Owens-illinois Inc. Executive Life Insurance Plan

Exhibit 10.1


Owens-Illinois


Executive Life Insurance Plan


Effective April 1, 2000


Owens-Illinois
Executive Life Insurance Plan


Owens-Illinois, Inc., a corporation duly organized and existing under the laws of the state of Delaware and having its corporate headquarters in the state of Ohio (hereinafter, together with its successors and assigns, called the "Company"), hereby establishes and will be the sponsor of this Owens- Illinois Executive Life Insurance Plan (the "Plan"), effective as of April 1, 2000. The Plan is established and will be maintained by the Company on behalf of each corporation (or other business entity) 50 percent or more of the voting stock (or other ownership interest) of which is owned, directly or indirectly, by the Company and which employs any person or persons who are eligible to participate in this Plan. Each such corporation (or other business entity), together with its successors and assigns, is hereinafter referred to as an "Employer".


W I T N E S S E T H:


The primary purpose of this Plan is to support the Employers in attracting and retaining qualified executive personnel, by providing for pre- retirement and post-retirement death benefits in an amount equal to three times annual base salary, determined as hereinafter provided and subject to certain limits hereinafter stated. The Company has determined that the foregoing can best be provided under split dollar life insurance arrangements, and an insurance policy has been or will be applied for on the life of each of the Participants. By execution of this Plan and the Agreement (as defined below), the Company and the Participants agree to make said insurance policies subject to the Plan.


Article I - Definitions


1.1 Administrator. The Plan administrator serving pursuant to Article XIII
of this Plan. The Company shall be the Administrator unless and until
the Company appoints one or more officers or employees of the Company
to serve as the Administrator.


1.2 Agreement. A Participation Agreement, in the form attached hereto as
Exhibit A, entered into between a Participant and the Company pursuant
to which the individual agrees to participate in the Plan.


1.3 Anniversary Date. The first day of each Plan Year.


1.4 Beneficiary. The beneficiary or beneficiaries of the Owner's portion
of the death benefit payable under each Policy, as designated in
accordance with paragraph 8.1 and such Policy.


1.5 Collateral Assignment. A contractual assignment, in the form attached
hereto as Exhibit B, entered into between the Owner of a Policy and the
Company pursuant to which the Owner assigns to the Company certain
rights in such Policy.


1 1.6 Disability. An Employee's inability, solely because of disease or
injury for which the Employee is under the care of a qualified
physician, to work within his or her own occupation, as determined for
purposes of the Owens-Illinois Long-Term Disability Plan (a component
of the Owens-Illinois, Inc. Salary Employees Welfare Benefit Plan).


1.7 Effective Date. April 1, 2000.


1.8 Employee. An individual performing services for an Employer for which
Form W-2 compensation is paid.


1.9 Insurance Company. Nationwide Life Insurance Company, or any other
insurance company or companies authorized to do business in the state
of Ohio selected by the Company for the issuance of a Policy pursuant
to the Plan.


1.10 Insurance Limit. The maximum amount of Owner's death benefit for which
a Policy may be issued at standard rates and on a guaranteed-issue
basis, as established by the Insurance Company, unless the Insurance
Company and the Company mutually consent to a different amount as the
Insurance Limit on coverage for an individual Participant. On the
Effective Date, the Insurance Limit on the original issuance of a
Policy is $1,500,000, subject to adjustment based on subsequent
increases in the Participant's annual base salary in accordance with
the Insurance Company's schedule therefor to a maximum of $3,000,000
on the Participant's Termination Date. The Insurance Limit is subject
to modification by the Insurance Company from time to time after the
Effective Date.


1.11 Owner. The Participant, or a life insurance trust created by the
Participant, or another person or entity designated by the Participant
with the written consent of the Company, who is or will be defined in a
Policy as Owner and, as such, possesses or will possess all incidents
of ownership in such Policy. It is the intention of the Plan that, with
respect to a Policy the Owner of which is not the Participant insured
by such Policy, such Participant will not possess any incidents of
ownership in such Policy.


1.12 Participant. Any Employee who is eligible to participate in the Plan
and has enrolled in the Plan in accordance with Article II, including a
former Employee who became a Participant before his or her Termination
Date and whose Agreement remains in effect.


1.13 Plan. This Owens-Illinois Executive Life Insurance Plan.


2 1.14 Plan Documents. This document and all documents incorporated into the
Plan under this document, including the Agreements, the Collateral
Assignments, the Policies, and any other documents specifically
referenced herein or therein.


1.15 Plan Year. Each 12 consecutive month period beginning on April 1 and
ending on the following March 31. The first Plan Year begins April 1,
2000 and ends March 31, 2001.


1.16 Policy. The life insurance policy on the life of a Participant,
together with any supplemental contracts issued by the Insurance Company
in conjunction therewith, purchased pursuant to the terms of the
Agreement to which such Participant is a party and the Plan.


1.17 Premium Payment Period. The period of time beginning on the issuance of
a Policy and ending on the Policy anniversary coinciding with or next
following the insured Participant's 65th birthday or, if later, on the
eighth Policy anniversary, throughout which period it is anticipated
that the insured Participant's Employer will pay all premiums into the
Policy. If the Agreement applicable to a Policy terminates during the
Premium Payment Period for such Policy, such Premium Payment Period
shall end concurrently.


1.18 Retirement. Retirement from employment with an Employer at a time and
under circumstances whereby the Participant would be eligible for an
immediately payable early or normal retirement benefit under the Owens-
Illinois Salary Retirement Plan, as from time to time in effect.


1.19 Term Cost. The annual cost, during each calendar year, of one-year term
life insurance in an amount equal to the Owner's portion of the death
benefit under the applicable Policy, determined by reference to the then
current published premium rates charged by the Insurance Company for
individual one-year term life insurance available to all standard risks
and otherwise in accordance with Revenue Ruling 64-328, 1964-2 C. B. 11,
and Revenue Ruling 66-110, 1966-1 C. B. 12, and/or any other applicable
rulings or interpretations by the Internal Revenue Service.


1.20 Termination Date. The date of termination of the Participant's
employment with the Employer(s) for any reason, including voluntary and
involuntary termination, as well as termination of employment due to
Disability or Retirement.


Article II - Eligibility


2.1 An Employee shall be eligible to participate in the Plan if his or her
job with an Employer is at or above the level of divisional vice
president (or equivalent, as determined by the Company) and the Employee
is designated as eligible by the Chief Executive Officer of the Company.


3 2.2 An Employee who is eligible to participate in the Plan on the Effective
Date, and who enrolls in the Plan by executing an Agreement, shall
become a Participant on or as of the Effective Date. An Employee who
becomes eligible to participate in the Plan after the Effective Date,
and who thereafter enrolls in the Plan by executing an Agreement, shall
become a Participant on the first Anniversary Date thereafter.


2.3 An Agreement shall go into effect on or as of the effective date
specified in the Agreement and shall remain in effect until the
Participant's death, unless terminated earlier as provided in Article
IX. Each Agreement shall, however, remain in effect notwithstanding the
termination of the Plan, the Company's discontinuance of the payment of
premiums under the Plan, or the cancellation, lapse, or surrender of the
Policy for any reason, so long as the Participant remains an Employee of
any Employer or has, prior to any such event, terminated such employment
by reason of Retirement or Disability.


Article III - Application for Insurance


3.1 On or before the Effective Date or Anniversary Date on which an eligible
Employee becomes a Participant, the Owner of the Policy to be issued on
the life of such Participant shall apply to the Insurance Company for
the issuance of a Policy insuring the Participant's life in such amount
as is determined by the Company, which amount shall include the amount
of the Owner's interest in the death benefit of the Policy, in
accordance with subparagraph 6.2(b), plus such additional amount as the
Company determines, in its sole and absolute discretion, to be
sufficient to allow the Company to recover, from its share of the
Policy's death benefit, the cumulative premiums paid into the Policy by
the Employer(s) plus interest thereon at a rate acceptable to the
Company. The Owner of the Policy shall be subject to the provisions of
the Plan, including the Agreement and the Collateral Assignment.
However, and notwithstanding anything herein to the contrary, neither an
Employee's eligibility to participate in the Plan, nor any of the
Company's and Employers' obligations to provide a death benefit in the
amount specified in subparagraph 6.2(b) with respect to any Participant,
are conditioned on the issuance of a Policy on the life of such
Participant, but the rights and interests of the Company, the Employers,
the Participant, and the Owner in and to any other feature of a Policy
are expressly conditioned upon the issuance of such Policy on such
underwriting classification and premium amounts as are acceptable to the
Company in the exercise of its sole and absolute discretion.


3.2 It is the intention of the Plan, as a matter of reasonable expectation
based on each Policy's death benefit amount, investment options,
schedule of premiums, and other relevant Policy features, and on the age
and other relevant characteristics of the insured Participant, but not
as a matter guaranteed by the Company, any Employer, the Insurance
Company, or otherwise, that:


4
(a) At any time after the end of each Policy's Premium Payment
Period, such Policy can be maintained in force for the
remaining life of the insured Participant without the
payment of additional premiums into the Policy, by utilizing
the Policy's cash surrender value; provided, however, that
if additional premiums are nevertheless required to be paid
into the Policy after the end of the Policy's Premium
Payment Period but while the Agreement remains in effect
with respect to such Policy, the Employer(s) shall pay such
premiums; and


(b) At any time after the end of each Policy's Premium Payment
Period, the Company's portion of the cash surrender value of
such Policy will equal no less than the cumulative amount of
premiums paid into the Policy by the insured Participant's
Employer(s), plus interest thereon from each premium payment
date to the date of reimbursement compounded annually at a
rate acceptable to the Company; provided, however, that any
shortfall in the value of the Company's portion of the cash
surrender value of a Policy may only be recovered from the
Company's portion of the Policy's death benefit as specified
in subparagraph 6.1(b) and shall not impair the amount of
the Owner's portion of such death benefit as specified in
subparagraph 6.2(b).


Article IV - Payment of Premiums


4.1 On or before the due date of each periodic Policy premium payable during
the Premium Payment Period, or within any grace period after such due
date permitted by the Policy, the Employer of the Participant insured by
such Policy shall pay the full amount of such premium to the Insurance
Company. The amount of the premium which the Employer shall pay each
year, and the period of years over which such premium is expected to be
paid, shall be detailed with respect to each Participant in a schedule
of premiums furnished by the Insurance Company to the Company at the
time of issuance of the Policy on the life of such Participant.


4.2 To the extent that an Employer pays the premium amounts for life
insurance benefits under a Policy, the Participant insured by such
Policy shall incur a taxable economic benefit each year equal in amount
to the Policy's Term Cost for such year, and the Employer will gross up
the amount thereof to cover the applicable federal, state, and local
income taxes thereon. The amount to be reported as income each year
shall include the amount of such economic benefit plus the additional
amount attributable to the Employer's grossing up such amount to cover
such taxes. The Employer will furnish the Participant with statements of
the amount of such income reportable by the Participant for federal,
state, and local income tax purposes.


5 4.3 Notwithstanding the schedule of premiums referred to in paragraph 4.1,
if any additional premiums should be required to be paid into a Policy
while the Plan and the Agreement applicable to such Policy remain in
effect, the insured Participant's Employer (or former Employer) shall
pay such premiums, but no additional premium payments shall be required
to be paid by an Employer on any Policy issued under the Plan after the
death of the insured Participant.


Article V - Collateral Assignment


5.1 To secure the repayment of the amount of the premiums paid by an
Employer hereunder, the Owner of each Policy shall, simultaneous with
the issuance of the Policy, execute a Collateral Assignment and deliver
it to the Company. Such Collateral Assignment shall grant to the Company
the interests in the Policy ascribed to the Company in Article VI. All
rights in and to the Policy not granted to the Company by the Collateral
Assignment or the Agreement shall be retained by the Owner of the
Policy, subject to applicable provisions of this Plan. Such Collateral
Assignment shall not be canceled, altered, or amended except as
expressly provided by the provisions of the Collateral Assignment and
permitted by the Plan.


Article VI - Policy Interests


6.1 At any time while the Agreement applicable to a Policy remains in
effect, the Company's ownership of such Policy is as follows:


(a) Cash Surrender Value. The Company shall own a portion of
the cash surrender value of each Policy equal to the
cumulati ...