Document:

Exhibit 10.30

 

2005
INCENTIVE AWARD PLAN

 

OF

 

OWENS-ILLINOIS,
INC.

 

RESTRICTED
STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT (the “Agreement”),
dated as of                  ,
20    is made by and between Owens-Illinois, Inc., a Delaware
corporation (the “Company”) and [                              ],
an employee of the Company or a Parent Corporation or a Subsidiary (the “Employee”):

 

WHEREAS, the Company has established the 2005
Incentive Award 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, the Compensation Committee of the
Board of Directors of the Company (the “Committee”) has determined it
would be to the advantage and best interest of the Company and its stockholders
to issue the shares of Restricted Stock provided for herein to the Employee in
partial consideration of services rendered, or to be rendered, to the Company
and/or its subsidiaries.

 

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 dishonesty, disloyalty, misconduct, insubordination, failure to
reasonably devote working time to assigned duties, failure or refusal to comply
with any reasonable rule, regulation, standard or policy which from time to
time may be established by the Company, including, without limitation, those
policies set forth in the Owens-Illinois Policy Manual in effect from time to
time, or failure to fully cooperate with any investigation of an alleged
violation of any such rule, regulation, standard or policy.

 

1

 

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 person, corporation or other entity engaged in the
United States of America or in any other country in which the Company, any
Parent Corporation or any Subsidiary manufactures or sells its products, in the
manufacture or sale of glass containers, plastic containers, plastic closures,
plastic prescription containers, or any other products manufactured or sold by
the Company, any Parent Corporation or any Subsidiary within the last two (2)
years prior to the Employee’s Termination of Employment.

 

Section 1.4.           Disability

 

“Disability”
shall mean the total disability of the Employee, as determined in the sole
discretion of the Committee.

 

Section 1.5 — Exchange Act

 

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

 

Section 1.6.           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
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 1.7.           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.

 

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Section 1.8.           Plan

 

“Plan”
shall mean the 2005 Incentive Award Plan of Owens-Illinois, Inc.

 

Section 1.9.           Restrictions

 

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

 

Section 1.10.        Restricted
Stock

 

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

 

Section 1.11.        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 1.12.        Secretary

 

“Secretary”
shall mean the Secretary of the Company.

 

Section 1.13.        Securities
Act

 

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

 

Section 1.14.        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 1.15.        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 or retirement; but
excluding (a)  a termination where there is a simultaneous reemployment or
continuing employment of the Employee by the Company, a Parent Corporation or a
Subsidiary, (b)  a termination where the Employee continues a relationship
(e.g., as a director or as a consultant) with the Company, a Parent Corporation
or a Subsidiary, or (c) a termination resulting from the death or Disability of
the Employee. 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 

 

3

 

whether a Termination of Employment resulted from a
discharge for Cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment. Notwithstanding any other provision of
this Agreement, the Company, any Parent Corporation 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 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 [                        ]
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 employ 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.           Lapse
of Restrictions.

 

The
Restricted Stock shall vest and all Restrictions thereon shall expire, either
(i) as to 25% of the shares of Restricted Stock granted pursuant to this
Agreement on each of the first four anniversaries of the date of grant of such
Restricted Stock, or (ii) in their entirety upon the Employee’s death or
Disability prior to a Termination of Employment. Upon the lapsing of
Restrictions applicable to shares of Restricted Stock 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 the other Restrictions. Such
vested shares shall cease to be considered Restricted Stock subject to the
terms and conditions of this Agreement.

 

Section 3.2.           Reacquisition
of Restricted Stock Upon a Termination of Employment

 

Upon a
Termination of Employment all shares of Restricted Stock granted to the Employee
pursuant to this Agreement with respect to which all applicable Restrictions
have not yet expired in accordance with Section 3.1 shall be reacquired by the
Company immediately 

 

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without payment of any consideration by the Company. No
payment is due to the Employee upon such reacquisition.

 

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 3.1, 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 3.2
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 or 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, pursuant
to Section 3.4 for the accelerated vesting and expiration of the Restrictions
on the 

 

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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

 

The Employee covenants
and agrees that prior to the Employee’s Termination of Employment and for a
period of three (3) years following the Employee’s Termination of Employment,
including without limitation termination for Cause or without Cause, the Employee
shall not, in the United States of America or in any other country in which the
Company, any Parent Corporation or any Subsidiary manufactures or sells it
products, engage, directly or indirectly, whether as principal or as agent,
officer, director, employee, consultant, shareholder or otherwise, alone or in
association with any other person, corporation or other entity, in any
Competing Business.

 

Section 4.2.           Non-Solicitation of Employees

 

The Employee agrees that
prior to his Termination of Employment and for three (3) years following the Employee’s
Termination of Employment, including without limitation termination for Cause
or without Cause, the Employee shall not, directly or indirectly, solicit or
induce, or attempt to solicit or induce, any employee of the Company, any
Parent Corporation or any Subsidiary to leave the employment of the Company,
any Parent Corporation or any Subsidiary for any reason whatsoever, or hire any
employee of the Company, any Parent Corporation or any Subsidiary except into
the employment of the Company, a Parent Corporation or a Subsidiary.

 

Section 4.3            Equitable Relief

 

The Employee agrees that
it is impossible to measure in money the damages that will accrue to the
Company in the event that the Employee breaches any of the restrictive
covenants provided in Sections 4.1 or 4.2 hereof. Accordingly, in the event that
the Employee breaches any such restrictive covenant, the Company shall be
entitled to an injunction restraining the Employee from further violating such
restrictive covenant. If the Company shall institute any action or proceeding
to enforce any such restrictive covenant, the Employee hereby waives the claim
or defense that the Company has an adequate remedy at law and agrees not to
assert such claim or defense. The foregoing shall not prejudice the Company’s
right to require the Employee to account for and pay over to the Company, and the
Employee hereby agrees to account for and pay over, any compensation, profits,
monies, accruals or other benefits derived or received by the Employee as a
result of any transaction constituting a breach of any of the restrictive
covenants provided in Sections 4.1 or 4.2 hereof.

 

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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 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 

 

7

 

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.

 

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 herein 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 are 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 

 

8

 

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.

 

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 (or other employer corporation) 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 (or other employer corporation)
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).

 

Notwithstanding anything herein to
the contrary, the number of shares which may be withheld with respect to the
vesting of Restricted Stock in order to satisfy the Company’s federal, state
and/or local tax withholding obligations with respect to the vesting of
Restricted Stock shall be limited to the number of shares which have a Fair
Market Value on the Vesting Date equal to the aggregate amount of such
withholding obligations based on the minimum applicable statutory withholding
rates for federal, state and/or local income and payroll tax purposes.

 

9

 

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.

 

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

 

	
   

  	
  OWENS-ILLINOIS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Sr. VP Chief Human
  Resources Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Employee’s Taxpayer

  	
   

  
	
  Identification Number:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

10Exhibit 10.31

 

INCENTIVE
AWARD PLAN

 

OF

 

OWENS-ILLINOIS,
INC.

 

PHANTOM
STOCK AGREEMENT

 

THIS PHANTOM STOCK AGREEMENT (the “Agreement”),
dated as of                    ,
20       is made by and between Owens-Illinois,
Inc., a Delaware corporation (the “Company”) and                                  ,
an employee of the Company or a Parent Corporation or a Subsidiary (the “Employee”):

 

WHEREAS, the Company has established the 2005
Incentive Award Plan (the “Plan”); and

 

WHEREAS, the Plan provides for the issuance
of phantom stock units, subject to certain vesting conditions thereon and to
other conditions stated herein; and

 

WHEREAS, the Compensation Committee of the
Board of Directors of the Company (the “Committee”) has determined it
would be to the advantage and best interest of the Company and its stockholders
to issue the Units provided for herein to the Employee in partial consideration
of services rendered, or to be rendered, to the Company and/or its
subsidiaries.

 

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 dishonesty, disloyalty, misconduct, insubordination, failure to
reasonably devote working time to assigned duties, failure or refusal to comply
with any reasonable rule, regulation, standard or policy which from time to
time may be established by the Company, including, without limitation, those
policies set forth in the Owens-Illinois Policy Manual in effect from time to
time, or failure to fully cooperate with any investigation of an alleged
violation of any such rule, regulation, standard or policy.

 

 

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 person, corporation or other entity engaged in                                  
or in any other country in which the Company, any Parent Corporation or any
Subsidiary manufactures or sells its products, in the manufacture or sale of
glass containers, plastic containers, plastic closures, plastic prescription
containers, or any other products manufactured or sold by the Company, any
Parent Corporation or any Subsidiary within the last two (2) years prior to the
Employee’s Termination of Employment.

 

Section 1.4.           Disability

 

“Disability”
shall mean the total disability of the Employee, as determined in the sole
discretion of the Committee.

 

Section 1.5 — Exchange Act

 

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

 

Section 1.6.           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
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 1.7.           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.

 

2

 

Section 1.8.           Plan

 

“Plan”
shall mean the 2005 Incentive Award Plan of Owens-Illinois, Inc.

 

Section 1.9.           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 1.10.        Secretary

 

“Secretary”
shall mean the Secretary of the Company.

 

Section 1.11.        Securities Act

 

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

 

Section 1.12.        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 1.13.        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 or retirement; but
excluding (a)  a termination where there is a simultaneous reemployment or
continuing employment of the Employee by the Company, a Parent Corporation or a
Subsidiary, (b)  a termination where the Employee continues a relationship
(e.g., as a director or as a consultant) with the Company, a Parent Corporation
or a Subsidiary, or (c) a termination resulting from the death or Disability of
the Employee. 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 Cause, and all questions of whether
a particular leave of absence constitutes a Termination of Employment. Notwithstanding
any other provision of this Agreement, the Company, any Parent Corporation 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.

 

3

 

ARTICLE II.

 

ISSUANCE
OF UNITS

 

Section 2.1.           Issuance of Units

 

 In consideration of the services rendered or
to be rendered to the Company, a Parent Corporation or a Subsidiary 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 awards
to the Employee                              
units of Phantom Stock (“Units”), 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 employ 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.

 

VESTING

 

Section 3.1.           Vesting of Units.

 

The Units
shall vest either (i) as to 25% of the Units granted pursuant to this Agreement
on each of the first four anniversaries of the date of grant of such Units, or
(ii) in their entirety upon the Employee’s death or Disability prior to a
Termination of Employment. Upon the vesting of Units and subject to Section
5.3, the Company shall cause certificates to be issued for one share of Common
Stock for each vested Unit and delivered to the Employee or his legal
representative.

 

Section 3.2.           Termination of Units Upon a
Termination of Employment

 

Upon a
Termination of Employment all Units awarded to the Employee pursuant to this
Agreement which have not vested in accordance with Section 3.1 shall terminate
immediately without payment of any consideration by the Company. No payment is
due to the Employee upon such termination.

 

Section 3.3.           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 

 

4

 

adopted prior to such event that, at some time prior
to the effective date of such event, all Units not previously terminated pursuant
to Section 3.2 shall fully vest.

 

Section 3.4.           Adjustment

 

In the
event of any change in the number of outstanding shares of Common Stock as a
result of a stock dividend or stock split, the Company shall make a
corresponding and proportionate adjustment in the number of Units credited to
the Employee. If the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of securities of the Company other
than by reason of a stock dividend or stock split, the Committee shall
determine a similar appropriate adjustment, and the same shall be made in the
number of Units then credited to the Employee.

 

ARTICLE IV.

 

NON-COMPETITION/NON-SOLICITATION

 

Section 4.1.           Covenant Not to Compete

 

The Employee covenants
and agrees that prior to the Employee’s Termination of Employment and for a
period of three (3) years following the Employee’s Termination of Employment,
including without limitation termination for Cause or without Cause, the Employee
shall not, in                                
or in any other country in which the Company, any Parent Corporation or any
Subsidiary manufactures or sells it products, engage, directly or indirectly,
whether as principal or as agent, officer, director, employee, consultant,
shareholder or otherwise, alone or in association with any other person,
corporation or other entity, in any Competing Business.

 

Section 4.2.           Non-Solicitation of Employees

 

The Employee agrees that
prior to his Termination of Employment and for three (3) years following the Employee’s
Termination of Employment, including without limitation termination for Cause
or without Cause, the Employee shall not, directly or indirectly, solicit or
induce, or attempt to solicit or induce, any employee of the Company, any
Parent Corporation or any Subsidiary to leave the employment of the Company,
any Parent Corporation or any Subsidiary for any reason whatsoever, or hire any
employee of the Company, any Parent Corporation or any Subsidiary except into
the employment of the Company, a Parent Corporation or a Subsidiary.

 

Section 4.3            Equitable Relief

 

The Employee agrees that
it is impossible to measure in money the damages that will accrue to the
Company in the event that the Employee breaches any of the restrictive
covenants provided in Sections 4.1 or 4.2 hereof. Accordingly, in the event
that the Employee breaches any such restrictive covenant, the Company shall be
entitled to an injunction restraining the Employee from further violating such
restrictive covenant. If the Company shall institute any action or proceeding
to enforce any such restrictive covenant, the Employee hereby waives the claim
or defense that the Company has an adequate remedy at law and agrees not to
assert such 

 

5

 

claim or defense. The
foregoing shall not prejudice the Company’s right to require the Employee to
account for and pay over to the Company, and the Employee hereby agrees to
account for and pay over, any compensation, profits, monies, accruals or other
benefits derived or received by the Employee as a result of any transaction
constituting a breach of any of the restrictive covenants provided in Sections
4.1 or 4.2 hereof.

 

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 or the Units, 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.           Units Not Transferable

 

No Unit
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, 

 

6

 

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 5.9 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 the
vesting of Units; 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.           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 5.4, 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 5.4. 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 or                                      
Postal Service.

 

Section 5.5.           Dividends

 

At
such times as dividends are paid on the outstanding Common Stock, the Company
shall calculate an equivalent dividend (the “Dividend Equivalent”) to be paid
on each Unit. The Company shall pay such Dividend Equivalents to the Employee
in the currency in which the Employee’s regular compensation is customarily
paid as soon as administratively feasible after the dividend is paid on the
Common Stock.

 

Section 5.6.           Titles

 

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

 

Section 5.7.           Conformity to Securities Laws

 

The
Employee acknowledges that the Plan and this Agreement are 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 only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by 

 

7

 

applicable law, this Agreement shall be deemed amended
to the extent necessary to conform to such laws, rules and regulations.

 

Section 5.8.           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.

 

Section 5.9.           Tax Withholding

 

The
Company’s obligation : (i) to issue or deliver to the Employee any certificate
or certificates for shares of stock; or (ii) to pay to the Employee any
dividends or make any distributions with respect to the Units, 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 (or other employer corporation)
for federal, state and/or local tax purposes; or

 

(b)           Subject to the Committee’s consent,
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 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)           Subject to the Committee’s consent, a
combination of payments provided for in the foregoing subsections (a) or (b).

 

Section 5.10.        Governing Law

 

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

 

8

 

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

 

	
   

  	
  OWENS-ILLINOIS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
  Employee’s Taxpayer

  	
   

  
	
  Identification Number:

  	
   

  
	
   

  	
   

  

 

9

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