Exhibit 10.2

 

OWENS-ILLINOIS

 

1997 EQUITY PARTICIPATION PLAN

 

RESTRICTED STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT, dated as of April 1, 2004 is made by and
between Owens-Illinois, Inc., a Delaware corporation (the “Company”) and Steven
R. McCracken, an employee of the Company or a Parent Corporation or a Subsidiary
(the “Employee”):

 

WHEREAS, the Company has established the Owens-Illinois 1997 Equity
Participation Plan (the “Plan”); and

 

WHEREAS, the Plan provides for the issuance of shares of the Company’s Common
Stock , subject to certain restrictions thereon and to other conditions stated
herein; and

 

WHEREAS, pursuant to the terms of a certain letter agreement dated March 31,
2004 between the Company and the Employee (the “Letter Agreement”), the Company
agreed to issue the shares of Restricted Stock provided for herein to the
Employee; and

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Whenever the following terms are used in this Agreement, they shall have the
meaning specified below, unless the context clearly indicates to the contrary. 
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Plan.  The masculine pronoun shall include the feminine and neuter and
the singular the plural, where the context so indicates.

 

Section 1.1.                                Cause

 

“Cause” shall mean (A) the Employee’s continued failure substantially to perform
your duties to the Company or any of its Subsidiaries or affiliates (other than
as a result of total or partial incapacity due to physical or mental illness)
for a period of ten (10) days following written notice by the Company to the
Employee of such failure, (B) the Employee’s commission of a felony under the
laws of the United States or any state thereof or a misdemeanor involving moral
turpitude, (C) the Employee’s willful malfeasance or willful misconduct in
connection with his duties to the Company, its Subsidiaries or affiliates, or
any act or omission which is injurious to the financial condition or business
reputation of the Company or any of its Subsidiaries or affiliates, or (D) the
Employee’s breach of the provisions of Paragraphs 2 or 3 of Appendix A of the
Letter Agreement.

 

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SECTION 1.2.                                COMMON STOCK

 

“Common Stock” shall mean the common stock of the Company, $.01 par value.

 

SECTION 1.3.                                COMPETING BUSINESS

 

“Competing Business” shall mean any business that competes with the business of
the Company or its affiliates (including, without limitation, businesses which
the Company or its affiliates have specific plans to conduct in the future and
as to which you are aware of such planning) in any geographical area where the
Company or its affiliates manufactures, produces, sells, leases, rents, licenses
or otherwise provides its products or services.

 

SECTION 1.4.                                EXCHANGE ACT

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

SECTION 1.5.                                FAIR MARKET VALUE

 

“Fair Market Value” of a share of the Company’s stock as of a given date shall
be: (i) the closing price of a share of the Company’s stock on the principal
exchange on which shares of the Company’s stock are then trading, if any, on the
day previous to such date, or, if shares were not traded on the day previous to
such date, then on the next preceding trading day during which a sale occurred;
or (ii) if such stock is not traded on an exchange but is quoted on NASDAQ or a
successor quotation system, (1) the last sales price (if the stock is then
listed as a National Market Issue under the NASD National Market System) or (2)
the mean between the closing representative bid and asked prices (in all other
cases) for the stock on the day previous to such date as reported by NASDAQ or
such successor quotation system; or (iii) if such stock is not publicly traded
on an exchange and not quoted on NASDAQ or a successor quotation system, the
mean between the closing bid and asked prices for the stock, on the day previous
to such date, as determined in good faith by the Compensation Committee of the
Board of Directors of the Company (the “Committee”); or (iv) if the Company’s
stock is not publicly traded, the fair market value established by the Committee
acting in good faith.

 

SECTION 1.6.                                PARENT CORPORATION

 

“Parent Corporation” shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

SECTION 1.7.                                PLAN

 

“Plan” shall mean the Company’s 1997 Equity Participation Plan.

 

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SECTION 1.8.                                RESTRICTIONS

 

“Restrictions” shall mean the reacquisition and transferability restrictions
imposed upon Restricted Stock under this Agreement.

 

SECTION 1.9.                                RESTRICTED STOCK

 

“Restricted Stock” shall mean Common Stock issued under this Agreement and
subject  to the Restrictions imposed hereunder.

 

SECTION 1.10.                         RULE 16B-3

 

“Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such
Rule may be amended from time to time.

 

SECTION 1.11.                         SECRETARY

 

“Secretary” shall mean the Secretary of the Company.

 

SECTION 1.12.                         SECURITIES ACT

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

SECTION 1.13.                         SUBSIDIARY

 

“Subsidiary” shall mean any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.  “Subsidiary” shall also mean any partnership
in which the Company and or any Subsidiary owns more than fifty (50%) percent of
the capital or profits interests.

 

SECTION 1.14.                         TERMINATION OF EMPLOYMENT

 

“Termination of Employment” shall mean the time when the employee-employer
relationship between the Employee and the Company, a Parent Corporation or a
Subsidiary is terminated for any reason, with or without Cause, including, but
not by way of limitation, a termination by resignation, discharge, death,
disability or retirement; but excluding (a) terminations where there is a
simultaneous reemployment or continuing employment of the Employee by the
Company, a Parent Corporation or any Subsidiary, (b) terminations where the
Employee continues a relationship (e.g., as a director or as a consultant) with
the Company, a Parent Corporation or a Subsidiary.  The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment.  Notwithstanding any other provision of
this Agreement, the

 

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Company or any Subsidiary has the absolute and unrestricted right to terminate
the Employee’s employment at any time for any reason whatsoever, with or without
Cause.

 

ARTICLE II.

 

ISSUANCE OF RESTRICTED STOCK

 

SECTION 2.1.                                ISSUANCE OF RESTRICTED STOCK

 

 In consideration of the services rendered or to be rendered to the Company, a
Parent Corporation or a Subsidiary pursuant to the terms of the Letter Agreement
and for other good and valuable consideration which the Committee has determined
to be equal to the par value of its Common Stock, on the date hereof the Company
issues to the Employee 155,000 shares of its Common Stock, upon the terms and
conditions set forth in this Agreement.

 

SECTION 2.2.                                NO RIGHT TO CONTINUED EMPLOYMENT

 

Nothing in this Agreement or in the Plan shall confer upon the Employee any
right to continue in the employee of the Company, any Parent Corporation or any
Subsidiary or shall interfere with or restrict in any way the rights of the
Company, any Parent Corporation or any Subsidiary, which are hereby expressly
reserved, to discharge the Employee at any time for any reasons whatsoever, with
or without Cause.

 

ARTICLE III.

 

RESTRICTIONS

 

SECTION 3.1.                                REACQUISITION OF RESTRICTED STOCK

 

Until vested, the shares of Restricted Stock issued to the Employee pursuant to
this Agreement are subject to reacquisition by the Company immediately upon a
Termination of Employment other than from death or total disability (as
determined by the Committee in accordance with Company plans and policies), in
which event all unvested shares of Restricted Stock shall immediately fully vest
and all Restrictions with respect to such shares of Restricted Stock shall
immediately expire.  Following any reacquisition by the Company pursuant to this
Section 3.1, the Company shall promptly pay to the Employee an amount equal to
the product of $.01 times the number of shares of Restricted Stock reacquired.

 

SECTION 3.2.                                LAPSE OF RESTRICTIONS.

 

The Restricted Stock shall vest, and all Restrictions thereon shall immediately
expire as follows: (a) 50% of the Restricted Shares will vest on April 1, 2006,
(b) 25% of the Restricted Shares will vest on April 1, 2007, and (c) the
remaining 25% of the Restricted Shares will vest on April 1, 2008.  Upon the
vesting of the shares and subject to Section 5.3, the Company shall cause new
certificates to be issued with respect to such vested shares and delivered to
the Employee or his legal representative, free from the legend provided for in
Section 3.3 and any of

 

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the other Restrictions.  Such vested shares shall cease to be considered
Restricted Stock subject to the terms and conditions of this Agreement.

 

SECTION 3.3.                                LEGEND.

 

Certificates representing shares of Restricted Stock issued pursuant to this
Agreement shall, until all restrictions lapse and new certificates are issued
pursuant to Section 3.2, bear the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING
REQUIREMENTS AND MAY BE SUBJECT TO REACQUISTION BY THE COMPANY UNDER THE TERMS
OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN OWENS-ILLINOIS, INC.
(THE “COMPANY”) AND THE HOLDER OF THE SECURITIES.  PRIOR TO VESTING OF OWNERSHIP
IN THE SECURITIES, THEY MAY NOT BE DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY
CIRCUMSTANCES.  COPIES OF THE ABOVE REFERENCED AGREEMENT ARE ON FILE AT THE
OFFICES OF THE COMPANY AT ONE SEAGATE, TOLEDO, OHIO 43604.

 

SECTION 3.4.                                MERGER, CONSOLIDATION, ACQUISITION,
LIQUIDATION OR DISSOLUTION

 

Notwithstanding any other provision of this Agreement, upon the merger or
consolidation of the Company into another corporation, the acquisition by
another corporation or person (excluding any employee benefit plan of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company) of all or substantially all of the Company ‘s
assets or 51% or more of the Company’s then outstanding voting stock, or the
liquidation or dissolution of the Company, the Committee shall then provide by
resolution adopted prior to such event that, at some time prior to the effective
date of such event, all shares of Restricted Stock not previously reacquired
pursuant to Section 3.1 shall fully vest and all Restrictions with respect to
such shares of Restricted Stock shall immediately expire.

 

SECTION 3.5.                                RESTRICTIONS ON NEW SHARES

 

In the event that the outstanding shares of the Company’s  Common Stock are
hereafter changed into or exchanged for a different number of kind of shares or
other securities of the Company or of another corporation pursuant to a merger
of the Company into another corporation, or the exchange of all or substantially
all of the assets of the Company for the securities of another corporation, or
the acquisition by another corporation or person (excluding any employee benefit
plan of the Company or any trustee or other fiduciary holding securities under
an employee benefit plan of the Company) of 51% or more of the Company’s then
outstanding voting stock, or the liquidation or dissolution of the Company, or a
stock split-up or stock dividend, such new, additional or different shares or
securities which are held or received by the Employee in his capacity as a
holder of Restricted Stock shall be considered to be Restricted Stock and shall
be subject to all of the Restrictions, unless the Committee provides,

 

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pursuant to Section 3.4 for the accelerated vesting and expiration of the
Restrictions on the shares of Restricted Stock underlying the distribution of
the new, additional or different shares or securities.

 

ARTICLE IV.

 

NON-COMPETITION/NON-SOLICITATION

 

Section 4.1.                                Covenant Not to Compete

 

Employee covenants and agrees that prior to Employee’s Termination of Employment
and for a period of one (1) year following the Employee’s Termination of
Employment, Employee will not, directly or indirectly: (a) engage in, invest in,
or enter into the employ of or otherwise render any services to, any Competing
Business, or (b) interfere with, or attempt to interfere with, business
relationships (whether formed before, on or after the date of the Letter
Agreement) between the Company or any of its affiliates and customers, clients,
suppliers, or investors of the Company or its affiliates.  Notwithstanding
anything to the contrary in this Agreement, the Employee may own up to 2% of the
securities of any person engaged in the business of the Company or its
affiliates that are publicly traded.

 

Section 4.2.                                Non-Solicitation of Employees

 

Employee covenants and agrees that prior to Employee’s Termination of Employment
and for a period of two (2) year following the Employee’s Termination of
Employment, Employee will not, directly or indirectly: (a) solicit or encourage
any employee of the Company or its affiliates to leave the employment of the
Company or its affiliates; or (B) hire any employee who was employed by the
Company or its affiliates within one year prior to Employee’s Termination of
Employment.

 

ARTICLE V.

 

MISCELLANEOUS

 

SECTION 5.1.                                ADMINISTRATION

 

The Committee shall have the power to interpret the Plan and this Agreement, and
to adopt such rules for the administration, interpretation, and application of
the Plan as are consistent therewith, to interpret, amend or revoke any such
rules.  All action taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. In its absolute discretion, the Board
may at any time and from time to time exercise any and all rights and duties of
the Committee under the Plan or this Agreement except with respect to matters
which under Rule 16b-3, or any regulations or rules issued thereunder, are
required to be determined in the sole discretion of the Committee.  No member of
the Committee or Board shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan

 

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or the Restricted Stock, and all members of the Committee and the Board shall be
fully protected by the Company in respect of any such action, determination or
interpretation.

 

SECTION 5.2.                                RESTRICTED STOCK NOT TRANSFERABLE

 

No Restricted Stock or any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Employee or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, hypothecation, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), any attempted disposition thereof shall be
null and void and of no effect; provided however, that this Section 5.2 shall
not prevent transfers by will or by the applicable laws of descent and
distribution.

 

SECTION 5.3.                                CONDITIONS TO ISSUANCE OF STOCK
CERTIFICATES

 

The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock pursuant to this Agreement prior to fulfillment
of all of the following conditions:

 

(A)                                  THE ADMISSION OF SUCH SHARES TO LISTING ON
ALL STOCK EXCHANGES ON WHICH SUCH CLASS OF STOCK IS THEN LISTED; AND

 

(B)                                 THE COMPLETION OF ANY REGISTRATION OR OTHER
QUALIFICATION OF SUCH SHARES UNDER ANY STATE OR FEDERAL LAW OR UNDER RULINGS OR
REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION OR OF ANY OTHER
GOVERNMENTAL REGULATORY BODY, WHICH THE COMMITTEE SHALL, IN ITS SOLE DISCRETION,
DEEM NECESSARY OR ADVISABLE; AND

 

(C)                                  THE OBTAINING OF ANY APPROVAL OR OTHER
CLEARANCE FROM ANY STATE OR FEDERAL GOVERNMENTAL AGENCY WHICH THE COMMITTEE
SHALL, IN ITS SOLE DISCRETION, DETERMINE TO BE NECESSARY OR ADVISABLE; AND

 

(D)                                 SUBJECT TO SECTION 5.10 THE PAYMENT BY THE
EMPLOYEE OF ALL AMOUNTS WHICH, UNDER FEDERAL, STATE OR LOCAL TAX LAW, THE
COMPANY (OR OTHER EMPLOYER CORPORATION) IS REQUIRED TO WITHHOLD UPON ISSUANCE OF
RESTRICTED STOCK AND/OR THE LAPSE OR REMOVAL OF ANY OF THE RESTRICTIONS; AND

 

(E)                                  THE LAPSE OF SUCH REASONABLE PERIOD OF TIME
AS THE COMMITTEE MAY FROM TIME TO TIME ESTABLISH FOR REASONS OF ADMINISTRATIVE
CONVENIENCE.

 

SECTION 5.4.                                ESCROW

 

THE SECRETARY OR SUCH OTHER ESCROW HOLDER AS THE COMMITTEE MAY APPOINT SHALL
RETAIN PHYSICAL CUSTODY OF THE CERTIFICATES REPRESENTING RESTRICTED STOCK,
INCLUDING SHARES OF RESTRICTED STOCK ISSUED PURSUANT TO SECTION 3.5, UNTIL ALL
OF THE RESTRICTIONS EXPIRE OR SHALL HAVE BEEN REMOVED; PROVIDED, HOWEVER, THAT
IN NO EVENT SHALL THE EMPLOYEE RETAIN PHYSICAL CUSTODY OF ANY CERTIFICATES
REPRESENTING RESTRICTED STOCK ISSUED TO HIM.

 

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SECTION 5.5.                                NOTICES

 

ANY NOTICE TO BE GIVEN UNDER THE TERMS OF THIS AGREEMENT TO THE COMPANY SHALL BE
ADDRESSED TO THE COMPANY IN CARE OF ITS SECRETARY, AND ANY NOTICE TO BE GIVEN TO
THE EMPLOYEE SHALL BE ADDRESSED TO HIM AT THE ADDRESS GIVEN BENEATH HIS
SIGNATURE HERETO.  BY A NOTICE GIVEN PURSUANT TO THIS SECTION 5.5, EITHER PARTY
MAY HEREAFTER DESIGNATE A DIFFERENT ADDRESS FOR NOTICES TO BE GIVEN TO HIM.  ANY
NOTICE WHICH IS REQUIRED TO BE GIVEN TO THE EMPLOYEE SHALL, IF THE EMPLOYEE IS
THEN DECEASED, BE GIVEN TO THE EMPLOYEE’S PERSONAL REPRESENTATIVE IF SUCH
REPRESENTATIVE HAS PREVIOUSLY INFORMED THE COMPANY OF HIS STATUS AND ADDRESS BY
WRITTEN NOTICE UNDER THIS SECTION 5.5.  ANY NOTICE SHALL BE DEEMED DULY GIVEN
WHEN ENCLOSED IN A PROPERLY SEALED ENVELOPE OR WRAPPER ADDRESSED AS AFORESAID,
DEPOSITED (WITH POSTAGE PREPAID) IN A POST OFFICE OR BRANCH POST OFFICE
REGULARLY MAINTAINED BY THE UNITED STATES POSTAL SERVICE.

 

SECTION 5.6.                                RIGHTS AS STOCKHOLDER

 

Upon delivery of the shares of Restricted Stock to the escrow holder pursuant to
Section 5.4, the Employee shall have all the rights of a stockholder with
respect to said shares, subject to the restrictions herein (including the
provisions of Section 5.10), including the right to vote the shares and to
receive all dividends or other distributions paid or made with respect to the
shares.

 

SECTION 5.7.                                TITLES

 

Titles are provided her in for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

 

SECTION 5.8.                                CONFORMITY TO SECURITIES LAWS

 

The Employee acknowledges that the Plan and this Agreement is intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including, without limitation,
the applicable exemptive conditions of Rule 16b-3.  Notwithstanding anything
herein to the contrary, this Agreement shall be administered, and the Restricted
Stock shall be issued only in such a manner as to conform to such laws, rules
and regulations.  To the extent permitted by applicable law, this Agreement and
the Restricted Stock issued hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.

 

Section 5.9.                                Amendments

 

This Agreement and the Plan may be amended without the consent of the Employee
provided that such amendment would not impair any rights of the Employee under
this Agreement.  No amendment of this Agreement shall, without the consent of
the Employee, impair any rights of the Employee under this Agreement.

 

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SECTION 5.10.                         TAX WITHHOLDING

 

The Company’s obligation : (i) to issue or deliver to the Employee any
certificate or certificates for unrestricted shares of stock; or (ii) to pay to
the Employee any dividends or make any distributions with respect to the
Restricted Stock, is expressly conditioned upon receipt from the Employee, on or
prior to the date reasonably specified by the Company of:

 

(A)                                  FULL PAYMENT (IN CASH OR BY CHECK ) OF ANY
AMOUNT THAT MUST BE WITHHELD BY THE COMPANY FOR FEDERAL, STATE AND/OR LOCAL TAX
PURPOSES; OR

 

(B)                                 SUBJECT TO THE COMMITTEE’S CONSENT AND
SECTION 5.10(C), FULL PAYMENT BY DELIVERY TO THE COMPANY OF UNRESTRICTED SHARES
OF THE COMPANY’S COMMON STOCK PREVIOUSLY OWNED BY THE EMPLOYEE DULY ENDORSED FOR
TRANSFER TO THE COMPANY BY THE EMPLOYEE WITH AN AGGREGATE FAIR MARKET VALUE
(DETERMINED, AS APPLICABLE, AS OF THE DATE OF THE LAPSE OF THE RESTRICTIONS OR
VESTING OR AS OF THE DATE OF THE DISTRIBUTION) EQUAL TO THE AMOUNT THAT MUST BE
WITHHELD BY THE COMPANY FOR FEDERAL, STATE AND/OR LOCAL TAX PURPOSES; OR

 

(C)                                  WITH RESPECT TO THE WITHHOLDING OBLIGATION
FOR SHARES OF RESTRICTED STOCK THAT BECOME UNRESTRICTED SHARES AS OF A CERTAIN
DATE (THE “VESTING DATE”), SUBJECT TO THE COMMITTEE’S CONSENT, FULL PAYMENT BY
RETENTION BY THE COMPANY OF A PORTION OF SUCH SHARES OF RESTRICTED STOCK WHICH
BECOME UNRESTRICTED OR VESTED WITH AN AGGREGATED FAIR MARKET VALUE (DETERMINED
ON THE VESTING DATE) EQUAL TO THE AMOUNT THAT MUST BE WITHHELD BY THE COMPANY
FOR FEDERAL, STATE AND/OR LOCAL TAX PURPOSES; OR

 

(D)                                 SUBJECT TO THE COMMITTEE’S CONSENT, A
COMBINATION OF PAYMENTS PROVIDED FOR IN THE FOREGOING SUBSECTIONS (A), (B) OR
(C).

 

SECTION 5.11.                         GOVERNING LAW

 

This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Delaware without regard to conflicts of laws
thereof.

 

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IN WITNESS HEREOF, this Agreement has been executed and delivered by the parties
hereto.

 

 

 

OWENS-ILLINOIS, INC.

 

 

 

 

 

 

 

 

By:

/s/ James W. Baehren

 

 

 

 

James W. Baehren, Senior Vice President

 

 

 

 

 

 

 

/s/ Steven R. McCracken

 

 

 

Steven R. McCracken

 

 

 

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