UNITED STATES
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SCHEDULE 14A

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Ferro Corporation

(Name of Registrant as Specified In Its Charter)

 

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			FERRO CORPORATION 100O LAKESIDE AVENUE CLEVELAND, OHIO 44114-1147 USA TELEPHONE: (216) 641-8580 FACSIMILE: (216) 875-7266 WEBSITE: www.ferro.com

March 18, 2008

Dear Shareholder:

     I cordially invite you to attend the 2008 Annual Meeting of Shareholders of Ferro Corporation, which will be held on Friday, April 25, 2008. The meeting will be held at the InterContinental Hotel and Conference Center located at 9801 Carnegie Avenue in Cleveland, Ohio, and will begin at 10:00 a.m. (Cleveland time).

     At the 2008 Annual Meeting, shareholders will vote on the election of four Directors. The following Proxy Statement contains information about the Directors standing for election, the Directors who will continue in office after the Annual Meeting, a description of our corporate governance practices and other relevant information about our Company and the Annual Meeting.

     Regardless of the number of shares you own, your participation is important. I urge you to vote as soon as possible by telephone, the Internet or mail, even if you plan to attend the meeting. You may revoke your proxy at any time before the meeting regardless of your voting method. If you choose, you may also vote your shares personally at the meeting. In any case, your vote is important.

     I look forward to seeing you at the Annual Meeting.

Who is soliciting my proxy with this Proxy Statement?

     The Board of Directors of Ferro is soliciting your proxy in connection with our Annual Meeting of Shareholders.

Where and when will the meeting be held?

     This year’s meeting will be held on Friday, April 25, 2008, at the InterContinental Hotel and Conference Center located at 9801 Carnegie Avenue in Cleveland, Ohio. The meeting will begin at 10:00 a.m. (Cleveland time). Complimentary valet parking will be provided.

What will be voted on at the meeting?

     At the meeting, shareholders will vote on the election of four Directors for terms ending in 2011.

What if I wish to attend the meeting?

     If you wish to attend the meeting, you should so indicate on the enclosed attendance response card and return the card to Ferro. This will assist us with meeting preparations and enable us to expedite your admission to the meeting.

Who is entitled to vote at the meeting?

     The record date for this meeting is March 3, 2008. On that date, we had 43,785,677 shares of Common Stock (which have a par value of $1.00 per share) and 282,487 shares of Series A ESOP Convertible Preferred Stock (which have no par value) outstanding. Each of these shares will be entitled to one vote at the meeting. (The Common Stock and Series A ESOP Convertible Preferred Stock will vote together as a single class.)

How do I vote?

     You may cast your votes in person at the meeting or by any one of the following ways:

     By Telephone: You may call the toll-free number (1–888-693-8683) printed on your proxy card. Follow the simple instructions and use the personalized control number printed on your proxy card to vote your shares. You will be able to confirm that your vote has been properly recorded. Telephone voting is available 24 hours a day. If you vote by telephone, you do not need to return your proxy card.

     Over the Internet: You may visit the website (www.cesvote.com) printed on your proxy card. Follow the simple instructions and use the personalized control number printed on your proxy card to vote your shares. You will be able to confirm that your vote has been properly recorded. Internet voting is available 24 hours a day. If you vote over the Internet, you do not need to return your proxy card.

     By Mail: You may mark, sign and date the enclosed proxy card and return it in the enclosed postage-paid envelope.

What if I change my mind before the meeting?

     If you change your mind, you may revoke your proxy by giving us notice, either in writing before the meeting to: Secretary, Ferro Corporation, 1000 Lakeside Avenue, Cleveland, Ohio 44114-1147 USA or at the meeting itself . (If you do revoke your proxy during the meeting, it will not, of course, affect any vote that has already been taken.)

PROXY STATEMENT

     This document is the Notice of Meeting and the Proxy Statement of the Board of Directors of Ferro Corporation in connection with the Annual Meeting of Shareholders to be held on Friday, April 25, 2008, at 10:00 a.m. (Cleveland time).

ELECTION OF DIRECTORS

     At the Annual Meeting, shareholders will consider the election of four Directors for terms ending in 2011. Our Board has ten Directors divided into three classes with each class having a minimum of three directors. The Directors in each class are elected for terms of three years so that the term of office of one class of Directors expires at each Annual Meeting. The following pages contain information about our Directors (both the nominees for re-election and the Directors whose terms will not expire at this meeting).

Nominees for Election at this Annual Meeting

     The current terms of office of Sandra Austin Crayton, Richard J. Hipple, William B. Lawrence, and Dennis W. Sullivan will expire on the day of this Annual Meeting (as soon as they or their successors are elected). The Board has nominated each of these incumbents for re-election at this Annual Meeting. Following is information^* about these four Directors:

		SANDRA AUSTIN CRAYTON Age: First Became a Ferro Director: Current Term Expires: Common Stock Owned: Common Stock Under Option: Committee Assignments:		60 1994 This Annual Meeting 20,529 shares 35,250 shares Finance Committee Governance & Nomination Committee

Biographical Information:

Ms. Crayton is a Managing Director with Alvarez and Marsal, a professional services firm. Ms. Crayton joined the firm in January 2006. Prior to that, Ms. Crayton was President and Chief Executive Officer of PhyServ, LLC, a health care billing, collections, receivables and information company.

Ms. Crayton was appointed Senior Vice President and General Manager of the Medical/Surgical and Psychiatry Management Centers of University Hospitals of Cleveland in 1988. From 1990 to 1994, she served as Executive Vice President and Chief Operating Officer of The University of Chicago Hospitals. In 1994, she was appointed President of Caremark Clinical Management Services, a division of Caremark Rx, Inc. In 1995, Ms. Crayton was named President of Caremark Physician Services, a division of Caremark, Inc., which provides physician practice management services. Between 1997 and 1999, Ms. Crayton was President and Chief Executive Officer of Sedona Health Care Group, Inc. In 1999, she became President and Chief Executive Officer of PhyServ LLC and retired from that position on June 1, 2001, when the company was sold.

		RICHARD. J. HIPPLE Age: First Became a Ferro Director: Current Term Expires: Common Stock Owned: Common Stock Under Option: Committee Assignments:		55 2007 This Annual Meeting 3,800 shares None Compensation Committee Finance Committee

Biographical Information:

Mr. Hipple is the Chairman of the Board, President and Chief Executive Officer of Brush Engineered Materials Inc., a manufacturer of high-performance engineered materials. Mr. Hipple has served as Chairman of the Board and Chief Executive Officer of Brush since May 2006 and President of Brush since May 2005. Mr. Hipple was Vice President of Strip Products of Brush from July 2001 until May 2002, when he became President of Alloy Products of Brush.

Prior to joining Brush, Mr. Hipple was President of LTV Steel Company, a business unit of the LTV Corporation.

		WILLIAM B. LAWRENCE Age: First Became a Ferro Director: Current Term Expires: Common Stock Owned: Common Stock Under Option: Committee Assignments:		63 1999 This Annual Meeting 18,460 shares 30,250 shares Audit Committee Compensation Committee Governance & Nomination   Committee (Chair)

Biographical Information:

Before the sale of TRW Inc. to Northrop Grumman in December 2002 and his retirement from TRW in February 2003, Mr. Lawrence served as TRW’s Executive Vice President, General Counsel & Secretary. TRW was a provider of advanced technology products and services for the global automotive, aerospace and information systems markets.

Mr. Lawrence first joined TRW in 1976 as counsel specializing in securities and finance. He held positions of increasing responsibility within the TRW law department until his appointment as TRW’s Executive Vice President of Planning, Development and Government Affairs in 1989 and a member of TRW’s Management Committee. In 1997, Mr. Lawrence was named to the additional position of Executive Vice President, General Counsel & Secretary.

Mr. Lawrence also serves as a director of Brush Engineered Materials Inc. (a manufacturer of high-performance engineered materials).

		DENNIS W. SULLIVAN Age: First Became a Ferro Director: Current Term Expires: Common Stock Owned: Common Stock Under Option: Committee Assignments:		69 1992 This Annual Meeting 43,032 shares 35,250 shares Audit Committee Governance & Nomination Committee

Biographical Information:

Mr. Sullivan retired as Executive Vice President of Parker Hannifin Corporation, a producer of motion and control components for commercial, industrial and aerospace markets, on December 31, 2003. Mr. Sullivan began his career with Parker in 1960. He became Group Vice President in 1972, President of the Fluid Connectors Group in 1976, Corporate Vice President in 1978, President of the Fluidpower Group in 1979 and President of the Industrial Sector in 1980. He became an Executive Vice President of Parker in 1981. Mr. Sullivan was formerly a director of Parker Hannifin and of KeyCorp (a bank-based financial services company).

     Ms. Crayton and Messrs. Hipple, Lawrence and Sullivan have agreed to stand for re-election. While we have no reason to believe that any of these nominees will be unable or unwilling to serve at the time of the Annual Meeting, in the unlikely event any of them does not stand for re-election, the shares represented by proxy at the Annual Meeting may be voted for the election of a substitute nominee named by the Board or there will be a vacancy available to be filled by the Board.

Vote Required

     The four nominees who receive the greatest number of votes cast for the election of Directors at the 2008 Annual Meeting by the shares present, in person or by proxy, and entitled to vote, will be elected Directors.

Board Recommendation

     The Board recommends that you vote FOR the election of Ms. Crayton and Messrs. Hipple, Lawrence and Sullivan. Unless you instruct otherwise on your proxy card or by telephone or Internet voting instructions, your proxy will be voted in accordance with the Board’s recommendation.

     If the election of Directors is by cumulative voting (see page 41 below), however, the persons appointed by your proxy intend to cumulate the votes represented by the proxies they receive and distribute such votes in accordance with their best judgment.

Directors Continuing in Office

     The following are the Directors who will continue in office after the Annual Meeting:

		MICHAEL H. BULKIN
		Age:		69
		First Became a Ferro Director:		1998
		Current Term Expires:		2010
		Common Stock Owned:		40,169 shares
		Common Stock Under Option:		35,250 shares
		Committee Assignments:		Compensation Committee (Chair)

Biographical Information:

Mr. Bulkin is a private investor. In 1965, he joined McKinsey & Company, Inc. (an international management consulting firm). He became a principal in 1970 and was elected a director in 1976. While serving with McKinsey & Company, Mr. Bulkin held several leadership positions including Managing Director of various offices, Chairman of the Partner Evaluation and Compensation Committee and member of the Shareholders Committee, Executive Committee, Strategy Development Committee, Professional Personnel Committee and Partner Election Committee. Mr. Bulkin retired from McKinsey & Company in 1993.

Mr. Bulkin also serves as a director of Bunge Limited (a global food and agribusiness company operating in the farm-to-consumer food chain).

		JENNIE S. HWANG, Ph.D.
		Age:		60
		First Became a Ferro Director:		2001
		Current Term Expires:		2009
		Common Stock Owned:		19,674 shares
		Common Stock Under Option:		25,250 shares
		Committee Assignments:		Audit Committee
				Governance & Nomination Committee

Biographical Information:

Dr. Hwang has over 30 years of experience in materials, electronics and chemical coatings through her management and/or ownership of businesses. She has served as the President of H-Technologies Group since 1994, encompassing international business, worldwide manufacturing services, intellectual property management and joint ventures. Dr. Hwang was also the Chief Executive Officer of International Electronic Materials Corporation (a manufacturing company she founded, which was later acquired). Prior to establishing these companies, Dr. Hwang held various senior executive positions with Lockheed Martin Corp., SCM Corp., and The Sherwin-Williams Company.

Dr. Hwang holds a Ph.D. in engineering and two M.S. degrees in liquid crystals and chemistry. She has served as National President of the Surface Mount Technology Association and in other global leadership positions and is a worldwide speaker and author of more than 300 publications and several internationally used textbooks on leading technologies and global market thrusts. Dr. Hwang has been elected to the National Academy of Engineering and International Hall of Fame (Women in Technology) and is a board member of Second Bancorp, Inc. (a bank holding company), Singapore Asahi Chemical Industries, Pte. Ltd. (a Singapore chemical company) and Case Western Reserve University.

		JAMES F. KIRSCH
		Age:		50
		First Became a Ferro Director:		2005
		Current Term Expires:		2009
		Common Stock Owned:		234,000 shares
		Common Stock Under Option:		201,250 shares

Biographical Information:

Mr. Kirsch was elected Chairman of Ferro’s Board of Directors on December 14, 2006. He was appointed Chief Executive Officer and a Director in November 2005. Mr. Kirsch joined Ferro in October 2004 as its President and Chief Operating Officer.

Prior to joining Ferro, Mr. Kirsch served as President of Premix Inc. and Quantum Composites, Inc., manufacturers of thermoset molding compounds, parts and sub-assemblies for the automotive, aerospace, electrical and HVAC industries. Prior to that, from 2002 through 2004, he served as President of Quantum Composites. From 2000 through 2002, he served as President and director of Ballard Generation Systems and Vice President for Ballard Power Systems in Burnaby, British Columbia, Canada.

Mr. Kirsch started his career with The Dow Chemical Company, where he spent 19 years and held various positions of increasing responsibility, including global business director of Propylene Oxide and Derivatives and Global Vice President of Electrochemicals.

		MICHAEL F. MEE
		Age:		65
		First Became a Ferro Director:		2001
		Current Term Expires:		2010
		Common Stock Owned:		26,665 shares
		Common Stock Under Option:		27,750 shares
		Committee Assignments:		Compensation Committee
				Finance Committee (Chair)

Biographical Information:

At the time of his retirement in March 2001, Mr. Mee served as Executive Vice President and Chief Financial Officer of Bristol-Myers Squibb Company, a pharmaceutical and related health care products company.

Mr. Mee joined Bristol-Myers Squibb in 1994 as its Chief Financial Officer and later assumed additional responsibility for Corporate Development and Global Business Services. In 1999, he was made Executive Vice President and became a member of the Office of the Chairman in 2000.

Before joining Bristol-Myers Squibb, Mr. Mee was involved in the reorganization of Wang Laboratories as Chairman of the Board and earlier as Executive Vice President and Chief Financial Officer of the company. Prior to joining Wang Laboratories in 1990, Mr. Mee had positions of increasing responsibility with Norton Company, Monsanto Company and Chrysler Corporation. Mr. Mee also serves as a director of Lincoln National Corporation (an insurance and financial services company).

		PERRY W. PREMDAS
		Age:		55
		First Became a Ferro Director:		2007
		Current Term Expires:		2010
		Common Stock Owned:		11,658 shares
		Common Stock Under Option:		None
		Committee Assignments:		Audit Committee
				Finance Committee

Biographical Information:

Mr. Premdas joined Ferro’s Board on February 23, 2007.

From 1999 to 2004, Mr. Premdas served as the chief financial officer and a member of the Board of Management of Celanese AG, a worldwide leader in chemical products, acetate fiber, technical polymers and performance products headquartered in Germany. From 1976 to 1998, Mr. Premdas held management and financial positions of increasing responsibility with Celanese Corporation and Hoechst AG, including chief financial officer roles at Hoechst Celanese Corporation and Centeon LLC.

Mr. Premdas is also a director of Compass Minerals International, Inc. (a salt and specialty fertilizer company) and Balchem Corporation (a developer, manufacturer and marketer of specialty performance ingredients and products for the nutritional, feed and medical sterilization industries).

		WILLIAM J. SHARP
		Age:		66
		First Became a Ferro Director:		1998
		Current Term Expires:		2009
		Common Stock Owned:		29,113 shares
		Common Stock Under Option:		35,250 shares
		Committee Assignments:		Audit Committee (Chair)
				Compensation Committee
				Finance Committee

Biographical Information:

Mr. Sharp serves as a consultant to various private equity groups.

In 2001, Mr. Sharp retired as President of North American Tire for The Goodyear Tire & Rubber Company, a tire, engineered rubber products and chemicals manufacturer.

Mr. Sharp began his career with Goodyear in 1964. Following various assignments in the United States and abroad, he was named Director of European Tire Production in 1984. He was appointed Vice President of Tire Manufacturing in 1987 and later Executive Vice President of Product Supply in 1991. In 1992, he became President and General Manager of Goodyear’s European Regional Operations. He was elected President of Goodyear Global Support Operations in 1996. Mr. Sharp is also a director of Jiangsu Xingda Tyre Cord Co. Ltd. (a Chinese tire component supplier), 2020 ChinaCap Acquirco, Inc. (a special purpose acquisition company) and Theotino, Inc. (a software platform for online work collaboration and services trading).

     On April 26, 2007, Albert Weisser, who serves as chairman and CEO of Bunge Corporation, resigned as a Director due to other personal commitments. At the time of his departure, the Board expressed its sincere thanks and appreciation to Mr. Weisser for his seven years of dedicated service to the Company.

Board Meetings and Attendance

     During 2007, the Board of Directors met seven times. During 2007, each Director attended at least 75% of the total number of meetings of the Board and the committees on which he or she served. (Mr. Premdas and Mr. Hipple, both of whom were elected to the Board during the year, did not attend meetings before their election.) Although we do not have a formal policy with respect to Director attendance at the Annual Meeting of Shareholders, the Directors are encouraged to attend. All of the Directors who were in office at the time attended the 2007 Annual Meeting held on April 27, 2007.

Director Compensation

     In 2007, Directors (other than Mr. Kirsch who is an employee of the Company) were paid a quarterly retainer of $16,250 ($65,000 per annum) and in February 2007 were awarded 3,800 deferred stock units. (Mr. Hipple, who joined the Board in June, did not receive deferred stock units in 2007.) The non-employee Directors do not receive a fee for attending meetings unless the total number of meetings a Director attends in a given year exceeds 24, in which case the Director would be paid $1,500 for each meeting in excess of 24. (In 2007, no Director attended more than 24 meetings.) In 2007, the Chair of the Audit Committee was paid an additional quarterly fee of $5,000 ($20,000 per annum) and the Chairs of the Compensation, Finance and Governance & Nomination Committees were each paid an additional quarterly fee of $2,500 ($10,000 per annum). Director fees and other compensation for 2007 were:

Directors’ Compensation Table

		Fees												Deferred Stock Units(2)
														Number of
														Shares of
		Paid In												Common								Total
Name		Cash				Deferred(1)				Total Fees				Stock				Value(3)				Compensation
		$				$				$				Shares				$				$
Michael H. Bulkin			0				75,000				75,000				3,800				83,562				158,562
Sandra Austin Crayton			65,000				0				65,000				3,800				83,562				148,562
Richard J. Hipple			32,500				0				32,500				0				0				32,500
Jennie S. Hwang			65,000				0				65,000				3,800				83,562				148,562
James F. Kirsch (4)			0				0				0				0				0				0
William B. Lawrence (5)			75,000				0				75,000				6,300				138,537				213,537
Michael F. Mee			0				75,000				75,000				3,800				83,562				158,562
Perry W. Premdas			0				65,000				65,000				3,800				83,562				148,562
William J. Sharp			85,000				0				85,000				3,800				83,562				168,562
Dennis W. Sullivan			0				65,000				65,000				3,800				83,562				148,562
Alberto Weisser			32,500				0				32,500				3,800				83,562				116,062

     Directors may defer their fees and common stock issuable upon settlement of the deferred stock units into a Ferro Common Stock account. Amounts so deferred are invested in Ferro Common Stock and dividends on those shares are reinvested in additional Ferro Common Stock. Ferro distributes the shares credited to a Director’s deferred account after he or she ceases to be a Director.

CORPORATE GOVERNANCE

     Ferro’s Board has long followed, both formally and informally, corporate governance principles designed to assure that the Board, through its membership, composition, and committee structure, is able to provide informed, competent and independent oversight of the Company. Below is a description of the corporate governance measures in place to assure that objective is met. Further information about the Company’s corporate governance policies may be found at our website: www.ferro.com.

Corporate Governance Principles

     The Board has adopted Corporate Governance Principles. These Corporate Governance Principles, which may be found on our website (www.ferro.com), are intended to assure that Ferro’s Director qualifications, Committee structure and overall Board processes provide good corporate governance and independent oversight of the Company’s management.

Director Independence

     The Board has also adopted formal Guidelines for Determining Director Independence, which are also available on our website (www.ferro.com). The purpose of these Guidelines is to assist the Board in its evaluation of and determination as to the independence of members of the Board. The Guidelines meet or exceed in all respects the standards set forth in section 303A of the New York Stock Exchange listing standards, and the Board has determined that all Directors, other than Mr. Kirsch, qualify as “independent” under such standards.

Board Committees

     The Board of Directors has four committees, which are an Audit Committee, a Compensation Committee, a Finance Committee, and a Governance & Nomination Committee.

o

Audit Committee

     The Audit Committee assists the Board with oversight of the integrity of Ferro’s financial statements, Ferro’s compliance with legal and regulatory requirements relating to its financial reports (including the annual Audit Committee report as required by the Securities Exchange Act of 1934), Ferro’s independent registered public accountants’ qualifications, independence, and performance, the performance of Ferro’s internal audit and risk management functions, compliance with Ferro’s legal and ethical policies and Ferro’s accounting practices and systems of internal controls. The Audit Committee is not, however, responsible for conducting audits, preparing financial statements, or the accuracy of any financial statements or filings, all of which remain the responsibility of management and the independent registered public accountants. The Committee’s charter may be found on our website (www.ferro.com).

     Dr. Hwang and Messrs. Lawrence, Sharp, and Sullivan served on the Audit Committee throughout 2007 and Mr. Sharp served as the Chair for the entire year. Mr. Premdas joined the Committee upon his election as a Director on February 23, 2007, and Mr. Weisser left the Committee upon his resignation on April 26, 2007. Each member of the Audit Committee is “independent” as required under section 301 of the Sarbanes-Oxley Act of 2002, as well as under the standards contained in section 303A of the New York Stock Exchange’s listing standards and the Company’s Guidelines for Determining Director Independence. The Board has determined, in its best judgment, that more than one member of the Audit Committee has the accounting and related financial management experience and expertise to qualify as an audit committee “financial expert” as defined in section 407 of the Sarbanes-Oxley Act and the Securities and Exchange Commission’s rules under that statute. In 2007, the Board designated Mr. Premdas as the Audit Committee’s named financial expert. (Mr. Premdas’ biography is on page 6 above.) Each member of the Audit Committee has the requisite financial literacy required under section 303A of the New York Stock Exchange listing standards to serve on the Audit Committee.

     The Audit Committee met twelve times in 2007. The Audit Committee’s report is on page 37 below.

o

Compensation Committee

     The Compensation Committee is responsible for recommending policies for compensation of Directors and setting the compensation of the Senior Management Committee, which is comprised of the Company’s executive officers. (See page 13 of the Company’s 2007 Annual Report on Form 10-K.) The Committee also oversees the various compensation and benefit plans and policies of the Company generally. The Committee’s charter may be found on our website (www.ferro.com).

     The Committee has retained Towers Perrin, a nationally-recognized executive compensation consulting firm, to provide support to the Committee and management. Towers Perrin assists with the design of pay plans and reviewing the effectiveness and competitiveness of the Company’s compensation programs. Towers Perrin also provides the Committee and management with market data on the compensation programs of peer companies. The Chief Executive Officer and Vice President, Human Resources make recommendations regarding compensation of the Senior Management Committee (other than for the Chief Executive Officer) based on the competitive market data, internal pay equity, responsibilities and performance. The Committee makes all final determinations regarding executive compensation, including salary, bonus targets, equity awards and related performance goals. From time to time, the Committee delegates to the Chief Executive Officer and Vice President, Human Resources authority to carry out certain administrative duties regarding the compensation programs, including grants of equity awards to non-executive employees and new hires. For more information on how executive compensation decisions are made, see the “Executive Compensation Discussion and Analysis” section beginning on page 12 below.

     Messrs. Bulkin, Hipple, Lawrence, Mee, and Sharp served as the members of the Compensation Committee during 2007, with Mr. Bulkin serving as the Chair. (Mr. Hipple was appointed to the Committee in December 2007.) All members of this Committee meet the “independence” standards contained in section 303A of the New York Stock Exchange’s listing standards and the Company’s Guidelines for Determining Director Independence.

     The Compensation Committee met seven times in 2007. The Compensation Committee’s report is on page 18 below.

o

Finance Committee

     The Finance Committee has oversight responsibilities with respect to reviewing the Company’s capital structure, worldwide capital needs, major capital allocations, financial position and related financial covenants and recommending to the Board financial programs and plans for implementing such programs. This Committee’s charter may also be found on our website (www.ferro.com).

     The Finance Committee met four times in 2007. Ms. Crayton and Messrs. Mee and Sharp were the members of the Finance Committee throughout 2007, with Mr. Mee serving as the Chair. Mr. Premdas joined the Committee upon his election as a Director on February 23, 2007, Mr. Weisser left the Committee upon his resignation on April 26, 2007, and Mr. Hipple joined the Committee upon his election as a Director on June 26, 2007. All members of this Committee meet the “independence” standards contained in section 303A of the New York Stock Exchange’s listing standards and the Company’s Guidelines for Determining Director Independence.

o

Governance & Nomination Committee

     The Governance & Nomination Committee is responsible for recommending to the Board corporate governance principles, overseeing adherence to the corporate governance principles adopted by the Board, recommending to the Board criteria and qualifications for new Board members, recommending to the Board nominees for appointment or election as Directors and recommending to the Board the composition and chairs of each committee. The Committee’s charter may be found on our website (www.ferro.com).

     In its role as the nominating body for the Board, the Committee reviews the credentials of potential Director candidates (including potential candidates recommended by shareholders), conducts interviews and makes formal recommendations to the Board for the annual and any interim election of

Directors. In making its recommendations, the Committee considers a variety of factors, including skills, independence, background, experience, diversity and compatibility with existing Board members. Other than the foregoing, there are no stated minimum criteria for Director nominees, and the Committee may also consider such other factors as it deems appropriate in the best interests of Ferro and its shareholders.

     The Committee identifies nominees by first evaluating the current members of the Board willing to continue in service. If any Board member does not wish to continue in service or if the Committee or the Board decides not to nominate a member for re-election, then the Committee identifies the desired skills and experience in light of the criteria outlined above. The Committee then establishes a pool of potential Director candidates from recommendations from the Board, senior management and shareholders. The Committee may also retain a third party search firm to assist in the identification of Director candidates. Mr. Premdas and Mr. Hipple were recommended to the Committee by non-management Directors.

     The Committee will consider candidates for Director who are recommended by shareholders. Shareholder recommendations should be submitted in writing to: Secretary, Ferro Corporation, 1000 Lakeside Avenue, Cleveland, Ohio 44114-1147 USA. The recommendation letter should include the shareholder’s own name, address and the number of shares owned and the candidate’s name, age, business address, residence address and principal occupation, as well as the number of shares the candidate owns. The letter should provide all of the information that would need to be disclosed in the solicitation of proxies for the election of directors under Federal securities laws. Finally, the shareholder should also submit the recommended candidate’s written consent to be elected and commitment to serve if elected. Ferro may also require a candidate to furnish additional information regarding his or her eligibility and qualifications.

     Ms. Crayton, Dr. Hwang, and Messrs. Lawrence and Sullivan are the members of the Governance & Nomination Committee, with Mr. Lawrence serving as the Chair. All members of this Committee meet the “independence” standards contained in section 303A of the New York Stock Exchange’s listing standards and the Company’s Guidelines for Determining Director Independence.

     The Governance & Nomination Committee met six times in 2007.

Other Corporate Governance Measures

     Ferro’s non-management Directors, all of whom are independent, meet at regularly scheduled executive sessions several times each year. These meetings are chaired by a lead Director selected from among the committee Chairs on a rotating basis. (Mr. Bulkin, the Chair of the Compensation Committee, currently serves as the lead Director.) Neither the Chief Executive Officer nor any other member of management attends these meetings. Following each executive session, the lead Director shares with the Chief Executive Officer such observations, comments or concerns as he and the other non-management Directors deem appropriate.

     The independent Directors have access to Ferro management as they deem necessary or appropriate. In addition, the Chairs of the Audit Committee, Governance & Nomination Committee and Compensation Committee meet periodically with members of senior management.

     Finally, Ferro has adopted a series of policies dealing with business conduct and ethics. These policies apply to all Ferro Directors, officers and employees. A summary of these policies may be found on Ferro’s website (www.ferro.com) and the full text of the policies is available in print, free of charge, by writing to: Secretary, Ferro Corporation, 1000 Lakeside Avenue, Cleveland, Ohio 44114-1147 USA. Under the Audit Committee’s charter, the Committee is charged with responsibility to assure that all exceptions to and waivers of the Company’s ethical and internal control policies are properly disclosed, documented and approved by the Committee and that no employee is disciplined, punished or otherwise disadvantaged as a consequence of reporting in good faith violations of the Company’s policies. Exceptions, waivers and amendments of those policies may be made, if at all, only by the Committee and, in the event any such exceptions, waivers or amendments are granted, a description of the change or event will be posted on Ferro’s website within four business days. Finally, further to assure compliance, Ferro maintains a hotline that allows employees throughout the world to report

confidentially any detected violations of these legal and ethical conduct policies consistent with local legal requirements and subject to local legal limitations.

     Any shareholder or other interested party who wishes to communicate directly and confidentially with the lead Director or the independent Directors as a group may contact the independent Directors at the following website: www.ferrodirectors.com. The independent Directors will handle such communications confidentially.

EXECUTIVE COMPENSATION DISCUSSION & ANALYSIS

     Set forth below is a description of the process by which the Company, through its Compensation Committee, set the compensation of its Chief Executive Officer and other members of the Senior Management Committee for 2007. (The Senior Management Committee is comprised of the Company’s executive officers.^* See page 13 of the Company’s 2007 Annual Report on Form 10-K.)

Our Compensation Philosophy and Objectives

     The primary objectives of the Company’s executive compensation program are:

	o		To provide a total compensation opportunity designed to attract, retain and align the efforts of an experienced and high-performing senior management team toward the achievement of the financial goals of the corporation and improvement in shareholder value,
	o		To design elements of the compensation program to reward the achievement of specific annual and long-term financial goals, and align the interests of executives with those of shareholders,
	o		To target executive compensation levels for base salary, annual incentives, and long-term incentive compensation at the 50th percentile of the competitive market, with a strong “pay-for-performance” relationship, to ensure the Company’s ability to compete in the market for executive talent, **
	o		To target appropriate portions of long-term incentive compensation, when necessary, towards retention of our executive team, and
	o		To ensure that the actual compensation paid to our executive team is aligned and correlated with financial performance results and changes in shareholder value.

Compensation Committee Oversight

     The Compensation Committee of the Board is responsible for establishing, implementing and monitoring adherence to the Company’s compensation philosophy for the Chief Executive Officer and the other members of the Senior Management Committee. The Compensation Committee sets the compensation of the Company’s executive officers, recommends to the Board compensation for the Directors and the Chairs and members of Board Committees, and oversees compensation and benefit plans and policies of the Company generally.

     In carrying out its oversight responsibilities, the Compensation Committee is supported by external executive compensation consultants and management. The nature of this support is summarized below:

     Role of External Compensation Consultants. The Compensation Committee has retained Towers Perrin, a nationally-recognized executive compensation consulting firm, to provide expertise to management and the Committee on the design of appropriate pay plans, analysis of the effectiveness of

existing plans, and the competitiveness of base salary, annual incentive levels, and long-term incentive awards with the competitive market.

     In fulfilling this role, Towers Perrin provides the Committee with competitive market data from a variety of sources. These companies are chosen based on their participation in a similar industry with a comparable size to the Company (based on revenues). This market data includes information from the proxies of Ferro’s 14 peer companies, from 17 specialty chemical companies in the S&P index, and from 730 Mid Cap companies with revenues from approximately $1 billion to $4 billion that are comparable to Ferro’s revenues. Ferro’s peer companies that Towers Perrin analyzed for 2007 included the following:

	A. Schulman, Inc.		The Lubrizol Corporation
	Albemarle Corporation		Minerals Technologies Inc.
	Cabot Corporation		Olin Corporation
	Chemtura Corporation		PolyOne Corporation
	Cytec Industries Inc.		Sigma-Aldrich Corporation
	H.B. Fuller Company		Valhi, Inc.
	Hercules Incorporated		W. R. Grace & Co.

     Towers Perrin also provides market data to the Chief Executive Officer and Vice President, Human Resources with respect to each of the Senior Management Committee positions. This information is considered by the Chief Executive Officer along with internal equity, scope of responsibilities, and performance, in making pay recommendations to the Committee for the Senior Management Committee. The Compensation Committee approves all pay decisions related to Senior Management Committee members.

     During 2007, Towers Perrin did not provide material services to the Company outside of those described in this section.

     Role of Management. Management of the Company supports the Compensation Committee in its assessment of executive compensation, implements decisions made by the Committee, and ensures that the Company’s compensation plans are administered in accordance with the provisions of the plans. The Company’s Vice President, Human Resources and Director, Compensation provide Towers Perrin with information concerning executives’ responsibilities, compensation, benefits, executive allowances, and Company financial data and business goals as necessary for them to complete their work for the Committee. The Chief Executive Officer and Vice President, Human Resources participate in an advisory capacity in the Compensation Committee’s meetings, including the annual compensation review in February each year, and provide the Committee with data and analyses as requested by the Committee. The Committee makes its decisions with respect to the Chief Executive Officer in executive session.

Our Current Compensation Program

     Our current compensation program includes a base salary, an annual incentive, long-term incentives, retirement benefits, supplemental contributions to the Company’s defined contribution program, and an executive allowance. We also make available to our executives the opportunity to participate in a deferred compensation plan. Finally, the Company provides its executives with protection against fundamental changes in the Company’s ownership and control through change-in-control agreements. The total compensation and the individual elements of compensation are periodically reviewed by the Committee based upon data provided by Towers Perrin on market practices of peer companies. The competitive market provides a larger range of companies and more information regarding the compensation of officers of Ferro’s peer companies because certain officers’ information is not available in the public disclosure by these companies. Each element of our compensation program is discussed below.

     Base Salary. An executive’s base salary is cash compensation that is based on internal equity and external competitive market data comparison. This portion of compensation is not at risk and is paid to the executive regardless of the performance of the Company in a particular year. The amount of base salary is reviewed on an annual basis and adjusted, if warranted, to reflect scope of responsibilities, individual performance and external market conditions. The Company targets base

salary at the 50^th percentile of the competitive market, but considers other factors, including individual performance and experience, internal equity, scope and influence of the position, in setting an individual’s base salary and overall compensation level. This ensures the Company’s ability to compete in the competitive market for executive talent.

     Annual Incentives. The Company’s Annual Incentive Plan (the “AIP”) provides an executive an opportunity to earn additional cash compensation based upon the achievement of pre-determined financial goals for the fiscal year. Target incentive opportunities, performance metrics and performance goals are established by the Compensation Committee and communicated to participants at the beginning of each year. These AIP goals are directly linked to the financial goals in the operating plan approved by the Board of Directors. At the Compensation Committee’s discretion, AIP payments to the Chief Executive Officer and each Senior Management Committee member may be adjusted upward or downward by as much as 20% to reflect individual performance in a given year. In addition, the Compensation Committee may adjust AIP performance results to account for certain one-time items in exceptional or extraordinary circumstances where the effects of the item are auditable.

     Long-Term Incentives. In November 2006, the Company’s shareholders approved the 2006 Long-Term Incentive Plan (the “2006 LTIP”). The 2006 LTIP replaced the earlier 2003 Long-Term Incentive Compensation Plan (the “2003 LTIP”). (The 2003 LTIP and the 2006 LTIP constitute the Company’s Long-Term Incentive Plan and are referred to as the “LTIP” in this Proxy Statement.) The terms of the two plans are substantially the same. Grants in 2007 were made under the 2006 LTIP.

     The LTIP is a critical component of the compensation program. It is designed to promote Ferro’s long-term financial interests and growth by attracting, retaining and motivating high quality key employees and Directors and aligning their interests with those of our shareholders. The LTIP is administered by the Compensation Committee. The Committee selects the employees and Directors who will participate in the program, approves the types and number of awards to be made to each participant, and approves the terms, conditions and limitations applicable to each award. The Compensation Committee delegates authority to the Chief Executive Officer within pre-established limitations to make awards to newly-hired employees who are not executive officers during the course of the year.

     The LTIP allows the Company to award six different types of long-term incentives, i.e., stock options, stock appreciation rights, restricted shares, performance shares, other common stock based awards (such as phantom common stock units and deferred common stock units), and dividend equivalent rights. In 2007, the Compensation Committee authorized two types of LTIP awards – stock options and performance shares. The basic terms of those awards are described below:

o		Stock Options. Stock options are issued with an exercise price at no less than the closing market price of Ferro Common Stock on the date the options are granted. Stock options have a maximum term of ten years and vest evenly over the first four anniversaries of the grant date. After receiving the recommendation of management, the Compensation Committee determines which employees receive stock options and the number of option shares granted to employees in accordance with the terms of the LTIP.
o		Performance Shares. At the time of award, the Company establishes a nominal or target number of shares for each participant. At the end of the performance period (currently, three years), a determination is made whether and to what extent the pre-established performance targets have been achieved. If target levels of performance are not achieved, a participant’s actual payout will be less than the nominal values of the awards. Threshold performance levels must be achieved to receive any payout. The Committee has the discretion to make adjustments to take into account extraordinary or nonrecurring items or events, or unusual nonrecurring gains or losses identified in Ferro’s financial statements, provided such adjustments are made in a manner consistent with Section 162(m) of the Internal Revenue Code (to the extent applicable). Payments at the end of the period are made one-half in shares and one-half in cash based on the average closing price for the Company’s Common Stock during the first 10 calendar days of the last month of the performance period. After receiving the recommendation of management, the Compensation Committee determines which employees

receive performance shares and the number of performance shares granted to employees in accordance with the terms of the LTIP.

     The Compensation Committee generally makes all LTIP awards at its meeting on a pre-determined date in February. The value of any awards, including stock option strike price, is determined by the closing price of Ferro Common Stock on the New York Stock Exchange on the date the Compensation Committee approves the grants. From time to time during the year, the Compensation Committee (or the Chief Executive Officer pursuant to his authority delegated to him by the Compensation Committee) may award shares to a new hire or, under unusual circumstances, to a current employee. In such cases, the value of the grant is based on the closing price of the Ferro Stock on the NYSE on the date the award is granted, which in the case of new hires is the first date he or she is employed.

     Executive Allowance and Other Benefits. During 2007, the Company provided an annual executive allowance for the Chief Executive Officer and other Senior Management Committee members in lieu of providing benefits such as personal use of the Company aircraft, financial planning, tax preparation, and club memberships. The executive allowance is paid in cash in April of each year. The amount of the allowance is set by the Compensation Committee and targeted at providing sufficient funds to pay for the discontinued executive benefits. For 2007, this amount was $35,000 for the Chief Executive Officer and $9,600 for other Senior Management Committee members. Company provided leased cars were eliminated for new Senior Management Committee hires as of April 1, 2006 and were phased out for the Chief Executive Office and other Senior Management Committee members as of December 31, 2007. Finally, our executives are entitled to four weeks of vacation per year.

     Retirement Benefits. In previous years, the Company offered its employees a defined benefit plan, known as the Ferro Corporation Retirement Plan (the “DB Plan”), and for executive employees a supplemental defined benefit program, known as the Ferro Corporation Supplemental Defined Benefit Plan for Executive Employees (the “Supplemental DB Plan”). The DB Plan and the Supplemental DB Plan provided employees annuity payments in retirement according to pre-determined formulas. Effective March 31, 2006, we “froze” our principal defined benefit plan (including the companion non-qualified supplemental defined benefit plan for executives) for purposes of future accruals. These plans had previously been frozen as to new entrants since July 1, 2003.^* Consequently, going forward the primary retirement benefit that will be provided to executive officers will be in the form of a defined contribution plan (including a companion non-qualified supplemental defined contribution plan for executive officers).

     Non-Qualified Plans. During 2007, Senior Management Committee members were eligible to participate in the Ferro Corporation Deferred Compensation Plan for Executive Employees (the “Deferred Compensation Plan”) and the Ferro Corporation Supplemental Defined Contribution Plan for Executive Employees (the “Supplemental DC Plan”). Under the Deferred Compensation Plan, participants may elect to defer a percentage of their annual salary, as well as their annual bonus and/or performance share payout, to be paid at a certain time specified by the participant and consistent with the terms of the plan. The Supplemental DC Plan provides participants with contributions that would have been made to their 401(k) and basic pension contribution accounts under the Ferro Corporation Savings and Stock Ownership Plan (the “DC Plan”), were it not for tax law limitations.

     Change-in-Control Agreements. For many years, the Board has recognized that, as is the case with many publicly-held corporations, there is always a possibility of a fundamental change in the Company’s ownership and control through a “change in control.” Any such threatened or actual change in control would create uncertainties and raise questions that could result in the departure or distraction of management personnel to the detriment of the Company and its shareholders. In light of these facts, the Board determined that appropriate steps needed be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management to their

assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a change in control. Consequently, the Company has entered into change in control agreements with each of the executive officers. For a discussion of payments to executive officers as a result of a change in control, see discussion under Employment Agreements and Termination and Change in Control Payments beginning on page 28 below.

Executive Compensation Process in 2007

     In 2007, the Compensation Committee continued the approach to long-term incentive compensation that was established in 2006. Long-term compensation opportunities were targeted at the 50^th percentile of the competitive market, with a mix of 50% stock options and 50% performance shares. Goals for the performance share grants awarded in connection with the 2007-2009 performance period were cumulative earnings per share and revenues over the performance period for all participants.

     The Compensation Committee also continued the approach to annual incentive compensation that had been established in 2006, which is to focus the efforts of the management team on the achievement of the most critical financial results for the year and to increase the linkage of payouts to achievement of the budgeted financial results. Goals for the 2007 AIP were corporate operating income and business unit operating profit. Target levels were set at the operating budget for the Company and business units. Threshold performance, the level required for any payout to be achieved, was set at 90% of the budgeted performance levels. At threshold performance, the payout would be 25% of an individual’s target incentive. The maximum payout would be earned for performance of 120% of budget or better. For 2007, the maximum payout would be 250% of an individual’s target incentive. The 2007 goals for the Chief Executive Officer, Chief Financial Officer and Vice President and General Counsel were based solely on corporate operating income. Goals for the Operating Vice Presidents were weighted 30% on corporate operating income and 70% on the operating profit of the business unit for which they were responsible.

     At its February 6, 2007 meeting, the Committee reviewed current levels of pay for the Senior Management Committee and the Chief Executive Officer’s recommendations for increases. The Committee approved salary increases based on competitive market salary movement, competitive base salary data, and internal equity considerations of 3.2% for Mr. Bays, 7.7% for Mr. Murry and 5.0% for Mr. Russell. These compensation changes were made retroactive to January 1, 2007. Ms. Bailey began employment with the Company on January 2, 2007 and was therefore not eligible for a salary increase.

     Mr. Kirsch’s base salary rate was increased from $650,000 to $700,000, retroactive to January 1, 2007. This increase resulted in a base salary for Mr. Kirsch that was between the 25^th and 50^th percentile of the competitive market data provided by Towers Perrin.

     Also at its February 6, 2007 meeting, the Committee made long-term incentive grants to the Chief Executive Officer and Senior Management Committee at levels approximating the 50^th percentile of competitive market based on data provided by Towers Perrin, split (in value) evenly between stock options and performance shares. Accordingly, Mr. Kirsch was awarded 150,000 stock options and 50,000 performance shares for the 2007-2009 performance period. Ms. Bailey was awarded 33,000 stock options and 11,500 performance shares; Mr. Murry was awarded 29,500 stock options and 10,100 performance shares; and Messrs. Bays and Russell were each awarded 25,000 stock options and 8,750 performance shares. The goals for the 2007-2009 performance shares were cumulative earnings per share weighted at 70% and cumulative sales revenues for the Company weighted at 30%. The cumulative sales revenue target was set at an annual growth rate of approximately 5%, a level comparable to the historical growth rate of peer companies. The cumulative earnings per share target was set at a level that, based on historical performance, would approximate the competitive market peers’ 40^th percentile performance. For the estimated payouts to Messrs. Kirsch and Bays for the 2005-2007 performance period, see Option Exercises and Stock Vested on page 25.

     At its February 28, 2008 meeting, the Committee decided to modify the long-term incentive program for 2008 through 2010. For 2008, a portion (20%) of the long term incentive target grant value for 2008, 2009 and 2010, for which performance shares would otherwise be granted, will be

replaced by a one-time grant of shares of restricted stock that will vest three years from the date of grant. The shares will vest only if the executive is employed by the Company at the end of the three-year period or his or her employment was ended due to death, disability, or a change of control during that period. At the end of the vesting period, the executive will receive shares of the Company’s Common Stock and the nominal amount of dividends paid on such shares during the three-year vesting period. The executive will be obliged to hold the shares remaining after satisfying any tax withholding obligations for a period of two years after the end of the vesting period. Long-term incentive grants for 2009 and 2010 will be reduced accordingly.

     On February 28, 2008, the Committee reviewed the Company’s performance compared to goals for the AIP. The 2007 target performance for corporate operating income (defined as business unit operating profit less corporate unallocated expenses and excluding certain non-recurring items) was established at $136.4 million, an 11.4% increase above actual 2006 performance. Threshold performance was established at 90% of target and maximum performance at 120% of target. Operating profit targets for each of the businesses were established at the operating budget level with thresholds and maximums set at 90% and 120% of budget, respectively.

     Management recommended to the Committee that AIP results for 2007 be adjusted for the effects of the quality issue at the Organic Specialties’ Evansville, Indiana facility and the safety intervention at the Electronic Material Systems’ South Plainfield, New Jersey facility, both of which occurred during 2007. The Committee concluded that these two events were extraordinary and exceptional and that the effects of those two items were auditable. Consequently, the Committee accepted management’s recommendation to adjust the 2007 AIP results by a total of $7.0 million, $4.0 million of which reflected the profit impact of the quality issue at the Evansville facility and $3.0 million of which reflected the profit impact of the safety intervention at South Plainfield. (No similar adjustments were made to 2006 AIP results).

     After these adjustments, the corporate operating income was $124.64 million, resulting in a score of 35.36%. Accordingly, the Committee approved AIP payments of $185,640 for Mr. Kirsch, $61,880 for Ms. Bailey, and $50,918 for Mr. Bays. Mr. Murry’s score for Inorganic Specialties was 55.58% resulting in an approved incentive payment of $97,265. Finally, Mr. Russell’s performance score for Electronic Material Systems was 10.61% resulting in an approved payment of $15,040. In addition, the Committee considered Mr. Russell’s special incentive opportunity of $100,000 for 2007 (provided to him at the time he joined the company in consideration of certain compensation he was forfeiting when he left his former employer). Although the Electronic Material Systems operating profit target was not achieved in 2007 and therefore the special incentive not earned by Mr. Russell, the Committee decided to make a discretionary payment of $75,000 in recognition of Mr. Russell’s capabilities and contributions to Electronic Material Systems during 2007. The Committee also decided that Mr. Russell would have an opportunity to make up the additional $25,000 if he achieves the operating profit target for Electronic Material Systems in 2008.

     Finally, the Compensation Committee reviewed the executive benefits provided to the Chief Executive Officer. The Committee approved a one-time payment to the Chief Executive Officer of $100,000 to reimburse him for the initiation fee for joining the Pepper Pike Country Club. The Committee recommended he join to enhance networking opportunities with other Cleveland area CEOs. The Committee approved payment of an executive allowance of $35,000 for 2008, the same level as in 2007.

Stock Ownership Guidelines

     Ferro has had stock ownership guidelines for its Directors and executive officers since 1998. The current guidelines, approved by the Compensation Committee on February 6, 2007, require the Chief Executive Officer and other Senior Management Committee members to achieve target levels ownership of 150,000 shares and 30,000 shares, respectively, within a five-year period. For non-executive Directors, the stock ownership guideline is 10,000 shares.

     Shares of Common Stock deemed to be owned by each executive and Director include shares owned outright with no restrictions, restricted stock grants, shares owned in the DC Plan, shares deemed to be invested in Ferro Common Stock through the Company’s deferred compensation and

supplemental defined contribution plans, 20% of vested options that are “in-the-money” by more than thirty percent, and shares represented by deferred stock units granted to non-executive Directors.

     Due to the trading blackouts in 2004 through 2006 associated with the restatement of our financial statements for the year ended December 31, 2003 and the quarter ended March 31, 2004, the time period for achieving this guideline for the current executives covered by the guideline was extended until December 31, 2011.

Section 162(m) Limitation

     Section 162(m) of the Internal Revenue Code generally provides that certain compensation in excess of $1.0 million per year paid to a company’s chief executive officer and any of its three highest paid executive officers is not deductible by a company unless the compensation qualifies for an exception. Section 162(m) provides an exception for performance-based compensation if certain procedural requirements, including shareholder approval of the material terms of the performance goals, are satisfied. The LTIP contains the provisions necessary to qualify the LTIP under the Section 162(m) exception and preserve the tax deductibility to the Company of compensation paid to executives under these plans in the future.

Compensation Committee Interlocks and Insider Participation

     During 2007, no officer or employee of Ferro served as a member of the Compensation Committee. Also, during 2007, there were no interlocking relationships (as described in Item 407(e)(4) of SEC Regulation S-K) between members of the Compensation Committee and Ferro.

Plans Described in This Proxy Statement

		Where
Plan Name		Described		Abbreviation
Annual Incentive Plan		Page 14		“AIP”
2006 Long-Term Incentive Plan		Page 14		“2006 LTIP”
2003 Long-Term Incentive Compensation Plan		Page 14		“2003 LTIP”
The 2006 LTIP and the 2003 LTIP, collectively		Page 14		“LTIP”
Ferro Corporation Retirement Plan		Page 15		“DB Plan”
Ferro Corporation Supplemental Defined Benefit Plan for Executive Employees		Page 15		“Supplemental DB Plan”
Ferro Corporation Savings and Stock Ownership Plan		Page 15		“DC Plan”
Ferro Corporation Supplemental Defined Contribution Plan for Executive Employees		Page 15		“Supplemental DC Plan”
Ferro Corporation Deferred Compensation Plan for Executive Employees		Page 15		“Deferred Compensation Plan”

2007 EXECUTIVE COMPENSATION

     The following table shows the elements of compensation paid or earned during 2007 and 2006 to each person serving as the Chief Executive Officer, the Chief Financial Officer and the other three highest paid executive officers as of December 31, 2007:

Summary Compensation Table

																										Change in
																										Pension
																										Value
																										and Non-
																						Non-Equity				Qualified
																						Incentive				Deferred
																						Plan				Compen-				All Other
Name and														Stock				Option				Compen-				sation				Compen-
Principal Position		Year				Salary (1)				Bonus(2)				Awards(3)				Awards(4)				sation(5)				Earnings(6)				sation(7)					Total
						$				$				$				$				$				$				$					$
James F. Kirsch			2007				700,000				0				419,722				603,616				185,640				0				186,866					2,095,844
Chairman, President and			2006				625,000				0				400,804				366,458				722,475				0				126,944					2,241,681
Chief Executive Officer
Sallie B. Bailey (8)			2007				348,905				100,000				158,061				46,230				61,880				0				80,677					795,753
Vice President and Chief Financial Officer
Thomas M. Gannon (8)			2007				2,813				0				0				0				0				0				554,755					557,568
Former Vice President and			2006				365,000				200,000				27,795				311,545				270,465				0				69,135					1,243,940
Chief Financial Officer
James C. Bays			2007				320,000				0				104,536				260,061				50,918				2,035				81,113					818,663
Vice President, General			2006				310,000				0				121,231				220,648				206,739				76,420				61,275					996,313
Counsel & Secretary
Michael J. Murry			2007				350,000				0				108,352				139,075				97,265				0				82,577					777,269
Vice President,			2006				325,000				0				81,892				93,357				267,313				0				51,916					819,478
Inorganic Specialties
Barry D. Russell (9)			2007				315,000				75,000				106,141				119,677				15,040				0				64,452					695,310
Vice President,			2006				205,780				0				78,994				58,214				305,057				0				21,205					669,250
Electronic Material Systems

	(a)		As of July 1, 2003, the DB Plan and the Supplemental DB Plan were frozen as to participation for new hires and, as of March 31, 2006, the plans were generally frozen as to future benefit accruals. Consequently Messrs. Gannon and Bays had pension benefit accruals under these plans during 2006 because they were hired before July 1, 2003; however, they did not accrue any additional benefits during 2007 because the plan was frozen as to future benefit accruals. For additional information regarding these plans, please see the Executive Compensation Discussion & Analysis on page 15 above and the Post-Employment Compensation Table on page 26 below.
			When Mr. Gannon’s employment terminated on January 2, 2007, he was not vested in a benefit under either plan because he did not have the required five years of credited vesting service. Consequently, he will receive no benefit under either plan. Because Mr. Gannon will not be eligible for any benefits under these plans, the Company did not incur the expense of having its outside actuaries calculate the benefits and no amount is listed for Mr. Gannon in this column. Consequently, only the change in pension values of Mr. Bays’ pension benefits under the plans appear in this column.
			The change in pension value portion of the amount for Mr. Bays for 2006 was recalculated by the Company’s actuaries (i) to include the AIP payments relating to 2006 and paid in 2007, and (ii) as a result of the change in calculation methodology pursuant to further guidance relating to disclosure rules promulgated by the Securities and Exchange Commission. The change in pension value portion of the amount for Mr. Bays for 2007 resulted in a reduction of $128.
	(b)		Mr. Bays also participated in the Deferred Compensation Plan under which participants can defer a portion of their salary and certain incentive payouts. Interest is credited to deferred amounts at the 10-year constant treasury maturity yield rate plus 300 basis points, calculated as of the last day of each quarter and applicable to each month of the next following quarter. The amount for Mr. Bays in this column includes the excess of the actual interest credited to Mr. Bays’ account under this plan for 2007 over the interest that would have been credited to his account had 120% of the 10-year constant treasury maturity yield rate been used instead.

(7)

Amounts in this column include (a) Company matching contributions and the basic pension contribution under the DC Plan, (b)supplemental Company matching contributions and the supplemental basic pension contribution under the Supplemental DC Plan, (c) amounts taxable to each of the named executives relating to group term life insurance under Internal Revenue Code Section 79, (d) executive allowances, (e) relocation expenses of Ms. Bailey and Mr. Russell and (f) severance payments to Mr. Gannon.

	(a)		and (b) For a description of the DC Plan and the Supplemental DC Plan, see the Executive Compensation Discussion & Analysis on page 15 above. The amounts included are for Company contributions made relating to 2007 and 2006 regardless of the vesting status of those contributions. Company contributions under the DC Plan and the Supplemental DC Plan vest equally over a period of five years from the date of hire.
	(c)		The Company provides U.S. salaried and certain hourly employees with group term life insurance coverage. The Company provides one times base salary (or, if greater, $50,000) of coverage at no charge to the employee, and the employee can elect to pay for more coverage. Internal Revenue Code Section 79 requires that a certain portion of employer-paid life insurance coverage be included in gross income for federal income tax purposes. The amounts in this column include the taxable amounts for 2007 and 2006.
	(d)		In 2006, the Company decided to discontinue certain benefits that had been made in prior years to officers who were members of the Senior Management Committee, replacing them with a fixed allowance for each year. See the Executive Compensation Discussion & Analysis on page 15 above for more information. Under this new approach, the Chief Executive Officer receives an annual allowance of $35,000 and each other eligible executive who is a member of the Senior Management Committee receives $9,600 (increased from $7,500 in 2006). The allowance period begins each April 1 and ends March 31 of the following year. Since Ms. Bailey began her employment in the middle of an allowance period on January 2, 2007, Ms. Bailey’s allowance amount for 2007 includes an additional $1,829, which represents the annual allowance that was paid to other eligible members of the Senior Management Committee in 2006, pro-rated based on the time she was employed during the 2006-2007 allowance period. The amount of the personal use of the Company car calculated under the incremental benefit approach is included in this column: for 2007 and 2006, respectively — Mr. Kirsch ($13,179 and $13,028), Mr. Gannon ($0 and $8,188), Mr. Bays ($8,080 and $15,373) and Mr. Murry ($9,090 and $8,585). Ms. Bailey and Mr. Russell have no Company-provided car consistent with Ferro’s new benefits program because they were hired after the new program went into effect.
	(e)		In 2007, the Company paid Ms. Bailey and Mr. Russell $29,917 and $9,640, respectively, for relocation expenses.
	(f)		Mr. Gannon ceased serving as Ferro’s Chief Financial Officer on January 2, 2007. Under an employment transition agreement dated October 25, 2006 between the Company and Mr. Gannon, Mr. Gannon received certain amounts. For a description of the terms of that agreement, see Employment Agreements and Termination and Change in Control Payments on page 28 below. Although the Company accrued for this agreement for financial reporting purposes in 2006, compensation paid to Mr. Gannon under this agreement is reflected in this Proxy Statement because Mr. Gannon’s employment actually terminated early in January 2007. Under that agreement, Mr. Gannon received severance payments during 2007 of $544,687 which are included in the “All Other Compensation” column of this table.

During 2007, there was no personal use of Company aircraft by any of the executives in this table.

(8)		On January 2, 2007, Sallie B. Bailey joined the Company and became its new Vice President and Chief Financial Officer. Mr. Gannon ceased serving as Ferro’s Chief Financial Officer on that date. A description of Mr. Gannon’s Executive Transition Agreement is set forth in footnote 7(e) of this table.
(9)		Mr. Russell joined the Company on April 24, 2006 as its Vice President, Electronic Material Systems.

Grants of Plan-Based Awards

     The following table sets forth information regarding 2007 awards under the AIP and under the LTIP, i.e., awards of Performance Shares (“PS”) and Stock Options to each of the executives named in the Summary Compensation Table:

Grants of Plan-Based Awards

Estimated

Future

Payouts

Under Non-

Estimated Future Payouts

Exercise

Equity

Under Equity Incentive

or Base

Grant Date

Incentive

Plan Awards

All Other

All Other

Price of

Value of Stock

Grant

Plan

Performance

Stock

Stock

Option

Option

and Option

Name

Date

Awards(1)

Shares(2)

Options(3)

Awards

Awards

Awards(4)

Awards(5)

Date

$

Shares

Shares

Shares

Shares

$/Share

$

James F. Kirsch

AIP Threshold

131,250

AIP Target

525,000

NA

AIP Maximum

1,312,500

PS Threshold

12,500

PS Target

02/06/07

50,000

1,099,500

PS Maximum

100,000

Stock Options

02/06/07

150,000

21.99

936,000

Sallie B. Bailey

AIP Threshold

43,750

AIP Target

175,000

NA

AIP Maximum

437,500

21.99

PS Threshold

2,875

PS Target

02/06/07

11,500

252,885

PS Maximum

23,000

Stock Options

02/06/07

33,000

21.99

205,920

James C. Bays

AIP Threshold

36,000

AIP Target

144,000

NA

AIP Maximum

360,000

PS Threshold

2,188

PS Target

02/06/07

8,750

192,413

PS Maximum

17,500

Stock Options

02/06/07

25,000

21.99

156,000

Michael J. Murry

AIP Threshold

43,750

AIP Target

175,000

NA

AIP Maximum

437,500

21.99

PS Threshold

2,525

PS Target

02/06/07

10,100

222,099

PS Maximum

20,200

Stock Options

02/06/07

29,500

21.99

184,080

Barry D. Russell

AIP Threshold

35,438

AIP Target (6)

241,750

NA

AIP Maximum (6)

454,375

PS Threshold

2,188

PS Target

02/06/07

8,750

192,413

PS Maximum

17,500

Stock Options

02/06/07

25,000

21.99

156,000

 

Outstanding Equity Awards, Option Exercises and Vesting of Stock Awards

     The following table sets forth information with respect to each of the executives named in the Summary Compensation Table regarding vested and unvested options and stock awards held as of December 31, 2007:

Outstanding Equity Awards

			Option Awards																				Stock Awards
																																			Equity
																											Market								Incentive
																											Value				Equity				Plan
											Equity																of				Incentive				Awards:
											Incentive												Num-				Shares				Plan				Market or
			Number								Plan												ber of				or				Awards:				Payout
			of				Number of				Awards:												Shares				Units				Number of				Value of
			Securities				Securities				Number of												or Units				of				Unearned				Unearned
			Underlying				Underlying				Securities												of Stock				Stock				Shares,				Shares,
			Unexercised				Unexercised				Underlying								Option				That				That				Units or				Units or
			Options				Options				Unexercised				Option				Expira-				Have				Have				Other Rights				Other Rights
			That Are				That Are Not				Unearned				Exercise				tion				Not				Not				That Have				That Have
Name			Exercisable				Exercisable				Options				Price				Date				Vested				Vested				Not Vested(1)				Not Vested(1)
			Shares				Shares				Shares				$				Date				Shares				$				Shares				$
James F. Kirsch (2)
Stock Options				93,750				31,250				—				21.15				10/18/14				—				—				—				—
Stock Options				35,000				105,000				—				20.69				02/16/16				—				—				—				—
Stock Options				—				150,000				—				21.99				02/06/17				—				—				—				—
Performance Shares				—				—				—				—				—				—				—				25,000				518,250
Performance Shares				—				—				—				—				—				—				—				83,500				1,730,955
Performance Shares				—				—				—				—				—				—				—				50,000				1,036,500
Sallie B. Bailey
Stock Options				—				33,000				—				21.99				02/06/17				—				—				—				—
Performance Shares				—				—				—				—				—				—				—				20,000				414,600
Performance Shares				—				—				—				—				—				—				—				11,500				238,395
James C. Bays (4)
Stock Options				11,250				—				—				20.18				05/16/11				—				—				—				—
Stock Options				30,000				—				—				25.50				02/11/12				—				—				—				—
Stock Options				35,000				—				—				21.26				02/28/13				—				—				—				—
Stock Options				29,250				9,750				—				26.26				02/09/14				—				—				—				—
Stock Options				22,000				22,000				—				19.39				02/07/15				—				—				—				—
Stock Options				5,687				17,063				—				20.69				02/16/16				—				—				—				—
Stock Options				—				25,000				—				21.99				02/06/17				—				—				—				—
Performance Shares				—				—				—				—				—				—				—				6,000				124,380
Performance Shares				—				—				—				—				—				—				—				23,000				476,790
Performance Shares				—				—				—				—				—				—				—				8,750				181,388
Michael M. Murry (5)
Stock Options				22,000				22,000				—				21.01				07/11/15				—				—				—				—
Stock Options				5,687				17,063				—				20.69				02/16/16				—				—				—				—
Stock Options				—				29,500				—				21.99				02/06/17				—				—				—				—
Performance Shares				—				—				—				—				—				—				—				23,000				476,790
Performance Shares				—				—				—				—				—				—				—				10,100				209,373
Barry D. Russell(6)
Stock Options				15,687				47,063				—				19.43				04/24/16				—				—				—				—
Stock Options				—				25,000				—				21.99				02/06/17				—				—				—				—
Performance Shares				—				—				—				—				—				—				—				23,000				476,790
Performance Shares				—				—				—				—				—				—				—				8,750				181,388

 

     The following table sets forth for each of the executives named in the Summary Compensation Table the exercises of stock options and an estimate of the vesting of stock awards under the Company’s LTIP during the fiscal year ended December 31, 2007:

Option Exercises and Stock Vested

		Option Awards								Stock Awards(1)
		Common Stock								Common Stock
		Acquired on				Value Realized on				Acquired on				Value Realized on
Name		Exercise				Exercise				Vesting				Vesting
		Shares				$				Shares				$
James F. Kirsch			0				0				5,650				122,153
Sallie B. Bailey			0				0				0				0
Thomas M. Gannon			14,250				23,370				0				0
James C. Bays			0				0				1,356				29,317
Michael J. Murry			0				0				0				0
Barry D. Russell			0				0				0				0

Post-Employment Compensation

      The following table sets forth the accumulated benefits under the DB Plan and the Supplemental DB Plan (collectively, the “DB Program”) for each of the executives named in the Summary Compensation Table:

Pension Benefits

						Number of Years
						of Credited				Present Value of				Payments During
Name		Plan				Service				Accumulated Benefit				Last Fiscal Year
						Years					$				$
James F. Kirsch			—				—				—				—
Sallie B. Bailey			—				—				—				—
Thomas M. Gannon			—				—				—				—
James C. Bays		DB Plan					4.75				132,895	(1)			0
		Supplemental DB Plan					4.75				177,203	(1)			0
Michael J. Murry			—				—				—				—
Barry D. Russell			—				—				—				—

     Under the DB Program, an eligible participant who retires at age 65 with at least 30 years of service will receive a monthly benefit equal to 50% of the monthly average of the participant’s highest five consecutive calendar years of compensation (which includes base salary and certain incentive payouts), reduced for 50% of the monthly primary social security benefits. Benefits are subject to reduction for service of less than 30 years and for commencement prior to age 60 for elected officers. Service in excess of 30 years is not taken into account for accrual of retirement benefits. Benefits are payable in a life annuity form with 120 monthly payments guaranteed, unless the benefits under the Supplemental DB Plan are commuted and paid in a single sum. Furthermore, the benefits payable under the Supplemental DB Plan to an eligible participant are conditioned upon the execution of, and compliance with, a non-competition, non-solicitation, non-disparagement and confidentiality agreement.

     Effective April 1, 2006, the Company’s U.S. defined benefit pension program for salaried and certain hourly employees was changed. Under the program changes announced February 15, 2006, benefits accrued for active employees who were participating in the DB Program were frozen as of March 31, 2006. (This freeze did not affect the benefits of current retirees, former employees or employees hired on or after July 1, 2003.) Beginning April 1, 2006, the affected employees joined salaried and certain hourly employees in the United States who were hired on or after July 1, 2003 in receiving an additional basic pension contribution each year from the Company under the DC Plan, and as executives, they are also eligible to receive the supplemental basic pension contribution under the Supplemental DC Plan.

     Ms. Bailey and Messrs. Kirsch, Murry, and Russell, who were hired after June 30, 2003, are not eligible for participation in the DB Program. Except for Mr. Gannon, only Mr. Bays participated in these plans during 2007 because he was hired before July 1, 2003. When Mr. Gannon’s employment terminated on January 2, 2007, he was not vested in a benefit under either plan because he did not have the required five years of credited vesting service. Consequently, he is not eligible for DB Program benefits. Due to Mr. Gannon’s not being eligible for DB Program benefits and the cost of calculations

that would have to be made by the Company’s actuaries, no amount is listed for him. Consequently, only Mr. Bays’ pension benefit accrual under the plans appears in this table. See the Change in Pension Value and Non-qualified Deferred Compensation Earnings column of the Summary Compensation Table on page 20 above for information regarding the change in value of Mr. Bays’ benefits under the DB Program during 2007.

Non-Qualified Deferred Compensation

     The following table sets forth information regarding non-qualified deferred compensation plans for 2007 with respect to each of the executives named in the Summary Compensation Table:

Non-Qualified Deferred Compensation

														Aggregate				Aggregate
		Executive’s				Company’s				Aggregate				Withdrawals /				Balance at
Name		Contributions				Contributions(1)				Earnings(2)				Distributions				December 31, 2007
			$				$				$				$				$
James F. Kirsch			0				109,335				2,249				0				187,747
Sallie B. Bailey			0				21,714				0				0				21,714
Thomas M. Gannon(3)			0				0				1,911				65,683				0
James C. Bays			0				34,754				6,975				0				162,379
Michael J. Murry			0				36,871				526				0				55,222
Barry D. Russell			0				37,118				0				0				37,118

     The non-qualified deferred compensation plans in this table consist of the Deferred Compensation Plan and the Supplemental DC Plan. Under the Deferred Compensation Plan, participants may elect to defer a percentage of their annual salary, as well as their annual incentive payout under the AIP, to be paid at a certain time specified by the participant consistent with the terms of the Deferred Compensation Plan. The amounts that were deferred in 2007 are listed in the Executive Contributions column in this table. There are no Company Contributions under the Deferred Compensation Plan. Under the Deferred Compensation Plan, among the executive officers listed in this table, only Mr. Bays has an account balance.

     Under the Supplemental DC Plan, participants may receive a supplemental matching contribution and/or a supplemental basic pension contribution. These are contributions that would have been made to the account of a participant in the DC Plan but for the application of Federal tax law limitations. There are no employee contributions under the Supplemental DC Plan.

     See footnote 6 to the Summary Compensation Table on page 21 above for a description of how interest is calculated under the Deferred Compensation Plan. Under the Supplemental DC Plan, Company contributions are deemed invested in Company Common Stock for the named executive officers, and earnings include deemed dividends, gains and losses. No actual shares of Company Common Stock are held by the Supplemental DC Plan.

Employment Agreements and Termination and Change in Control Payments

     Employment Agreements. The Company and Mr. Kirsch entered into an employment agreement when Mr. Kirsch joined the Company on October 18, 2004. The agreement terminates on Mr. Kirsch’s death, disability, voluntary termination, or involuntary termination (with or without cause). The initial term of the employment agreement ended December 31, 2007, but it is renewable for one-year periods thereafter.

     Mr. Kirsch’s base salary for 2006 was $600,000 from January through June, and increased to $650,000 on July 1, 2006. Mr. Kirsch’s base salary for 2007 was $700,000. His target bonus in both years was 75% of his base salary. Mr. Kirsch is also eligible for awards under the Company’s LTIP, including awards of stock options and performance shares, as and to the extent determined by the Compensation Committee of the Board, and to participate in other benefit plans generally available to senior management.

     If Mr. Kirsch’s employment were to end on account of an involuntary “Termination Without Cause” (as that term is defined in his employment agreement), the Company would be obligated to –

o		Pay Mr. Kirsch a lump sum severance payment equal to two times his full year’s compensation (base salary plus targeted annual bonus),
o		Provide Mr. Kirsch continued participation in Ferro’s employee benefit programs for up to 24 months,
o		Provide Mr. Kirsch outplacement services, and
o		Reimburse Mr. Kirsch for legal fees he incurs as a result of his termination of employment.