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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