Exhibit 10.27

 

March 10, 2005

 

 

Steven R. McCracken

One SeaGate

Toledo, Ohio 43666

 

 

Dear Steve:

 

Reference is made to a certain letter agreement dated March 31, 2004 between you
and the Owens-Illinois, Inc. (the “Company”) setting forth the terms of your
employment as Chairman and Chief Executive Officer.

 

1.                              UPON YOUR ACCEPTANCE HEREOF, PARAGRAPH 5 OF THE
LETTER WILL BE DEEMED TO BE AMENDED TO READ, IN ITS ENTIRETY, AS FOLLOWS:

 

“5.  Employee Benefits and Perquisites.  You will participate in the Company’s
employee benefit plans (except for severance or incentive plans) as in effect
from time to time, including its health plan and life insurance plan
(collectively, the “Employee Benefits”), on the same basis as those benefits are
generally made available to other senior executives of the Company.  You will be
provided with four weeks (20 days) per year of paid vacation.  You will have use
of a Company car and will be reimbursed for reasonable fees paid for financial
consulting.  You will participate in the Company’s supplemental retirement plan,
with accelerated vesting in order to meet the service requirements after five
years of service.

 

Provided you earn at least five years of service with the Company, the
retirement benefit (annuity and/or lump sum) payable to you upon your retirement
from the Company under the Owens-Illinois Salary Retirement Plan and
Supplemental Retirement Benefit Plan (the “Plans”) would be calculated based on
a Life Annuity equal to the O-I Annuity Amount (as defined below).  Capitalized
terms used herein without definition shall have the meanings ascribed to them in
the Plans.

 

The “O-I Annuity Amount” means an amount equal to the Calculated Annuity Amount
(as defined below) less the Offset Annuity Amount (as defined below).

 

The “Calculated Annuity Amount” means a Life Annuity calculated upon your
retirement from the Company based on Years of Service equal to your Years of
Service with the Company, plus your years of service with your prior employer.

 

The “Offset Annuity Amount” means a Life Annuity calculated by taking the
monthly annuity amount receivable by you from your prior employer as of April 1,
2004 and calculating the actuarial equivalent thereof on the date of your
retirement using (i) the Applicable Interest Rate and (ii) a remaining life
expectance at the time of retirement using the Applicable Mortality Table.

 

The O-I Annuity Amount would be used for the calculation of benefits (annuity
and/or lump sum) due to you upon your retirement from the Company based on your
Final Average Earnings with the Company.”

 

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2.                              EXCEPT AS OTHERWISE PROVIDED HEREIN, THE
AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.

 

 

Sincerely,

 

 

 

 

 

   /s/ James W. Baehren

 

 

By: James W. Baehren

 

Its: Senior Vice President

 

 

Acknowledged and Agreed:

 

 

 

 

 

   /s/ Steven R. McCracken

 

 

Steven R. McCracken

 

 

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