Amendment to Employment Agreement Between Owens-Illinois, Inc. and Steven R. McCracken (August 3, 2006)
This amendment updates the employment agreement between Owens-Illinois, Inc. and Steven R. McCracken, the company's Chairman and CEO. It revises the section on employee benefits, confirming McCracken's participation in company benefit plans, vacation, car use, and financial consulting reimbursement. It also clarifies how his retirement benefits will be calculated, including the integration of service years from a prior employer and specific actuarial calculations. All other terms of the original agreement remain unchanged.
Exhibit 10.1
August 3, 2006
Steven R. McCracken
One SeaGate
Toledo, Ohio 43666
Dear Steve:
Reference is made to a certain letter agreement dated March 31, 2004 between you and the Owens-Illinois, Inc. (the Company), as amended by letter agreement dated March 10, 2005, setting forth the terms of your employment as Chairman and Chief Executive Officer.
1. Upon your acceptance hereof, paragraph 5 of the Letter will be deemed to be amended to read, in its entirety, as follows:
5. Employee Benefits and Perquisites. You will participate in the Companys employee benefit plans (except for severance or incentive plans) as in effect from time to time, including its health plan and life insurance plan (collectively, the Employee Benefits), on the same basis as those benefits are generally made available to other senior executives of the Company. You will be provided with four weeks (20 days) per year of paid vacation. You will have use of a Company car and will be reimbursed for reasonable fees paid for financial consulting.
Provided that prior to April 1, 2009 you (a) are not terminated by the Company for Cause, or (b) do not resign from the Company, the retirement benefit (annuity and/or lump sum) payable to you upon your retirement from the Company under the Owens-Illinois Salary Retirement Plan and Supplemental Retirement Benefit Plan (the Plans) would be calculated based on a Life Annuity equal to the O-I Annuity Amount (as defined below). Capitalized terms used herein without definition shall have the meanings ascribed to them in the Plans.
The O-I Annuity Amount means an amount equal to the Calculated Annuity Amount (as defined below) less the Offset Annuity Amount (as defined below).
The Calculated Annuity Amount means a Life Annuity calculated upon your retirement from the Company based on Years of Service equal to your Years of Service with the Company, plus your years of service with your prior employer.
The Offset Annuity Amount means a Life Annuity calculated by taking the monthly annuity amount receivable by you from your prior employer as of April 1, 2004 and calculating the actuarial equivalent thereof on the date of your
retirement using (i) the Applicable Interest Rate and (ii) a remaining life expectance at the time of retirement using the Applicable Mortality Table.
The O-I Annuity Amount would be used for the calculation of benefits (annuity and/or lump sum) due to you upon your retirement from the Company based on your Final Average Earnings with the Company.
2. Except as otherwise provided herein, the Agreement shall remain in full force and effect.
| Sincerely, | ||
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| /s/ James W. Baehren |
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| By: James W. Baehren | ||
| Its: Senior Vice President | ||
Acknowledged and Agreed: |
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/s/ Steven R. McCracken |
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Steven R. McCracken |
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