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.”


 





















 


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