Exhibit 10.21
AMENDED AND RESTATED
STOCK OPTION PLAN FOR KEY EMPLOYEES
OF
OWENS-ILLINOIS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
THIS AGREEMENT, dated ____________, 19__, is made by and between
Owens-Illinois, Inc., a Delaware corporation hereinafter referred to as
"Company," and _________________________, an employee of the Company or a
Subsidiary of the Company, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity
to purchase shares of its $.01 par value Common Stock (as defined hereunder);
and
WHEREAS, the Company wishes to carry out the Amended and Restated
Stock Option Plan for Key Employees of Owens-Illinois, Inc. (the terms of
which are hereby incorporated by reference and made a part of this Agreement);
and
WHEREAS, the Compensation Committee of the Company's Board of
Directors (hereinafter referred to as the "Committee"), appointed to
administer said Plan, has determined that it would be to the advantage and
best interest of the Company and its stockholders to grant the Non-Qualified
Option provided for herein to the Optionee as an inducement to remain in the
service of the Company, its Parent Corporations or its Subsidiaries (each as
defined hereunder) and as an incentive for increased efforts during such
service, and has advised the Company thereof and instructed the undersigned
Officers (as defined hereunder) to issue said Option;
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. The masculine pronoun shall include the feminine and neuter,
and the singular the plural, where the context so indicates.
Section 1.1 - Board
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"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Common Stock
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"Common Stock" shall mean the Company's common stock, $.01 par
value.
Section 1.4 - Company
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"Company" shall mean Owens-Illinois, Inc. In addition, "Company"
shall mean any corporation assuming, or issuing new employee stock options in
substitution for, the Option and Incentive Stock Options (as defined in
Section 1.10 of the Plan), outstanding under the Plan, in a transaction to
which Section 424(a) of the Code applies.
Section 1.5 - Exchange Act
----------- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.6 - Fair Market Value
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"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 - Officer
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"Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
Section 1.8 - Option
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"Option" shall mean the Non-Qualified Option (as defined in
Section 1.11 of the Plan) to purchase Common Stock of the Company granted
under this Agreement.
Section 1.9 - Parent Corporation
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"Parent Corporation" shall mean any corporation in an unbroken
chain of corporations ending with the Company if each of the corporations
other than the Company then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
Section 1.10 - Plan
------------ ----
"Plan" shall mean the Amended and Restated Stock Option Plan for
Key Employees of Owens-Illinois, Inc..
Section 1.11 - Rule 16b-3
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"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such rule may be amended in the future.
Section 1.12 - Secretary
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"Secretary" shall mean the Secretary of the Company.
Section 1.13 - Securities Act
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"Securities Act" shall mean the Securities Act of 1933, as
amended.
Section 1.14 - Subsidiary
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"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 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 50% of
the capital of profits interests.
Section 1.15 - Termination of Employment
------------ -------------------------
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company, a Parent
Corporation or a Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death, total disability 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 the Optionee
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 Termination of Employment, including, but not by way of
limitation, the question of whether a Termination of Employment resulted from
a discharge for good cause, and all questions of whether particular leaves of
absence constitute Terminations of Employment. Notwithstanding any other
provision of this Agreement, the Company or any of its subsidiaries has an
absolute and unrestricted right to terminate the Optionee's employment at any
time for any reason whatsoever, with or without cause.
ARTICLE II
GRANT OF OPTION
---------------
Section 2.1 - Grant of Option
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In consideration of the Optionee's agreement to remain in the
employ of the Company, its Parent Corporations or its Subsidiaries and for
other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of
an aggregate of ________ shares of its $.01 par value Common Stock upon the
terms and conditions set forth in this Agreement.
Section 2.2 - Purchase Price
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The purchase price of the shares of stock covered by the Option
shall be $_____ per share without commission or other charge.
Section 2.3 - Consideration to Company
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In consideration of the granting of this Option by the Company,
the Optionee agrees to render faithful and efficient services to the Company,
a Parent Corporation or a Subsidiary, with such duties and responsibilities as
the Company shall from time to time prescribe, for a period of at least one
year from the date this Option is granted. Nothing in this Agreement or in the
Plan shall confer upon the Optionee 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 Corporations and any
Subsidiary, which are hereby expressly reserved, to discharge the Optionee at
any time for any reason whatsoever, with or without cause.
Section 2.4 - Adjustments in Option
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In the event that the outstanding shares of Common Stock subject
to the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, or the number of shares is
increased or decreased by reason of a stock split up, stock dividend,
combination of shares or any other increase or decrease in the number of such
shares of Common Stock effected without receipt of consideration by the
Company (provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration") the Committee shall make appropriate adjustments in the number
and kind of shares as to which the Option, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the
Optionee's proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in the Option shall be made without change in
the total price applicable to the unexercised portion of the Option (except
for any change in the aggregate price resulting from rounding-off of share
quantities or prices) and with any necessary corresponding adjustment in the
Option price per share. Any such adjustment made by the Committee shall be
final and binding upon the Optionee, the Company and all other interested
persons.
ARTICLE III
PERIOD OF EXERCISABILITY
------------------------
Section 3.1 - Commencement of Exercisability
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(a) Except as provided in Section 3.4, no Option may be
exercised in whole or in part during the first year after such Option is
granted.
(b) Except to the extent that such Option becomes exercisable
sooner pursuant to Section 3.1(c), the Option shall become exercisable as to
50% of the shares covered by the Option on the fifth anniversary of the date
the Option is granted and as to the remaining 50% of the shares covered by the
Option on the sixth anniversary of the date the Option is granted. Such
installments shall be cumulative.
(c) The Option shall become exercisable after the first
anniversary of the date the Option is granted at the time when the average
Fair Market Value per share of Common Stock for any period of 20 consecutive
trading days (commencing after such first anniversary) is at least equal to
the product of the Fair Market Value per share on the date the Option is
granted times the amount shown below under "Stock Price Multiple" as to the
percentage of the shares of Common Stock initially subject to the Option shown
below under "Exercisable Percentage."
Stock Price Multiple Exercisable Percentage
-------------------- ----------------------
120% 25%
144% 50%
172% 75%
206% 100%
For example, a 1,000 share Option exercisable at $15.00 per share
(100% of Fair Market Value at the date of Option grant) would become
exercisable as to 250 shares when a 20 consecutive trading day period average
price of $18.00 is achieved ($18.00 is 120% of $15.00). Further vesting would
occur if and when the next percentage multiple or multiples are achieved.
(d) Except as provided in Section 3.4, no portion of the Option
which is unexercisable at Termination of Employment shall thereafter become
exercisable.
Section 3.2 - Duration of Exercisability
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The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.l shall
remain exercisable until it becomes unexercisable under Section 3.3.
Section 3.3 - Expiration of Option
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The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten years and one day from the date the
Option was granted; or
(b) The time of the Optionee's Termination of Employment unless
such Termination of Employment results from his normal retirement or total
disability (each as determined by the Committee in accordance with Company
policies), early retirement with the consent of the Committee or death or his
being discharged not for good cause, or unless the Optionee's right to
exercise his Options has been extended by the Committee pursuant to Section
4.4(a)(vii) of the Plan; or
(c) The expiration of three months from the date of the
Optionee's Termination of Employment by reason of his normal retirement or
early retirement with the consent of the Committee, or the expiration of such
period as shall be determined by the Committee in the event the Optionee's
right to exercise his Options is extended by the Committee pursuant to Section
4.4(a)(vii) of the Plan, unless the Optionee dies within said period; or
(d) The expiration of three months from the date of the
Optionee's Termination of Employment by reason of his being discharged not for
good cause, unless the Optionee dies within said three-month period; or
(e) The expiration of such period as shall be determined by the
Committee in the event the Optionee's right to exercise his Options is
extended by the Committee pursuant to Section 4.4(a)(vii) of the Plan, unless
the Optionee dies within such period; or
(f) The expiration of one year from the date of the Optionee's
Termination of Employment by reason of his total disability; or
(g) The expiration of one year from the date of the Optionee's
death; or
(h) The effective date of either the merger or consolidation of
the Company with or into 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 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, unless the Committee waives this provisions in
connection with such transaction. At least ten days prior to the effective
date of such merger, consolidation, acquisition, liquidation or dissolution,
the Committee shall give the Optionee notice of such event if the Option has
then neither been fully exercised nor become unexercisable under this Section
3.3.
Section 3.4 - Acceleration of Exercisability
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(a) In the event of a Termination of Employment resulting from
an Optionee's normal retirement or total disability (each as determined by the
Committee in accordance with Company policies), early retirement with the
consent of the Committee or death, the Option shall be exercisable as to all
shares covered hereby, notwithstanding that this Option may not have become
fully exercisable under Section 3.1; or
(b) In the event of the merger or consolidation of the Company
with or into 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 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 and incorporated in the notice referred to in Section 3.3(h),
that at some time prior to the effective date of such event this Option shall
be exercisable as to all the shares covered hereby, notwithstanding that this
Option may not yet have become fully exercisable under Section 3.1; provided,
however, that this acceleration of exercisability shall not take place if:
(i) This Option becomes unexercisable under Section
3.3 prior to said effective date; or
(ii) In connection with such an event, provision is
made for an assumption of this Option or a substitution therefor
of a new option by an employer corporation or a parent or
subsidiary of such corporation.
The Committee may make such determinations and adopt such rules
and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not by way
of limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV
EXERCISE OF OPTION
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Section 4.1 - Person Eligible to Exercise
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During the lifetime of the Optionee, only he may exercise the
Option or any portion thereof. After the death of the Optionee, any
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by his personal
representative or by any person empowered to do so under the Optionee's will
or under the then applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
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Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time
prior to the time when the Option or portion thereof becomes unexercisable
under Section 3.3; provided, however, that each partial exercise shall be for
not less than one hundred (100) shares (or the minimum installment set forth
in Section 3.1, if a smaller number of shares) and shall be for whole shares
only.
Section 4.3 - Manner of Exercise
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The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following
prior to the time when the Option or such portion becomes unexercisable under
Section 3.3:
(a) Notice in writing signed by the Optionee or the
other person then entitled to exercise the Option or portion,
stating that the Option or portion is thereby exercised, such
notice complying with all applicable rules established by the
Committee; and
(b) (i) Full payment (in cash or by check) for the
shares with respect to which such Option or portion is exercised;
or
(ii) With the consent of the Committee,
(A) shares of the Company's Common Stock owned by the
Optionee duly endorsed for transfer to the Company, or
(B) subject to the timing requirements of Section 4.4,
shares of the Company's Common Stock issuable to the
Optionee upon exercise of the Option, with a Fair
Market Value on the date of option exercise equal to
the aggregate purchase price of the shares with
respect to which such Option or portion is exercised;
or
(iii) With the consent of the Committee,
a full recourse promissory note bearing interest (at
least such rate as shall then preclude the imputation
of interest under the Code or successor provision) and
payable upon such terms as may be prescribed by the
Committee. The Committee may also prescribe the form
of such note and the security to be given for such
note. The Option may not be exercised, however, by
delivery of a promissory note or by a loan from the
Company when or where such loan or other extension of
credit is prohibited by law; or;
(iv) With the consent of the Committee,
any combination of the consideration provided in the
foregoing subparagraphs (i), (ii) and (iii); and
(c) A bona fide written representation and agreement,
in a form satisfactory to the Committee, signed by the Optionee or
other person then entitled to exercise such Option or portion,
stating that the shares of stock are being acquired for his own
account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules
and regulations thereunder, and that the Optionee or other person
then entitled to exercise such Option or portion will indemnify
the Company against and hold it free and harmless from any loss,
damage, expense or liability resulting to the Company if any sale
or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee
may, in its absolute discretion, take whatever additional actions
it deems appropriate to insure the observance and performance of
such representation and agreement and to effect compliance with
the Securities Act and any other federal or state securities laws
or regulations. Without limiting the generality of the foregoing,
the Committee may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on
an Option exercise does not violate the Securities Act, and may
issue stop-transfer orders covering such shares. Share
certificates evidencing stock issued on exercise of this Option
shall bear an appropriate legend referring to the provisions of
this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of
this subsection (c) shall, however, not be required if the shares
to be issued pursuant to such exercise have been registered under
the Securities Act, and such registration is then effective in
respect of such shares; and
(d) Full payment to the Company (or other employer
corporation) of all amounts which, under federal, state or local
tax law, it is required to withhold upon exercise of the Option;
with the consent of the Committee, (i) shares of the Company's
Common Stock owned by the Optionee duly endorsed for transfer, or,
(ii) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock issuable to the Optionee upon exercise
of the Option, valued at Fair Market Value as of the date of
Option exercise, may be used to make all or part of such payment;
and
(e) In the event the Option or portion shall be
exercised pursuant to Section 4.l by any person or persons other
than the Optionee, appropriate proof of the right of such person
or persons to exercise the Option.
Section 4.4 - Certain Timing Requirements
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Shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the tax withholding consequences
of such exercise only (i) during the period beginning on the third business
day following the date of release of the quarterly or annual summary statement
of sales and earnings of the Company and ending on the twelfth business day
following such date or (ii) pursuant to an irrevocable written election by the
Optionee to use shares of the Company's Common Stock issuable to the Optionee
upon exercise of the Option to pay all or part of the withholding taxes
(subject to the approval of the Committee) made at least six months prior to
the payment of such withholding taxes.
Section 4.5 - Conditions to Issuance of Stock Certificates
----------- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option,
or any portion thereof, may be either previously authorized but unissued
shares or issued shares which have been reacquired by the Company. Such
shares shall be fully paid and nonassessable. The Company shall not be
required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of the Option or portion thereof 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 absolute 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 absolute discretion, determine to be necessary or
advisable; and
(d) The payment to the Company (or other employer
corporation) of all amounts, if any, which, under federal, state
or local tax law, it is required to withhold upon exercise of the
Option; and
(e) The lapse of such reasonable period of time
following the exercise of the Option as the Committee may from
time to time establish for reasons of administrative convenience.
Section 4.6 - Rights as Stockholder
----------- ---------------------
The holder of the Option shall not be, nor have any of the rights
or privileges of, a stockholder of the Company in respect to any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
ARTICLE V
OTHER PROVISIONS
----------------
Section 5.1 - Administration
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The Committee shall have the power to interpret the Plan, this
Agreement and all other documents relating to the Option and to adopt such
rules for the administration, interpretation and application of the Plan as
are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Optionee, the Company and
all other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Option and all members of the Committee shall be
fully protected by the Company in respect to any such action, determination or
interpretation. The Board shall have no right to exercise any of the rights
or duties of the Committee under the Plan and this Agreement.
Section 5.2 - Option Not Transferable
----------- -----------------------
Unless otherwise approved in writing by the Committee, no shares
acquired upon exercise of any Option by any Officer may be sold, assigned,
pledged, encumbered or otherwise transferred until at least six months have
elapsed from (but excluding) the date that such Option was granted.
Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the
Optionee or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, 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 5.2 shall not prevent transfers by will or by the applicable laws of
descent and distribution.
Section 5.3 - Shares to Be Reserved
----------- ---------------------
The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be
sufficient to satisfy the requirements of this Agreement.
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 Optionee 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 it or him. Any notice which is required to be given to
the Optionee shall, if the Optionee is then deceased, be given to the
Optionee'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 Postal Service.
Section 5.5 - Titles
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Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
Section 5.6 - Rule 16b-3
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The Company shall take such actions with respect to the Plan as
may be necessary to satisfy the requirements of Rule 16b-3.
Section 5.7 - Conformity to Securities Laws
----------- -----------------------------
This Agreement is intended to conform to the extent necessary with
all provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3. Notwithstanding anything
herein to the contrary, this Agreement shall be administered, and the Option
shall be granted and may be exercised, 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 Option granted hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
Section 5.8 - Amendment
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This Agreement may be amended only by a writing executed by the
parties hereto which specifically states that it is amending this Agreement.
Section 5.9 - 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 ____________________________________
Its ___________________________________
________________________________________
Optionee
________________________________________
________________________________________
Address
Optionee's Social Security Number:
________________________________________