FERRO CORP
EX-10.20
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><B>EXHIBIT 10.20</B></FONT>
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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TERMS OF INCENTIVE STOCK OPTION GRANTS</B>
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    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Generally. </B>This document sets forth the terms and conditions under which incentive stock
options (the &#147;ISO Options&#148;) are granted under paragraph 4(a) of the 2006 Long-Term Incentive
Plan (the &#147;Plan&#148;), which was approved by Ferro Corporation shareholders on November&nbsp;3, 2006.
The ISO Option grants to which these terms apply are intended to qualify as incentive stock
options under Section&nbsp;422 of the Internal Revenue Code of 1986, as amended. (The recipient of
an ISO Option grant is called the &#147;ISO Optionee&#148; below. The term &#147;Ferro&#148; below includes Ferro
Corporation and its subsidiary and affiliated companies.)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Precedence of the Plan. </B>The terms of this document are in all events subject to the terms
and conditions of the Plan. If there is any inconsistency between this document and the Plan,
then the Plan, and not this document, will govern. The Governance, Nomination and
Compensation Committee of the Board of Directors (or such other committee as the Board may
from time to time designate) (the &#147;Committee&#148;) administers awards under the Plan and has the
authority to determine the terms and conditions, not inconsistent with the provisions of the
Plan, of any Award granted under this Plan. In this capacity, the Committee also has the
authority to construe and interpret the provisions of the Plan and all awards under the Plan
and to establish, amend, and rescind rules and regulations for the administration of the Plan,
all of which will be binding on the ISO Optionee.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Basic Option Terms. </B>The name of the ISO Optionee, the date of the ISO Option grant, the
aggregate number of shares of Ferro Common Stock that may be purchased under the ISO Option,
the option exercise price, and the expiration date of the ISO Option (<I>i.e.</I>, last date on which
such ISO Option may be exercised) are set forth separately in a grant letter from Ferro to the
ISO Optionee which refers expressly to this document.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Normal Exercise. </B>Except as otherwise provided below, ISO Options will become exercisable
only if and after the ISO Optionee has remained employed by Ferro for one year from the date
of the ISO Option grant, whereupon such rights shall become exercisable to the extent of 25%
of the aggregate number of shares granted, which percentage shall increase to 50% after two
years, 75% after three years and to 100% after four years of employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Retirement. </B>If an ISO Optionee retires from his or her employment with Ferro under a Ferro
retirement plan or policy (including early retirement) before an ISO Option has been exercised
or expired, then the ISO Option will become 100% exercisable when the ISO Optionee retires and
the ISO Optionee will then be entitled to exercise the ISO Option at any time on or before
such ISO Option expires.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Disability. </B>If an ISO Optionee&#146;s employment terminates due to the ISO Optionee&#146;s total and
permanent disability before an ISO Option has been exercised or expired, then the ISO Option
will become 100% exercisable when the ISO Optionee&#146;s employment terminates and the ISO
Optionee will then be entitled to exercise the ISO Option at any time on or before such ISO
Option expires.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Death. </B>If an ISO Optionee dies before an ISO Option has been exercised or expired, then the
person who is entitled by will or the applicable laws of descent and distribution may exercise
the option rights (a)&nbsp;in full in the case of an ISO Optionee who was employed by Ferro at the
time of his or her death or (b)&nbsp;in the case of an ISO Optionee not so employed, to the extent
that the ISO Optionee was entitled to exercise the same immediately before his or her death.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Change of Control. </B>If a &#147;Change of Control&#148; occurs before an ISO Option has been exercised
or expired, then the ISO Option will become 100% exercisable immediately upon the &#147;Change of
Control&#148; <I>provided that </I>the ISO Optionee is then employed by Ferro. (For purposes of this
document, the term &#147;Change of Control&#148; has the meaning given to that term in paragraph 9 of
the Plan.)</TD>
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    <TD width="3%" nowrap align="left"><B>9.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Other Termination of Employment. </B>If the ISO Optionee&#146;s employment with Ferro terminates
before an ISO Option has been exercised or expired for any reason other than those stated in
clauses 5-8 above, the ISO Optionee may exercise the option rights at any time within the
three-month period after his or her termination of employment (but before the expiration of
the ISO Option) to the extent he or she was entitled to exercise the same immediately before
the termination of employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>10.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Liquidation, Dissolution and Merger. </B>If at any time before an ISO Option is exercised or
expires Ferro is liquidated or dissolved, or becomes a party to a plan of merger or
consolidation with respect to which Ferro is not the surviving corporation, then the following
will apply:</TD>
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    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ferro will give the ISO Optionee at least 30&nbsp;days&#146; prior written notice that
such event will occur.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the ISO Optionee is then employed by Ferro, then the ISO Option will
immediately become 100% exercisable <I>provided that </I>the ISO Optionee exercises the ISO
Option before it expires and within 30&nbsp;days after the notice.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the ISO Optionee is not then employed by Ferro, then the ISO Option will be
exercisable to the extent it was exercisable on the date of such notice <I>provided that</I>
the ISO Optionee exercises the ISO Option before it expires and within 30&nbsp;days after
the notice.</TD>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">If an ISO Option has not been exercised on or before the effective date of any such
liquidation, dissolution, merger or consolidation, then notwithstanding the provisions of
clauses 58 above, the ISO Option will terminate on such date, unless another corporation
assumes the ISO Option.
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    <TD width="3%" nowrap align="left"><B>11.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Exercise. </B>An ISO Option may be exercised by delivering to Ferro at the office of its
Treasurer a written notice signed by the person entitled to exercise the option, of the
election to exercise the option and stating the number of shares to be purchased, together
will full payment of the option exercise price of the shares then to be purchased. Payment of
the option exercise price may be made, at the election of the ISO Optionee, (a)&nbsp;in cash, (b)
in Ferro Common Stock, or (c)&nbsp;in any combination of cash and Ferro Common Stock. Shares of
Ferro Common Stock used in payment of the purchase price will be valued at their closing price
on the New York Stock Exchange on the trading day immediately preceding the date of exercise.
Upon the proper exercise of an ISO Option, Ferro will issue the appropriate number of shares
of Ferro Common Stock in the name of the person exercising the ISO Option and deliver to him
or her a certificate or certificates for the shares purchased. The ISO Optionee will either
pay in cash, within the time period specified by Ferro, the amount (if any) required to be
withheld for Federal, state or local tax purposes on account of the exercise of an ISO Option
or to make arrangements to satisfy such withholding requirements in a manner satisfactory to
Ferro.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>12.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Legal Restrictions on Exercise. </B>No ISO Option will be exercisable if and to the extent such
exercise would violate:</TD>
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    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any applicable state securities law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any applicable registration or other requirements under the Securities Act of
1933, as amended (the &#147;1933 Act&#148;) the Securities Exchange Act of 1934, as amended, or
the listing requirements of any stock exchange; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any applicable legal requirement of any other government authority.</TD>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Ferro will make reasonable efforts to comply with the foregoing laws and requirements so as
to permit the exercise of ISO Options. Furthermore, if a Registration Statement with
respect to the shares to be issued upon the exercise of an ISO Option is not in effect or if
counsel for Ferro deems it necessary or desirable in order to avoid possible violation of
the 1933 Act, Ferro may require, as a condition to its issuance and delivery of certificates
for the shares, the delivery to Ferro of a commitment in writing by the person exercising
the option
that at the time of such exercise it is his or her intention to acquire such shares for his
or her own account for
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">investment only and not with a view to, or for resale in connection
with, the distribution thereof; that such person understands the shares may be &#147;restricted
securities&#148; as defined in Rule&nbsp;144 of the Securities and Exchange Commission; and that any
resale, transfer or other disposition of said shares will be accomplished only in compliance
with Rule&nbsp;144, the 1933 Act, or the other Rules and Regulations there under. Ferro may
place on the certificates evidencing such shares an appropriate legend reflecting the
aforesaid commitment and the Company may refuse to permit transfer of such certificates
until it has been furnished evidence satisfactory to it that no violation of the 1933 Act or
the Rules and Regulations there under would be involved in such transfer.
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    <TD width="3%" nowrap align="left"><B>13.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Forfeiture. </B>The ISO Optionee will forfeit the ISO Option if, from the date the ISO Option is
granted until the date the ISO Option has been fully exercised or expired, he or she &#151;</TD>
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    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Directly or indirectly, engages in, or assists or has a material ownership
interest in, or acts as agent, advisor or consultant of, for, or to any person, firm,
partnership, corporation or other entity that is engaged in the manufacture or sale of
any products manufactured or sold by Ferro or any products that are logical extensions,
on a manufacturing or technological basis, of such products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Discloses to any person any proprietary or confidential business information
concerning Ferro or any Ferro officers, Directors, employees, agents, or
representatives which the ISO Optionee obtained or which came to his or her attention
during the course of his or her employment with Ferro;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Takes any action likely to disparage or have an adverse effect on Ferro, its
subsidiaries, or affiliates or any of Ferro&#146;s officers, Directors, employees, agents,
or representatives;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Induces or attempts to induce any Ferro employee to leave the employ of Ferro
or otherwise interferes with the relationship between Ferro and any of Ferro&#146;s
employees, or hires or assists in the hiring of any person who was a Ferro employee, or
solicits, diverts or otherwise attempts to take away any customers, suppliers, or
co-venturers of Ferro, either on the ISO Optionee&#146;s own behalf or on behalf of any
other person or entity; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Otherwise performs any act or engages in any activity which in the opinion of
the Committee is inimical to the best interests of Ferro.</TD>
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    <TD width="3%" nowrap align="left"><B>14.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Withholding. </B>All amounts paid to or on behalf of the ISO Optionee in respect of an ISO
Option will be subject to withholding as required by law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>15.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Transferability. </B>Subject only to the exceptions stated in paragraph 8 of the Plan, an ISO
Option is not transferable by the ISO Optionee other than by will or by the laws of descent
and distribution. An ISO Option will be exercisable during the lifetime of the ISO Optionee
only by the ISO Optionee and/or his or her guardian or legal representative.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>16.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Adjustments on Changes in Capitalization. </B>If at any time before an ISO Option is exercised
or expires, the shares of Ferro Common Stock are changed or Ferro makes an &#147;extraordinary
distribution&#148; or effects a &#147;prorata repurchase&#148; of Common Stock as described in paragraph 8 of
the Plan or takes any other action described in that paragraph, then the shares of Common
Stock issuable pursuant to such ISO Option will be appropriately adjusted as provided in such
paragraph.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>17.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Rights as a Shareholder. </B>The ISO Optionee acknowledges that as holder of an ISO Option
the ISO Optionee has no rights as a shareholder or otherwise in respect of any of the shares
as to which the ISO Option has not been effectively exercised.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>18.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Employment at Will. </B>By countersigning and returning to Ferro a copy of the grant letter, the
ISO Optionee acknowledges and agrees that, as in the past, he or she is an employee at will of
Ferro.</TD>
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