Document:

Exhibit 10.3

 

SECOND AMENDED AND RESTATED

2005 INCENTIVE AWARD PLAN

OF

OWENS-ILLINOIS, INC.

 

PERFORMANCE STOCK UNIT AGREEMENT

 

THIS PERFORMANCE STOCK UNIT AGREEMENT (“Agreement”), dated [ · ] is made by and between Owens-Illinois, Inc., a Delaware corporation (the “Company”) and the person whose account for which this grant is being accepted, an employee or consultant of the Company, a Parent Corporation or a Subsidiary (the “Participant”):

 

WHEREAS, the Company has established the Second Amended and Restated 2005 Incentive Award Plan (the “Plan”) (the terms of which are hereby incorporated by reference and made a part of this Agreement); and

 

WHEREAS, the Plan provides for the issuance of Performance Stock Units (“PSUs”), subject to vesting based on performance conditions 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 PSUs provided for herein to the Participant in partial consideration of services rendered, or to be rendered, to the Company, a Parent Corporation or a Subsidiary.

 

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 and 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 - 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, or any other products manufactured or sold by the Company, any Parent Corporation or any Subsidiary within the last three (3) years prior to the Participant’s Termination of Employment or Retirement.

 

Section 1.3 - Good Reason

 

“Good Reason” means the occurrence of any of the following without the prior written consent of the Participant:

 

(i)            a material diminution in base compensation;

 

(ii)           a material diminution in authority, duties or responsibilities (including, if Participant is then serving as the Chief Executive Officer or the Chief Financial Officer of the Company, any changes which result from Participant not being employed by a public company following a Change in Control);

 

(iii)          a material change in the geographic location at which the Participant must perform services; or

 

(iv)          any other action or inaction that constitutes a material breach by the Company of the terms of Participant’s employment as in effect immediately prior to a Change in Control.

 

Notwithstanding the foregoing, (a) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date no later than thirty (30) days from the date of such notice) is given no later than thirty (30) days after the time at which the Participant becomes aware of the occurrence of the event or condition purportedly giving rise to Good Reason and (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company shall have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.

 

Section 1.4 - 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 1.5            Performance Period

 

“Performance Period” shall mean [INSERT PERFORMANCE PERIOD].

 

Section 1.6- Retirement

 

“Retirement” solely for purposes of this Agreement shall mean “separation from service” (within the meaning of Section 409A of the Code) of an Employee from the Company, a Parent Corporation or a Subsidiary after reaching the age of 60 and having 10 years of employment, or after reaching the age of 65.

 

Section 1.7 - 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 percent (50%) of the capital or profits interests.

 

Section 1.8 - Termination of Employment

 

“Termination of Employment” shall mean the time when the employee-employer relationship between the Participant 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 (i) any termination where there is a simultaneous reemployment by the Company, a Parent Corporation or a Subsidiary, or (ii) any termination where Participant 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 other matters and questions relating to a 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 an absolute and unrestricted right to terminate Participant’s employment at any time for any reason whatsoever, with or without Cause.

 

Section 1.9- Vesting Date

 

“Vesting Date” shall mean the date on which the PSU is vested under Section 3.1 or 3.2 of this Agreement.

 

ARTICLE II.

 

ISSUANCE OF PSUS

 

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 Stock, on the date hereof the Company awards

 

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to the Participant the number of PSUs specified for this grant in the Solium Shareworks Account accessible by the Participant.

 

ARTICLE III.

 

VESTING; PAYMENT

 

Section 3.1 - Vesting of PSUs

 

(a)           Except as otherwise provided in Section 3.1 and 3.2, the PSUs shall vest in their entirety on [INSERT THE FIRST DAY OF THE CALENDAR YEAR IMMEDIATELY FOLLOWING THE LAST DAY OF THE PERFORMANCE PERIOD]; provided, however, that notwithstanding the foregoing the PSUs shall be fully vested on the date the Participant (i) dies, (ii) satisfies the requirements for Retirement or (iii) experiences a Disability.

 

(b)           If the Participant experiences a Termination of Employment resulting from the Company’s discharge of the Participant without Cause, such Participant shall immediately vest in that number of PSU’s, equal to the number of PSU’s in which such Participant would have vested on [INSERT THE FIRST DAY OF THE CALENDAR YEAR IMMEDIATELY FOLLOWING THE LAST DAY OF THE PERFORMANCE PERIOD], but for such Termination of Employment, multiplied by a fraction, the numerator of which is the number of days from the date hereof to the date of Participant’s Termination of Employment and the denominator of which is the number of days from the date hereof to [INSERT THE FIRST DAY OF THE CALENDAR YEAR IMMEDIATELY FOLLOWING THE LAST DAY OF THE PERFORMANCE PERIOD].

 

Section 3.2 — [Effect of a Change in Control

 

Notwithstanding Section 3.1, if:

 

(a)           The PSUs are not continued, assumed or new PSUs substituted therefore by a successor, or any parent or subsidiary thereof, under Section 11.1(b)(ii) of the Plan, then immediately prior to the Change in Control the PSUs shall become fully vested and payable at target levels subject to an effective on the Change in Control; or

 

(b)           The PSUs are continued, assumed or new PSUs are substituted therefore by a successor, or any parent or subsidiary thereof, under 11.1(b)(ii) of the Plan, then such continued, assumed or new performance stock units shall become fully vested upon the Participant’s Termination of Employment without Cause or by the Participant for Good Reason prior to the second (2nd) anniversary of the Change in Control.](1)

 

(1)  Insert in applicable award agreements.

 

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Section 3.3 - Termination of PSUs

 

Until vested pursuant to Section 3.1 or 3.2, all PSUs issued to the Participant pursuant to this Agreement shall terminate immediately upon the Participant’s Termination of Employment.  For the avoidance of doubt, if the Participant experiences a Termination of Employment prior to a Vesting Date for any reason not described in Section 3.1 or 3.2(b), all PSUs issued to the Participant pursuant to this Agreement shall immediately terminate.

 

Section 3.4 - Payment of PSUs

 

Except as provided under Section 3.2(a) vested PSUs shall become payable, to the extent any amount becomes payable in respect of a vested PSU, as soon as practicable after [INSERT THE FIRST DAY OF THE CALENDAR YEAR IMMEDIATELY FOLLOWING THE LAST DAY OF THE PERFORMANCE PERIOD]; provided, however, if the Participant has not satisfied the requirements for Retirement or has not died or incurred a Disability, such payment shall be made by the March 15 immediately following the end of the Performance Period, and if the Participant has a Termination of Employment due to death, Retirement or Disability prior to [INSERT THE FIRST DAY OF THE CALENDAR YEAR IMMEDIATELY FOLLOWING THE LAST DAY OF THE PERFORMANCE PERIOD], such vested PSUs shall become payable as soon as practicable after the Company determines the extent, if any, to which the performance criteria below have been satisfied, but in any event during [INSERT CALENDAR YEAR FOLLOWING THE END OF THE PERFORMANCE PERIOD].  Each vested PSU shall entitle the Participant to receive a number of shares of Stock, if any, determined by reference to [INSERT PERFORMANCE TARGETS AND WEIGHTINGS].

 

ARTICLE IV.

 

NON-COMPETITION/NON-SOLICITATION

 

Section 4.1 - Covenant Not to Compete

 

Participant covenants and agrees that prior to Participant’s Termination of Employment and for a period of three (3) years following the Participant’s Termination of Employment, including without limitation termination for Cause or without Cause, Participant shall not, in any country in which the Company, any Parent Corporation or any Subsidiary manufactures or sells its 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

 

Participant agrees that prior to his Termination of Employment and for three (3) years following Participant’s Termination of Employment, including without limitation termination for Cause or without Cause, Participant 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.

 

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Section 4.3 - Equitable Relief

 

Participant agrees that it is impossible to measure in money the damages that will accrue to the Company in the event that Participant breaches any of the restrictive covenants provided in Sections 4.1 or 4.2 hereof.  Accordingly, in the event that Participant breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining Participant from further violating such restrictive covenant.  If the Company shall institute any action or proceeding to enforce any such restrictive covenant, Participant 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 Participant to account for and pay over to the Company, and Participant hereby agrees to account for and pay over, any compensation, profits, monies, accruals or other benefits derived or received by Participant 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.

 

OTHER PROVISIONS

 

Section 5.1 - PSUs Not Transferable

 

Neither the PSUs nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Participant 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), and any attempted disposition thereof shall be null and void and of no effect; provided however, that this Section 5.1 shall not prevent transfers by will or by the applicable laws of descent and distribution.

 

Section 5.2 - No Right to Continued Employment

 

Nothing in this Agreement or in the Plan shall confer upon the Participant 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 Participant at any time for any reasons whatsoever, with or without Cause.

 

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

 

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(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 Participant of all amounts which, under federal, state or local tax law, the Company, a Parent Corporation or a Subsidiary is required to withhold upon vesting or payment of a PSU; 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 delivered to the Company under this Agreement shall be delivered to such individual and in such form as the Committee shall specify from time to time and communicate to the Participant.  Any notice to be delivered to the Participant shall be addressed to the Participant at the Participant’s last address reflected in the Company’s records.  Notices may, as approved by the Committee be given electronically (or by facsimile), and if so approved will be deemed given when sent.  Otherwise, notices shall be sent by reputable overnight courier or by certified mail (return receipt requested) through the United States Postal Service.

 

Section 5.5 - Rights as Stockholder

 

Participant shall not, by virtue of the PSUs, be entitled to vote in any Company election, receive any dividend in respect of shares of Stock subject to the PSUs or exercise any other rights of a stockholder of the Company.  The PSUs shall not confer upon the Participant any rights of a stockholder of the Company unless and until the PSUs have vested and certificates representing the shares of Stock subject to the PSUs shall have been issued by the Company pursuant to the terms of this Agreement.

 

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 Laws

 

The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of applicable law, including without limitation the 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 Rule 16b-3 of the Exchange Act.  Notwithstanding anything herein to the contrary, this

 

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Agreement shall be administered, and the PSUs shall be granted, 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 PSUs granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

 

Section 5.8 - Section 409A

 

Section 409A of the Internal Revenue Code provides that “nonqualified deferred compensation” that does not meet the requirements specified in Section 409A may become subject to penalty taxes.  Currently, the Company does not believe that PSUs constitute nonqualified deferred compensation within the meaning of Section 409A; however, if, in the future, the PSUs are or may become subject to Section 409A, the Committee may make such modifications to the Plan and this Agreement as may become necessary or advisable, in the Committee’s sole discretion, to either comply with Section 409A or to avoid its application to the PSUs.

 

Section 5.9 - Amendment

 

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

 

Section 5.10 - Tax Withholding

 

The Company’s obligation to issue or deliver to the Participant any certificate or certificates for shares of Stock is expressly conditioned upon receipt from the Participant, 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, a Parent Corporation or Subsidiary 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 Stock previously owned by the Participant, duly endorsed for transfer to the Company by the Participant 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, a Parent Corporation or a Subsidiary for federal, state and/or local tax purposes; or

 

(c)           With respect to the withholding obligation for RSUs that become vested, subject to the Committee’s consent, full payment by retention by the Company of a portion of the shares deliverable in respect of such vested RSUs with an aggregated Fair Market Value (determined on the payment date) equal to the amount that must be withheld by the Company, a Parent Corporation or a Subsidiary 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) and (c).

 

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Notwithstanding anything herein to the contrary, the number of shares of Stock which may be withheld with respect to the payment of any PSUs in order to satisfy the Company’s federal, state and/or local tax withholding obligations with respect to the payment of the PSUs shall be limited to the number of shares of Stock which have a Fair Market Value on the date of withholding 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.

 

Section 5.11 - Clawback

 

Notwithstanding anything contained in the Agreement to the contrary, all PSUs awarded under this Agreement, and any shares of Stock issued upon settlement hereunder shall be subject to forfeiture, or repayment pursuant to the terms of any policy that the Company may implement in compliance with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.

 

Section 5.12 - Governing Law

 

The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

 

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

 

	
 
    	
OWENS-ILLINOIS, INC.
    
	
 
    	

    
	
 
    	
By:
    	
Paul A. Jarrell
    
	
 
    	
Its:
    	
SVP &   Chief Administrative Officer
    

 

9Exhibit 10.4

 

Owens-Illinois Executive Severance Policy

 

I.                                        Background and Purpose

 

Effective March 7, 2015, Owens-Illinois (the “Company”) hereby establishes an Executive Severance Policy (the “Policy”) in order to provide severance benefits to certain eligible employees.

 

II.                                   Scope and Eligibility

 

This Policy applies to all employees of the Company and its subsidiaries who are senior leaders and are designated by the Compensation Committee of the Board of Directors of the Company (the “Committee”) to be a participant in the Policy.

 

III.                              Definitions

 

Administrator:  The Committee shall be the Administrator, or following a Change in Control the successor to the Committee.

 

Base Pay:  The straight annual salary paid to an Eligible Employee, excluding bonuses and sales or other types of commissions.  For purposes of calculating the Severance Pay, the Eligible Employee’s Base Pay shall be the greater of (i) the Base Pay as in effect immediately prior to the Termination Date, or (ii) the Base Pay as in effect prior to any reduction in Base Pay constituting Good Reason.

 

Benefits:   The medical, dental, prescription drug and life insurance coverage provided to active employees of the Company as in effect on the Termination Date, at the active employee rate.

 

Cash Compensation: The total annual cash compensation which an Eligible Employee is eligible to earn, including but not limited to Base Pay and Target Bonus.

 

Cause:  Cause shall mean the Eligible Employee’s dishonesty, disloyalty, misconduct, insubordination, failure to reasonably devote working time to assigned duties, failure or refusal to fully comply with any reasonable rule or regulation, standard or policy which, from time to time, may be established by the Company, including without limitation, those policies set forth in the Company Policy Manual, and failure to cooperate with any investigation of an alleged violation of any such rule, regulation, standard or policy.

 

Change in Control:  A “Change in Control” has the meaning set forth in Second Amended and Restated Owens-Illinois, Inc. 2005 Incentive Award Plan, or any successor equity incentive plan adopted by the Company and approved by shareholders.

 

Eligible Employees:  Employees who meet the eligibility requirements of this Policy.

 

Good Reason:  The occurrence of any of the following events arising within 24 months following a Change in Control and without the Eligible Employee’s prior written consent (i) a material

 

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diminution of an Eligible Employee’s Base Pay, (ii) a material diminution in authority, duties or responsibilities (including, if the Eligible Employee is the Chief Executive Officer or Chief Financial Officer of the Company, any material changes which result from not being employed by a public company following the Change in Control) from those in effect immediately prior to the date of the Change in Control, (iii) a material change in the geographic location where the Eligible Employee is required to perform services, or (iv) any other action or inaction that constitutes a material breach by the Company of the terms of the Eligible Employee’s employment as in effect immediately prior to the Change in Control.  The Eligible Employee must provide notice to the Company of the existence of one or more of the conditions listed above, within a period not to exceed 30 days of the initial existence of such condition, and the Company shall have a period of 30 days to remedy the condition.  If the Company is unable to remedy such condition within the 30 day cure period, the Eligible Employee may terminate his employment for Good Reason (which termination shall occur no later than 180 days following the initial existence of the applicable Good Reason condition).

 

Qualified Termination:  An Eligible Employee’s termination of employment by the Company or any subsidiary (or any successor thereto, including any Successor Employer) without Cause at any time, or following a Change in Control for Good Reason; but in no event will a Qualifying Termination occur if the Eligible Employee is offered employment with any Successor Employer at the same level of Base Salary and Cash Compensation.

 

Release:  The general release/waiver of claims which will be supplied by the Company as soon as practicable but not later than 5 business days following the Termination Date.

 

Severance Pay:  Means the product of two times the sum of the Executive’s (i) Base Pay and (ii) Target Bonus.

 

Severance Period:  Means the 24 months following the Termination Date.

 

Successor Employer:  Means any entity that acquires or assumes assets of the Company in a Change in Control.

 

Target Bonus:  An Eligible Employee’s Base Pay multiplied by the greater of the Eligible Employee’s (i) target bonus percentage under the Company’s annual incentive plan as in effect immediately prior to the Termination Date, or (ii) target bonus percentage as in effect prior to any reduction in target bonus percentage constituting Good Reason.

 

Termination Date:  The date of an Eligible Employee’s termination of employment in connection with a Qualified Termination.

 

IV.                               Conditions Under Which Severance Pay is Available to Eligible Employees

 

Eligible Employees shall receive Severance Pay under this Policy after their Termination Date if such termination is due to a Qualified Termination.

 

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An employee has not experienced a Qualified Termination and is not eligible for Severance Pay under this Policy if the Eligible Employee:

 

·                  Voluntarily resigns employment (other than for Good Reason);

·                  Dies or becomes disabled;

·                  Is terminated for Cause; or

·                  Is offered employment with any Successor Employer at the same level of Base Salary and Cash Compensation.

 

As a further condition to an Eligible Employee’s receipt of benefits under this Policy, such employee must first:

 

·                  sign the agreement regarding confidentiality, non-competition, non-solicitation and non-disparagement attached as Exhibit A (the “Non-Compete Agreement”); and

·                  sign and not revoke (during any period permitted under applicable law) the Release within 50 days following the Termination Date.

 

V.                                    Severance Pay

 

Amount of Payment

 

Eligible Employees who experience a Qualified Termination, and meet the conditions for payment under the terms of this Policy  will receive the Severance Pay.  Except as specifically provided in “Severance Benefits Required by Law or Other Agreement” below, pay during the period between the date notice of a Qualifying Termination is given and the Termination Date will not offset any Severance Pay.

 

Subject to the tax provisions described below, the Severance Pay shall be paid in a lump sum, on the 8th day following the effective day of  the Release.  If the Severance Pay would be payable in one tax year or another depending upon when the Eligible Employee returns the Release, the Severance Pay will not be paid until the first business day of the later tax year, regardless of when the Release is signed and effective.

 

Severance Benefits Required by Law or Other Agreement

 

Any notice, pay in lieu of notice, severance benefits or other benefits that are required by any federal, state or local law relating to severance, plant closures, terminations, reductions-in-force, or plant relocations will reduce the Severance Pay provided by this Policy.

 

In the event that an Eligible Employee is entitled to receive Severance Pay under this Policy and any other plan, program, arrangement or individual agreement, the Eligible Employee shall be entitled to receive the greater of the Severance Pay under this Policy or the amount which the Eligible Employee would receive under such other plan, program, arrangement or individual agreement.  In no event shall an Eligible Employee receive severance pay under both this Policy and any other plan, program, arrangement or individual agreement.

 

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Benefits

 

An Eligible Employee’s Benefits  will remain in effect through the last day of the month in which the Severance Period ends.  If at any time the Company determines in its sole discretion that it cannot provide the Benefits without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall, in lieu of such Benefits, provide to the Eligible Employee a taxable cash payment in an amount equal to the difference between the applicable monthly premium the Eligible Employee is required to pay for such coverage under COBRA and the amount such Eligible Employee would pay as an active employee, multiplied by the number of calendar months (including partial months) remaining until the expiration of the Severance Period, which amount shall be paid within thirty (30) days following the date of the Company’s determination.

 

Outplacement Provisions

 

Eligible Employees who have a Qualified Termination will receive outplacement assistance during the Severance Period applicable to senior executive from time to time as determined by the Company.

 

VI.                               Benefits

 

Payment of Severance Pay does not affect the Company’s established procedures with respect to payment for accrued but unused vacation, or the methods established for concluding or continuing participation in any benefit program maintained by the Company.  The provisions of all the Company’s benefit plans, including equity compensation plans, control in the event of a conflict with any provision herein to the extent that such provisions provide for greater benefits to an Eligible Employee than those provided hereunder.

 

VII.                          Modifications and Termination

 

The Company reserves the right to modify and/or terminate this Policy at any time and in any manner prior to a Change in Control.  Following a Change in Control, this Policy may not be modified, amended or terminated in any manner which would adversely impact any Eligible Employee with respect to participation in the Policy, eligibility for the Severance Pay, amount of Severance Pay or in any other manner during the 24 months following such a Change in Control.  This Policy shall be binding upon and shall automatically be assigned to each successor of the Company, including any Successor Employer with respect to each Eligible Employee who is employed by the Successor Employer following a Change in Control.

 

VIII.                     Parachute Payments

 

In the event that the severance and other benefits provided for in this Policy or otherwise payable to an Eligible Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this paragraph, would be subject to the excise tax imposed by Section 4999 of the Code, then the Eligible Employee’s Severance Benefits under this Policy shall be payable either (A) in full, or (B) as to

 

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such lesser amount which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by an Eligible Employee on an after-tax basis, of the greatest amount of severance benefits under this Policy, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.  All determinations required under this paragraph shall be made in writing by the Company’s independent public accountants, whose determination shall be conclusive and binding upon all Eligible Employees and the Company for all purposes.  For purposes of making the calculations required by this paragraph, the accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The accountants shall provide detailed supporting calculations both to the Company and the Eligible Employee within 15 business days of the receipt of notice from that there has been a parachute payment, or such earlier time as is requested by the Company.  All fees and expenses of the accountants shall be borne solely by the Company.  All amounts payable to Eligible Employee under this paragraph shall be paid as soon as practicable after the event giving rise to payment of any excise tax under Section 4999 of the Code by the Eligible Employee, but no later than the December 31 of the year next following the year in which the Eligible Employee, or the Company on behalf of the Eligible Employee, remits the excise taxes due.  .  If Severance Benefit are to be reduced, such reduction will be made in a manner as the Company and the Eligible Employee shall mutually agree that would not result in a violation of Section 409A.

 

IX.                              Taxes

 

All amounts payable pursuant to this Policy shall be paid net of any applicable withholding and/or employment taxes under federal, state or local law and any additional withholding to which the Eligible Employee has agreed.  Notwithstanding anything in this Policy to the contrary, any compensation or benefits payable hereunder that constitutes “nonqualified deferred compensation” (“Deferred Compensation”) within the meaning of Section 409A of the Code and which are payable upon the Eligible Employee’s termination of employment shall be payable only if such termination constitutes the Eligible Employee’s “separation from service” with the Company within the meaning of Code Section 409A (a “Separation from Service”).  In addition, if the Company determines that the Eligible Employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code at the time of the Eligible Employee’s Separation from Service, any Deferred Compensation to which the Eligible Employee is entitled hereunder in connection with such Separation from Service shall be delayed to the extent required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  To the extent that the payment of any Deferred Compensation is delayed in accordance with the preceding sentence, such Deferred Compensation shall be paid to the Eligible Employee in a lump sum on the first business day following the earlier to occur of (i) the expiration of the six-month period measured from the date of the Eligible Employee’s Separation from Service, or (ii) the date of the Eligible Employee’s death, and any compensation or benefits that are payable hereunder following such delay shall be paid as otherwise provided herein.  In addition, to the extent that any reimbursements described in Treasury Regulation 1.409A-1(b)(9)(v)(A) or (C) (including without limitation, any outplacement services) for which reimbursement in one taxable year could affect the payments or expenses eligible for reimbursement in another taxable year or for which the right to payment is subject to

 

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liquidation or exchange for another benefit, such payments or reimbursements shall be made promptly by the Company, but in any event no later than the end of the second calendar year following the calendar year in which the Separation from Service occurs.

 

X.                                   Administration

 

This Policy is not intended to be an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (ERISA).  Rather, this Policy is intended to be solely a pay practice of the Company, with benefits payable from the general assets of the Company or its successor and shall be administered accordingly.  All claims under this Policy shall be governed by the laws of the State of Ohio, without reference to the conflict of law provisions thereof.

 

The Policy shall be interpreted in accordance with its terms and their intended meanings.  However, the Administrator shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion they deem to be appropriate in their reasonable discretion, and to make any findings of fact needed in the administration of the Policy.  The validity of any such interpretation, construction, decision, or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly arbitrary or capricious.  All determinations by the Administrator will be final and conclusive upon all persons and be given the maximum possible deference allowed by law.  If, due to errors in drafting, any Policy provision does not accurately reflect its intended meaning, as demonstrated by consistent interpretations or other evidence of intent, or as determined by the Administrator in its reasonable discretion, the provision shall be considered ambiguous and shall be interpreted by the Administrator and all Policy fiduciaries in a fashion consistent with its intent, as determined in the reasonable discretion of the Administrator.  The Administrator shall amend the Policy retroactively to cure any such ambiguity.

 

Claims Procedure

 

All disputes or controversies arising under or in connection with this Policy settled by arbitration, conducted before a single neutral arbitrator in Toledo, Ohio, in accordance with the National Rules for the Resolution of Employment Disputes (the “Rules”) of the American Arbitration Association (“AAA”).  If the parties are unable to agree upon an arbitrator, one shall be appointed by the AAA in accordance with its Rules.  The costs of the arbitration, including the cost of any record or transcripts of the arbitration, AAA’s administrative fees, the fee of the arbitrator, all other fees and costs, shall be borne by the Company.  Each party shall bear their own attorneys’ fees and expenses, provided, however, that if the arbitrator determines, in a finding on the merits, that any claim was frivolous, the arbitrator may provide, as part of the award, attorneys’ fees.  Judicial orders to enforce the arbitration provisions of this Policy and otherwise in aid of arbitration may be entered by the federal and state courts located in Toledo, Ohio, at any time prior to or after a final decision by the arbitrators, and the Company and each Eligible Employee hereby submits to personal jurisdiction in the State of Ohio and to venue in such courts.

 

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XI.                              At-Will Employment

 

No provision of the Policy is intended to provide any Eligible Employee with any right to continue as an employee with the Company or its subsidiaries, or in any other capacity, for any specific period of time, or otherwise affect the right of the Company or its subsidiaries to terminate the employment or service of any individual at any time for any reason, with or without Cause.

 

For more information on any aspect of this Policy, please contact the Senior Vice President, Chief Administrative Officer.

 

Issued: March 7, 2015

 

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