OI » Topics » Retirement Benefits

This excerpt taken from the OI DEF 14A filed Apr 7, 2008.

Retirement Benefits

        The Company maintains two qualified retirement plans for U.S. based salaried employees: the Salary Retirement Plan (a defined benefit pension plan), and the Stock Purchase and Savings Plan (a defined contribution plan). The Company also maintains two non-qualified retirement plans for employees who earn in excess of the qualified plan limits: the Supplemental Benefits Retirement Plan (a defined benefit plan); and the Executive Deferred Savings Plan (a defined contribution plan).

        The defined benefit pension plan was closed to new entrants after December 31, 2004. Participants at that date continue to accrue pension benefits under the plan. The annual benefit is calculated based on the following formula:

      1.212% multiplied by average annual earnings for high three years of salary plus bonus (if applicable) multiplied by number of years of service, plus

      .176% multiplied by average annual earnings above the Social Security wage rate at retirement multiplied by number of years of service

        Also after December 31, 2004, the Company made some changes to the way that benefits can be paid. Benefits accrued at December 31, 2004 are eligible to be paid in a lump sum. Benefits accrued

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post-December 31, 2004, however, are only eligible to be paid on an annuity basis. Messrs. White, Baehren and Crawford are eligible to participate in this plan.

        As a qualified plan, benefits are limited by IRS regulations. For those employees who earn compensation in excess of these limits, the Company maintains an unfunded SBRP. This plan allows for benefits in excess of the IRS limits to be accrued and paid to participants upon retirement. As a non-qualified plan, all payments are made in a lump sum out of the general assets of the Company. Messrs. White, Baehren and Crawford are eligible to participate in this plan. Mr. Stroucken accrues a benefit under this plan pursuant to the terms of his employment agreement as described below under the heading "Compensation Discussion and Analysis—CEO Compensation."

        The Company maintains a superannuation plan for the benefit of employees in Australia. Similar to a cash balance plan in the United States, this plan provides a defined benefit to the employee at retirement based on the employees level of contribution to the plan during their career with the Company. The plan requires a minimum Company contribution for each employee and provides for a higher level of Company contribution if the employee also elects to contribute. The plan complies with local regulations governing superannuation benefits in Australia. Mr. Ridder is eligible to participate in this plan.

        The Stock Purchase and Savings Plan ("SPASP") is a defined contribution plan, provided under section 401(k) of the Internal Revenue Code. For all U.S. based salaried participants, the plan provides the opportunity to contribute up to 80% of base salary on a tax-deferred basis (subject to annual limits established by the IRS). The Company provides a match equal to 50% of the first 8% of base salary contributed by the participant. While employees may direct their own contributions into a number of provided investments, the Company match is made in Common Stock. The match is immediately vested, and participants can move the match out of Common Stock, and into any of the other investments, at any time subject to blackout periods and other trading window restrictions. Messrs. Stroucken, White, Baehren and Crawford are eligible to participate in this plan.

        For participants hired January 1, 2005 and later, who are not eligible to participate in the Salary Retirement Plan, the Company also makes a base contribution to the SPASP equal to 2% of base salary. This contribution is made each payroll period, and is invested in the same investment options selected by the participants for their own contributions. Mr. Stroucken is eligible to participate in this plan.

        As contributions to the SPASP are limited to amounts prescribed by the IRS, the Company also maintains a non-qualified Executive Deferred Savings Plan. This plan allows certain employees (including the named executive officers) to defer up to 19% of their base salary. The plan allows participants to elect that their deferrals be credited to either a money-market type fund (the cash deferral account) or Common Stock account. Interest in the cash deferral account accrues interest, compounded monthly, at an annual rate equal from time to time to the average annual yield on domestic corporate bonds of Moody's A-rated companies. This is an unfunded plan, and any deferrals made to this plan are not protected against bankruptcy, insolvency, or the Company's discretion to reduce or cancel the participant's account balance.

        Upon termination or retirement, participants may elect to leave their assets in the SPASP or roll them out, either on a cash basis or into another tax qualified retirement vehicle. Assets in the Executive Deferred Savings Plan will be paid out of the general assets of the Company and are paid in a lump sum. Messrs. Stroucken, White, Baehren and Crawford are eligible to participate in this plan.

        The Company provides retiree medical benefits to U.S. based salaried employees hired prior to January 1, 2003. The plan was closed to new entrants as of January 1, 2003. Participants at that date are

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still covered by the plan. U.S. based executive officers participate in the plan on the same basis as all other salaried employees. Messrs. Baehren, Crawford and White are entitled to receive benefits from this plan upon retirement.

This excerpt taken from the OI DEF 14A filed Apr 5, 2007.

Retirement Benefits

        The Company maintains two qualified retirement plans for U.S. based salaried employees: the Salary Retirement Plan (a defined benefit pension plan), and the Stock Purchase and Savings Program (a defined contribution plan). The Company also maintains two non-qualified retirement plans for employees who earn in excess of the qualified plan limits: the Supplemental Benefits Retirement Plan (a defined benefit plan) ("SBRP"); and the Executive Deferred Savings Plan (a defined contribution plan).

        The defined benefit pension plan was closed to new entrants after December 31, 2004. Participants at that date continue to accrue pension benefits under the plan. The annual benefit is calculated based on the following formula:

      1.212% multiplied by average annual earnings for high three years of salary plus bonus (if applicable) multiplied by number of years of service, plus

      .176% multiplied by average annual earnings above the Social Security wage base at retirement multiplied by number of years of service

        Also after December 31, 2004, the Company made some changes to the way that benefits can be paid. Benefits accrued at December 31, 2004 are eligible to be paid in a lump sum. Benefits accrued post-December 31, 2004, however, are only eligible to be paid on an annuity basis.

        As a qualified plan, benefits under the Salary Retirement Plan are limited by IRS regulations. For those employees who earn compensation in excess of these limits, the Company maintains an unfunded SBRP. This plan allows for benefits in excess of the IRS limits to be accrued and paid to participants upon retirement. As a non-qualified plan, all payments are made in a lump sum out of the general assets of the Company.

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        In 2006, the Committee agreed to the establishment of a springing rabbi trust for the SBRP. This trust protects participants in the event of a change in control. No protection is provided in the event of bankruptcy or insolvency. The trust provides that, in the event of a change in control (as defined in IRS regulations), the Company may fund the benefits accrued under the SBRP; it further provides that in the event the Company receives notification that a tax liability has been created for the participants, the trust may distribute the assets to the participants. However, the trust also gives new management of the Company (in the event of a change in control) the opportunity to accept the terms of the current SBRP, thus eliminating the need to fund the trust.

        The Company maintains the International Pension Plan, a non-qualified defined benefit pension plan covering a limited group of employees, including Mr. Restrepo. This plan is meant to provide coverage for employees who spend a significant portion of their careers outside of their home country and, as a result, may have a deficiency in their retirement benefit. The plan provides a similar level of benefits as the U. S. Salary Retirement Plan, and any payments from this plan are reduced by benefits paid from any other Company sponsored retirement plan.

        The Stock Purchase and Savings Program ("SPASP") is a defined contribution plan provided under section 401(k) of the Internal Revenue Code. For all U.S. based salaried participants, the plan provides the opportunity to contribute up to 80% of base salary on a tax-deferred basis (subject to annual limits established by the IRS). The Company provides a match equal to 50% of the first 8% of base salary contributed by the participant. While employees may direct their own contributions into a number of provided investments, the Company match is made in Common Stock. The match is immediately vested, and participants can move the match out of Common Stock, and into any of the other investments, at any time.

        For participants hired January 1, 2005 and later, who are not eligible to participate in the Salary Retirement Plan, the Company also makes a base contribution to the SPASP equal to 2% of base salary. This contribution is made each payroll period, and is invested in the same investment options selected by participants for their own contributions.

        As contributions to the SPASP are limited to amounts prescribed by the IRS, the Company also maintains the non-qualified Executive Deferred Savings Plan. This plan allows certain employees (including the named executive officers) to defer up to 19% of their base salary. The plan allows participants to elect that their deferrals be credited to either a money-market type fund (the cash deferral account) or Common Stock account. Interest in the cash deferral account accrues interest, compounded monthly, at an annual rate equal from time to time to the average annual yield on domestic corporate bonds of Moody's A-rated companies. This is an unfunded plan, and any deferrals under this plan are not protected against bankruptcy, insolvency, or the Company's discretion to reduce or cancel the employee's account balance.

        Upon termination or retirement, participants may elect to leave their assets in the SPASP or roll them out, either on a cash basis or into another tax qualified retirement vehicle. Deferrals under the Executive Deferred Savings Plan will be paid out of the general assets of the Company and are paid in a lump sum.

        The Company provides retiree medical benefits to U.S. based salaried employees hired prior to January 1, 2003. The plan was closed to new entrants as of January 1, 2003. Participants at that date are still covered by the plan. U.S. based executive officers participate in the plan on the same basis as all other salaried employees. The following named executive officers are entitled to receive benefits from this plan upon retirement: James W. Baehren, Philip McWeeny, Edward C. White.

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