|
|
|
|
|
|
|
|
Name and Address
of Beneficial Owner
|
|
Amount and
Nature of Beneficial
Ownership(1)
|
|
Percentage
|
|
The Vanguard Group, Inc.(2)
100 Vanguard Blvd
Malvern, Pennsylvania 19355
|
|
|
12,132,396
|
|
|
7.35
|
|
BlackRock, Inc.(3)
40 East 52nd Street
New York, New York 10022
|
|
|
10,923,583
|
|
|
6.6
|
|
James W. Baehren
|
|
|
108,868
|
(4)(5)(6)
|
|
|
*
|
Erik C. M. Bouts
|
|
|
3,350
|
(4)(5)
|
|
|
*
|
Stephen P. Bramlage, Jr.
|
|
|
35,660
|
(4)(5)
|
|
|
*
|
Gary F. Colter
|
|
|
33,437
|
(7)
|
|
|
*
|
Arnaud N. J. M. de Weert
|
|
|
8,083
|
(5)
|
|
|
*
|
Jay L. Geldmacher
|
|
|
17,039
|
(7)
|
|
|
*
|
Peter S. Hellman
|
|
|
20,143
|
(7)
|
|
|
*
|
Anastasia D. Kelly
|
|
|
33,230
|
(7)
|
|
|
*
|
John J. McMackin, Jr.
|
|
|
42,008
|
(7)
|
|
|
*
|
Hari N. Nair
|
|
|
0
|
|
|
|
*
|
Hugh H. Roberts
|
|
|
21,155
|
(7)
|
|
|
*
|
Albert P. L. Stroucken
|
|
|
1,422,700
|
(5)
|
|
|
*
|
Helge H. Wehmeier
|
|
|
52,827
|
(7)
|
|
|
*
|
Carol A. Williams
|
|
|
0
|
|
|
|
*
|
Dennis K. Williams
|
|
|
22,984
|
(7)
|
|
|
*
|
Thomas L. Young
|
|
|
27,655
|
(7)
|
|
|
*
|
All directors and executive officers as a group (19 persons)
|
|
|
1,957,984
|
(4)(5)(6)(7)
|
|
1.2
|
|
-
*
-
Indicates
less than one percent (1%) ownership.
-
(1)
-
For
purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares as of a given date if such person has the
right to acquire such shares within 60 days after
76
such
date. For purposes of computing the percentage of outstanding shares held by each person or group of persons named above on a given date, any security that such person or persons has the right to
acquire within 60 days after such date is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
-
(2)
-
The
Schedule 13G dated February 12, 2014 received by the Company from the Vanguard Group, Inc. ("Vanguard") indicated that Vanguard is
the beneficial owner of 12,132,396 shares of the Common Stock, with the sole power to vote or to direct the vote on 261,524 shares, the sole power to dispose or to direct the disposition of 11,886,072
shares and the shared power to dispose or to direct the disposition of 246,324 shares.
-
(3)
-
The
Schedule 13G dated January 31, 2014 received by the Company from BlackRock, Inc. ("BlackRock") indicated that BlackRock is the
beneficial owner of 10,923,583 shares of the Common Stock, with the sole power to vote or to direct the vote on 9,422,512 shares and the sole power to dispose or to direct the disposition of
10,923,583 shares.
-
(4)
-
The
table includes the number of shares of Common Stock that Messrs. Baehren, Bouts and Bramlage, and all directors and executive officers as a group
held in the Stock Purchase and Savings Program. No shares are held in such program for Messrs. de Weert and Stroucken.
-
(5)
-
The
number of shares beneficially owned includes the following currently exercisable options:
|
|
|
|
|
Director/Officer
|
|
Options
|
|
James W. Baehren
|
|
|
43,442
|
|
Erik C. M. Bouts
|
|
|
2,525
|
|
Stephen P. Bramlage, Jr.
|
|
|
34,908
|
|
Arnaud N. J. M. de Weert
|
|
|
5,491
|
|
Albert P. L. Stroucken
|
|
|
765,288
|
|
All directors and executive officers as a group
|
|
|
908,353
|
|
-
(6)
-
The
number of shares shown as beneficially owned includes the following number of shares of unvested restricted stock over which the following persons or
group had voting, but not investment, power as of March 20, 2014:
|
|
|
|
|
Officer
|
|
Restricted
Stock
|
|
James W. Baehren
|
|
|
40,000
|
|
All directors and executive officers as a group
|
|
|
41,000
|
|
77
-
(7)
-
The
number of shares shown as beneficially owned includes the following number of unvested restricted stock units that will vest within 60 days of
March 20, 2014:
|
|
|
|
|
Director
|
|
Restricted
Stock Unit
|
|
Gary F. Colter
|
|
|
2,957
|
|
Jay L. Geldmacher.
|
|
|
2,957
|
|
Peter S. Hellman
|
|
|
2,957
|
|
Anastasia D. Kelly
|
|
|
2,957
|
|
John J. McMackin, Jr.
|
|
|
2,957
|
|
Hugh H. Roberts
|
|
|
2,957
|
|
Helge H. Wehmeier
|
|
|
2,957
|
|
Dennis K. Williams
|
|
|
2,957
|
|
Thomas L. Young
|
|
|
2,957
|
|
All directors and executive officers as a group
|
|
|
26,613
|
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors, certain officers and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership (Forms 3, 4 and 5) with the SEC with a copy to the New York Stock
Exchange. These reporting persons are required by SEC regulation to furnish the Company with copies of all such forms which they file. To the Company's knowledge, based solely on review of the copies
of such reports furnished to the Company and written representations that no reports were required, all of these reporting persons made all required filings on time during 2013, except for the
following:
-
-
Gary F. Colter filed a late Form 4 on March 19, 2013 for the purchase of shares; and
-
-
James W. Baehren filed a late Form 4 on November 19, 2013 for the purchase and sale of shares pursuant to
the exercise of stock options.
2015 ANNUAL MEETING OF SHARE OWNERS
A share owner desiring to submit a proposal for inclusion in the Company's Proxy Statement for the 2015 Annual Meeting may do so by
following the procedures prescribed in Rule 14a-8 of the Exchange Act. Any such proposal must be received by the Company no later than December 1, 2014. The Company requests that all
such proposals be addressed to the "Secretary" at Owens-Illinois, Inc., One Michael Owens Way, Perrysburg, Ohio 43551-2999, and be mailed by certified mail, return receipt requested.
Share
owners who submit to the Company evidence of their Common Stock ownership may recommend candidates for the Board. Recommendations of candidates for the Board submitted by share
owners for consideration for the 2015 Annual Meeting will be considered by the Nominating/Corporate Governance Committee if the Company receives written notice of such recommendations no later than
December 1, 2014. The Company requests that all such notices be addressed to the "Secretary" at Owens-Illinois, Inc., One Michael Owens Way, Perrysburg, Ohio 43551-2999. The notice must
include certain information about that person being recommended, including (i) age, (ii) business and residence addresses, (iii) principal occupation, (iv) a description of
any arrangements or understandings between the share owner and such nominee pursuant to which the nomination is to be made by the share owner, and (v) such other information as would be
required to be included in a proxy statement soliciting proxies to
78
elect
that person as a director. The notice must also contain the consent of the nominee to serve as a director if so elected.
Share
owners wishing to submit proposals or director nominations that are not to be included in such Proxy Statement must give timely notice thereof in writing to the Secretary. To be
timely, a share owner's proposal or nomination must be received by the Company no later than February 1, 2015, and
must otherwise satisfy the requirements of the Company's By-Laws as then in effect. If the date of the 2015 Annual Meeting changes by more than thirty (30) days from the date of the 2014 Annual
Meeting, a share owner's proposal or nomination must be received by the Company no later than ten (10) calendar days following the first public announcement of the revised date of the 2015
Annual Meeting.
FORWARD LOOKING STATEMENTS
This Proxy Statement contains "forward looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). These
statements are based on the Company's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward looking
statements may include statements regarding actions to be taken by the Company. The Company undertakes no obligation to publicly update any forward looking statement, whether as a result of new
information, future events or otherwise. Forward looking statements should be evaluated together with the many uncertainties that affect the Company's business, particularly those mentioned in the
risk factors in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and in the Company's periodic reports on Form 10-Q and
Form 8-K.
PROXY SOLICITATION
The Company will pay the cost of preparing and mailing this Proxy Statement and other costs of the proxy solicitation made by the
Board. Certain of the Company's officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Board's recommendations, but no additional
remuneration will be paid by the Company for the solicitation of those proxies. Such solicitations may be made by personal interview, telephone and telegram. Arrangements have also been made with
brokerage firms and others for the forwarding of proxy solicitation materials to the beneficial owners of Common Stock, and the Company will reimburse them for reasonable out-of-pocket expenses
incurred in connection therewith.
The
Company has made this Proxy Statement, the Company's 2013 Annual Report on Form 10-K and the Stakeholder Letter available to each share owner entitled to vote at the Annual
Meeting. These materials may be accessed on the Internet at www.proxyvote.com. Included in the Form 10-K are the Company's consolidated financial statements for the year ended
December 31, 2013.
A
copy of the Company's Form 10-K, including the financial statement schedules, as filed with the SEC, may be obtained without charge by sending a written request therefor to
Owens-Illinois, Inc., Investor Relations, One Michael Owens Way, Perrysburg, Ohio 43551-2999. The Form 10-K is also available without charge on the Company's website at www.o-i.com.
Perrysburg,
Ohio
April 4,
2014
79
Appendix A
RECONCILIATION OF ADJUSTED NET EARNINGS TO EARNINGS FROM
CONTINUING OPERATIONS ATTRIBUTABLE TO THE COMPANY
The information presented regarding adjusted net earnings relates to earnings attributable to the Company exclusive of items management
considers not representative of ongoing operations and does not conform to U.S. generally accepted accounting principles (GAAP). It should not be construed as an alternative to the reported results
determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the comparability of results on ongoing operations. Management uses this non-GAAP
information principally for internal reporting, forecasting and budgeting. Management believes that the non-GAAP presentation allows the Board of Directors, management, investors and analysts to
better understand the Company's financial performance in relationship to core operating results and the business outlook.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
(Dollars in millions, except per share amounts)
|
|
Earnings
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
Earnings from continuing operations attributable to the Company
|
|
$
|
202
|
|
$
|
1.22
|
|
$
|
186
|
|
|
1.12
|
|
Items that management considers not representative of ongoing operations
|
|
|
248
|
|
|
1.50
|
|
|
252
|
|
|
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings
|
|
$
|
450
|
|
$
|
2.72
|
|
$
|
438
|
|
$
|
2.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF FREE CASH FLOW TO CASH PROVIDED BY
CONTINUING OPERATING ACTIVITIES
The information presented regarding free cash flow relates to cash provided by continuing operating activities less capital spending
and does not conform to U.S. generally accepted accounting principles (GAAP). It should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has
included this non-GAAP information to assist in understanding the comparability of cash flows. Management uses this non-GAAP information principally for internal reporting, forecasting and budgeting.
Management believes that the non-GAAP presentation allows the Board of Directors, management, investors and analysts to better understand the Company's financial performance in relationship to core
operating results and the business outlook.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
Cash provided by continuing operating activities
|
|
$
|
700
|
|
$
|
580
|
|
$
|
505
|
|
$
|
600
|
|
Additions to property, plant and equipmentcontinuing
|
|
|
(361
|
)
|
|
(290
|
)
|
|
(285
|
)
|
|
(500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
$
|
339
|
|
$
|
290
|
|
$
|
220
|
|
$
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-1
Appendix B
SECOND AMENDED AND RESTATED
OWENS-ILLINOIS, INC.
2005 INCENTIVE AWARD PLAN
ARTICLE 1.
PURPOSE
The purpose of the Owens-Illinois, Inc. Second Amended and Restated 2005 Incentive Award Plan (the
"Plan")
is to promote the success
and enhance the value of, as well as
aid Owens-Illinois, Inc. (the
"Company")
by linking the personal interests of current and future Employees and Consultants to those of Company
stockholders. The Plan is intended to incentivize these individuals to continue providing the Company with outstanding performance, to generate superior returns to Company stockholders, and to provide
flexibility to the Company in its ability to motivate, attract, and retain the services of Employees and Consultants upon whose judgment, interest, and special effort the successful conduct of the
Company's operation is largely dependent. This Plan constitutes the further amendment and restatement of the Amended and Restated Owens-Illinois, Inc. 2005 Incentive Award Plan (the "2009
Plan"), which was approved by the Company's stockholders on April 23, 2009. In the event that the Company's stockholders do not approve the Plan at the 2014 annual meeting, the 2009 Plan will
continue in full force and effect on the terms and conditions set forth in the 2009 Plan as if the terms of this Plan were not adopted or approved by the Board.
ARTICLE 2.
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates
otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 "
Applicable Accounting Standards
" shall mean Generally Accepted Accounting Principles in the United States, International
Financial Reporting Standard or such other accounting principles or standards as may apply to the Company's financial statements under United States federal securities laws from time to time.
2.2
"Award"
means an Option, a Restricted Stock award, a Stock Appreciation Right award, a Performance Share award, a
Performance Stock Unit award, a Dividend Equivalents award, a Stock Payment award, a Deferred Stock award, a Restricted Stock Unit award, an Other Stock-Based Award, a Performance Bonus Award, or a
Performance-Based Award granted to a Participant pursuant to the Plan.
2.3
"Award Agreement"
means any written agreement, contract, or other instrument or document evidencing an Award, including
through any electronic medium.
2.4
"Board"
means the Board of Directors of the Company.
2.5
"Change in Control"
means and includes each of the following:
(a) A
transaction or series of transactions (other than an offering of Stock to the general public through a registration statement filed with the Securities and Exchange
Commission) whereby any "person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an
employee benefit plan
B-1
maintained
by the Company or any of its Subsidiaries or a "person" that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting
power of the Company's securities outstanding immediately after such acquisition; or
(b) During
any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a
director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.4(a) or Section 2.4(c)) whose election by the
Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two
year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
(c) The
consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company's assets in any single transaction or series of related
transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
(i) Which
results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially
all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the
"Successor Entity"))
directly or
indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, and
(ii) After
which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity;
provided, however,
that no person or group shall be treated
for purposes of this Section 2.4(c)(ii) as beneficially owning 50% or more of
combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or
(d) The
Company's stockholders approve a liquidation or dissolution of the Company.
Notwithstanding
the foregoing, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for the deferral of compensation and is subject to
Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) must also constitute a
"change in control event," as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A.
The
Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant
to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided, that any exercise of authority in conjunction with a
determination of whether a Change
B-2
in
Control is a "change in control event" as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.
2.6
"Code"
means the Internal Revenue Code of 1986, as amended.
2.7
"Committee"
means the committee of the Board described in Article 12.
2.8
"Consultant"
means any consultant or adviser if:
(a) The
consultant or adviser renders bona fide services to the Company;
(b) The
services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company's securities; and
(c) The
consultant or adviser is a natural person who has contracted directly with the Company to render such services.
2.9
"Covered Employee"
means an Employee who is, or could be, a "covered employee" within the meaning of
Section 162(m) of the Code.
2.10
"Deferred Stock"
means a right to receive a specified number of shares of Stock during specified time periods pursuant
to Article 8.
2.11
"Disability"
means that the Participant qualifies to receive long-term disability payments under the Company's long-term
disability insurance program, as it may be amended from time to time.
2.12
"Dividend Equivalents"
means a right granted to a Participant pursuant to Article 8 to receive the equivalent
value (in cash or Stock) of dividends paid on Stock.
2.13
"Effective Date"
shall have the meaning set forth in Section 13.1.
2.14
"Eligible Individual"
means any person who is an Employee or a Consultant, as determined by the Committee.
2.15
"Employee"
means any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the
Company or any Subsidiary.
2.16
"Exchange Act"
means the Securities Exchange Act of 1934, as amended.
2.17
"Fair Market Value"
shall mean, as of any given date, the value of a share of Stock determined as follows:
(a) If
the Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select
Market), (ii) national market system or (iii) automated quotation system on which the Stock is listed, quoted or traded, its Fair Market Value shall be the closing sales price for a
share of Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Stock on the date in question, the closing sales price for a share of Stock on
the last preceding date for which such quotation exists, as reported in
The Wall Street Journal
or such other source as the Committee deems reliable;
(b) If
the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted
by a recognized securities dealer, its Fair Market Value shall be the mean of the closing representative bid and asked
B-3
prices
for such date or, if there are no bid and asked prices for a share of Stock on such date, the closing bid and low asked prices for a share of Stock on the last preceding date for which such
information exists, as reported in
The Wall Street Journal
or such other source as the Committee deems reliable; or
(c) If
the Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized
securities dealer, its Fair Market Value shall be established by the Committee in good faith.
2.18
"Full Value Award"
means any Award other than an Option, SAR or other Award for which the Participant pays the intrinsic
value (whether directly or by forgoing a right to receive a cash payment from the Company).
2.19
"Incentive Stock Option"
means an Option that is intended to meet the requirements of Section 422 of the Code or
any successor provision thereto.
2.20
"Non-Employee Director"
means a member of the Board who qualifies as a "Non-Employee Director" as defined in
Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.
2.21
"Non-Qualified Stock Option"
means an Option that is not intended to be an Incentive Stock Option.
2.22
"Option"
means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number
of shares of Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
2.23
"Other Stock-Based Award"
means an Award granted or denominated in Stock or units of Stock pursuant to
Section 8.7 of the Plan.
2.24
"Participant"
means any Eligible Individual who, as a member of the Board, Consultant or Employee, has been granted an
Award pursuant to the Plan.
2.25
"Performance-Based Award"
means an Award granted to selected Covered Employees pursuant to Articles 6 and 8, but
which is subject to the terms and conditions set forth in Article 9. All Performance-Based Awards are intended to qualify as Qualified Performance-Based Compensation.
2.26
"Performance Bonus Award"
has the meaning set forth in Section 8.8.
2.27
"Performance Criteria"
means the criteria that the Committee selects for purposes of establishing the Performance Goal
or Performance Goals for a Performance-Based Award for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following: (i) earnings
before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per share of Stock;
(v) book value per share of Stock; (vi) return on equity; (vii) expense management; (viii) return on investment before or after the cost of capital;
(ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) Stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow; (xvii) working capital; (xviii) return on assets; (xix) cost reduction
goals; (xx) return on sales; (xxi) gross margin; (xxii) debt reduction; (xxiii) new product launches; (xxiv) completion of joint ventures, divestitures, acquisitions
or other corporate transactions; (xxv) new business or expansion of customers or clients; (xxvi) productivity improvement or (xxvii) total shareholder
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return.
The foregoing criteria may relate to the Company, one or more of its Subsidiaries or one or more of its divisions or units or any combination of the foregoing, and may be applied on an
absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine.
2.28
"Performance Goals"
means, for a Performance Period, the goals established in writing by the Committee for the
Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a division, business unit, or an individual. The achievement of each Performance Goal shall be determined in accordance with Applicable Accounting Standards,
to the extent applicable. The Committee may, in its sole discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such
adjustments may include one or more of the following: (i) items related to a change in Applicable Accounting Standards; (ii) items relating to financing activities; (iii) expenses
for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity
acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do
not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the
Performance Period; or (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate
transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company's core, on-going business
activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership
arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xix) items
relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions. For all Awards intended to be Qualified Performance-Based
Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.
2.29
"Performance Period"
means the one or more periods of time, which may be of varying and overlapping durations, as the
Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to, and the payment of, a Performance-Based
Award.
2.30
"Performance Share"
means a share of Stock granted to a Participant pursuant to Article 8, the vesting of which
is contingent upon achieving certain Performance Goals or other performance-based targets established by the Committee.
2.31
"Performance Stock Unit"
means a right granted to a Participant pursuant to Article 8, to receive Stock, the
payment of which is contingent upon achieving certain Performance Goals or other performance-based targets established by the Committee.
2.32
"Plan"
means this Amended and Restated Owens-Illinois, Inc. 2005 Incentive Award Plan, as it may be amended from
time to time.
2.33
"Qualified Performance-Based Compensation"
means any compensation that is intended to qualify as "qualified
performance-based compensation" as described in Section 162(m)(4)(C) of the Code.
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2.34
"Restricted Stock"
means Stock awarded to a Participant pursuant to Article 6 that is subject to certain
restrictions and may be subject to risk of forfeiture.
2.35
"Restricted Stock Unit"
means an Award granted pursuant to Section 8.6.
2.36
"Securities Act"
shall mean the Securities Act of 1933, as amended.
2.37
"Stock"
means the common stock of the Company, par value $0.01 per share, and such other securities of the Company that
may be substituted for Stock pursuant to Article 11.
2.38
"Stock Appreciation Right"
or
"SAR"
means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on the date the SAR is exercised over the Fair Market Value on the date the
SAR was granted as set forth in the applicable Award Agreement.
2.39
"Stock Payment"
means (a) a payment in the form of shares of Stock, or (b) an option or other right to
purchase shares of Stock, as part of any bonus, deferred compensation or other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to Article 8.
2.40
"Subsidiary"
means any "subsidiary corporation" as defined in Section 424(f) of the Code and any applicable
regulations promulgated thereunder or any other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company.
2.41 "
Substitute Award
" shall mean an Award granted under the Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock;
provided
,
however
, that in no event shall the term "Substitute Award" be construed to refer to an award
made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.
2.42
"Successor Entity"
shall have the meaning set forth in Section 2.4(c)(i).
ARTICLE 3.
SHARES SUBJECT TO THE PLAN
3.1
Number of Shares.
(a) Subject
to Article 11 and Section 3.1(b), the aggregate number of shares of Stock which may be issued or transferred pursuant to Awards under the Plan
shall be 22,000,000 shares,
provided, however,
that such aggregate number of shares of Stock available for issuance under the Plan shall be reduced by
1.75 shares for each share of Stock delivered in settlement of any Full Value Award. The maximum shares of Stock that may be issued pursuant to the exercise of Incentive Stock Options shall be
22,000,000 shares.
(b) If
any shares of Stock subject to an Award that is not a Full Value Award are forfeited or expire or such Award is settled for cash (in whole or in part), the shares of
Stock subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. To the extent that a Full Value Award
is forfeited or expires or such Full Value Award is settled for cash (in whole or in part), the shares of Stock available under the Plan shall be increased by 1.75 shares of Stock subject to such Full
Value Award that is forfeited, expired or settled
in cash. Notwithstanding anything to the contrary contained herein, the following shares of Stock shall not be added to the shares of Stock authorized for grant under Section 3.1(a) and
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shall
not be available for future grants of Awards: (i) shares of Stock tendered by a Participant or withheld by the Company in payment of the exercise price of an Option; (ii) shares of
Stock tendered by a Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) shares of Stock subject to a Stock Appreciation Right that
are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (iv) shares of Stock purchased on the open market with the cash proceeds from the
exercise of Options. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares of Stock available for issuance under the Plan.
Notwithstanding the provisions of this Section 3.1(b), no shares of Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an
incentive stock option under Section 422 of the Code.
(c) Substitute
Awards shall not reduce the shares of Stock authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards
under the Plan and shall not reduce the shares of Stock authorized for grant under the Plan;
provided
that Awards using such available shares of Stock
shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were
not employed by or providing services to the Company or its Subsidiaries immediately prior to such acquisition or combination.
3.2
Stock Distributed.
Any Stock distributed pursuant to an Award may consist, in whole or in part, of
authorized and unissued Stock, treasury Stock or Stock purchased on the open market.
3.3
Limitation on Number of Shares Subject to Awards.
Notwithstanding any provision in the Plan to the contrary,
and subject to Article 11, the maximum number of shares of Stock with respect to one or more Awards that may be granted to any one Participant during a calendar year (measured from the date of
any grant) shall be 700,000 and the maximum aggregate dollar value of any Award designated to be paid solely in cash to any Covered Employee during any calendar year which is intended to be a
Performance Based Award shall not exceed $5,000,000.
ARTICLE 4.
ELIGIBILITY AND PARTICIPATION
4.1
Eligibility.
Each Eligible Individual shall be eligible to be granted one or more Awards pursuant to the
Plan.
4.2
Participation.
Subject to the provisions of the Plan, the Committee may, from time to time, select from
among all Eligible Individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No Eligible Individual shall have any right to be granted an Award
pursuant to this Plan.
4.3
Foreign Participants.
In order to assure the viability of Awards granted to Participants employed in foreign
countries, the Committee may provide for such special terms as it may consider necessary or
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appropriate
to accommodate differences in local law, tax policy, or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan
as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose;
provided,
however,
that no such supplements, amendments, restatements or alternative versions shall increase the share limitations contained in Sections 3.1 and 3.3 of the Plan.
ARTICLE 5.
STOCK OPTIONS
5.1
General.
The Committee is authorized to grant Options to Eligible Individuals on the following terms and
conditions:
(a)
Exercise Price.
The exercise price per share of Stock subject to an Option shall be determined by the
Committee and set forth in the Award Agreement;
provided
that the exercise price for any Option shall not be less than 100% of the Fair Market Value of
a share of Stock on the date of grant.
(b)
Time and Conditions of Exercise.
The Committee shall determine the time or times at which an Option may be
exercised in whole or in part;
provided
that the term of any Option granted under the Plan shall not exceed ten years. The Committee shall also
determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised.
5.2
Incentive Stock Options.
The terms of any Incentive Stock Options granted pursuant to the Plan must comply
with the conditions and limitations contained in Section 13.2 and this Section 5.2.
(a)
Eligibility.
Incentive Stock Options may be granted only to employees of the Company or any "subsidiary
corporation" thereof (within the meaning of Section 424(f) of the Code and the applicable regulations promulgated thereunder).
(b)
Exercise Price.
The exercise price per share of Stock shall be set by the Committee;
provided
that subject to
Section 5.2(d) the exercise price for any Incentive Stock Option shall not be less than 100% of the Fair Market Value on
the date of grant.
(c)
Individual Dollar Limitation.
The aggregate Fair Market Value (determined as of the time the Option is
granted) of all shares of Stock with respect to which Incentive Stock Options are first exercisable by
a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock
Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.
(d)
Ten Percent Owners.
An Incentive Stock Option shall be granted to any individual who, at the date of grant,
owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110% of Fair
Market Value on the date of grant and the Option is exercisable for no more than five years from the date of grant.
(e)
Notice of Disposition.
The Participant shall give the Company prompt notice of any disposition of shares of
Stock acquired by exercise of an Incentive Stock Option within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of such shares of
Stock to the Participant.
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(f)
Right to Exercise.
During a Participant's lifetime, an Incentive Stock Option may be exercised only by the
Participant.
5.3
Substitution of Stock Appreciation Rights.
The Committee may provide in the Award Agreement evidencing the
grant of an Option that the Committee, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option,
subject to the provisions of Section 7.2 hereof; provided that such Stock Appreciation Right shall be exercisable with respect to the same number of shares of Stock for which such substituted
Option would have been exercisable.
5.4
Substitute Awards.
Notwithstanding the foregoing provisions of this Article 5 to the contrary, in the
case of an Option that is a Substitute Award, the price per share of the shares of Stock subject to such Option may be less than 100% of the Fair Market Value per share on the date of grant;
provided
that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares of Stock subject
to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the
transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor entity that were subject to the grant assumed or substituted
for by the Company, over (y) the aggregate exercise price of such shares.
ARTICLE 6.
RESTRICTED STOCK AWARDS
6.1
Grant of Restricted Stock.
The Committee is authorized to make Awards of Restricted Stock to any Eligible
Individual selected by the Committee in such amounts and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by a written Restricted
Stock Award Agreement.
6.2
Issuance and Restrictions.
Restricted Stock shall be subject to such restrictions on transferability and
other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These
restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award
or thereafter. In addition, with respect to a share of Restricted Stock with performance-based vesting, dividends which are paid prior to vesting shall only be paid out to the Participant to the
extent that the performance-based vesting conditions are subsequently satisfied and the share of Restricted Stock vests.
6.3
Forfeiture.
Except as otherwise determined by the Committee at the time of the grant of the Award or
thereafter, upon termination of employment or service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited;
provided, however,
that,
the Committee may (a) provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.
6.4
Certificates for Restricted Stock.
Restricted Stock granted pursuant to the Plan may be evidenced in such
manner as the Committee shall determine. Certificates or book entries evidencing shares of Restricted Stock must include an appropriate legend referring to the terms, conditions, and restrictions
B-9
applicable
to such Restricted Stock, and the Company may, in its sole discretion, retain physical possession of any stock certificate until such time as all applicable restrictions lapse.
ARTICLE 7.
STOCK APPRECIATION RIGHTS
7.1
Grant of Stock Appreciation Rights.
(a) The
Committee is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may
determine consistent with the Plan;
provided, however
, that the term of any Stock Appreciation Right shall not be more than ten (10) years from
the date of grant.
(b) A
Stock Appreciation Right shall entitle the Participant (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a
specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by
subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of shares of Common Stock with
respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Committee may impose. The exercise price per share of Stock subject to each Stock Appreciation
Right shall be set by the Committee, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.
(c) Notwithstanding
the foregoing provisions of Section 7.1(b) to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the price per
share of Stock subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share on the date of grant;
provided
that the excess of: (i) the aggregate Fair Market
Value (as of the date such Substitute Award is granted) of the Stock subject to the
Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction
giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the
Company, over (y) the aggregate exercise price of such shares.
7.2
Form of Payment.
Payment of the amounts determined under Section 7.1(b) shall be in cash, shares of
Common Stock (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Committee.
ARTICLE 8.
OTHER TYPES OF AWARDS
8.1
Performance Share Awards.
Any Participant selected by the Committee may be granted one or more Performance
Share awards which shall be denominated in a number of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among
such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
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8.2
Performance Stock Units.
Any Participant selected by the Committee may be granted one or more Performance
Stock Unit awards which shall be denominated in units of value including dollar value of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the
Committee shall consider (among such other factors as it deems relevant in light of
the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
8.3
Dividend Equivalents.
(a) Any
Participant selected by the Committee may be granted Dividend Equivalents based on the dividends declared on the shares of Stock that are subject to any Award, to be
credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such formula and at such time and subject to such limitations as may be determined by the Committee. No Dividend Equivalent will
be paid to a Participant unless and until the Award to which such Dividend Equivalent relates vests.
(b) Notwithstanding
the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.
8.4
Stock Payments.
Any Participant selected by the Committee may receive Stock Payments in the manner
determined from time to time by the Committee;
provided,
that unless otherwise determined by the Committee such Stock Payments shall be made in lieu of
base salary, bonus, or other cash compensation otherwise payable to such Participant. The number of shares shall be determined by the Committee and may be based upon the Performance Criteria or other
specific performance criteria determined appropriate by the Committee, determined on the date such Stock Payment is made or on any date thereafter.
8.5
Deferred Stock.
Any Participant selected by the Committee may be granted an award of Deferred Stock in the
manner determined from time to time by the Committee. The number of shares of Deferred Stock shall be determined by the Committee and may be linked to the Performance Criteria or other specific
performance criteria determined to be appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. Stock underlying a Deferred
Stock award will not be issued until the Deferred Stock award has vested, pursuant to a vesting schedule or performance criteria set by the Committee. Unless otherwise provided by the Committee, a
Participant awarded Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Deferred Stock Award has vested and the Stock underlying the
Deferred Stock Award has been issued.
8.6
Restricted Stock Units.
The Committee is authorized to make Awards of Restricted Stock Units to any
Participant selected by the Committee in such amounts and subject to such terms and conditions as
determined by the Committee. At the time of grant, the Committee shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate. At the time of grant, the Committee shall specify the maturity date applicable to each grant of Restricted Stock Units which shall be no earlier than the
vesting date or dates of the Award and may be determined at the election of the grantee. On the maturity date, the Company shall, subject to Section 10.5(b), transfer to the Participant one
unrestricted, fully transferable share of Stock for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited.
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The
Committee shall specify the purchase price, if any, to be paid by the grantee to the Company for such shares of Stock. Unless otherwise determined by the Committee, a Participant who holds
Restricted Stock Units shall possess no incidents of ownership with respect to the Stock represented by such Restricted Stock Units, unless and until such Stock is transferred to the Participant
pursuant to the terms of this Plan and the Award Agreement.
8.7
Other Stock-Based Awards.
Any Participant selected by the Committee may be granted one or more Awards that
provide Participants with shares of Stock or the right to purchase shares of Stock or that have a value derived from the value of, or an exercise or conversion privilege at a price related to, or that
are otherwise payable in shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each
case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems relevant
in light of the specific type of Award) the contributions, responsibilities and other compensation of the particular Participant.
8.8
Performance Bonus Awards.
Any Participant selected by the Committee may be granted one or more
Performance-Based Awards in the form of a cash bonus (a
"Performance Bonus Award")
payable upon the attainment of Performance Goals that are established
by the Committee and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Committee. Any such Performance Bonus
Award paid to a Covered Employee shall be based upon objectively determinable bonus formulas established in accordance with Article 9.
8.9
Term.
Except as otherwise provided herein, the term of any Award of Performance Shares, Performance Stock
Units, Dividend Equivalents, Stock Payments, Deferred Stock, Restricted Stock Units or Other Stock-Based Award shall be set by the Committee in its discretion.
8.10
Exercise or Purchase Price.
The Committee may establish the exercise or purchase price, if any, of any
Award of Performance Shares, Performance Stock Units, Deferred Stock, Stock Payments, Restricted Stock Units or Other Stock-Based Award;
provided,
however,
that such price shall not be less than the par value of a share of Stock on the date of grant, unless otherwise permitted by applicable state law.
8.11
Termination of Employment or Service.
An Award of Performance Shares, Performance Stock Units, Dividend
Equivalents, Deferred Stock, Stock Payments, Restricted Stock Units, Other Stock-Based Award or Performance Bonus Award shall only be exercisable or payable while the Participant is an Employee or
Consultant, as applicable;
provided, however,
that the Committee in its sole and absolute discretion may provide that an Award of Performance Shares,
Performance Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments, Restricted Stock Units or Other Stock-Based Award or Performance Bonus Award may be exercised or paid subsequent to a
termination of employment or service, as applicable, or following a Change in Control of the Company, or because of the Participant's retirement, death or Disability, or otherwise;
provided, however,
that any such provision with respect to Performance Shares or Performance Stock Units shall be subject to the requirements of
Section 162(m) of the Code that apply to Qualified Performance-Based Compensation.
8.12
Form of Payment.
Payments with respect to any Awards granted under this Article 8 shall be made in
cash, in Stock or a combination of both, as determined by the Committee.
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ARTICLE 9.
PERFORMANCE-BASED AWARDS
9.1
Purpose.
The purpose of this Article 9 is to provide the Committee the ability to qualify Awards
other than Options and SARs and that are granted pursuant to Articles 6 and 8 as Qualified Performance-Based Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over any contrary provision contained in Articles 6 or 8;
provided,
however,
that the Committee may in its discretion grant Awards to Covered Employees that are based on Performance Criteria or Performance Goals but that do not satisfy the
requirements of this Article 9.
9.2
Applicability.
This Article 9 shall apply only to those Covered Employees selected by the Committee
to receive Performance-Based Awards. The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the period.
Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any subsequent Performance
Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period.
9.3
Procedures with Respect to Performance-Based Awards.
To the extent necessary to comply with the Qualified
Performance-Based Compensation requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted under Articles 6 and 8 which may be granted to one or more Covered
Employees, no later than ninety (90) days following the commencement of any fiscal year in question or any other designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Covered Employees, (b) select the Performance Criteria applicable
to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify the
relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the
completion of each Performance Period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. In determining the amount earned
by a Covered Employee, the Committee shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that
the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Period.
9.4
Payment of Performance-Based Awards.
Unless otherwise provided in the applicable Award Agreement, or
required by applicable law, a Participant must be employed by the Company or a Subsidiary on the day a Performance-Based Award or Performance Bonus Award for such Performance Period is paid to the
Participant. Furthermore, a Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved.
9.5
Additional Limitations.
Notwithstanding any other provision of the Plan, any Award which is granted to a
Covered Employee and is intended to constitute Qualified Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as qualified performance-based compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent necessary to
conform to such requirements.
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ARTICLE 10.
PROVISIONS APPLICABLE TO AWARDS
10.1
Stand-Alone and Tandem Awards.
Awards granted pursuant to the Plan may, in the discretion of the Committee,
be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.
10.2
Award Agreement.
Awards under the Plan shall be evidenced by Award Agreements that set forth the terms,
conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant's employment or service terminates, and the Company's authority
to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.
10.3
Limits on Transfer.
No right or interest of a Participant in any Award may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Company
or a Subsidiary. Except as otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed of by a Participant other than by will or the laws of descent and
distribution. The
Committee by express provision in the Award or an amendment thereto may permit an Award (other than an Incentive Stock Option) to be transferred to, exercised by and paid to certain persons or
entities related to the Participant, including but not limited to members of the Participant's family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are
members of the Participant's family and/or charitable institutions, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and procedures as
the Committee may establish. Any permitted transfer shall be subject to the condition that the Committee receive evidence satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a "blind trust" in connection with the Participant's termination of employment or service with the Company or a Subsidiary to assume a position with a governmental,
charitable, educational or similar non-profit institution) and on a basis consistent with the Company's lawful issue of securities.
10.4
Beneficiaries.
Notwithstanding Section 10.3, a Participant may, in the manner determined by the
Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant's death. A beneficiary, legal guardian,
legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the
extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and resides in a community
property state, a designation of a person other than the Participant's spouse as his or her beneficiary with respect to more than 50% of the Participant's interest in the Award shall not be effective
without the prior written consent of the Participant's spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the
Participant's will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation
is filed with the Committee.
10.5
Stock Certificates; Book Entry Procedures.
(a) Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the
exercise of any Award, unless and until the Board has determined, with advice of counsel, that the issuance and delivery of such
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certificates
is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed or traded.
All Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state, or
foreign jurisdiction, securities or other laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded.
The Committee may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Board may require that a
Participant make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The
Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation,
as may be imposed in the discretion of the Committee.
(b) Notwithstanding
any other provision of the Plan, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, the Company shall
not deliver to any Participant certificates evidencing shares of Stock issued in connection with any Award and instead such shares of Stock shall be recorded in the books of the Company (or, as
applicable, its transfer agent or stock plan administrator).
10.6
Paperless Administration.
In the event that the Company establishes, for itself or using the services of a
third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation,
granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.
10.7
Payment.
The Committee shall determine the methods by which Participants may make payment with respect to
any Awards granted under the Plan, including payment of any tax withholding, which shall include, without limitation: (i) cash, (ii) shares of Stock held for such period of time as may
be required by the Committee in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the exercised portion of
the Option, or the amount of taxes to be withheld, (iii) delivery of a written or electronic notice that the Participant has placed a market sell order with a broker acceptable to the Company
with respect to Stock then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay
a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required;
provided
that payment of such
proceeds is then made to the Company upon settlement of such sale, or (iv) other property acceptable to the Committee, and the methods by which shares of Stock shall be delivered or deemed to
be delivered to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant shall be permitted to make payment on any Award granted under the Plan with a loan or
other extension of credit from the Company.
10.8
Claw-Back Provision.
Pursuant to its general authority to determine the terms and conditions applicable to
Awards under the Plan, the Committee shall have the right to provide, in an Award Agreement or otherwise, or to require a Participant to agree by separate written or electronic instrument, that any
Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any
Stock underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the
requirements of
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applicable
law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such
claw-back policy and/or in the applicable Award Agreement.
ARTICLE 11.
CHANGES IN CAPITAL STRUCTURE
11.1
Adjustments.
(a) In
the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization, distribution of Company assets to
stockholders (other than normal cash dividends), or any other corporate event affecting the Stock or the share price of the
Stock, the Committee shall make such proportionate and equitable adjustments, if any, as the Committee in its discretion deems appropriate to reflect such changes with respect to (i) the
aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3); (ii) the terms and
conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and/or (iii) the grant or exercise price per share for
any outstanding Awards under the Plan. Any adjustment affecting an Award intended as Qualified Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of
the Code.
(b) In
the event of any transaction or event described in Section 11.1(a) or any unusual or nonrecurring transactions or events affecting the Company, any affiliate
of the Company, or the financial statements of the Company or any affiliate (including without limitation any Change in Control), or of changes in applicable laws, regulations or accounting
principles, and whenever the Committee determines that action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under
the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles, the Committee, in its sole
discretion and on such terms and conditions as it deems appropriate, either by amendment of the terms of any outstanding Awards or by action taken prior to the occurrence of such transaction or event
and either automatically or upon the Participant's request, is hereby authorized to take any one or more of the following actions:
(i) To
provide for either (A) termination of any such Award in exchange for an amount of cash and/ or other property, if any, equal to the amount that would have been
attained upon the exercise of such Award or realization of the Participant's rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this
Section 11.1(b) the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant's rights, then such Award may be
terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion having an aggregate value not
exceeding the amount that could have been attained upon the exercise of such Award or realization of the Participant's rights had such Award been currently exercisable or payable or fully vested;
(ii) To
provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; and
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(iii) To
make adjustments in the number and type of shares of Stock (or other securities or property) subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future;
(iv) To
provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the
Plan or the applicable Award Agreement; and
(v) To
provide that the Award cannot vest, be exercised or become payable after such event.
11.2
Impact of a Change in Control.
Subject to any applicable requirements of Section 409A of the Code,
upon or in anticipation of, a Change in Control, the Committee, in its sole and absolute discretion, may (a) cause any and all Awards outstanding hereunder to become fully exercisable,
(b) cause all forfeiture conditions to lapse and to terminate at a specific time in the future, including but not limited to the date of such Change in Control, (c) give each Participant
the right to exercise such Awards during a period of time as the Committee, in its sole and absolute discretion, shall determine, and/or (d) cause any and all Awards outstanding hereunder to
terminate at a specific time in the future, including but not limited to the date of such Change in Control.
11.3
Outstanding AwardsCertain Mergers.
Subject to any required action by the stockholders of the
Company, in the event that the Company shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such merger or consolidation shall pertain to and apply to the securities that a holder of the number of shares of Stock
subject to such Award would have received in such merger or consolidation.
11.4
Outstanding AwardsOther Changes.
In the event of any other change in the capitalization of the
Company or corporate change other than those specifically referred to in this Article 11, the Committee may, in its sole and absolute discretion, make such adjustments in the
number and kind of shares or other securities subject to Awards outstanding on the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may
consider appropriate to prevent dilution or enlargement of rights hereunder.
11.5
No Other Rights.
Except as expressly provided in the Plan, no Participant shall have any rights by reason
of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to an Award or the grant or exercise price of any Award.
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ARTICLE 12.
ADMINISTRATION
12.1
Committee.
The Compensation Committee (or another committee or a subcommittee of the Board assuming the
functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and shall consist solely of two or more Non-Employee Directors appointed by and holding
office at the pleasure of the Board, each of whom is intended to qualify as both a "non-employee director" as defined by Rule 16b-3 of the Exchange Act or any successor rule, an "outside
director" for purposes of Section 162(m) of the Code and an "independent director" under the rules of the New York Stock Exchange (or other principal securities market on which shares of Common
Stock are traded);
provided,
that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of
such action are later determined not to have satisfied the requirements for membership set forth in this Section 12.l or otherwise provided in any charter of the Committee. Except as may
otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the
Committee may only be filled by the Board. Notwithstanding the foregoing, the Board or Committee may delegate its authority hereunder to the extent permitted by Section 12.5.
12.2
Action by the Committee.
Unless otherwise established by the Board or in any charter of the Committee, a
majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the
Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to
that member by any officer or other employee of the Company or any Subsidiary, the Company's independent certified public accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.
12.3
Authority of Committee.
Subject to any specific designation in the Plan, the Committee has the exclusive
power, authority and discretion to:
(a) Designate
Participants to receive Awards;
(b) Determine
the type or types of Awards to be granted to each Participant;
(c) Determine
the number of Awards to be granted and the number of shares of Stock to which an Award will relate;
(d) Determine
the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions
related to noncompetition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines;
provided,
however,
that the Committee shall not have the authority to accelerate the vesting or waive the forfeiture of any Performance-Based Awards;
(e) Determine
whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
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(f) Prescribe
the form of each Award Agreement, which need not be identical for each Participant;
(g) Decide
all other matters that must be determined in connection with an Award;
(h) Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
(i) Interpret
the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and
(j) Make
all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan.
12.4
Decisions Binding.
The Committee's interpretation of the Plan, any Awards granted pursuant to the Plan, any
Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.
12.5
Delegation of Authority.
To the extent permitted by applicable law, the Committee may from time to time
delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards to Participants other than (a) senior executives of the
Company who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or members of the Board) to whom authority to grant or amend
Awards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation, and the Committee may at any
time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 12.5 shall serve in such capacity at the pleasure of the Committee.
ARTICLE 13.
EFFECTIVE AND EXPIRATION DATE
13.1
Effective Date.
The Plan was originally adopted effective on May 11, 2005, the date it was
originally approved by the Company's stockholders, and further amended and restated effective as of April 23, 2009, the date the 2009 Plan was approved by the Company's stockholders. This
Second Amended and Restated Plan will be effective on the date it is approved by the affirmative vote of the holders of a majority of the shares of stock of the Company present or represented and
entitled to vote at the 2014 annual meeting if such meeting is duly held in accordance with the applicable provisions of the Company's Bylaws (the "
Second Restatement Effective
Date
"). In the event that the Company's stockholders do not approve the Plan, the 2009 Plan will continue in full force and effect on its terms and conditions as in effect
immediately prior to the date this Second Amended and Restated Plan is approved by the Board.
13.2
Expiration Date.
The Plan will expire on, and no Incentive Stock Option or other Award may be granted
pursuant to the Plan after the tenth anniversary of the Second Restatement Effective Date. Any Awards that are outstanding on the tenth anniversary of the Second Restatement Effective Date shall
remain in force according to the terms of the Plan and the applicable Award Agreement.
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ARTICLE 14.
AMENDMENT, MODIFICATION, AND TERMINATION
14.1
Amendment, Modification and Termination.
With the approval of the Board, at any time and from time to time,
the Committee may terminate, amend or modify the Plan;
provided, however,
that (a) to the extent necessary and desirable to comply with any
applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required, and (b) except as
permitted under Article 11, stockholder approval is required for any amendment to the Plan that (i) increases the number of shares available under the Plan (other than any adjustment as
provided by Article 11), (ii) permits the Committee to grant Options or SARs with an exercise price that is below Fair Market Value on the date of grant, (iii) permits the
Committee to extend the exercise period for an Option or Stock Appreciation Right beyond ten years from the date of grant, (iv) reduce the exercise price per share of any outstanding Option or
Stock Appreciation Right granted under the Plan, (v) cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right's price per
share exceeds the Fair Market Value of a share of Common Stock, or (vi) results in a material increase in benefits or a change in eligibility requirements.
14.2
Awards Previously Granted.
No termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant.
ARTICLE 15.
GENERAL PROVISIONS
15.1
No Rights to Awards.
No Eligible Individual or other person shall have any claim to be granted any Award
pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Eligible Individuals, Participants or any other persons uniformly.
15.2
No Stockholders Rights.
Except as otherwise provided herein, a Participant shall have none of the rights of
a stockholder with respect to shares of Stock covered by any Award until the Participant becomes the record owner of such shares of Stock.
15.3
Withholding.
The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant's FICA obligation) required by law to be withheld with
respect to any taxable event concerning a Participant arising as a result of this Plan. The
Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold shares of Stock otherwise issuable under an Award (or allow
the return of shares of Stock) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of Stock which may be
withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award within six months (or such other period as may be
determined by the Committee) after such shares of Stock were acquired by the Participant from the Company) in order to satisfy the Participant's federal, state, local and foreign income and payroll
tax liabilities with respect to the issuance, vesting, exercise or payment of the Award shall be limited to the number of shares which have a Fair Market Value on the date of withholding or repurchase
equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such
supplemental taxable income.
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15.4
No Right to Employment or Services.
Nothing in the Plan or any Award Agreement shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate any Participant's employment or services at any time, nor confer upon any Participant any right to continue in the employ or
service of the Company or any Subsidiary.
15.5
Unfunded Status of Awards.
The Plan is intended to be an "unfunded" plan for incentive compensation. With
respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.
15.6
Indemnification.
To the extent allowable pursuant to applicable law, each member of the Committee or of the
Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from
any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her;
provided
he or she gives the
Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
15.7
Relationship to other Benefits.
No payment pursuant to the Plan shall be taken into account in determining
any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly
provided in writing in such other plan or an agreement thereunder.
15.8
Expenses.
The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.
15.9
Titles and Headings.
The titles and headings of the Sections in the Plan are for convenience of reference
only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
15.10
Fractional Shares.
No fractional shares of Stock shall be issued and the Committee shall determine, in its
discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.
15.11
Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan, the
Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the
extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
15.12
Government and Other Regulations.
The obligation of the Company to make payment of awards in Stock or
otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register
pursuant to the Securities Act of 1933, as amended, any of the shares of Stock paid pursuant to the
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Plan.
If the shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act of 1933, as amended, the Company may restrict the transfer of such
shares in such manner as it deems advisable to ensure the availability of any such exemption.
15.13
Section 409A.
To the extent that the Committee determines that any Award granted under the Plan is
subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable,
the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following
the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance
as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department
of Treasury guidance.
15.14
Governing Law.
The Plan and all Award Agreements shall be construed in accordance with and governed by the
laws of the State of Delaware.
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OWENS-ILLINOIS,
INC. ONE MICHAEL OWENS WAY PERRYSBURG, OH 43551 VOTE BY INTERNET -
www.proxyvote.com Use the Internet to transmit your voting instructions and
for electronic delivery of information up until 11:59 P.M. Eastern Time the
day before the cutoff date or meeting date. Have your proxy card in hand when
you access the web site and follow the instructions to obtain your records
and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF
FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our
company in mailing proxy materials, you can consent to receiving all future
proxy statements, proxy cards and annual reports electronically via e-mail or
the Internet. VOTE IN PERSON This card serves as an admission ticket for one
shareholder as of March 20, 2014 and must be presented at the door for
admittance to the Annual Meeting of Share Owners. At the meeting, you will
need to request a ballot to vote these shares. VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand when you call and then follow the instructions. VOTE
BY MAIL Mark, sign and date your proxy card and return it in the postagepaid
envelope we have provided or return it to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK
INK AS FOLLOWS: M69715-P47991 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND
RETURN THIS PORTION ONLY OWENS-ILLINOIS, INC. For Withhold For All To
withhold authority to vote for any individual The Board of Directors
recommends you vote FOR the following: All All Except nominee(s), mark For
All Except and write the number(s) of the nominee(s) on the line below. 1.
Election of Directors Nominees: 01) Jay L. Geldmacher 02) Peter S. Hellman
03) Anastasia D. Kelly 04) John J. McMackin, Jr. 05) Hari N. Nair 06) Hugh H.
Roberts 07) Albert P. L. Stroucken 08) Carol A. Williams 09) Dennis K.
Williams 10) Thomas L. Young The Board of Directors recommends you vote
FORproposals 2, 3 and 4: For Against Abstain 2. To ratify the selection of
Ernst & Young LLP as the Company's independent registered public
accounting firm for 2014. 3. To approve, by advisory vote, the Company's
named executive officer compensation. 4. To approve the second amendment and
restatement of the Company's 2005 Incentive Award Plan, that, among other
things, increases the number of shares available under the plan by 6,000,000,
extends the term of the plan until March 2024 and continues to allow grants
under the plan to qualify as performance based for purposes of Section 162(m)
of the Internal Revenue Code. NOTE: In their discretion, the Proxies are
authorized to vote upon such other business as may properly come before the
meeting or any adjournment(s) or postponement(s) thereof. Please sign exactly
as your name(s) appear(s) hereon. When signing as attorney, administrator,
executor, guardian or trustee, please give full title as such. Joint owners
should each sign personally. All holders must sign. If a corporation or
partnership, please sign in full corporate or partnership name by authorized
officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners)
Date
|
|
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Stakeholder Letter, Notice and Proxy Statement and Annual Report on Form 10-K
are available at www.proxyvote.com. M69716-P47991 OWENS-ILLINOIS, INC. Annual
Meeting of Share Owners May 15, 2014 9:00 AM This proxy is solicited on
behalf of the Board of Directors The undersigned hereby appoint(s) James W.
Baehren, Stephen P. Bramlage, Jr. and Paul A. Jarrell and each of them, or if
more than one is present and acting then a majority thereof, as Proxies with
full power of substitution, and hereby authorize(s) them to represent and to
vote, as designated on the reverse side hereof, all shares of common stock of
Owens-Illinois, Inc. held of record by the undersigned on March 20, 2014, at
the Annual Meeting of Share Owners to be held on May 15, 2014, or at any
adjournment(s) or postponement(s) thereof. The undersigned also provides
directions to New York Life Trust Company, as Trustee, to vote all shares of
common stock of Owens-Illinois, Inc. allocated to the account(s) of the
undersigned as of March 20, 2014, in the Owens-Illinois, Inc. Stock Purchase
and Savings Program or the Owens-Illinois, Inc. Long-Term Savings Plan (the
"Plans"), at the aforesaid Annual Meeting or any adjournment(s) or
postponement(s) thereof, as specified on the reverse side of this card. This
proxy when properly executed, will be voted in the manner directed herein by
the undersigned Share Owner. If no direction is made: This proxy will be
voted FOR the election of the director nominees, FOR Proposal 2, FOR Proposal
3 and FOR Proposal 4. New York Life Trust Company, as Trustee, will vote all
such shares allocated to the Plan account(s) of the undersigned on all
proposals in accordance with the majority of Plan shares for which voting
instructions are received. PLEASE EXECUTE THIS PROXY WHETHER OR NOT YOU PLAN
TO ATTEND IN PERSON, AND RETURN THE PROXY PROMPTLY IN THE ENVELOPE PROVIDED
SO THAT STOCK HELD WILL BE REPRESENTED IN ALL EVENTS AND SO THAT WE MAY HAVE
A QUORUM. PLEASE SIGN YOUR NAME ON THE REVERSE SIDE. WHEN SIGNING AS
ATTORNEY, ADMINISTRATOR, EXECUTOR, GUARDIAN OR TRUSTEE, PLEASE GIVE FULL
TITLE AS SUCH. JOINT OWNERS SHOULD EACH SIGN PERSONALLY. Continued and to be
signed on reverse side
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