.8
|
)
|
|
|
38.8
|
|
Cash income taxes
|
|
|
(25.7
|
)
|
|
|
(19.7
|
)
|
|
|
(21.4
|
)
|
|
|
(9.4
|
)
|
|
|
(5.8
|
)
|
Cash interest
|
|
|
(26.9
|
)
|
|
|
(17.5
|
)
|
|
|
(16.2
|
)
|
|
|
(28.5
|
)
|
|
|
(26.8
|
)
|
Pension
|
|
|
(4.5
|
)
|
|
|
(5.3
|
)
|
|
|
(4.1
|
)
|
|
|
(28.8
|
)
|
|
|
(29.1
|
)
|
Incentive compensation
|
|
|
(12.2
|
)
|
|
|
(8.8
|
)
|
|
|
(14.6
|
)
|
|
|
(21.6
|
)
|
|
|
(0.7
|
)
|
Other
|
|
|
2.2
|
|
|
|
(0.6
|
)
|
|
|
2.7
|
|
|
|
14.4
|
|
|
|
(29.8
|
)
|
Sold Business Venezuela
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
0.4
|
|
|
|
(1.5
|
)
|
Adjusted Cash Flow from Continuing Operations (Non-GAAP measure)
1
|
|
$
|
90.1
|
|
|
$
|
85.4
|
|
|
$
|
76.4
|
|
|
$
|
37.4
|
|
|
$
|
26.0
|
|
1.
|
Adjusted cash flow from continuing operations is Adjusted EBITDA less capital expenditures, changes in working capital, cash income taxes, cash interest, pension contributions, incentive compensation payments and other
continuing operating cash items.
|
It should be noted that adjusted cash flow from continuing operations is a financial measure not
required by, or presented in accordance with, accounting principles generally accepted in the United States (U.S. GAAP). This non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, the financial measure
prepared in accordance with U.S. GAAP, and a reconciliation of this financial measure to the most comparable U.S. GAAP financial measure is presented. We believe this data provides investors with additional information on the underlying
operations and trends of the business and enables period-to-period comparability of financial performance.
A-4
Ferro Corporation and Subsidiaries
Reconciliation of Adjusted Diluted Earnings per Share
For the Twelve Months Ended December 31, 2017, 2016, 2015, 2014 and 2013
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Diluted earnings (loss) per share (GAAP)
|
|
$
|
0.67
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.72
|
|
|
$
|
0.99
|
|
|
$
|
0.82
|
|
Special items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.07
|
|
Restructuring
|
|
|
0.10
|
|
|
|
0.18
|
|
|
|
0.07
|
|
|
|
0.06
|
|
|
|
0.23
|
|
Pension
1
|
|
|
(0.03
|
)
|
|
|
0.16
|
|
|
|
0.10
|
|
|
|
0.63
|
|
|
|
(0.51
|
)
|
Other
2
|
|
|
0.55
|
|
|
|
0.25
|
|
|
|
(0.45
|
)
|
|
|
0.23
|
|
|
|
(0.02
|
)
|
Taxes
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.21
|
)
|
|
|
(0.16
|
)
|
Discontinued operations
|
|
|
|
|
|
|
0.76
|
|
|
|
0.42
|
|
|
|
(1.08
|
)
|
|
|
(0.10
|
)
|
Noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
Total special items
4
|
|
|
0.62
|
|
|
|
1.34
|
|
|
|
0.12
|
|
|
|
(0.37
|
)
|
|
|
(0.49
|
)
|
Adjusted diluted earnings per share from continuing operations (Non GAAP measure)
|
|
$
|
1.29
|
|
|
$
|
1.09
|
|
|
$
|
0.85
|
|
|
$
|
0.62
|
|
|
$
|
0.33
|
|
1.
|
Pension and other post-retirement benefit mark-to-market adjustments and settlements.
|
2.
|
For 2017, the adjustments to Other relates to the amortization of purchase accounting adjustments related to our recent acquisitions, other acquisition costs, legal, professional and other expenses related
to certain business development activities, FX loss incurred on our Euro-denominated term loan, a loss on an equity method investment, gains and losses on asset sales, debt extinguishment charges, a gain on adjustment of a liability related to a
divested business in Argentina, and the gain recognized on increasing our ownership interest in Gardenia. In addition to the tax impacts to adjustments at statutory rates in note 3 below, an adjustment has also been made to adjust for the impact
associated with the Tax Cut and Jobs Act that was recorded in the fourth quarter.For 2016, the adjustments to Other relates to the amortization of purchase accounting adjustments related to our recent acquisitions, legal, professional
and other expenses related to certain business development activities, the gain on an asset sale that was recognized during the year, the finalization of the purchase price for the acquisition of Vetriceramici, impacts of currency-related items in
Egypt and the impact of the loss on a foreign currency contract associated with the purchase of Cappelle. For 2015, the adjustments to Other relates to currency related items in Venezuela, legal, professional and other expenses related
to certain business development activities and the loss on a foreign currency contract associated with the purchase of Nubiola. For 2014 and 2013, the adjustments to Other relates to certain severance costs, ongoing costs at facilities
that have been idled, gain/loss on divestitures, proxy contest related costs, certain business development activities, and certain costs related to divested assets and product lines.
|
3.
|
For 2017, 2016 and 2015, the tax rate reflects the reported tax rate, adjusted for non-GAAP adjustments being tax effected at the respective statutory rate where the item originated. For 2014 and 2013, adjustment of
reported income and of special items to a normalized 36% tax rate.
|
4.
|
Due to rounding, total earnings per share related to special items does not always add to the total adjusted earnings per share.
|
A-5
FERRO CORPORATION
2018 OMNIBUS INCENTIVE PLAN
1.
Purpose
. The purpose of this 2018 Omnibus Incentive Plan (this Plan) is to promote the long-term financial interests and growth of Ferro
Corporation and its subsidiaries and affiliated companies (Ferro) by:
(a) Attracting and retaining high-quality key employees and
Directors;
(b) Further motivating key employees and Directors to achieve Ferros short- and long-range performance goals and objectives and
act in the best interests of Ferro and its shareholders generally;
(c) Aligning the interests of Ferros key employees and Directors with
those of Ferros shareholders by encouraging their increased ownership of Ferro Common Stock, par value $1.00 per share (Common Stock); and
(d) Providing cash and equity compensation components to allow Ferro to offer competitive compensation to its employees.
2.
Plan Administration
. The Compensation Committee (the Committee) of the Board of Directors (the Board) (or such other committee as the
Board may from time to time designate) will administer this Plan. The Committee shall consist of not less than three Directors, all of whom shall be Non-Employee Directors (as defined in Rule 16b-3(b)(3)(i) of the Securities Exchange Act of 1934)
and Outside Directors (as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time (the Code)). If Ferros shareholders approve the Plan, the Ferro Corporation 2013 Omnibus Long-Term
Incentive Plan (the Prior Plan) will terminate in its entirety effective on the date of such approval (the Approval Date); provided that all outstanding awards under the Prior Plan as of the Approval Date shall remain
outstanding and shall be administered and settled in accordance with the provisions of the Prior Plan. Subject to any limitations established by the Board, in administering this Plan the Committee will have conclusive authority:
(a) To determine the terms and conditions, not inconsistent with the provisions of this Plan, of any Award granted under this Plan and prescribe the
form of any agreement or document applicable to any such Award;
(b) To construe and interpret the provisions of this Plan and all Awards granted
under this Plan;
(c) To establish, amend, and rescind rules and regulations for the administration of this Plan;
(d) To make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers
anti-dilution adjustments;
(e) To interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the
Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
(f) To exercise judgment to make any and all other
determinations which it determines to be necessary or advisable for the administration of the Plan.
B-1
The Committee will also have such additional authority as the Board may from time to time determine to be necessary or
desirable in order to further the purposes of this Plan.
3.
Awards to Participants
. The Committee will select the employees and Directors of Ferro
(Participants) who will participate in this Plan and determine the type(s) and number of award(s) (Awards) to be made to each such Participant. The Committee will determine the terms, conditions and limitations applicable to
each Award. The Committee may, if it so chooses, delegate authority to Ferros Chief Executive Officer to select certain of the Participants (other than officers and Directors subject to reporting under Section 16 of the Securities
Exchange Act of 1934) and to determine Awards to be granted to such Participants on such terms as the Committee may specify.
4.
Types of Awards
. Under this
Plan, the Committee will have the authority to grant the following types of Awards to Participants of Ferro:
(a)
Stock Options
. The
Committee may grant Awards in the form of Stock Options. Such Stock Options may be either incentive stock options (within the meaning of Section 422 of the Code) or nonstatutory stock options (not intended to qualify under Section 422 of
the Code). However, incentive stock options may be granted only to employees of Ferro and subsidiary corporations that are at least 50% owned, directly or indirectly, by Ferro. The option price of a Stock Option may be not less than the per share
Fair Market Value of the Common Stock on the date of the grant.
For the purposes of all grants of Awards under this Plan, Fair Market
Value means, as of any given date, the quoted closing price of the Common Stock on such date on the New York Stock Exchange or, if no such sale of the Common Stock occurs on the New York Stock Exchange on such date, then such closing price on
the next day on which the Common Stock is traded. If the Common Stock is no longer traded on the New York Stock Exchange, then the Fair Market Value of the Common Stock shall be determined by the Committee in good faith; provided, however, that
(i) if the Common Stock is readily tradable on an established securities market, the Fair Market Value shall be determined in the same manner as when it was traded on the New York Stock Exchange; and (ii) if the Common Stock is not traded
on an established securities market, Fair Market Value shall be determined using a reasonable application of a reasonable valuation method. Except as provided in Section 7 hereof, the terms of outstanding Stock Options may not be amended to
reduce the exercise price of such outstanding Stock Options or otherwise increase the value of such outstanding Stock Options and outstanding Stock Options may not be cancelled or exchanged for cash, other Awards or other Stock Options with an
exercise price that is less than the exercise price of the original Stock Options without shareholder approval. Stock Options will be exercisable in whole or in such installments and at such times and upon such terms as the Committee may specify;
provided, however, that (i) Stock Options shall vest and therefore become exercisable no earlier than one year after the date of grant; and (ii) no Stock Options may be exercisable more than ten years after the date of grant.
A Participant will be permitted to pay the exercise price of a Stock Option: (a) in cash or by check, (b) with shares of Common Stock
(c) by a cashless exercise program established with a broker or (d) by a combination of the foregoing methods. As determined by, and upon such terms as the Committee shall approve, the exercise price may be paid by a reduction in the
number of shares of Common Stock otherwise deliverable upon exercise of such Stock Option with a Fair Market Value equal to the aggregate exercise price. The aggregate fair market value (determined at the time the option is granted) of shares of
Common Stock as to which incentive stock options are exercisable for the first time by a Participant during any calendar year (under this Plan and any other plan of Ferro) may not exceed $100,000 (or such other limit as may be fixed by the Code from
time to time). Any Stock Option granted that is intended to qualify as an incentive stock option, but fails to so qualify at or after the date of grant will be treated as a nonstatutory stock option.
B-2
(b)
Stock Appreciation Rights
. The Committee may grant Awards in the form of Stock Appreciation
Rights. Stock Appreciation Rights will be granted for a stated number of shares of Common Stock on such terms, conditions and restrictions as the Committee deems appropriate. Stock Appreciation Rights will entitle a Participant to receive a payment,
in cash or Common Stock, as determined by the Committee, equal to the excess of (x) the Fair Market Value, on the date of exercise or surrender, of the number of shares of Common Stock covered by such exercise or surrender over (y) the
Stock Appreciation Rights exercise price (which may not be less than the Fair Market Value on the date of grant). Stock Appreciation Rights must be exercised within ten years of the date of grant. Except as provided in Section 7 hereof, the
terms of outstanding Stock Appreciation Rights may not be amended to reduce the exercise price of outstanding Stock Appreciation Rights or otherwise increase the value of such outstanding Stock Appreciation Rights and outstanding Stock Appreciation
Rights may not be cancelled or exchanged for cash, other Awards or other Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Stock Appreciation Rights without shareholder approval. Stock Appreciation
Rights may be granted either separately or in conjunction with other Awards granted under this Plan. Any Stock Appreciation Right related to a Stock Option, however, will be exercisable only to the extent the related Stock Option is exercisable.
Similarly, upon exercise of a Stock Appreciation Right as to some or all of the shares of Common Stock covered by a related Stock Option, the related Stock Option will be canceled automatically to the extent of the Stock Appreciation Right
exercised, and such shares of Common Stock shall not be eligible for subsequent grant. Any Stock Appreciation Right related to a nonstatutory stock option may be granted at the same time such stock option is granted or at any subsequent time before
exercise or expiration of such stock option. Any Stock Appreciation Right related to an incentive stock option must be granted at the same time such incentive stock option is granted.
(c)
Restricted Awards
. The Committee may grant Awards in the form of actual shares of Common Stock (Restricted Shares) or
hypothetical Common Stock units having a value equal to the Fair Market Value of an identical number of shares of Common Stock (Restricted Share Units and together with Restricted Shares, Restricted Awards). Such Restricted
Awards may be in such numbers of shares of Common Stock and at such times as the Committee determines. Such Restricted Awards will have vesting and forfeiture restrictions as the Committee may determine at the time of grant. The Committee may permit
cash and stock dividends on Restricted Awards to be credited to a Participant and reinvested in additional Restricted Awards and subject to forfeiture until the underlying Restricted Award has vested. With respect to Restricted Awards that vest
based solely on the lapse of time, the aggregate Award may not vest in whole or in part less than 12 months from the date of grant. With respect to Restricted Awards that vest based on performance criteria, the restriction period applicable to such
Restricted Awards may not be less than 12 months. Notwithstanding the foregoing minimum vesting and nonforfeitability requirements, the Committee may authorize the grant of Restricted Awards that are subject to periods of vesting and forfeiture less
than 12 months, provided the amount of such Awards, when taken together with any Performance Awards granted pursuant to Section 4(d) and other Awards granted pursuant to Section 4(e) that are similarly not subject to the minimum vesting or
forfeiture time limits, in the aggregate do not exceed ten percent of the maximum number of shares of Common Stock that may be issued or delivered under this Plan as set forth in Section 6 below.
(d)
Performance Awards
. The Committee may grant Awards in the form of cash, shares of Common Stock (Performance Shares), units, each
of which represent the right to receive a share of Common Stock (Performance Share Units) or a combination thereof that are earned upon achievement or satisfaction of Performance Targets specified by the Committee (collectively,
Performance Awards). Performance Awards may be in such cash amount, numbers of shares of Common Stock or a combination thereof and at such times as the Committee determines. The Committee shall specify the time and manner of payment of
the Performance Awards earned. Performance Awards will be earned upon satisfaction of Performance Targets relating to Performance
B-3
Periods established by the Committee at or prior to the date of a grant. At the end of the applicable Performance Period, Performance Awards in the form of Performance Shares or Performance Share
Units will be settled by the issuance of Common Stock, payment of cash, or a combination of Common Stock and cash, or forfeited, based upon the level of achievement of the Performance Targets as determined by the Committee. If earned Performance
Shares initially were represented by forfeitable Common Stock, such Common Stock will become nonforfeitable or be repurchased by Ferro at the time of payment. Performance Awards may not become nonforfeitable or settled less than 12 months from the
date of grant. Notwithstanding the foregoing the minimum vesting and nonforfeitability requirement, the Committee may authorize the grant of Performance Awards that are subject to periods of vesting and forfeiture of less than 12 months, provided
the amount of such Awards, when taken together with any Restricted Awards granted pursuant to Section 4(c) and other Awards granted pursuant to Section 4(e) that are similarly not subject to the minimum vesting or forfeiture time limits,
in the aggregate do not exceed ten percent of the maximum number of shares of Common Stock that may be issued or delivered under this Plan as set forth in Section 6 below.
The Committee may establish Performance Targets in terms of any or all of the following:
|
(i)
|
net earnings or net income (before or after taxes);
|
|
(ii)
|
basic or diluted earnings per share (before or after taxes);
|
|
(iii)
|
value-added sales or value-added sales growth;
|
|
(iv)
|
gross revenue or gross revenue growth;
|
|
(v)
|
gross profit or gross profit growth;
|
|
(vi)
|
operating profit (before or after taxes) or operating profit growth;
|
|
(vii)
|
return on assets, capital, invested capital, equity or sales;
|
|
(viii)
|
cash flow (including, but not limited to, operating cash flow, free cash flow, change in net debt, and cash flow return on capital);
|
|
(ix)
|
earnings before or after taxes, interest, and/or depreciation and amortization;
|
|
(x)
|
gross margins or operating margins;
|
|
(xi)
|
improvements on capital structure;
|
|
(xii)
|
budget and expense management or sales, general, and administrative expenses as a percent of sales;
|
|
(xiii)
|
productivity ratios;
|
|
(xiv)
|
economic value added or other value added measurements;
|
|
(xv)
|
Common Stock price and/or related return measures (including, but not limited to, growth measures and total shareholder return);
|
B-4
|
(xviii)
|
operating efficiency;
|
|
(xix)
|
working capital or changes in working capital;
|
|
(xxii)
|
sales and sales growth;
|
|
(xxiv)
|
completion of acquisitions, divestitures, joint ventures, or business expansions;
|
|
(xxv)
|
completion of restructuring programs;
|
|
(xxvi)
|
debt leverage ratios and other credit ratios; or
|
|
(xxvii)
|
the attainment of levels of performance of Ferro under one or more of the measures described above relative to the performance of other businesses, or various combinations of the foregoing, or changes in any of the
foregoing.
|
Performance targets may exclude the effects of special charges, including restructuring and impairment charges, asset write-offs, or other
non-recurring charges as approved by the Committee. Performance Targets applicable to Performance Awards may vary from Award to Award and from Participant to Participant.
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 Ferros financial statements, provided such adjustments are made in a manner consistent with Section 162(m) of the Code (to the extent applicable).
Performance Awards 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. (The foregoing provisions of this Section 4(d) will also apply to Restricted Awards made under Section 4(c) to the extent such Restricted Awards are subject to performance goals of Ferro.)
(e)
Other Common Stock Based Awards
. The Committee may grant Awards in the form of Common Stock, phantom Common Stock units, deferred Common
Stock or units, or other Awards valued in whole or in part by reference to, or otherwise based upon, Common Stock. Such Common Stock Based Awards may be settled in cash or Common Stock, or a combination thereof, and will be subject to terms and
conditions established by the Committee and set forth in the applicable Award Agreement. With respect to any such Awards represented by forfeitable Common Stock that vest or become nonforfeitable based solely on the lapse of time, the aggregate
Award may not vest or become nonforfeitable in whole less than 12 months from the date of grant. With respect to any such Awards represented by forfeitable Common Stock that vest or become nonforfeitable based on performance criteria, the Award may
not vest or become nonforfeitable less than 12 months from the date of grant. Notwithstanding the foregoing minimum vesting and nonforfeitability requirements, the Committee may authorize the grant of Common Stock Based Awards that are subject to
periods of vesting and forfeiture of less than 12 months, provided the amount of such Awards, when taken together with any
B-5
Restricted Awards granted pursuant to Section 4(c) and any Performance Awards granted pursuant to Section 4(d) that are similarly not subject to vesting or forfeiture time limits, in
the aggregate do not exceed ten percent of the maximum number of shares of Common Stock that may be issued or delivered under this Plan as set forth in Section 6 below.
(f)
Dividend Equivalent Rights
. The Committee may grant Awards in the form of Dividend Equivalent Rights. Dividend Equivalent Rights entitle the
Participant to receive credits based on cash distributions that would have been paid on the shares of Common Stock specified in the Dividends Equivalent Right (or other Award to which it relates) if such shares had been issued to and held by the
Participant. A Dividend Equivalent Right may be granted hereunder to any Participant as a component of another Award (other than Stock Options or Stock Appreciation Rights) or as a freestanding Award, with such terms and conditions as set forth by
the Committee; provided that Dividend Equivalent Rights with respect to an Award that is subject to vesting or is earned based on Performance Targets shall accrue but will not be paid until such Award vests or is earned.
5.
Award Agreements
. All Awards to Participants under this Plan will be evidenced by a written agreement (an Award Agreement) between Ferro and the
Participant, which may, but need not, be executed by the Participant, containing such terms not inconsistent with this Plan as the Committee may determine, including such restrictions, conditions, and requirements as to transferability, continued
employment, individual performance or financial performance of Ferro or a subsidiary or affiliate as the Committee deems appropriate, and, for Awards subject to Section 409A of the Code, including further such terms and conditions specifying
time and form of payment, deferral, acceleration of distributions and elections, all as may be required in order to satisfy the requirements of Section 409A of the Code. Each such Award Agreement will, however, provide that the Award will be
forfeitable if, in the opinion of the Committee, the Participant, without the written consent of Ferro:
(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 or services that compete
with products or services manufactured or sold by Ferro, or any subsidiary or affiliate, 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 of the officers, Directors, employees, agents,
or representatives of Ferro, 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 or any of the officers, Directors, employees, agents, or representatives of
Ferro;
(d) Induces or attempts to induce any employee of Ferro to leave the employ of Ferro or otherwise interferes with the relationship between
Ferro and any of its respective employees, or hires or assists in the hiring of any person who was an employee of Ferro, or solicits, diverts or otherwise attempts to take away any customers, suppliers, or co-venturers of Ferro, either on the
Participants 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.
6.
Shares Subject to this Plan
. The shares of Common Stock to be issued under this Plan
may be either authorized but unissued shares or previously issued shares reacquired by Ferro and held as treasury shares, as the Committee may from time to time determine. Subject to adjustment as provided in Section 7 below, the maximum
aggregate number of shares of Common Stock that may be issued or
B-6
delivered under this Plan is 4,500,000 shares of Common Stock. Upon the Effective Date, no further awards will be made under the Prior Plan.
Any shares of Common Stock issued by Ferro through the assumption or substitution of outstanding grants previously made by an acquired corporation or
entity shall not reduce the number of shares available for Awards under this Plan. If any shares of Common Stock subject to any Award granted under this Plan or Prior Plans are forfeited, terminated or are settled in cash without the issuance of
such shares, the shares subject to such Award, to the extent of any such forfeiture or nonissuance, shall be again be available for grant under this Plan as if such shares had not been subject to an Award. With respect to Stock Options or Stock
Appreciation Rights settled in shares of Common Stock, the full number of shares subject to the Stock Appreciation Right shall be counted against the number of shares for issuance under this Plan regardless of the net number of shares of Common
Stock issued upon settlement. For purposes of clarity, shares tendered or withheld to satisfy the exercise price or tax withholding obligations arising in connection with the exercise or vesting of an Award (including in connection with a net
exercise as contemplated by Section 4(a)) shall not be added back into the shares available under the plan and shall not be available for further grant.
Subject to adjustment as provided in Section 7, the maximum number of shares of Common Stock subject to Awards granted during any 12-month period to any Director,
together with any cash fees paid to such Director during such 12-month period shall not exceed a total value of $500,000 (calculating the value of any Awards based on the grant date fair value for financial reporting purposes). Subject to adjustment
as provided in Section 7, no Participant shall be granted during any 12 month period, Awards with respect to more than 1,500,000 shares of Common Stock in the aggregate. If an Award is to be settled in cash, the number of shares of Common Stock
on which the Award is based shall not count toward the individual share limit set forth in this Section 6. The maximum aggregate compensation that may be paid under an Award to be settled in cash in any calendar year to a Participant shall be
$4,000,000; provided that if an Award to be settled in cash is subject to a Performance Period of more than 12 months, the maximum aggregate compensation shall equal the product of $4,000,000 and the full number of 12-month periods in the
Performance Period.
7.
Adjustments
. Upon Changes in Capitalization. If the outstanding shares of Common Stock are changed by reason of any reorganization,
recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation or any change in the corporate structure or Common Stock of Ferro, then the maximum aggregate number and class of shares of Common Stock as to
which Awards may be granted under this Plan, the maximums described in Section 6 above, the shares of Common Stock issuable pursuant to then outstanding Awards, and the option price of outstanding stock options and any related Stock
Appreciation Rights shall be appropriately adjusted by the Committee. If Ferro makes an extraordinary distribution in respect of Common Stock or effects a pro rata repurchase of Common Stock, the Committee may consider the economic impact of the
extraordinary distribution or pro rata repurchase on Participants and make such adjustments as it deems equitable under the circumstances. For purposes of this Section 7,
(a) The term extraordinary distribution means a dividend or other distribution of (i) cash, where the aggregate amount of such cash
dividend or distribution together with the amount of all cash dividends and distributions made during the preceding twelve months, when combined with the aggregate amount of all pro rata repurchases (for this purpose, including only that portion of
the aggregate purchase price of such pro rata repurchases that is in excess of the fair market value of the Common Stock repurchased during such 12-month period), exceeds ten percent of the aggregate fair market value of all shares of Common Stock
outstanding on the record date for determining the shareholders entitled to receive such extraordinary distribution, or (ii) any shares of capital stock of Ferro (other than shares of Common Stock), other securities of Ferro, evidences of
indebtedness of Ferro or any other person, or any other property (including shares of any subsidiary of Ferro), or any combination thereof; and
B-7
(b) The term pro rata repurchase means a purchase of shares of Common Stock by Ferro,
pursuant to any tender offer or exchange offer subject to section 13(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act) or any successor provision of law, or pursuant to any other offer available to substantially
all holders of Common Stock other than a purchase of shares of Ferro made in an open market transaction.
The determinations of the Committee under this
Section 7 shall be final and binding upon all Participants, in the absence of revision by the Board.
8.
Assignment and Transfer
. Except as provided
herein, no Award shall be transferable by a Participant or Director except by will or the laws of descent and distribution, and Stock Options and Stock Appreciation Rights may be exercised during a Participants or Directors lifetime only
by the Participant or Director or the Participants or Directors guardian or legal representative. Notwithstanding the foregoing, the Committee may authorize the transfer of all or a portion of an Award (other than an incentive stock
option), so long as such transfer is made for no consideration to:
(a) a Participants or Directors spouse, children, grandchildren,
parents, siblings and other family members approved by the Committee (collectively, Family Members) during such Participants or Directors lifetime;
(b) trust(s) for the exclusive benefit of such Participant, Director, or Family Members;
(c) partnerships or limited liability companies in which such Participant, Director, or Family Members are at all times the only partners or members; or
(d) charitable organizations as defined in Section 501I(3) of the Code, but only if the transfer would not result in the loss of any exemption
under Rule 16b-3 of the Exchange Act with respect to any Award.
Any transfer to or for the benefit of Family Members permitted under this Plan may be made subject
to such conditions or limitations as the Committee may establish to ensure compliance under the Federal securities laws, or for other purposes. Subject to the terms of the Award, a transferee-Family Member may exercise a Stock Option and/or related
Stock Appreciation Right during or after the Participants or Directors lifetime.
9.
Change of Control
. The obligations of Ferro under the Plan
shall be binding upon any successor corporation or organization resulting from a merger, consolidation or other reorganization of Ferro, or upon any successor corporation or organization succeeding to all or substantially all of the assets and
business of Ferro (each, a Successor Corporation). Except as the Board may expressly provide in an Award Agreement, change in control agreement or otherwise, (i) each outstanding Award shall be assumed or an equivalent Award
substituted by the Successor Corporation, and (ii) if a Participants Continuous Service is terminated without Cause during the 24-month period following a Change of Control, the following will apply:
(a) All Stock Options (including Director Stock Options) and Stock Appreciation Rights then outstanding shall become fully exercisable as of the
termination date;
(b) All restrictions and conditions with respect to all Restricted Awards then outstanding shall be deemed fully released or
satisfied as of the termination date; and
(c) With respect to Performance Awards, all incomplete Performance Periods in respect of such Award in
effect on the date the termination occurs shall end on the date of such termination and the
B-8
Committee shall (i) determine the extent to which the Performance Targets with respect to each such Performance Period have been met based upon such audited or unaudited financial
information then available as it deems relevant and (ii) cause to be paid to the applicable Participant partial or full Awards with respect to the Performance Targets for each such Performance Period based upon the Committees
determination of the degree of attainment of the Performance Targets or, if not determinable, assuming that the applicable target levels of performance have been attained, or on such other basis determined by the Committee. To the extent
practicable, any actions taken by the Committee under this paragraph (c) shall occur in a manner and at a time that allows affected Participants the ability to participate in the Change of Control with respect to the shares of Common Stock
subject to their Awards.
In the event that the Successor Corporation in a Change of Control refuses to assume or substitute for the Award, the Committee may cause
any or all of such Awards to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Awards to lapse. If an Award is exercisable in lieu of assumption or substitution
in the event of a Change of Control, the Committee shall notify the Participant that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change of Control
and the Award shall terminate upon the expiration of such period.
In addition, in the event of a Change of Control, the Committee may determine, upon at least 10
days advance notice to the affected persons, to cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per share of Common Stock received or to
be received by other shareholders of the Company in the event. In the case of any Stock Option or Stock Appreciation Right with an exercise price that equals or exceeds the price paid for a share of Common Stock in connection with the Change of
Control, the Committee may cancel the Stock Option or Stock Appreciation Right without the payment of consideration therefor.
For purposes of this Section 9,
the following terms shall have the meanings set forth below:
Cause means that, in the reasonable judgment of the Committee, any of the following events
have occurred: (i) the willful or negligent failure by the Participant to substantially perform his or her duties with Ferro and, after written notification by Ferro to the Participant, the continued failure of the Participant to substantially
perform such duties; (ii) the willful or negligent engagement by the Participant in conduct that is demonstrably and materially injurious to Ferro, financially or otherwise; (iii) action or inaction by the Participant that constitutes a
breach of fiduciary duty with respect to Ferro or any of its subsidiaries; (iv) the engagement by the Participant in egregious misconduct involving moral turpitude; or (v) the Participants material breach of any agreement in respect
of confidentiality with Ferro.
A Change in Control will be deemed to have occurred if and when any of the following occurs:
(a) Any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 25% or more of either (1) the
then-outstanding shares of common stock of the Company (the Outstanding Company Common Stock), or (2) the combined voting power of the Companys then-outstanding securities entitled to vote generally in the election of
directors (the Outstanding Company Voting Securities); provided, however, that for purposes of this paragraph (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliated company or (iv) any acquisition pursuant to a transaction that
satisfies the conditions set forth in paragraphs (c)(1), (c)(2) and (c)(3) below; or
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(b) The following individuals (the Incumbent Board) cease for any reason to constitute a
majority of the number of Directors then serving (1) individuals who are Directors as of the Effective Date, and (2) new Directors (other than a Director whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board) whose appointment or election by the Board or nomination for
election by the Companys shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors as of today or whose appointment, election, or nomination for
election was previously so approved or recommended; or
(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its
subsidiaries (each, a Business Combination), in each case unless, following such Business Combination, (1) All or substantially all of the individuals and entities that were the Beneficial Owners of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately before such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent
securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately before such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) No Person (other than a
corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such
ownership existed prior to the Business Combination, and (3) At least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
Continuous Service means the Participants service with Ferro or any subsidiary or affiliate of Ferro, whether as an employee, consultant or Director,
is not interrupted or terminated. The Participants Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to Ferro or any subsidiary or an affiliate of
Ferro as an employee, consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participants Continuous Service; provided further that if any
Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code.
Good
Reason means the occurrence of any of the following: (i) a reduction in a Participants annual base salary rate, unless such reduction generally applies to other similarly situated Participants regardless of the reason(s)
therefor; (ii) a substantial diminution in a Participants duties, authorities or responsibilities; or (iii) the relocation of a Participants principal place of employment with Ferro such that (a) the distance from the
former principal place of employment to the relocated principal place of
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employment is over fifty (50) miles and (b) the distance from his or her primary residence to the relocated principal place of employment is over fifty (50) miles; provided,
however, that Good Reason shall exist only to the extent that a Participant provides Ferro, in care of the Legal Department at Ferros then-current corporate headquarters, with written notice of his or her intention to terminate employment with
Ferro for Good Reason that specifies the condition(s) constituting Good Reason and Ferro fails to correct such condition(s) within ten (10) business days from receipt of such written notice. Notwithstanding the foregoing, Good Reason shall
cease to exist for an event on the one hundred and twentieth (120th) day following the later of its occurrence or the Participants knowledge thereof, unless the Participant has given Ferro written notice of such condition and of the
Participants intent to terminate for Good Reason prior to such date. With respect to the Chief Executive Officer only, Good Reason shall also include a change in responsibilities such that the Chief Executive Officer reports to someone other
than directly to Ferros Board of Directors.
10.
Employee Rights Under this Plan
. No employee or other person shall have any claim or right to be
granted any Award under this Plan. Neither this Plan nor any action taken under this Plan shall be construed as giving any employee any right to be retained in the employ of Ferro or any subsidiary or affiliate.
11.
Settlement by Subsidiaries and Affiliates
. Settlement of Awards held by employees of subsidiaries or affiliates shall be made by and at the expense of such
subsidiary or affiliate. Ferro either will sell or contribute, in its sole discretion, to the subsidiary or affiliate, the number of shares needed to settle any Award that is granted under this Plan.
12.
Securities Law Issues
. All shares of Common Stock or other securities issued under the Plan shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal or state
securities laws, and the Committee may cause a legend or legends to be placed on any certificates for such shares to make appropriate reference to such restrictions or to cause such restrictions to be noted in the records of Ferros stock
transfer agent and any applicable book entry system.
13.
Taxes
. No later than the date as of which an amount first becomes includable in the gross income of
the Participant for federal income tax purposes with respect to any Award under the Plan, the Participant shall pay to Ferro, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state or local taxes or other
items of any kind required by law to be withheld with respect to such amount. Subject to the following sentence, unless otherwise determined by the Committee, withholding obligations may be settled with Common Stock, including unrestricted Common
Stock previously owned by the Participant or Common Stock that is part of the Award that gives rise to the withholding requirement. Notwithstanding the foregoing, any election by a Section 16 Participant to settle such tax withholding
obligation with Common Stock that is previously owned by the Participant or part of such Award shall be subject to prior approval by the Committee, which may be granted in the applicable Award Agreement. The obligations of Ferro under the Plan shall
be conditional on such payment or arrangements and Ferro, to the extent permitted by law, shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.
14.
Amendment or Termination
. Ferro reserves the right to amend, modify or terminate this Plan or any Award at any time by action of the Committee or the Board,
however, any amendment or modification that requires shareholder approval to comply with any applicable law, regulation or rule, including any rule relating to the listing on a national securities exchange of Common Stock, shall not be effective
unless and until shareholder approval has been obtained. If an amendment, modification or termination impairs the rights of a Participant or creates or increases a Participants federal income tax liability with respect to an Award, the consent
of such Participant to amend, modify or terminate an outstanding
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Award Agreement is required. Subject to the above provisions, the Committee shall have all necessary authority to amend this Plan, clarify any provision or take into account changes in applicable
securities and tax laws or accounting rules in administering this Plan.
15.
Compliance with Section 409A of the Code
.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder (which are subject to, and not exempt from, Section 409A
of the Code) comply with the provisions of Section 409A of the Code. This Plan and any grants made hereunder shall be administrated in a manner consistent with this intent, and any provision that would cause this Plan or any such grant (which
are subject to, and not exempt from, Section 409A of the Code) made hereunder to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made by Ferro without the consent of Participants). Any reference in this Plan to Section 409A of the Code will also include any proposed, temporary or final
regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
(b) If, at the time of a Participants separation from service (within the meaning of Section 409A of the Code), (i) such Participant is
a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by Ferro from time to time) and (ii) Ferro makes a good faith determination that an amount payable hereunder constitutes
deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under
Section 409A of the Code, then Ferro shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest, on the first business day of the seventh month after the Participants separation from
service.
16.
Clawbacks
. Notwithstanding any other provisions in the Plan, Awards shall be subject to such deductions and clawback recovery as may be
required to be made pursuant to any law, government regulation or stock exchange listing requirement or any policy adopted by Ferro pursuant to any such law, government regulation or stock exchange listing requirement.
17.
Sub-Plans
. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue-sky, securities, tax or other laws of
various jurisdictions in which Ferro intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but
each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
18.
Effective Date and Term of Plan
. This Plan
is adopted by the Board as of February 22, 2018, and will be effective upon approval by Ferro shareholders at the 2018 annual meeting or such other meeting held to approve the Plan (the Effective Date) . No Awards shall be made under
this Plan after March 31, 2028, provided that any Awards outstanding on such date shall not be affected and shall continue in accordance with their terms.
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Note
Under rules of the Securities Exchange Commission, to minimize mailing costs we are permitted to send a single set
of annual reports and proxy statements to any household at which two or more shareholders reside if they appear to be members of the same family. A number of brokerage firms have also instituted this practice with respect to the delivery of
documents to shareholders residing at the same address. With this practice, however, each shareholder continues to receive a separate proxy card for voting. Any shareholder affected by this practice who desires to receive multiple copies of annual
reports and proxy statements in the future may write or call Investor Relations at 6060 Parkland Boulevard, Suite 250, Mayfield Heights, Ohio 44124, Attention: Investor Relations, telephone 216.875.5400.
Where innovation delivers performance FERRO vision
2020
6060 PARKLAND BOULEVARD I SUITE 250 I MAYFIELD HEIGHTS, OH 44124 I 216.875.5600 I FERRO.COM
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IMPORTANT ANNUAL MEETING INFORMATION
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Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
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Electronic
Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 11:59 p.m., EDT, on May 2, 2018.
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Vote by Internet
Go to
www.investorvote.com/FOE
Or scan the QR code with your
smartphone
Follow the
steps outlined on the secure website
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Vote by telephone
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Call toll free
1-800-652-VOTE
(8683) within the USA, US territories & Canada on a
touch tone telephone
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Follow the instructions provided by the recorded message
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IF YOU HAVE NOT VOTED VIA THE
INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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A
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Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4.
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1. ELECTION OF DIRECTORS
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For
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01 - Gregory E. Hyland
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02 -David A. Lorber
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03 - Marran H. Ogilvie
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04 - Andrew M. Ross
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05 -Allen A. Spizzo
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06 - Peter T. Thomas
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07 - Ronald P. Vargo
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Abstain
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For
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Against
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Abstain
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2. Approval of the 2018
Omnibus Incentive Plan.
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3. Advisory vote on the
compensation for named executive officers.
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4. Ratification of the
appointment of Deloitte & Touche LLP as the Independent Registered Public Accounting Firm.
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Change of
Address
Please print new address below.
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
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When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. A proxy given by a corporation should be signed in
the corporate name by the chairman of its board of directors, its president, vice president, secretary, or treasurer.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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02SN4A
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Stockholders you can be sure your shares are represented at the meeting by promptly
returning your vote.
q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE,
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
Proxy Ferro Corporation
This proxy is solicited on behalf of the Board
of Directors for the Annual Meeting of Shareholders on May 3, 2018
The undersigned shareholder of Ferro Corporation hereby appoints Mark H.
Duesenberg, Benjamin J. Schlater and Jose Tortajada, and each of them, the proxies of the undersigned, with full power of substitution to vote the shares of the undersigned at the 2018 Annual Meeting of Shareholders of the Corporation and any
adjournment thereof upon the proposals on the reverse side.
Please indicate how you wish your shares to be voted. Unless otherwise indicated, the
proxies will vote FOR the election as Directors of all nominees and FOR Proposals 2, 3 and 4.
IMPORTANT NOTICE TO PARTICIPANTS IN
THE FERRO CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN
As a participant in the Ferro Corporation 401(k) Plan (the Plan), you
have the right to instruct GreatWest Trust Company, LLC, as Trustee, to vote the shares allocated to your Plan account, as specified on the reverse side. If no instructions are given or if your voting instructions are not received on or before
10:00 am EDT on May 1, 2018, the Trustee will vote the uninstructed shares in the same proportion in which it has received voting instructions.
IMPORTANT THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE
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IMPORTANT ANNUAL MEETING INFORMATION
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|
|
|
Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
|
|
☒
|
q
PLEASE FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
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A
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Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4.
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1. ELECTION OF DIRECTORS
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For
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Withhold
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For
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Withhold
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For
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Withhold
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+
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01 - Gregory E. Hyland
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☐
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☐
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02 - David A. Lorber
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☐
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☐
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03 - Marran H. Ogilvie
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☐
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☐
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04 - Andrew M. Ross
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☐
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☐
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05 - Allen A. Spizzo
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☐
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☐
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06 - Peter T. Thomas
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☐
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☐
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07 - Ronald P. Vargo
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☐
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☐
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For
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Against
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Abstain
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For
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Against
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Abstain
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2. Approval of the 2018
Omnibus Incentive Plan.
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☐
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☐
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☐
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3. Advisory vote on the
compensation for named executive officers.
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☐
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☐
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☐
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4. Ratification of the
appointment of Deloitte & Touche LLP as the Independent Registered Public Accounting Firm.
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☐
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☐
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☐
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B
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
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When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. A proxy given by a corporation should be signed in
the corporate name by the chairman of its board of directors, its president, vice president, secretary, or treasurer.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/ /
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02SN5A
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Stockholders you can be sure your shares are represented at the meeting by promptly
returning your vote.
q
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE
BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
Proxy Ferro Corporation
This proxy is solicited on behalf of the Board
of Directors for the Annual Meeting of Shareholders on May 3, 2018
The undersigned shareholder of Ferro Corporation hereby appoints Mark H.
Duesenberg, Benjamin J. Schlater and Jose Tortajada, and each of them, the proxies of the undersigned, with full power of substitution to vote the shares of the undersigned at the 2018 Annual Meeting of Shareholders of the Corporation and any
adjournment thereof upon the proposals on the reverse side.
Please indicate how you wish your shares to be voted. Unless otherwise indicated, the
proxies will vote FOR the election as Directors of all nominees and FOR Proposals 2, 3 and 4.
IMPORTANT NOTICE TO PARTICIPANTS IN
THE FERRO CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN
As a participant in the Ferro Corporation 401(k) Plan (the Plan), you
have the right to instruct GreatWest Trust Company, LLC, as Trustee, to vote the shares allocated to your Plan account, as specified on the reverse side. If no instructions are given or if your voting instructions are not received on or before
10:00 am EDT on May 1, 2018, the Trustee will vote the uninstructed shares in the same proportion in which it has received voting instructions.
IMPORTANT THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE
Ferro (NYSE:FOE)
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