def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
LIBBEY INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
form or schedule and the date of its filing. |
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Amount previously paid: |
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Form, Schedule or Registration Statement No.: |
LIBBEY INC.
P.O. BOX 10060
300 MADISON AVENUE
TOLEDO, OHIO
43699-0060
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
ON MAY 6, 2010
Dear Fellow Libbey Shareholder:
We will hold our 2010 Annual Meeting of Libbey shareholders on
Thursday, May 6, 2010, at 2 p.m., Eastern Time, at the
Libbey Corporate Showroom located at 335 North St. Clair Street,
Toledo, Ohio.
At the meeting, shareholders will:
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elect four directors, each for a term of three years;
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vote upon the Amended and Restated Libbey Inc. 2006 Omnibus
Incentive Plan;
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vote to ratify the appointment of Ernst & Young LLP as
Libbeys independent auditors for our fiscal year ending
December 31, 2010; and
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transact such other business as properly may come before the
meeting.
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You are entitled to vote at the meeting if you were an owner of
record of Libbey Inc. common stock at the close of business on
March 19, 2010. If your ownership is through a broker or
other intermediary, you will need to have proof of your
stockholdings in order to be admitted to the meeting. A recent
account statement, letter or proxy from your broker or other
intermediary will suffice.
Whether or not you plan to attend the meeting, we hope you will
vote as soon as possible in accordance with the instructions
contained under Questions and Answers How
do I vote? in the enclosed proxy statement.
Management sincerely appreciates your support.
Sincerely,
John F. Meier
Chairman of the Board of Directors and
Chief Executive Officer
Susan Allene Kovach
Secretary
March 30, 2010
Toledo, Ohio
TABLE OF
CONTENTS
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A-1
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LIBBEY
INC.
PROXY
STATEMENT
Important Notice
Regarding the Availability of Proxy Materials
for the Annual
Meeting of Shareholders to Be Held on May 6,
2010.
Pursuant to rules promulgated by the Securities and Exchange
Commission, or the SEC, we have elected to provide access to our
proxy materials both by sending you this full set of proxy
materials, including a notice of annual meeting, proxy card and
2009 Annual Report to Shareholders, and by notifying you of the
availability of our proxy materials on the Internet. The notice
of annual meeting, proxy statement and 2009 Annual Report to
Shareholders are available at https://wwww.proxyvote.com.
In accordance with the SECs rules, the materials on the
site are searchable, readable and printable, and the site does
not have cookies that enable us to identify visitors.
We have sent you this proxy statement because our Board of
Directors is asking you to give your proxy (that is, the
authority to vote your shares) to our proxy committee so that
they may vote your shares on your behalf at our annual meeting
of shareholders. The members of the proxy committee are John F.
Meier and Susan Allene Kovach. They will vote your shares as you
instruct.
We will hold the meeting in the Libbey Corporate Showroom
located at 335 North St. Clair Street, Toledo, Ohio. The meeting
will be held on May 6, 2010, at 2 p.m., Eastern Time.
This proxy statement contains information about the matters
being voted on and other information that may be helpful to you.
We began the mailing to shareholders of this proxy statement and
the enclosed proxy on or about March 30, 2010.
QUESTIONS AND
ANSWERS
Who may
vote?
You may vote if you were a holder of Libbey Inc.
(Libbey) common stock at the close of business on
March 19, 2010.
What may I vote
on?
You may vote on the following proposals:
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Proposal 1: Election of four
nominees Carlos V. Duno, Peter C. McC. Howell, John
C. Orr and Richard I. Reynolds to serve as
Class II directors;
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Proposal 2: Approval of the Amended and Restated
Libbey Inc. 2006 Omnibus Incentive Plan; and
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Proposal 3: Ratification of the appointment of
Ernst & Young LLP as Libbeys independent
auditors for the 2010 fiscal year.
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How does the
Board recommend that I vote?
The Board recommends that you vote:
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Proposal 1: FOR each of Carlos V. Duno, Peter C.
McC. Howell, John C. Orr and Richard I. Reynolds to serve as
Class II directors;
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Proposal 2: FOR the Amended and Restated Libbey
Inc. 2006 Omnibus Incentive Plan; and
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Proposal 3: FOR ratification of the appointment
of Ernst & Young LLP as Libbeys independent
auditors for the 2010 fiscal year.
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1
How do I
vote?
Registered
Shareholders
If you are a registered shareholder, you may vote in any of the
following ways:
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Vote by telephone: Call on a touch-tone
telephone, toll-free
1-800-690-6903,
24 hours a day, seven days a week, until 11:59 p.m.,
eastern time, on May 5, 2010. Make sure you have your proxy
card available, and follow the simple instructions provided.
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Vote over the internet: Go to
www.proxyvote.com, 24 hours a day, seven days a week, until
11:59 p.m., eastern time, on May 5, 2010. Make sure
you have your proxy card available and follow the simple
instructions provided.
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Vote by mail: Mark, date and sign the enclosed
proxy card and return it in the enclosed, postage-paid envelope.
You should sign your name exactly as it appears on the proxy
card. If you are signing in a representative capacity (for
example, as guardian, executor, trustee, custodian, attorney or
officer of a corporation), you should indicate your name and
title or capacity.
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Vote in person at the annual meeting: Bring
the enclosed proxy card or other proof of identification and
request a ballot at the meeting.
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Shares held jointly by two or more registered shareholders may
be voted by any joint owner unless we receive written notice
from another joint owner denying the authority of the first
joint owner to vote those shares.
Shares Held
in Street Name
If you hold your shares in street name in other
words, you hold your shares through a broker or other nominee,
you will receive from your broker a notice regarding
availability of proxy materials that will tell you how to access
our proxy materials and provide voting instructions to your
broker over the internet. It also will tell you how to request a
paper or
e-mail copy
of our proxy materials. If you hold your shares in street name
and do not provide voting instructions to your broker, your
shares will not be voted on any proposals on which your broker
does not have discretionary authority to vote, including the
election of directors and the approval of the Amended and
Restated Libbey Inc. 2006 Omnibus Incentive Plan.
Shares Held
Through 401(k) Plan
If you participate in the Libbey Retirement Savings Plan, which
we refer to as our 401(k) plan, and if you have investments in
the Libbey Inc. stock fund and have an email address and
internet access provided by Libbey for business purposes, you
will receive an email message at your Libbey-provided email
address containing instructions that you must follow in order
for shares attributable to your account to be voted. If you
participate in our 401(k) plan, have investments in the Libbey
Inc. stock fund and do not have an email address and internet
access provided by Libbey for business purposes, you will
receive instructions from the trustee of the 401(k) plan that
you must follow in order for shares attributable to your account
to be voted.
May I change my
vote?
If you are a shareholder of record, you may, at any time before
your shares are voted at the annual meeting, change your vote or
revoke your proxy by:
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sending us a proxy card dated later than your last vote;
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notifying the Secretary of Libbey in writing; or
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voting at the meeting.
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If you hold your shares in street name through a broker or other
nominee, you should contact your broker or nominee to determine
how to change your vote or revoke your proxy.
2
How many
outstanding shares of Libbey common stock are there?
At the close of business on March 19, 2010, there were
16,162,306 shares of Libbey common stock outstanding. Each
share of common stock is entitled to one vote.
How big a vote do
the proposals need in order to be adopted?
As long as a quorum is present either in person or by proxy at
the Annual Meeting, each proposal must receive the votes of the
holders of a majority of the shares of common stock present in
person or represented by proxy at the Annual Meeting.
What constitutes
a quorum?
Under our By-laws, the holders of a majority of the total shares
issued and outstanding, whether present in person or represented
by proxy, will constitute a quorum, permitting business to be
transacted at the meeting.
Votes cast in person or by proxy will be tabulated by the
inspector of elections appointed for the meeting and will
determine whether a quorum is present. Abstentions will be
counted as shares that are present and entitled to vote for
purposes of determining whether a quorum is present. For
purposes of determining whether the shareholders have approved a
matter, abstentions are not treated as votes cast affirmatively
or negatively, and therefore will have no effect on the outcome
of Proposal 1, Proposal 2 or Proposal 3. Broker
non-votes will not be considered as present and entitled to vote
with respect to that matter. The common stock outstanding on the
record date held by the trustee under Libbeys 401(k) plan
will be voted by the trustee in accordance with written
instructions from participants in that plan or, as to those
shares for which no instructions are received, in a uniform
manner as a single block in accordance with the instructions
received with respect to the majority of shares of the plan for
which instructions were received.
What are broker
non-votes?
If you hold your shares in street name through a
broker or other nominee, your broker or nominee may not be
permitted to vote your shares with respect to certain matters,
including the election of directors and the approval of the
Amended and Restated Libbey Inc. 2006 Omnibus Incentive Plan,
unless you give your broker or nominee specific instructions as
to how to vote. For example, unless brokers have received voting
instructions from their customers, brokers may not vote their
customers shares with respect to the election of
directors, approval of equity compensation plans or other
non-routine matters. Non-voted shares on non-routine matters are
called broker non-votes. They will not be counted in determining
the number of shares necessary for approval but will be counted
in determining whether there is a quorum.
How will voting
be conducted on other matters raised at the meeting?
The proxy committee will vote on other matters that properly
come before the meeting in accordance with the Boards
recommendation or, if no recommendation is given, in the
discretion of the proxy committee.
When must
shareholder proposals be submitted for the 2011 annual
meeting?
A shareholder desiring to submit a proposal for inclusion in our
proxy statement for our Annual Meeting to be held in 2011 must
deliver the proposal so that we receive it no later than
December 8, 2010. Any proposal submitted outside the
processes of
Rule 14a-8
under the Exchange Act will be considered untimely if submitted
after February 22, 2011. We request that all such proposals
be addressed to Susan Allene Kovach, Vice President, General
Counsel and Secretary, Libbey Inc., 300 Madison Avenue,
P.O. Box 10060, Toledo, Ohio
43699-0060.
3
STOCK
OWNERSHIP
Who are the
largest owners of Libbey stock?
The following table shows information with respect to the
persons we know to be the beneficial owners of more than five
percent of our common stock as of December 31, 2009.
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Amount and
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Nature
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Name and Address
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of Beneficial
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Percent
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of Beneficial Owner
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Ownership
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of Class
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Zesiger Capital Group LLC(1)
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2,054,880
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12.8
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320 Park Avenue, 30th Floor
New York, NY 10022
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Bank of America Corporation and affiliates(2)
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1,582,167
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9.5
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100 North Tryon Street
Charlotte, NC 28255
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Amendment No. 6 to Schedule 13G filed with the
Securities and Exchange Commission on behalf of Zesiger Capital
Group LLC, an investment advisor, indicates that, as of
December 31, 2009, Zesiger Capital Group LLC is the
beneficial owner of 2,054,880 common shares, with sole
dispositive power as to 2,054,880 common shares and sole voting
power as to 1,488,000 common shares. The schedule further states
that all securities reported in the schedule are held in
discretionary accounts that Zesiger Capital Group LLC manages,
and that no single client of Zesiger Capital Group LLC owns more
than 5% of the class. |
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The number of shares beneficially owned by Bank of America
Corporation, or BAMC, and its affiliates and their collective
percentage of ownership is based on information supplied by BAMC
in connection with our
Form S-3/A
registration statement filed with the SEC on February 18,
2010. The number of shares beneficially owned by BAMC and its
affiliates is based on 16,097,861 shares of common stock
outstanding as of December 31, 2009 and
(a) 485,309 shares of common stock underlying a
warrant issued to Merrill Lynch PCG, Inc. on June 16, 2006,
(b) 933,145 shares of common stock issued to Merrill
Lynch PCG, Inc. on October 28, 2009,
(c) 71,223 shares of common stock currently
exercisable by Merrill Lynch PCG, Inc. under a warrant issued to
it to purchase up to 3,446,856 shares of our common stock
(due to the contractual limitations on the warrants
exercise, the remaining 3,395,663 shares issuable under the
warrant are not currently exercisable), (d) 540 shares
of common stock owned by Bank of America N.A., or BAM, as of
October 28, 2009, (e) 89,000 shares of common
stock owned by Merrill Lynch, Pierce, Fenner & Smith,
Inc., or MLPFS, as of October 28, 2009 and
(f) 2,950 shares of common stock owned by Columbia
Management Advisors, LLC, or CMA, as of October 28, 2009.
As the ultimate parent holding company of each of Merrill Lynch
PCG, Inc., BAM, MLPFS and CMA, BAMC may be deemed to
beneficially own the shares held by each such entity.
Furthermore, as the parent company of CMA, BAM may be deemed to
beneficially own the shares held by CMA. |
How much Libbey
stock do our directors and officers own?
Stock
Ownership Guidelines
Each of our outside directors is required, prior to the
expiration of his or her second full term, to own at least
4,000 shares of Libbey common stock. Compliance with this
guideline may be achieved through direct ownership of shares of
our common stock, through deferral of director compensation into
an account, the value of which is based upon the value of our
common stock plus dividends (as described under
Compensation-Related Matters Compensation
Discussion and Analysis How are Libbeys
directors compensated? below), or through a
combination of these means.
In October 2007, we established guidelines pursuant to which our
executive officers also are required to achieve ownership of
meaningful amounts of equity in Libbey. Specifically, each
executive officer is required to achieve ownership of a
specified number of shares of Libbey common stock equal to a
multiple of his or her
4
base salary in effect on January 1, 2008 or, if later, the
date on which the executive officer becomes subject to the
guidelines. For individuals who were executive officers as of
January 1, 2008, the applicable deadline for compliance
with the guidelines is December 31, 2012. For individuals
who become executive officers after January 1, 2008, the
applicable deadline is the fifth anniversary of the date on
which they become executive officers.
The applicable multiples for the executive officers are as
follows:
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Multiple of
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Executive Officer Title
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Base Salary
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Chief Executive Officer
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5X
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President, Executive Vice President, group or divisional
president(1)
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3X
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Other Vice Presidents
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2X
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No individuals currently occupy the positions of President or
group or divisional president. Mr. Reynolds currently is
Libbeys only Executive Vice President. |
We generally determine the number of shares of stock that each
executive officer is required to own by the applicable deadline
as follows. First, we multiply the applicable executive
officers annual base salary on January 1, 2008 (or
the date on which he or she becomes subject to the guidelines,
if later) by the appropriate multiple from the above table. We
then divide the product by the average closing price of Libbey
common stock over a period of time to be determined by the
Nominating and Governance Committee of Libbeys Board of
Directors. For those individuals who were executive officers as
of January 1, 2008, the Nominating and Governance Committee
determined that the average closing price of Libbey common stock
over 2007, $16.84, would be used to determine the number of
shares that they are required to own as of December 31,
2012.
In light of the significant volatility in our stock price during
the one-year period prior to July 1, 2009, when
Mr. Roberto Rubio joined us as Vice President, Managing
Director, Libbey Mexico, the Nominating and Governance Committee
considered a number of different methodologies for determining
the number of shares that Mr. Rubio should be required to
own by the fifth anniversary of his date of hire. Ultimately,
the Nominating and Governance Committee based its decision as to
Mr. Rubios equity ownership guideline on internal
equity factors, comparing his annualized base salary to the
annualized base salary of the other executive officers and
positioning his guideline so that it exceeds that of the other
Vice Presidents, whose guidelines were determined using a 2X
multiple of base salary but have annualized base salaries that
are lower than Mr. Rubios. Mr. Rubios
guideline is lower than the guidelines of our CEO and Executive
Vice President, whose respective guidelines were determined
based upon higher multiples of base salary.
The following forms of equity, which we refer to as Qualifying
Shares, will be counted in determining whether an executive
officer has achieved the guideline applicable to him or her:
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Shares of Libbey common stock held by the officer, his or her
spouse
and/or his
or her minor children (as long as they are minors), if:
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The shares are not subject to forfeiture under the terms of any
award of those shares or the terms of any plan pursuant to which
those shares are purchased
and/or
held; and
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The shares are not pledged to secure any indebtedness;
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Awards, pursuant to any plan approved by the Compensation
Committee of the Board of Directors, of restricted shares,
restricted stock units, which we refer to as RSUs, or shares
issued in settlement of performance shares, but only if and to
the extent the vesting requirements (whether continued service
to Libbey or achievement of performance targets) associated with
the shares already have been satisfied;
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Shares of Libbey common stock that are held for the benefit of
the executive officer or his or her spouse or minor children in
a 401(k) savings account, in Libbeys Employee Stock
Purchase Plan
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(which we terminated effective May 31, 2009), in any
individual retirement account or in any trust or other estate
planning vehicle;
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Phantom stock into which any restricted shares, RSUs
or shares issued in settlement of performance shares are
deferred pursuant to any plan approved by the Compensation
Committee of the Board of Directors; and
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Vested,
in-the-money
stock options, but only to the extent they do not exceed 50% of
the shares required by the guideline applicable to the
particular executive officer.
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As of March 19, 2010, the number of Qualifying Shares held
by the executive officers whom we refer to as the named
executives (as set forth under Compensation-Related
Matters Summary Compensation Table below)
was as follows:
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Applicable Guideline
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Number of
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Named Executive(1)
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(Number of Shares)
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Qualifying Shares Held
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J. Meier
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204,869
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321,812
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G. Geswein(2)
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40,099
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29,849
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R. Reynolds
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79,504
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140,882
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R. Rubio(3)
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48,800
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1,274
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Mr. Wilkes resigned from the Company effective
December 31, 2009. |
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As to Mr. Geswein, the number of qualifying shares held
does not include 1,642 RSUs that are scheduled to vest on
May 23, 2010. These RSUs are included under
Beneficial Ownership Table below. |
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(3) |
|
Mr. Rubio joined the Company on July 1, 2009. |
The Nominating and Governance Committee, which is responsible
for monitoring compliance with the guidelines, has authority to
address extenuating circumstances that prevent an executive
officer from complying with the guidelines by the deadline
applicable to him or her. In addition, the Nominating and
Governance Committee has authority to work out transition plans
for executive officers nearing retirement.
6
Beneficial
Ownership Table
The following table shows, as of March 19, 2010, the number
of shares of our common stock and percentage of all issued and
outstanding shares of our common stock that are beneficially
owned (unless otherwise indicated) by our directors, the named
executives and our directors and executive officers as a group.
Our address is the address of each director and executive
officer set forth below. The shares owned by the executive
officers set forth below include the shares held in their
accounts in the Libbey Inc. Retirement Savings Plan, which we
refer to as our 401(k) plan. An asterisk indicates ownership of
less than one percent of the outstanding stock.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
of Beneficial
|
|
Percent
|
Name of Beneficial Owner
|
|
Ownership
|
|
of Class
|
|
Carlos V. Duno(1)
|
|
|
5,395
|
|
|
|
*
|
|
William A. Foley(1)
|
|
|
16,817
|
|
|
|
*
|
|
Gregory T. Geswein(2)(3)
|
|
|
81,629
|
|
|
|
*
|
|
Jean-René Gougelet(1)
|
|
|
8,319
|
|
|
|
*
|
|
Peter C. McC. Howell(1)(4)
|
|
|
13,472
|
|
|
|
*
|
|
John F. Meier(2)(3)(5)
|
|
|
409,943
|
|
|
|
2.53
|
%
|
Deborah G. Miller(1)
|
|
|
15,072
|
|
|
|
*
|
|
Carol B. Moerdyk(1)
|
|
|
17,617
|
|
|
|
*
|
|
John C. Orr(1)
|
|
|
7,500
|
|
|
|
*
|
|
Richard I. Reynolds(2)(3)
|
|
|
258,755
|
|
|
|
1.60
|
%
|
Roberto B. Rubio(3)
|
|
|
1,274
|
|
|
|
*
|
|
Terence P. Stewart(1)
|
|
|
7,928
|
|
|
|
*
|
|
Kenneth G. Wilkes(2)(3)(6)
|
|
|
195,695
|
|
|
|
1.21
|
%
|
Directors & Executive Officers as a
Group(1)(2)(3)(4)(5)(6)
|
|
|
1,510,924
|
|
|
|
9.34
|
%
|
|
|
|
(1) |
|
Does not include the following number of shares of our common
stock that are deferred under our 2009 Director Deferred
Compensation Plan, which we refer to as our Director DCP, or
shares of phantom stock held by non-management directors
pursuant to our previous deferred compensation plans for outside
directors, in each case as of March 19, 2010: |
|
|
|
|
|
|
|
Number of
|
|
|
Deferred or
|
Name of Director
|
|
Phantom Shares
|
|
C. Duno
|
|
|
12,802
|
|
W. Foley
|
|
|
11,778
|
|
J. R. Gougelet
|
|
|
1,638
|
|
P. Howell
|
|
|
10,778
|
|
D. Miller
|
|
|
2,191
|
|
C. Moerdyk
|
|
|
18,453
|
|
J. Orr
|
|
|
0
|
|
T. Stewart
|
|
|
59,674
|
|
All non-employee directors as a group
|
|
|
117,314
|
|
For more information regarding our deferred compensation plans
for non-management directors, see Compensation
Discussion and Analysis How are Libbeys
directors compensated? below.
|
|
|
(2) |
|
Does not include shares of our common stock that have vested but
are deferred under our Executive Deferred Compensation Plan,
which we refer to as our EDCP. As of March 19, 2010, each
of |
7
|
|
|
|
|
Messrs. Geswein, Meier, Reynolds, Rubio and Wilkes, and all
executive officers as a group, had the following number of
shares of our common stock that are vested but deferred under
our EDCP: |
|
|
|
|
|
|
|
Number of
|
|
|
Shares of
|
Named Executive
|
|
Deferred Stock
|
|
G. Geswein
|
|
|
5,707
|
|
J. Meier
|
|
|
61,508
|
|
R. Reynolds
|
|
|
0
|
|
R. Rubio
|
|
|
0
|
|
K. Wilkes
|
|
|
34,003
|
|
All executive officers as a group
|
|
|
127,922
|
|
|
|
|
(3) |
|
Includes the following number of non-qualified stock options,
which we refer to as NQSOs, that have been granted to
Messrs. Geswein, Meier, Reynolds, Rubio and Wilkes and that
currently are exercisable or will be exercisable on or before
May 29, 2010: |
|
|
|
|
|
|
|
Number of
|
|
|
Outstanding Stock
|
|
|
Options Exercisable
|
Named Executive
|
|
Within 60 Days
|
|
G. Geswein
|
|
|
61,625
|
|
J. Meier
|
|
|
231,120
|
|
R. Reynolds
|
|
|
157,623
|
|
R. Rubio
|
|
|
0
|
|
K. Wilkes
|
|
|
120,261
|
|
All executive officers as a group
|
|
|
868,755
|
|
|
|
|
(4) |
|
Includes 750 shares held by family members of
Mr. Howell. Mr. Howell disclaims any beneficial
interest in these shares. |
|
(5) |
|
Includes 8,406 shares held by family members of
Mr. Meier. Mr. Meier disclaims any beneficial interest
in these shares. |
|
(6) |
|
Includes 28,488 RSUs that vested upon Mr. Wilkess
resignation from the Company on December 31, 2009. |
In addition to outstanding shares of common stock that our named
executives beneficially owned as of March 19, 2010, the
named executives have received the following grants of RSUs that
have not yet vested:
|
|
|
|
|
|
|
No. of
|
Named Executive
|
|
Unvested RSUs(1)
|
|
G. Geswein
|
|
|
18,894
|
|
J. Meier
|
|
|
65,679
|
|
R. Reynolds
|
|
|
33,149
|
|
R. Rubio
|
|
|
15,656
|
|
K. Wilkes
|
|
|
0
|
|
All executive officers as a group
|
|
|
196,813
|
|
|
|
|
(1) |
|
Of these amounts, a total of 3,283 RSUs with four-year vesting
were granted to Mr. Geswein on May 23, 2007; a total
of 53,665 RSUs with four-year vesting were granted to all
executive officers on February 16, 2007 and
February 15, 2008; a total of 122,106 RSUs with four-year
vesting were granted to all executive officers on
February 12, 2009; and a total of 15,656 RSUs with
four-year vesting were granted to Mr. Rubio on July 1,
2009. In addition, a total of 196,345 RSUs with four-year
vesting were awarded to all executive officers on
February 8, 2010, but the grant of these RSUs is subject to
shareholder approval of the Amended and Restated Libbey Inc.
2006 Omnibus Incentive Plan. One share of our common stock will
be issued for each vested RSU. Dividends do not accrue on RSUs
until they vest. For further information, see
Compensation-Related Matters In what forms did
Libbey deliver compensation to its executives in 2009 and what
purposes do the various forms of compensation serve?
and the Outstanding Equity Awards at Fiscal Year-End table
below. |
8
Section 16(a)
Beneficial Ownership Reporting Compliance
Based solely on our review of filings with the Securities and
Exchange Commission and written representations that no other
reports were required to be filed by the relevant persons, we
believe that, during the fiscal year ended December 31,
2009, all officers, directors and
greater-than-ten-percent
beneficial owners complied with the filing requirements
applicable to them pursuant to Section 16 of the Exchange
Act on a timely basis except that each of Gregory T. Geswein,
Jonathan S. Freeman and Timothy T. Paige failed to timely file
one report relative to one transaction. All of the required
reports have been subsequently filed.
LIBBEY CORPORATE
GOVERNANCE
Who are the
current members of Libbeys Board of Directors?
Our Board of Directors is divided into three classes of
directors. Each year, one class of directors stands for election
at our annual meeting of shareholders. It is important to us
that our directors and candidates for our Board not only meet
the Requisite Qualifications for Board Candidates
described under How does our Board select nominees for
the Board? below, but also possess experience,
qualifications or skills in the substantive areas that impact
our business. The biographies below highlight the individual
attributes of each director that enhance the Boards
collective knowledge and experience.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board Committee
|
|
Director
|
Director
|
|
Age
|
|
Experience
|
|
Assignments
|
|
Since
|
|
Carlos V. Duno (Class II)
|
|
|
62
|
|
|
Mr. Duno is the Owner and Chief Executive Officer of Marcia Owen
Associates/Group Powell One (since 2006), the premier recruiting
and staffing firm in Northern New Mexico, and Owner and Chief
Executive Officer of CDuno Consulting (since 2004). From 2001 to
2004, Mr. Duno served as Chairman of the Board and Chief
Executive Officer of Clean Fuels Technology, a leading developer
of emulsified fuels for transportation and power generation
applications. Mr. Dunos glass industry experience began
during his six years as President of Business Development and
Planning for Vitro S.A. in Monterrey, Mexico from 1995 to 2001.
Mr. Dunos earlier professional experience includes a
two-year term as Vice President Strategic Planning for Scott
Paper Company and a combined ten years of international
assignments for Scott Paper Company, McKinsey & Co. and Eli
Lilly. Mr. Duno holds a B.S. in industrial engineering from
the National University of Mexico, and an M.B.A. in finance and
an M.S. in industrial engineering, both from Columbia
University. He is also an Audit Committee Financial Expert. Mr.
Duno is Chairman of the Board of the Santa Fe Botanical Garden
(since 2006) and a former member of the Boards of Directors of
Clean Fuels Technology, Inc. and Anchor Glass Container
Corporation. The Board believes Mr. Dunos extensive
experience in strategic planning for international
organizations, together with his first-hand glass industry
experience in Mexico, make him well-qualified to serve as a
director of the Company.
|
|
Chair, Audit Committee;
Member, Nominating and
Governance Committee
|
|
|
2003
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board Committee
|
|
Director
|
Director
|
|
Age
|
|
Experience
|
|
Assignments
|
|
Since
|
|
William A. Foley (Class III)
|
|
|
62
|
|
|
Mr. Foley currently serves as Chairman and Chief Executive
Officer of both Blonder Home Accents (since 2008) and Think Well
Inc. (since 2005). Previously, Mr. Foley was President and a
director of Arhaus, Inc.; co-founder of Learning Dimensions LLC;
and Chairman and Chief Executive Officer of LESCO Inc. Mr. Foley
has also fulfilled the roles of Vice President, General Manager
for The Scotts Company Consumer Division, and Vice President and
General Manager of Rubbermaid Inc.s Specialty Products
division. Mr. Foley spent the first fourteen years of his career
with Anchor Hocking Corp. in various positions, including Vice
President of Sales & Marketing. Mr. Foley is currently on
the Board of Directors of Blonder Home Accents (since 2001), and
has previous experience on the boards of several public and
private companies, including Arhaus Inc., LESCO Inc. and
Associated Estates. Mr. Foley holds a bachelors
degree from Indiana University and an M.B.A. from Ohio
University. Mr. Foleys consumer product marketing
experience, particularly in the glass tableware industry, along
with his significant leadership and management skills,
strengthen the Boards collective qualifications, skills
and experience.
|
|
Chair, Nominating and
Governance Committee;
Member, Compensation
Committee
|
|
|
1994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter C. McC. Howell (Class II)
|
|
|
60
|
|
|
Since 1997, Mr. Howell has been an advisor to various business
enterprises in the areas of acquisitions, marketing and
financial reporting, particularly with respect to operations in
the Peoples Republic of China. Mr. Howells positions
before 1997 include Chairman and Chief Executive Officer of
Signature Brands USA Inc. (formerly Health-O-Meter); President,
Chief Executive Officer and a director of Mr. Coffee Inc.;
and Chief Financial Officer of Chemical Fabrics Corporation. Mr.
Howell also spent ten years as an auditor for Arthur Young
& Co. (now Ernst & Young). Since 1989, Mr. Howell
has been a director of one or more public companies. His current
directorships include Pure Cycle Corporation (NASDAQ: PCYO)
(since 2004); Lite Array & Global Lite Array, a subsidiary
of the publicly held Global-Tech Applied Innovations (NASDAQ:
GAI) (since 2001); and Great Lakes Cheese Company Limited (since
2006). Mr. Howell holds B.A. and M.A. degrees in economics from
Cambridge University, is a Fellow of the Institute of Chartered
Accountants of England & Wales, and is an Audit Committee
Financial Expert. In addition to his significant financial
expertise, public directorship experience, and retail and
foodservice industry knowledge, Mr. Howell provides the
Board with a unique perspective on the issues facing
international businesses in their relations with China.
|
|
Member, Audit Committee;
Member, Nominating and
Governance Committee
|
|
|
1993
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board Committee
|
|
Director
|
Director
|
|
Age
|
|
Experience
|
|
Assignments
|
|
Since
|
|
John F. Meier (Class I)
|
|
|
62
|
|
|
Mr. Meier and has served as Chairman of the Board and Chief
Executive Officer of Libbey since the Company went public in
June 1993. Before the Companys initial public offering,
Mr. Meier was General Manager of Libbey and a corporate
Vice President of Owens-Illinois, Inc., Libbeys former
parent company. Mr. Meier has also served in various marketing
positions since he first joined the Company in 1970, including a
five-year assignment with Durobor, S.A., Belgium. In 1997, Mr.
Meier served as Chairman of the National Housewares
Manufacturers Association (now the International Housewares
Association). Mr. Meiers corporate governance
experience includes current directorships with Cooper Tire and
Rubber Company (NYSE: CTB) (since 1997) and Applied Industrial
Technologies (NYSE: AIT) (since 2005). Mr. Meier received a B.S.
in business administration from Wittenberg University and an
M.B.A. from Bowling Green State University. Having worked for
Libbey for forty years, Mr. Meier brings to the Board a
comprehensive understanding of the Company and the glass
tableware industry.
|
|
|
|
|
1987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deborah G. Miller (Class III)
|
|
|
60
|
|
|
From 2003 to the present, Ms. Miller has been the Chief
Executive Officer of Enterprise Catalyst Group, a management
consulting firm specializing in high technology and
biotechnology transformational applications. Ms. Miller was also
President and Chief Executive Officer and Chairman of Ascendent
Systems, a provider of enterprise voice mobility solutions, from
2005 to 2007. Ms. Miller has more than thirty years of global
management experience, including roles as Chief Executive
Officer of Maranti Networks; President and Chief Executive
Officer of Egenera; Chief Executive Officer of On Demand
Software; and various positions with IBM. Throughout her career,
Ms. Miller has contributed to the success of international
business enterprises with her innovative approach to sales and
marketing. She is a member of the Board of Directors of Sentinel
Group Funds, Inc. (SENCX) (since 1995) and Wittenberg University
(since 1999), from which she received her bachelors
degree. As a result of Ms. Millers global management
experience, sales and marketing ingenuity, strategic thinking,
and extensive information technology experience, she is uniquely
qualified to serve as a director of the Company.
|
|
Member, Compensation
Committee; Member,
Nominating and
Governance Committee
|
|
|
2003
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board Committee
|
|
Director
|
Director
|
|
Age
|
|
Experience
|
|
Assignments
|
|
Since
|
|
Carol B. Moerdyk (Class I)
|
|
|
59
|
|
|
Ms. Moerdyk retired from OfficeMax Incorporated (formerly Boise
Cascade Office Products Corporation) in 2007. At OfficeMax, she
served as Senior Vice President, International from August 2004
until her retirement. Previously, she held various roles at
Boise Cascade Office Products Corporation including Senior Vice
President Administration, Senior Vice President North American
and Australasian Contract Operations, and Chief Financial
Officer. Ms. Moerdyk began her professional career as an
assistant professor of finance at the University of Maryland.
Ms. Moerdyk serves on the Boards of Directors of American
Woodmark Corporation (NASDAQ: AMWD) (since 2005) and Kids Sports
Stars/Azimuth Foundation (since 2009). An Audit Committee
Financial Expert, Ms. Moerdyk is a Chartered Financial Analyst
and holds a bachelors degree from Western Michigan
University and a Ph.D. Candidates Certificate in finance
from the University of Michigan. Ms. Moerdyks
significant financial expertise, developed through her
experience as a CFA and public company Chief Financial Officer,
together with her executive leadership and international
operations experience, make her a valuable contributor to the
Board.
|
|
Chair, Compensation
Committee; Member, Audit Committee
|
|
|
1998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John C. Orr (Class II)
|
|
|
59
|
|
|
Since 2005, Mr. Orr has been the President, Chief Executive
Officer, and a director of Myers Industries, Inc. (NYSE: MYE),
an international manufacturer of polymer products for
industrial, agricultural, automotive, commercial and consumer
markets. Before assuming his current position, Mr. Orr was
President and Chief Operating Officer of Myers Industries and
General Manager of Buckhorn Inc., a Myers Industries subsidiary.
Mr. Orrs earlier career included 28 years with The
Goodyear Tire and Rubber Company, where he gained experience in
production and plant management at facilities throughout North
America and Australia, eventually holding such positions as
Director of Manufacturing in Latin America and Vice President
Manufacturing for the entire company worldwide. Mr. Orr holds a
B.S. in communication from Ohio University and has additional
training from Harvard Business School in business strategy,
finance and operations. Mr. Orr has served on the board of Akron
General Medical Center since 2006. Mr. Orrs extensive
experience in international manufacturing and plant management
is an important asset to the Board.
|
|
Member, Compensation
Committee
|
|
|
2008
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board Committee
|
|
Director
|
Director
|
|
Age
|
|
Experience
|
|
Assignments
|
|
Since
|
|
Richard I. Reynolds (Class II)
|
|
|
63
|
|
|
Since 1995, Mr. Reynolds has served as Libbeys Executive
Vice President and Chief Operating Officer. Now in his fortieth
year with the Company, Mr. Reynolds has held various positions
at Libbey, including Vice President and Chief Financial Officer
from 1993 to 1995; and Director of Finance and Administration
from 1989 to 1993. Mr. Reynolds holds a B.B.A. from the
University of Cincinnati. In addition to his work for the
Company, Mr. Reynolds serves on the boards of several private
organizations. As a result of the breadth and depth of his
experience with the Company, Mr. Reynolds provides the Board
with a learned perspective on the financial, administrative and
operational aspects of Libbeys business.
|
|
|
|
|
1993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terence P. Stewart (Class III)
|
|
|
61
|
|
|
Mr. Stewart is the Managing Partner of Stewart and Stewart, a
Washington, D.C.-based law firm specializing in trade and
international law issues, where he has been employed since 1976.
He has worked with various industries to solve trade matters in
the United States and abroad. Mr. Stewart is an adjunct
professor at Georgetown University Law Center, from which he
received his law degree. He also holds a B.A. from the College
of the Holy Cross and an M.B.A. from Harvard University. Both
the Ukrainian Academy of Foreign Trade and the Russian Academy
of Sciences have granted Mr. Stewart Honorary Doctorates.
Mr. Stewart is a member of the Council of Advisors of the
U.S. Court of Appeals for the Federal Circuit and a member
of the Steering Group of the International Trade Committee of
the American Bar Associations International Law Section.
Recently, Mr. Stewart has written extensively on trade relations
with the Peoples Republic of China, including volumes on
WTO accession commitments undertaken and progress made in
meeting those commitments over time, a review of intellectual
property protection within China and steps being taken to
address problems in enforcement, and reports on subsidies
provided to major sectors of the Chinese economy.
Mr. Stewart currently serves on the boards of several
private societies and associations and is a former member of the
Companys Nominating and Governance Committee. Mr. Stewart
possesses particular knowledge and experience in international
legal/regulatory and government affairs, including foreign trade
matters relevant to the glass industry, that strengthen the
Boards collective qualifications, skills and experience.
|
|
|
|
|
1997
|
|
How is our Board
leadership structured?
As noted above, our Board currently includes eight non-employee
directors and two employee directors. Of our eight non-employee
directors, seven have been determined to be independent. For
more information with respect to how the Board determines which
directors are considered independent, see How does our
13
Board determine which directors are considered
independent? below. Mr. Meier, our CEO, has
served as Chairman of the Board since 1993, when we became a
publicly-held company.
We are well-served by the Board leadership structure described
above. By unifying the Chairman and CEO roles in Mr. Meier,
we demonstrate to our employees, suppliers, customers and other
stakeholders that we are under strong leadership, with a single
person who has extensive institutional and industry knowledge
setting the tone and having primary responsibility for managing
our operations.
Although Mr. Meier serves as both Chairman and CEO, a
number of factors about our directors and the way our Board
operates promote independent oversight of management, including
our Chairman and CEO:
|
|
|
|
|
More than two-thirds of our directors are independent.
|
|
|
|
Each of our Boards standing committees (the Audit
Committee, the Compensation Committee and the Nominating and
Governance Committee) consists solely of independent directors.
|
|
|
|
Our Board meets regularly in executive session outside the
presence of management and has designated one of the independent
directors (currently Deborah G. Miller) to chair and lead those
executive sessions and to serve as a liaison to Mr. Meier.
|
|
|
|
Our independent directors routinely interact with members of
management who are not members of the Board, obtaining and
sharing information and viewpoints with respect to our business.
|
|
|
|
Our independent directors actively oversee key issues of concern
to them. For example, during 2009 the Board appointed a special
committee of independent directors to oversee our
recapitalization efforts. Carol B. Moerdyk chaired that
committee, which included William A. Foley and Peter C. McC.
Howell, and served as liaison to management while we negotiated
our debt exchange, which we consummated on October 28,
2009. The special committee was disbanded late in 2009.
|
Does Libbey have
Corporate Governance Guidelines?
Our Board of Directors has adopted Corporate Governance
Guidelines that govern the Board of Directors. Our Corporate
Governance Guidelines, as well as the charters for each of the
Audit, Compensation and Nominating and Governance committees,
are available on our website (www.libbey.com).
What is the role
of the Boards committees?
Our Board of Directors currently has three standing committees:
an Audit Committee; a Compensation Committee; and a Nominating
and Governance Committee.
Audit Committee. The Board of Directors
adopted an Audit Committee Charter in 2000 and periodically
reviews and, when indicated in light of current best practices,
updates the Audit Committee Charter. Most recently, the Board of
Directors adopted a new Audit Committee Charter at the
Boards meeting held on February 5, 2008. The current
Audit Committee Charter is available on Libbeys website
(www.libbey.com).
The functions of the Audit Committee are described under
Audit-Related Matters; Report of the Audit
Committee below. The Audit Committee met eight times
during 2009. On February 9, 2010, the Board selected the
members of the Audit Committee for the coming year, as shown
above. The Board has determined that all members of the Audit
Committee are independent, within the meaning of SEC regulations
and the listing standards of the NYSE Amex exchange. The Board
has further determined that each of Messrs. Duno and Howell
and Ms. Moerdyk is qualified as an audit committee
financial expert, as defined in SEC regulations, and that each
of Messrs. Duno, Gougelet and Howell and Ms. Moerdyk
is financially sophisticated and literate and has accounting and
related financial management expertise, as those qualifications
are interpreted by the Board in its business judgment.
Compensation Committee. The Compensation
Committee is responsible for (a) discharging the
Boards responsibilities relating to executive
compensation, including by considering the potential impact of
our executive compensation program on our risk profile,
(b) producing an annual report on executive compensation
for inclusion in the proxy statement or annual report on
Form 10-K
as required by the SEC, and
14
(c) approving grants of stock options and other awards
under the companys equity participation plans and
providing oversight and administration of these plans in
accordance with the provisions of the plans. In particular, the
Compensation Committee has been charged with the following
responsibilities:
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The Compensation Committee reviews executive compensation at
comparable companies and recommends to the Board compensation
levels and incentive compensation plans for our executives;
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The Compensation Committee reviews and approves the goals and
objectives relevant to the targets of the executive incentive
compensation plans, taking into account the potential impact of
these goals, objectives and targets on our risk profile;
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Following the Boards annual evaluation of the performance
of the Chief Executive Officer (which is reviewed with the CEO
by the chairs of the Compensation Committee and Nominating and
Governance Committee), the Compensation Committee establishes
the compensation of the CEO based on the evaluation, and in
determining the long-term incentive compensation component of
the CEOs compensation, the Compensation Committee
considers the Companys performance, relative shareholder
return, the value of similar awards to chief executive officers
at comparable companies and the awards given to the
Companys CEO in prior years.
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The Compensation Committee performs an annual evaluation of the
performance and effectiveness of the Compensation Committee.
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The Compensation Committee met 10 times during 2009. On
February 9, 2010, the Board selected the members of the
Compensation Committee for the coming year, as shown above. The
Board has determined that all members of the Compensation
Committee are independent, within the meaning of the listing
standards of the NYSE Amex exchange, and that all members of the
Compensation Committee are outside directors, within
the meaning of 26 CFR § 1.162-27.
Nominating and Governance Committee. Pursuant
to the charter of the Nominating and Governance Committee, the
Committee is responsible for developing and implementing
policies and practices relating to corporate governance,
including reviewing and monitoring implementation of our
Corporate Governance Guidelines. In addition, the Committee is
responsible for establishing a selection process for new
directors to meet the needs of the Board, for evaluating and
recommending candidates for Board membership, for assessing the
performance of the Board and reviewing that assessment with the
Board and for establishing objective criteria to evaluate the
performance of the CEO. The Committee also is responsible for
reporting to the Board trends in director compensation practices
and the competitiveness of the Companys director
compensation practices.
The Nominating and Governance Committee met seven times in 2009.
On February 9, 2010, the Board selected the members of the
Nominating and Governance Committee for the coming year, as
shown above. The Board has determined that all of the members of
the Committee are independent, within the meaning of the listing
standards of the NYSE Amex exchange.
In addition, as indicated above under How is our Board
leadership structured?, during 2009 the Board
appointed an ad hoc special committee of independent
directors to oversee our recapitalization efforts. The special
committee, which met 30 times during 2009, was disbanded late in
2009.
How does our
Board oversee risk?
Our management is responsible for
day-to-day
risk management and our Board, through the Audit Committee, is
responsible for oversight of managements risk management
processes. We have implemented an enterprise-wide risk
management program. Our Director, Enterprise Risk Management,
has primary responsibility for this program and reports to our
Vice President, Chief Financial Officer. We also have an
Enterprise Risk Management Steering Committee consisting of
members of senior management from across our operations.
Through our enterprise risk management program, we identify,
evaluate and address actual and potential risks that may impact
our business and our financial results. Our Director, Enterprise
Risk Management
15
reports routinely to the Audit Committee with respect to the
status of our program and particular risk strategies, and we
apprise our Board of particular risk management matters in
connection with its general oversight of our business.
How does our
Board select nominees for the Board?
Our Board selects new directors following review and evaluation
by the Nominating and Governance Committee, which also proposes
and reviews the criteria for membership at least biannually and
the selection process. The Nominating and Governance Committee
solicits input from all Board members and makes its
recommendation to the Board. An invitation to join the board is
extended by the Chairman of the Board on behalf of the Board. A
shareholder who wishes to recommend a prospective nominee for
the Board may notify our Corporate Secretary or any member of
the Nominating and Governance Committee in writing, including
such supporting material as the shareholder deems appropriate.
Candidates for director nominated by shareholders will be given
the same consideration as candidates nominated by other sources.
The Board in its Corporate Governance Guidelines has determined
that Board members must satisfy the following standards and
qualifications:
Requisite
Characteristics for Board Candidates
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the highest professional and personal ethics and values,
consistent with longstanding Libbey values and standards
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broad experience at the policy-making level in business,
government, education, technology or public interest
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commitment to enhancing shareholder value
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devotion of sufficient time to carry out the duties of Board
membership and to provide insight and practical wisdom based
upon experience
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expertise in areas that add strategic value to the Board
and/or
knowledge of business in foreign locations strategic to our
then-current or potential future operations. For example,
current or recent experience as a chief executive officer of a
public company; expertise in logistics and advanced supply chain
management; experience as an executive with a large
multinational company or as an expatriate executive in the Far
East, Europe or Latin America; management experience in the
foodservice industry; or management or board experience in a
highly leveraged environment.
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In addition, the Boards Corporate Governance Guidelines
set forth the Boards intention to seek directors who are
strategic thinkers, understand complex capital structures and
the operational constraints that they create, are members of the
boards of directors of other public companies and have
experience and expertise in corporate governance, marketing
expertise
and/or
experience in the consumer products industry. Consistent with
the Boards Corporate Governance Guidelines, the Board also
seeks directors who, as compared to then-existing members of the
Board, are diverse with respect to geography, employment, age,
race or gender. Reflecting this desire to foster a diverse
Board, two of our directors are women and one director is
Hispanic. In addition, one director is French and brings us his
deep knowledge of the European glass tableware industry, and
another director is British and, through his wide travels around
the world, brings us his perspective as to the international
business environment, particularly in China.
Finally, the Board considers such other relevant factors as it
deems appropriate, including the current composition of the
Board, the balance of management and independent directors, the
need for Audit Committee expertise and the evaluations of other
prospective nominees.
The Nominating and Governance Committee employed the services of
a third-party search firm to identify and recruit
Ms. Moerdyk to the Board in 1998 and Mr. Orr to the
Board in 2008, and, under its charter, the Nominating and
Governance Committee continues to have the authority to employ
the services of a third-party search firm in fulfilling its
duties to select nominees to the Board.
16
How does our
Board determine which directors are considered
independent?
Pursuant to the Corporate Governance Guidelines approved by the
Board, the Board has made a determination as to the independence
of each of the members of the Board. In making this
determination, the Board has considered the existence or absence
of any transactions or relationships between each director or
any member of his or her immediate family and Libbey and its
subsidiaries and affiliates, including those reported under
Certain Relationships and Related
Transactions What transactions involved directors or
other related parties? below. The Board also examined
the existence or absence of any transactions or relationships
between directors or their affiliates and members of
Libbeys senior management or their affiliates.
As provided in the Guidelines, the purpose of this review was to
determine whether there is any relationship that is inconsistent
with a determination that a director is independent of Libbey or
its management. Specifically, the Guidelines preclude a
determination by the Board that a director is independent if the
director does not meet the independence requirements set forth
in the listing standards of the New York Stock Exchange, which
are substantially the same as the independence requirements set
forth in the listing standards of the NYSE Amex exchange, on
which our common stock currently is listed.
As a result of this review, the Board has affirmatively
determined that Carlos V. Duno, William A. Foley, Jean-René
Gougelet, Peter C. McC. Howell, Deborah G. Miller, Carol B.
Moerdyk and John C. Orr are independent of Libbey and its
management under the standards set forth in the Corporate
Governance Guidelines. Messrs. Meier and Reynolds are
considered inside directors because of their employment as
senior executives of Libbey. Mr. Stewart is considered a
non-independent director because in the past three years Stewart
and Stewart, the law firm of which Mr. Stewart is managing
partner, has provided legal services to Libbey in connection
with international trade matters and is expected to continue to
do so. For more information with respect to the compensation
paid to Mr. Stewarts law firm for services provided
to Libbey in 2009, see Corporate Governance
Certain Relationships and Related
Transactions What transactions involved directors or
other related parties? below.
How often did our
Board meet during fiscal 2009?
The Board of Directors met 14 times during 2009. Six of these
meetings were regularly scheduled meetings and eight of them
were special meetings (three of which were attended only by
non-employee directors). During 2009, each member of the Board
of Directors attended 75% or more of the aggregate number of
meetings of the Board and at least 75% of the aggregate number
of meetings of the committees of the Board that he or she was
eligible to attend. In addition to the regularly scheduled and
special meetings referred to above, and in light of the
turbulent economy and related concerns about our business and
capital structure, management held, at the Boards request,
informal telephonic status updates generally on a weekly basis
between February and October of 2009. Attendance by individual
members of the Board of Directors at these informal telephonic
status updates was voluntary.
Certain
Relationships and Related Transactions What
transactions involved directors or other related
parties?
We desire to maintain a Board of Directors in which a
substantial majority of our directors are independent, as
defined in our Corporate Governance Guidelines. Those Guidelines
preclude a determination by the Board that a director is
independent if the director does not meet the independence
requirements set forth in the listing standards of the New York
Stock Exchange, which are substantially the same as the
independence requirements set forth in the listing standards of
the NYSE Amex exchange, on which our common stock currently is
listed. We generally prohibit related-party transactions
involving directors. Our Board makes a single exception to that
policy in order to enable us to obtain legal services with
respect to international trade matters from the law firm of
Stewart and Stewart, of which Mr. Stewart is managing
partner. During 2009 Stewart and Stewart received fees of
approximately $8,721 from us for legal services in connection
with various international trade matters. We anticipate that we
will continue to utilize the legal services of Stewart and
Stewart in the future in connection with international trade
matters. In that
17
connection, because our Board believes that Libbeys
General Counsel is best suited to select legal counsel for
Libbey, the Board does not require that we seek the approval of
the Board, or of any committee of the Board, in connection with
our engagement of Stewart and Stewart. However, the Board has
determined that, as a result of our engagement of Stewart and
Stewart with respect to international trade matters,
Mr. Stewart is not independent of Libbey.
In addition, our Code of Business Ethics and Conduct, which we
refer to as our Code of Ethics, requires that all of
Libbeys directors, officers and other employees avoid
conflicts of interest. Related-party transactions that are of
the nature and magnitude that they must be disclosed pursuant to
Item 404(b) of
Regulation S-K
would be considered transactions that could give rise to a
conflict of interest, and therefore are covered by our Code of
Ethics. Our Code of Ethics requires that any conflicts of
interest be reported to our Legal Department, and that the
written concurrence of our General Counsel is required to waive
any conflict of interest. In addition, our Code of Ethics
requires that waivers of our Code of Ethics with respect to
executive officers or directors may be granted only by the Board
of Directors and only if the noncompliance with our Code of
Ethics is or would be immaterial or if the Board of Directors
otherwise determines that extraordinary circumstances exist and
that the waiver is in the best interests of our shareholders.
How do
shareholders and other interested parties communicate with the
Board?
Shareholders and other parties interested in communicating
directly with the non-management directors as a group may do so
by writing to Non-Management Directors,
c/o Corporate
Secretary, Libbey Inc., 300 Madison Avenue,
P.O. Box 10060, Toledo, Ohio
43699-0060.
The Nominating and Governance Committee has approved a process
for handling letters that we receive and that are addressed to
the non-management members of the Board. Under that process, the
Corporate Secretary is responsible for reviewing all such
correspondence and regularly forwarding to the non-management
members of the Board a summary of all correspondence and copies
of all correspondence that, in the opinion of the Corporate
Secretary, deals with the function of the Board or committees
thereof or that the Corporate Secretary otherwise determines
requires the attention of the Board. Directors may, at any time,
review a log of all correspondence that we receive and that are
addressed to the Non-Management Directors or other members of
the Board and request copies of any such correspondence.
Concerns relating to accounting, internal controls or auditing
matters are brought immediately to the attention of our internal
auditors and Audit Committee and are handled in accordance with
procedures established by the Audit Committee with respect to
such matters.
Are Libbeys
Corporate Governance Guidelines, Code of Business Ethics and
Conduct and Committee Charters available to
shareholders?
Our Corporate Governance Guidelines and Code of Business Ethics
and Conduct (which applies to all of our employees, officers and
directors), as well as the Charters for each of the Audit
Committee, the Compensation Committee and the Nominating and
Governance Committee, are available on our website
(www.libbey.com). They also are available in print, upon
request, to any holder of our common stock. Requests should be
directed to Corporate Secretary, Libbey Inc., 300 Madison
Avenue, P.O. Box 10060, Toledo, Ohio
43699-0060.
Are Libbeys
directors required to attend Libbeys annual meeting of
shareholders?
While our directors are not required to attend our annual
meeting of shareholders, we typically schedule a meeting of the
Board of Directors to take place at the same location and on the
same day as the annual meeting of shareholders. As a result, we
anticipate that a substantial majority of our directors will be
present at the annual meeting of shareholders to be held on
May 6, 2010. In 2009, all members of the Board of Directors
attended our annual meeting of shareholders.
18
AUDIT-RELATED
MATTERS
Who are
Libbeys auditors?
Upon the recommendation of the Audit Committee, the Board of
Directors has appointed Ernst & Young LLP as
Libbeys independent auditors for the fiscal year ending
December 31, 2010. Although ratification by the
shareholders is not required by law, the Board of Directors
believes that you should be given the opportunity to express
your views on the subject. See
Proposal 2 Ratification of
Auditors below.
A representative of Ernst & Young LLP is expected to
attend the Annual Meeting and will have an opportunity to make a
statement if the representative so desires. The representative
will be available to respond to appropriate questions.
What fees has
Libbey paid to its auditors for fiscal 2009 and 2008?
Fees for services rendered by Ernst & Young LLP for
the years ended December 31, 2009 and 2008 are as follows:
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Nature of Fees
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2009 Fees
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2008 Fees
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Audit Fees(1)
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$
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1,314,690
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$
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1,329,777
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Audit Related Fees(2)
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$
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80,000
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$
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80,000
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Tax Fees(3)
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$
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0
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$
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2,334
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All Other Fees
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$
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0
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$
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0
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Total
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$
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1,394,690
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$
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1,412,111
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(1) |
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Fees for audit services include fees associated with the annual
audit of our internal controls, the annual audit of financial
statements and the reviews of our quarterly reports on
Form 10-Q
and annual report on Form
10-K. |
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Audit-related fees include fees for audits of our employee
benefit plans. |
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(3) |
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Compliance related to value-added tax (VAT) refunds in Mexico in
2008. |
All audit-related, tax and other services were pre-approved by
the Audit Committee, which concluded that the provision of these
services by Ernst & Young LLP was compatible with the
maintenance of that firms independence in the conduct of
its audit functions. The Audit Committees policy regarding
auditor independence requires pre-approval by the Audit
Committee of audit, audit-related and tax services on an annual
basis. The policy requires that engagements that the auditors or
management anticipates will exceed pre-established thresholds
must be separately approved. The policy also provides that the
Committee will authorize one of its members to pre-approve
certain services. The Committee has appointed Carlos V. Duno,
Chair of the Committee, to pre-approve these services.
Report of the
Audit Committee
The following Report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other filing by Libbey under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent Libbey specifically incorporates this
Report by reference therein.
The Audit Committee oversees the integrity of our financial
statements on behalf of the Board of Directors; the adequacy of
our systems of internal controls; our compliance with legal and
regulatory requirements; the qualifications and independence of
our independent auditors; and the performance of our independent
auditors and of our internal audit function.
In fulfilling its oversight responsibilities, the Audit
Committee has direct responsibility for, among other things:
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confirming the independence of our independent auditors;
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appointing, compensating and retaining our independent auditors;
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reviewing the scope of the audit services to be provided by our
independent auditors, including the adequacy of staffing and
compensation;
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approving non-audit services;
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overseeing managements relationship with our independent
auditors;
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overseeing managements implementation and maintenance of
effective systems of internal and disclosure controls;
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reviewing our internal audit program; and
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overseeing our enterprise risk management program.
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The Audit Committee reviews and discusses with management and
the independent auditors all annual and quarterly financial
statements prior to their issuance. The Audit Committees
discussions with management and the independent auditors include
a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial
statements.
The Audit Committee met both with management and with the
independent auditors who are responsible for auditing the
financial statements prepared by management and expressing an
opinion on the conformity of those audited financial statements
with accounting principles generally accepted in the United
States. The Audit Committee also met with each of the
independent auditors and the internal auditors without
management being present. The Audit Committee discussed with the
independent auditors and management the results of the
independent auditors examinations; their judgments as to
the quality, not just the acceptability, of our accounting
principles; the adequacy and effectiveness of our accounting and
financial internal controls; the reasonableness of significant
judgments; the clarity of disclosures in the financial
statements; and such other matters as are required to be
communicated to the Audit Committee under generally accepted
auditing standards, including Accounting Standards Board
Statement on Auditing Standards No. 61, Communication with
Audit Committees. In addition, the Audit Committee discussed
with the independent auditors the auditors independence
from management and Libbey, including the matters in the written
disclosures required by the Independence Standards Board,
Standard No. 1, Independence Discussions with Audit
Committees.
Taking all of these reviews and discussions into account, the
Audit Committee has recommended to the Board of Directors that
the audited financial statements be included in our Annual
Report on
Form 10-K
for the year ended December 31, 2009, for filing with the
Securities and Exchange Commission.
Carlos V. Duno, Chair
Jean-René Gougelet
Peter C. McC. Howell
Carol B. Moerdyk
COMPENSATION-RELATED
MATTERS
Compensation
Discussion and Analysis
Executive
Summary
Financial and Operational Highlights for
2009. As 2009 began, we faced weakened economies
in all of our key markets around the world and, compared to the
fourth quarter of 2007, a steep drop-off in our core
U.S. foodservice sales, as many of our foodservice
customers dramatically reduced inventories in the fourth quarter
of 2008. We were highly leveraged, with debt that included a
$150.0 million asset-based loan facility, which we refer to
as our ABL facility, $306.0 million of floating rate senior
secured notes, which we refer to as our senior notes, and
$148.9 million principal amount of senior subordinated
secured
payment-in-kind
notes, which we refer to as our PIK notes. Through June 1,
2009, interest on the PIK notes was payable through
20
issuance of additional PIK notes and, as a result, the principal
amount of the PIK notes had increased to $160.9 million at
June 30, 2009. In addition, a semi-annual cash interest
payment of $12.9 million was due on the PIK notes on
December 1, 2009.
The combination of these factors raised concerns as to our
ability to generate sufficient cash to meet our business needs
and service our debt and, together with the global credit
crisis, created concern about our ability to refinance our debt
before the December 1, 2009 due date for the
$12.9 million cash interest payment on the PIK notes.
Reflecting these uncertainties, our stock price started the year
at $1.25 and dropped as low as $0.47 when our stock was
de-listed by the New York Stock Exchange in April 2009.
Led by our executive officers, our 6,850 employees gave
their maximum effort to address the challenges facing us. After
setting an ambitious goal to generate $18.0 million of free
cash flow in 2009, compared to a use of cash in 2008 of
$46.6 million, through aggressive cost-cutting and
inventory control measures we beat that goal by
$67.4 million an improvement of
$132.0 million in free cash flow compared to 2008. In
addition, in spite of a 7.6% reduction in our net sales, which
declined from $810.2 million in 2008 to $748.6 million
in 2009, we increased our adjusted EBITDA from
$85.2 million in 2008 to $90.1 million in
2009 a $4.9 million increase.
In addition, in October 2009, we exchanged the PIK notes for a
combination of new PIK notes and equity, in the process
eliminating the $12.9 million cash interest payment that
was due on December 1, 2009. In recognition of our improved
liquidity and capital structure, our stock price rebounded to
close out 2009 at $7.65, a 512% increase over our closing stock
price at the end of 2008. The improvement in our financial
results, stock price and capital structure positioned us for
listing on the NYSE Amex exchange at the beginning of this year,
followed shortly after that by the successful refinancing of our
ABL facility, senior notes and new PIK notes in early February
2010.
2009 Executive Compensation Highlights. As a
result of the significant deterioration in our stock price
during the second half of 2008 as the global economic recession
began to impact our business, we paid no annual incentive
compensation to our executives for 2008 performance. In
addition, in October 2008 we froze the salaries of our
U.S. salaried employees, and, as the recession continued to
negatively impact our business in early 2009, we cut the
salaries of our U.S. salaried employees and suspended our
matching contribution to our 401(k) plan in February 2009. The
salaries of our U.S. executive officers were reduced by
7.5%, while the salaries of our other U.S. salaried
employees were reduced by 5%. Further, in reaction to our low
stock price and the limited number of shares available for
awards under our 2006 Omnibus Incentive Plan, we modified our
long-term incentive program, which we refer to as our LTIP, by,
among other things, changing the methodology for determining the
number of NQSOs and RSUs awarded to our executives in 2009. This
change in methodology resulted in a substantial decline in the
long-term compensation opportunity available to our executive
officers for 2009. As a result of the collective impact of these
measures, our executive officers experienced a reduction in
their total direct compensation
opportunity1
for 2009 of between 18% and 36%.
At the same time, we recognized that it was critical that we
keep our executives motivated during 2009, and to keep their
interests aligned with our shareholders, in order to ensure that
we would have adequate liquidity to meet our business needs and
pay interest on our high levels of debt, including the
$12.9 million cash interest payment due under our PIK notes
on December 1, 2009. In light of our relatively near-term
debt maturities in late 2010 and mid-2011, we also believed that
it was important to position Libbey to refinance that debt as
soon as the capital markets stabilized. Accordingly, we designed
our incentive plans for 2009, including our senior management
incentive plan, which we refer to as our 2009 SMIP, and the
performance component of our long-term incentive plan for 2009,
which we refer to as our 2009 LTIP, to reward our executive
officers based upon our free cash flow generation during 2009,
but we conditioned payment of
1 Total
direct compensation includes salary, annual cash incentives and
bonus compensation, and long-term incentive compensation. The
total direct compensation opportunity contemplates payment of
incentive compensation (annual and long-term) at target,
although the opportunity for payouts in excess of target exists
under the relevant plans.
21
incentive compensation on achievement of adjusted earnings
before interest, taxes, depreciation and amortization, which we
refer to as adjusted EBITDA. For further information as to how
we calculate adjusted EBITDA, see What compensation did
Libbeys executives receive for 2009? below. In
addition, we conditioned our obligation to pay the cash
component of our 2009 LTIP to all executive officers other than
Mr. Meier and Mr. Reynolds (both of whom are
retirement-eligible) upon the executive officers
continuous employment with Libbey through December 31,
2011. We imposed that condition in order to further our talent
retention objective, as described below under What are
the objectives of Libbeys executive compensation
program?.
As indicated above under Financial and Operational
Highlights for 2009, we set a record for free cash
flow generation in 2009, and our adjusted EBITDA for 2009 was
102.7% of our budgeted EBITDA for the year. As a result, the
Compensation Committee, at its February 8, 2010 meeting,
authorized the following awards under our 2009 SMIP to our named
executives:
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With respect to the corporate component, representing 70% of
each named executives opportunity under the SMIP, a
maximum payout representing 200% of each named executives
target opportunity; and
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With respect to the individual component, representing 30% of
each named executives opportunity under the SMIP, payouts
representing between 71% and 200% of the named executives
respective target opportunities.
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In addition, the Compensation Committee determined that, for the
2007-2009
performance cycle under our long-term incentive plan for 2007,
which we refer to as our 2007 LTIP, 67.8% of the target number
of performance shares awarded in 2007 had been earned, since we
achieved cumulative adjusted EBITDA over the performance cycle
equal to 90.4% of the sum of adjusted EBITDA budgeted for each
year during the performance cycle.
For more information with respect to these awards, see
What compensation did Libbeys executives receive
for 2009? below.
What are the
objectives of Libbeys executive compensation
program?
Our executive compensation program for 2009 was structured to
achieve the following objectives:
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Talent Attraction and Retention Objective. Our
business experienced significant challenges as a result of the
global economic recession and credit crisis in late 2008 and
2009. In order to meet these challenges, it was imperative that
we attract and retain our highly qualified, experienced
executives, including Mr. Rubio, who joined us in July 2009.
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Motivational Objective. We have a complex
business, with operations in five countries on three continents
and sales to more than 100 countries across the globe. In order
to meet the challenges that our business faced during 2009, and
in light of constraints imposed on the compensation
opportunities that we could provide to our executives, as
described above, it was incumbent upon us to create an executive
compensation program providing adequate financial incentives to
keep our executives motivated throughout the year.
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Alignment Objective. In light of the impact of
the challenged economy and credit markets on our business and
our stock price, we structured the program to ensure that, if
our shareholders profited, our executives also would profit.
Accordingly, our executive compensation program for 2009 was
designed to align the interests of our executives with those of
our shareholders.
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Reasonableness Objective. We designed our 2009
executive compensation program to balance the need to provide
sufficient financial incentives to achieve the three objectives
described above with the need to ensure that executive
compensation is reasonable and appropriate.
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22
In what forms
did Libbey deliver compensation to its executives in 2009, and
what purposes do the various forms of compensation
serve?
In 2009 we delivered compensation opportunities to our
executives in the form of annual cash compensation; long-term
cash and equity-based incentives; fringe benefits and limited
perquisites; and income protection under certain limited
circumstances. Although our most senior executives have the
highest compensation opportunities, they also have a higher
percentage of their compensation opportunities at
risk than our more junior executives.
The following table sets forth the respective forms of
compensation for which our executive officers were eligible for
2009, the characteristics of those forms of compensation, and
the purposes or objectives that each form of compensation is
designed to fulfill:
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Form of Compensation
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Characteristics
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Purpose/ Objective
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Annual cash compensation
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Base Salary
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Fixed component, reviewed annually.
For our executive officer based in Mexico, also includes certain compensation elements (such as the so-called 13th month premium payable under the laws of many countries) that we are required to provide to him in accordance with the Federal Labor Law of Mexico.
Differences among executives are a function of level of responsibility, experience, tenure, individual performance, comparison to market pay information and applicable law.
For our named executives for 2009, base salary represented between 35% and 48% of their 2009 total direct compensation opportunity.
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To compensate executives based upon level of responsibility, experience, tenure, individual performance and comparison to market pay information and applicable law.
To provide for a stable and fixed level of compensation at competitive rates, thereby contributing to our talent attraction and retention objective.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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Annual incentive award under our SMIP
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At-risk variable pay opportunity for short-term performance.
Target award equal to a percentage of actual base salary.(1)
Differences in target awards are a function of level of responsibility, anticipated ability to affect company performance and comparison to market pay information.
For 2009, each executive officers target opportunity had two components a corporate component, representing 70% of his or her target opportunity for 2009, and an individual component, representing 30% of his or her target opportunity for 2009.
Amount actually payable varies based upon company performance and individual performance. In 2009, the amount actually payable under the corporate component was dependent upon the extent to which we achieved budgeted free cash flow, although no payout under either the corporate or the individual components could be earned unless certain threshold levels of cash generation and adjusted EBITDA also were met.
For the named executives for 2009, target payouts under our 2009 SMIP represented between 22% and 32% of their 2009 total direct compensation opportunity.
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To motivate sustained performance.
To motivate achievement of short-term company and individual goals.
To attract and retain talent by providing a market-competitive cash incentive opportunity.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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Discretionary cash awards
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Payout based upon the Compensation Committees
qualitative assessment of each executive officers
individual performance, performance relative to internal peers,
the extent to which the leadership of the executive officer
contributed to our success during the year and any outstanding
achievements during the year that were not contemplated when we
set the individual goals under the SMIP.
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To reward individual performance that demonstrates
excellence in the execution and achievement of short-term goals
without sacrificing focus on Libbeys long-term goals.
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Long-term Incentives under our LTIP(2)
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Performance component
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At-risk variable pay opportunity for sustained, long-term performance.
Target opportunity equal to a percentage of base salary.
Differences in target opportunities are a function of level of responsibility, anticipated ability to affect company performance over the long term and comparison to market pay information.
Amount actually earned is formula-driven. For the 2007-2009 and 2008-2010 performance cycles, amount actually earned varies based upon the extent to which we achieve budgeted EBITDA over the applicable performance cycle. For the 2009 performance cycle, amount actually earned varies based upon the extent to which we achieved budgeted free cash flow during the performance cycle.
For the 2007-2009 and 2008-2010 performance cycles, payable in the form of one share of Libbey Inc. common stock for each earned performance share. For the 2009 performance cycle, payable in the form of cash.
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To motivate long-term performance because the amount realized by executives varies based upon actual financial performance.
To align interests with shareholders.
To attract and retain high-caliber executive talent.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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Generally awarded each year for a three-year performance cycle that begins on January 1 of the first year, although, in light of the lack of visibility into expected future performance resulting from the significant economic turbulence of late 2008 and early 2009, a one-year performance cycle was selected for the plan adopted in February 2009. The determination of the payout for each performance cycle occurs early in the year after the performance cycle ends.
For 2009, value of performance component at target payout was intended to represent 40% of each named executives long-term incentive opportunity but actually represented 82% of each named executives actual long-term incentive opportunity and between 20% and 27% of his or her total direct compensation opportunity.
With respect to performance cycles as to which the award earned is payable in shares of Libbey Inc. common stock, performance shares having a grant date fair value equal to a target payout are awarded at inception of the performance cycle, but the underlying shares of common stock are issued only if and to the extent earned. No dividends are payable on the common stock underlying unearned performance shares, and the executive does not have voting rights with respect to unearned performance shares.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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NQSOs
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Inherently performance-based award.
Exercise price equal to closing price on grant date.
Differences in the value (and therefore number) of NQSOs awarded to various executives are a function of level of responsibility, anticipated ability to affect company performance over the long term, comparison of grant date value to be transferred to market pay information and differences in Black Scholes values of the NQSOs on their respective grant dates.
Generally awarded annually, with one-quarter vesting at the end of each of the first four years of a ten-year term. Awards to new hires that cliff vest on the third anniversary of date of hire also may be made.
For 2009, grant date fair value of NQSOs was intended to represent 20% of each named executives long-term incentive opportunity, but actually represented between 2% and 8% of his or her total direct compensation opportunity.
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To motivate long-term performance because amount realized by executives is based on the increase in the stock price from the date of grant.
To align interests with shareholders.
To attract talent by providing market-competitive awards; time-based vesting also serves to retain talent.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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RSUs
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Differences in the value (and therefore number) of RSUs awarded to various executives are a function of level of responsibility, anticipated ability to affect company performance over the long term, comparison to market pay information and the closing price used to determine the number of RSUs awarded.
Generally awarded annually, with one-quarter vesting on each of the first through fourth anniversaries of the grant date.
For 2009, grant date fair value of RSUs was intended to represent 40% of each named executives long-term incentive opportunity, but actually represented between 2% and 5% of his or her total direct compensation opportunity.
No dividends are payable on the common stock underlying unvested RSUs, and the executive does not have voting rights with respect to unvested RSUs.
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To attract talent by providing market-competitive awards; time-based vesting also serves to retain talent.
To motivate performance because amount realized by executives varies based upon stock price performance over an extended period of time.
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Fringe benefits and perquisites
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Medical, dental and life insurance benefits
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Benefits provided to U.S. executive officers on the
same basis as for all salaried U.S. employees. Benefits provided
to our executive officer based in Mexico on the same basis as
for certain levels of management at our Mexican subsidiary.
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To provide market-competitive fringe benefits that
further our talent attraction and retention objective.
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Limited perquisites
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Tax return preparation and financial planning
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Direct payment or reimbursement of fees incurred in
connection with personal financial planning and tax return
preparation, together with related gross-ups.
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To provide access to knowledgeable resources that
can assist our executives in efficiently and effectively
managing their personal financial and tax planning issues.
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Executive health screening program
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Annual executive physical examination and related
services.
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To provide executives with health screening and
related services to help them maintain their overall health,
thereby contributing to continuity of management.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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Limited ground transportation
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For each executive officer based in Toledo, Ohio, ground transportation for trips between Toledo, Ohio and the Detroit/Wayne County Metropolitan airport for the executive when traveling for business purposes and for the executive and his or her spouse when traveling together.
For our executive officer based in Monterrey, Mexico, ground transportation for travel between the executives home, our facilities in Monterrey and the Monterrey airport.
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To provide fringe benefits that further our talent attraction and retention objective and our reasonableness objective.
For our executive officer based in Monterrey, Mexico, to provide secure transportation in light of the heightened risk of kidnap for ransom in that location.
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Relocation benefits
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Typically provided to senior executives who are required to relocate as a result of their employment with Libbey.
Typically covers expenses associated with selling an existing home, house-hunting and moving to the new location. Also includes a tax gross-up.
In extremely rare instances, includes loss-on-sale protection if necessary to lure an exceptional executive.
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To attract and retain talent.
To motivate performance by enabling a relocating executive to remain focused on business issues rather than relocation issues.
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Income protection
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Retirement plans
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Cash balance pension plan, which we refer to as our
Salary Plan
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Qualified plan for all U.S. salaried employees hired
before January 1, 2006; certain long-term employees, including
our CEO and COO, are eligible for a benefit at least equal to
the benefit that would have been provided under our previous
defined benefit plan.
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To provide a reasonable level of replacement income
upon retirement, thereby serving as an incentive for a long-term
career with Libbey.
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Supplemental Retirement Benefit Plan, which we refer
to as our SERP
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An excess, nonqualified plan designed to provide
substantially identical retirement benefits as the Salary Plan,
to the extent the Salary Plan cannot provide those benefits due
to limitations set forth in the Internal Revenue Code of 1986,
as amended, which we refer to as the Code or the Internal
Revenue Code.
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To provide a reasonable level of replacement income
upon retirement, thereby serving as an incentive for a long-term
career with Libbey.
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We have provided no enhancement of service credit
under the SERP.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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401(k) savings plan
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Matching contributions to our 401(k) savings plan
provided on the same basis as for all salaried U.S. employees.
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To provide an opportunity to save for retirement on
a tax-deferred basis up to limits established by the Code.
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Executive Deferred Compensation Plan, an unfunded
plan that we refer to as our EDCP
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Permits deferrals of up to 60% of base pay and cash incentive compensation, and up to 100% of equity compensation.
Deferred cash compensation deemed invested in one of 13 measurement funds, including a Libbey Inc. phantom stock fund; deferred equity compensation deemed invested in the Libbey Inc. phantom stock fund.
With respect to deferrals of eligible compensation in excess of IRS limitations applicable to qualified plans, matching contributions equal to 100% of first 1%, and 50% of next 2-6%, of eligible compensation deferred.
No guaranteed return on amounts deferred, which are subject to the rights of our general creditors in the event of our insolvency.
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To restore benefits that would have been available
to the executives under the 401(k) plan but for IRS limitations
on qualified plans, and to provide executives with an additional
vehicle that enables them to save for retirement on a
tax-deferred basis, in each case contributing to our talent
attraction and retention objective. To the extent cash or equity
compensation is deemed invested in the Libbey Inc. phantom stock
fund, also provides executive officers with an additional
vehicle to meet the stock ownership guidelines applicable to
executive officers.
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Executive long-term disability coverage
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Enhances the standard 60% long-term disability benefit that we provide to all U.S. salaried employees with an additional benefit of up to 15% of regular earnings and incentive and bonus pay, or $7,500 per month, for a total long-term disability benefit of up to 75% of pay.
Coverage is portable.
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To provide a higher level of replacement income upon
disability than is provided under our disability coverage
available to all U.S. salaried employees, thereby contributing
to our talent attraction and retention objective and our
objective of motivating our executives to focus on business
issues.
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Form of Compensation
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Characteristics
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Purpose/ Objective
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Employment and change in control agreements
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With respect to our executive officers based in the U.S., contingent component; payouts only if employment is terminated under certain circumstances, although certain annual incentive and other performance-based compensation may vest on an accelerated basis solely upon a change in control (without the requirement that employment be terminated).
With respect to our executive based in Mexico, a minimum payout is required under Mexican law unless employment is terminated for cause, as defined under the Federal Labor Law of Mexico. Otherwise, payouts only if employment is terminated under certain circumstances, although certain annual incentive and other performance-based compensation may vest on an accelerated basis solely upon a change in control (without the requirement that employment be terminated).
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With respect to our executive officer based in Monterrey, Mexico, to comply with the Federal Labor Law of Mexico, which requires that each employee of a Mexican company be provided an employment agreement.
To facilitate attraction and retention of high caliber executives in a competitive labor market in which formal severance plans are common.
To ensure executives focus on exploring opportunities that will result in maximum value for our shareholders, including actions that might result in a loss of employment with, or a change in position or standing within, Libbey.
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(1) |
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The following table sets forth the target percentage of actual
base salary for each of the named executives in 2009: |
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Target SMIP Opportunity as a
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Percentage of Actual Base Salary
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Named Executive
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(%)
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G. Geswein
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60
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%
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J. Meier
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90
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%
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R. Reynolds
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75
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%
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R. Rubio
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55
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%
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K. Wilkes
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55
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%
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(2) |
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In 2009, each executive officers long-term incentive
opportunity comprised a cash-based performance component and an
award of NQSOs and RSUs. The long-term incentive opportunity is
intended to have |
31
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an aggregate economic value equal to a target percentage of the
executives base salary. The following table sets forth the
target percentage for each of the named executives in 2009: |
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Target LTIP Opportunity as a
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Percentage of Base Salary
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Named Executive
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(%)
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G. Geswein
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100
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%
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J. Meier
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180
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%
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R. Reynolds
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140
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%
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R. Rubio
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80
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%
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K. Wilkes
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100
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%
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For the reasons described below under What compensation
did Libbeys executives receive for 2009 Stock
Options and RSUs, the Compensation Committee elected
to change the methodology used for determining the number of
NQSOs and RSUs to be awarded to the executives in 2009. As a
result of this change, the effective long-term incentive
opportunity provided to our named executives in 2009 represented
only the following percentages of their base salary:
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Effective Target LTIP Opportunity as a
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Percentage of Base Salary
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Named Executive
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(%)
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G. Geswein
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48.6
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%
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J. Meier
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87.5
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%
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R. Reynolds
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68.0
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%
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R. Rubio
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42.4
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%
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K. Wilkes
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48.6
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%
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How does
Libbey determine the forms and amounts of executive
compensation?
Development and Implementation of the Executive Compensation
Program. The Compensation Committee of our Board
of Directors is responsible for overseeing the design,
development and implementation of our executive compensation
program. In discharging that responsibility, the Compensation
Committee engaged Hewitt Associates as its independent executive
compensation consultant for 2009. All amounts that we incurred
in 2009 for services provided by Hewitt Associates were
attributable to services provided by Hewitt Associates to the
Compensation Committee in connection with its executive
compensation decisions.
The Compensation Committee consults with Hewitt when the
Compensation Committee determines it to be appropriate, and a
representative of Hewitt frequently attends meetings of the
Compensation Committee. Our CEO, our Vice President
Administration and our Vice President, General Counsel attend
meetings of, and provide information to, the Compensation
Committee and its consultant to assist them in their
compensation determinations. In addition, management may request
that the Compensation Committee convene a meeting, and
management may communicate with the Compensation
Committees consultant in order to provide the consultant
with information or understand the views of, or request input
from, the consultant as to compensation proposals being
submitted by management to the Committee. However, the
Compensation Committee meets in executive session, without any
member of management being present, to discuss and make its
final compensation decisions.
Our non-CEO executives play no direct role in determining their
own compensation, except to the extent they provide the CEO with
an assessment of their own performance against their individual
performance objectives and to the extent that the Vice
President Administration and the Vice President,
General Counsel provide information to the Compensation
Committee with respect to compensation programs affecting all
executive officers.
With respect to our SMIP and our long-term incentive plans, the
Compensation Committee sets the performance goals based upon
input from our CEO with respect to those goals, including
suggested individual performance objectives and metrics under
the SMIP. In setting our corporate performance
32
objectives and measures, the Committee seeks input from Hewitt.
The Committee also seeks input from our Board in setting our
CEOs individual performance objectives and metrics.
In determining awards to be made for current and future
performance periods, the Compensation Committee considers
internal pay equity within the executive officer group, but does
not consider the impact of, or wealth accumulated as a result
of, equity awards made during prior years.
In connection with the preparation of our proxy statement each
year, the Committee reviews tally sheets that
summarize, for each of our executive officers, the compensation
paid and equity grants awarded during the prior year, as well as
the amounts that would have been payable to each executive
officer if the executive officers employment had been
terminated under a variety of scenarios as of December 31 of the
prior year. The Committee uses these tally sheets,
which provide substantially the same information as is provided
in the tables included in this proxy statement, primarily for
purposes of ensuring that our executives estimated
compensation is consistent with the Committees intent in
adopting the program and for reviewing internal pay equity
within the executive officer group.
Process for Setting 2009 Executive
Compensation. In late 2008, the Compensation
Committee determined that a more in-depth review of the
Committees executive compensation program should be
completed. Accordingly, the Committee engaged Hewitt to review
the compensation of several of the Companys executives.
After performing a regression analysis utilizing manufacturing
companies with revenues less than $5 billion in
Hewitts Regression Analysis System, Hewitt concluded that
the 2008 base salaries of the executives studied generally were
competitive, although some were below market and others were
above market. The names of the companies in the Regression
Analysis System were not disclosed to the Committee or the
Company and were not material to the Committees decisions.
Hewitt also concluded that most executives long-term
incentive compensation target opportunities were below market.
As a result, while salaries for all of our executive officers
were frozen in October 2008 and subsequently reduced by 7.5% in
February 2009, the Committee determined in February 2009 that
the long-term incentive target opportunities of certain
executive officers should be increased. The Committees
determination was based upon the Hewitt analysis and
recommendations by the CEO as to internal pay equity. The
adjusted target opportunities were effective with awards made
under the 2009 LTIP. The Compensation Committee subsequently
established Mr. Rubios target long-term incentive
opportunity at 80% of annualized base salary when he joined us
in July 2009. This target long-term incentive opportunity was
determined to be appropriate given the scope of his
responsibilities as Vice President, General Manager, Libbey
Mexico. After Mr. Rubio was named Vice President, General
Manager, International Operations and was added to our payroll
in the U.S. effective January 1, 2010, the Compensation
Committee increased Mr. Rubios 2010 target long-term
incentive opportunity to 100% of annualized base salary, the
same target long-term incentive opportunity applicable to
Mr. Wilkes, our previous Vice President, General Manager,
International Operations.
Our Equity Grant Practices. Since 2006, grants
of equity awards have been made under the following
circumstances:
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We occasionally grant sign-on awards of NQSOs to
individuals who have accepted offers of employment for executive
positions with Libbey. With respect to each grant of NQSOs, the
exercise price of the NQSOs is the closing price of Libbey
common stock on the date on which the Compensation Committee
authorizes the award or, if later, the date on which the
individual reports to work at Libbey.
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In February of 2007 and 2008, the Compensation Committee granted
RSUs, NQSOs and performance shares to our executive officers and
other key executives under our long-term incentive compensation
program. In February 2009, the Compensation Committee granted
RSUs and NQSOs to our executive officers and other key
executives under our 2009 LTIP. In each year, the Compensation
Committee also granted NQSOs to certain members of senior
management who do not participate in our long-term incentive
compensation program. Although the Compensation Committee
authorized these awards at its meeting in early February of each
year, before we announced financial results for the recently
concluded fiscal year, the grants were not made until after we
announced those financial results. The number of RSUs and
performance shares awarded in 2007 and 2008 was a function of
the
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closing price of our common stock over a period of 60
consecutive trading days ending on the first business day after
we announced those results, and the number of NQSOs awarded in
2007 and 2008 was a function of the Black Scholes value of the
NQSOs on the grant date, which, as indicated above, was the
first business day after we announced those results. With
respect to awards of RSUs and NQSOs made in February 2009, we
modified our methodology for determining the number of RSUs to
be awarded because we wanted to control the rate at which we
delivered equity compensation to executives in the light of the
significant reduction in our share price in late 2008 and early
2009. As a result, for the awards made in February 2009, the
number of RSUs was a function of the average closing price of
our common stock on the last day of each month from February
2008 through January 2009, and the number of NQSOs was a
function of the average Black Scholes value of the NQSOs on the
last day of each month during the same
12-month
period. The exercise price of the NQSOs granted in each of 2007,
2008 and 2009 is the closing price of our common stock on the
respective grant dates.
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Effective July 1, 2009, when Mr. Rubio joined us, the
Compensation Committee granted him RSUs and NQSOs (including a
sign-on award of NQSOs) under our 2009 LTIP and prorated awards
of performance shares under our 2007 LTIP and our 2008 LTIP. For
purposes of determining the number of RSUs, NQSOs and
performance shares to be awarded to Mr. Rubio, the
Compensation Committee used the same denominator as it used for
the February 2009 awards to the other executive officers. The
exercise price of the NQSOs was our closing stock price on
July 1, 2009.
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The Compensation Committee has delegated authority to the
Chairman of the Board to make limited grants of NQSOs,
restricted stock and RSUs to senior managers and other employees
who are not executive officers. The Chairmans authority to
make these grants is subject to the following limitations and
conditions:
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The Compensation Committee has limited the total number of
shares that may be granted as NQSOs, restricted stock or RSUs,
as the case may be;
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The exercise price of any NQSOs that the Chairman awards cannot
be less than the closing price of our common stock on the date
of grant;
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Grants of NQSOs may not be made during quiet
periods; and
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The Chairman must report periodically to the Compensation
Committee with respect to the awards that he has made pursuant
to this delegation of authority.
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Potential Impact of Misconduct on
Compensation. Our SMIP and long-term incentive
plans are authorized under our 2006 Omnibus Incentive Plan. Our
shareholders approved our 2006 Omnibus Incentive Plan at our
annual meeting of shareholders on May 4, 2006. As
Proposal 2 below indicates, we are seeking your approval of
the Amended and Restated Libbey Inc. 2006 Omnibus Incentive
Plan, which we refer to as the Amended Omnibus Plan. Under the
2006 Omnibus Incentive Plan and the Amended Omnibus Plan, which
we refer to collectively as the Omnibus Plan, if:
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we are required, as a result of misconduct, to prepare an
accounting restatement due to our material noncompliance with
any financial reporting requirement under the securities
laws; and
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any of our executives knowingly engaged, or was grossly
negligent in engaging, in the misconduct, or knowingly failed,
or was grossly negligent in failing, to prevent the misconduct
or is one of the individuals subject to automatic forfeiture
under Section 304 of the Sarbanes-Oxley Act of 2002,
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then the executive is required to reimburse us the amount of any
payment in settlement of an award made under the Omnibus Plan
and earned or accrued during the
12-month
period following the first public issuance or filing with the
SEC of the financial document embodying the financial reporting
requirement in question.
Share Ownership Guidelines. In 2004 we
implemented share ownership guidelines for our non-employee
directors. In October 2007, we established guidelines pursuant
to which our executive officers also
34
are required to achieve ownership of meaningful amounts of
equity in Libbey. For further information regarding our stock
ownership guidelines for non-employee directors and executive
officers, see Stock Ownership How much
Libbey stock do our directors and officers own?
Stock Ownership Guidelines above.
What
compensation did Libbeys executives receive for
2009?
Base Salaries. As discussed earlier, effective
February 16, 2009, we reduced the salaries of our executive
officers other than Mr. Rubio (who was not employed by us
on that date) by 7.5%. As a result of our extremely successful
efforts in reducing costs and completing our debt exchange, as
discussed above under Executive Summary
Financial and Operational Highlights for 2009, we
significantly improved our liquidity and financial flexibility
throughout 2009. As a result, we rescinded the salary reductions
for pay periods beginning December 1, 2009.
Annual Incentive Compensation. As indicated
under In what forms did Libbey deliver compensation to
its executives for 2009, and what purposes do the various forms
of compensation serve? above, the SMIP, which is our
annual incentive plan for senior management, included two
components in 2009: a corporate component, representing 70% of
each executive officers target opportunity; and an
individual component, representing 30% of each executive
officers target opportunity. For 2009, the amount of
annual incentive compensation earned under the corporate
component was dependent upon the extent to which we achieved
budgeted free cash flow of $18.0 million for 2009. We
calculate free cash flow as follows:
|
EBITDA (calculated as described below)
|
Plus or minus: Changes in working capital
|
Minus: Capital expenditures
|
Plus or minus: The amount by which expense for pension and
postretirement benefits exceeds our cash pension and
postretirement obligations
|
Minus: Cash interest paid
|
Plus or minus: Other(1)
|
|
Free cash flow
|
|
|
|
(1) |
|
Other primarily includes special charges, changes in prepaid
expenses, accrued liabilities and salary and wage accrual, as
well as stock compensation expense and gain (loss) on foreign
exchange. |
For financial reporting purposes, we define free cash flow as
net cash provided by (used in) operating activities, less
capital expenditures, adjusted for proceeds of asset sales and
other. Our consolidated financial statements filed on
Form 10-K
with the SEC on March 15, 2010, provide the following
reconciliation of net cash provided by (used in) operating
activities to free cash flow:
|
Net cash provided by (used in) operating activities
|
Less: Capital expenditures
|
Plus: Proceeds from asset sales and other
|
|
Free cash flow
|
The calculation that we use in order to determine free cash flow
for incentive compensation purposes yields the same result as
the reconciliation of net cash provided by (used in) operating
activities to free cash flow described above.
We selected free cash flow as our corporate-wide performance
measure for 2009 because the generation of cash to fund our
operations and to service our debt was paramount as we faced the
effects of the global economic recession on our sales and
profitability and the global credit crisis on our ability to
refinance the PIK notes before we were obligated to make a
$12.9 million cash interest payment on the PIK notes on
December 1, 2009. In order to mitigate the potential that
this emphasis on free cash flow in the short term might
jeopardize our future over the long-term, we determined that no
annual incentive should be paid out
35
under the corporate component unless we also achieved EBITDA
equal to at least $65.0 million, or approximately 75% of
our budgeted EBITDA, for 2009. EBITDA is calculated as follows:
|
Net (loss) income
|
Add: Interest expense
|
Add: Provision (benefit) for income taxes
|
Earnings (Loss) before interest and income taxes
|
Add: Depreciation and amortization
|
Earnings before interest, taxes, depreciation and amortization
(EBITDA)
|
In light of our announcement in December 2008 that we would be
closing our Syracuse China manufacturing facility located in
Syracuse, New York and our glassware distribution center located
in Mira Loma, California in 2009, we determined that, for
purposes of determining the extent to which we achieved budgeted
EBITDA for 2009, special charges in accordance with generally
accepted accounting principles should be excluded both from
budgeted and actual EBITDA. Special charges recognized during
the year are detailed in Notes 7 and 9 to the Consolidated
Financial Statements included in our Annual Report on
Form 10-K
filed on March 15, 2010. We refer to EBITDA, adjusted for
these special charges, as adjusted EBITDA.
The remaining 30% of our executives annual incentive
opportunity for 2009 was based upon achievement of a series of
other goals developed early in the year and tailored
specifically for the respective executive officers. Although
disclosure of certain of the individual goals of our executives
may result in competitive harm, the following table provides
examples of the individual goals of our named executives for
2009:
|
|
|
Named Executive
|
|
Individual Goals
|
|
|
|
|
G. Geswein
|
|
Drive the organization to achieve incremental cash
flow enhancements of $46.0 million to $50.0 million.
|
|
|
Drive the organization to achieve a working capital
productivity ratio of at least 3.8.
|
|
|
Work with our financial advisors to achieve an
appropriate restructuring of our capital structure that
maintains specified levels of liquidity throughout 2009.
|
|
|
|
J. Meier
|
|
Ensure that our capital structure is meaningfully
improved.
|
|
|
Sustain the business in the face of significant
economic uncertainty and the global credit crisis.
|
|
|
Ensure that we achieve budgeted free cash flow and
EBITDA.
|
|
|
Achieve specified succession planning goals,
including with respect to our Libbey Mexico leadership.
|
|
|
|
R. Reynolds
|
|
Ensure that we achieve budgeted net sales, EBITDA
and cash generation on a consolidated basis.
|
36
|
|
|
Named Executive
|
|
Individual Goals
|
|
|
|
|
R. Rubio
|
|
Achieve budgeted results for Libbey Mexico with
respect to measures relating to Overall Equipment Effectiveness,
service level improvement and safety.
|
|
|
|
K. Wilkes
|
|
Achieve budgeted net sales, EBITDA and cash
generation for our International Operations.
|
On February 8, 2010, the Compensation Committee met and
reviewed our performance and the performance of our executive
officers during 2009. The Committee reviewed our actual free
cash flow and adjusted EBITDA for 2009, and compared them to our
budgeted free cash flow and budgeted EBITDA for the year. The
results of the Committees determination with respect to
the corporate component of our 2009 SMIP are set forth in the
table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
Payout
|
|
|
Actual
|
|
Budget
|
|
Actual to Budget
|
|
Percentage
|
|
Free Cash Flow
|
|
$
|
85.4 million
|
|
|
$
|
18.0 million
|
|
|
474.4%
|
|
200%
|
Adjusted EBITDA
|
|
$
|
90.1 million
|
|
|
$
|
87.7 million
|
|
|
102.7%
|
|
Not Applicable
|
The Committee also received input from our CEO as to the
performance by our other executive officers relative to their
individual objectives. In addition, prior to the meeting, the
Committee reviewed the performance evaluation completed by our
non-employee directors with respect to our CEOs
performance in 2009, including his performance with respect to
his individual objectives. After meeting in executive session
with the Committees independent compensation consultant,
the Committee determined that the respective named executives
had earned the payout percentages indicated in the table below
with respect to their individual objectives:
|
|
|
|
|
Named Executive
|
|
Payout Percentage
|
|
G. Geswein
|
|
|
200
|
%
|
J. Meier
|
|
|
200
|
%
|
R. Reynolds
|
|
|
134
|
%
|
R. Rubio
|
|
|
180
|
%
|
K. Wilkes
|
|
|
71
|
%
|
In determining whether to exercise negative discretion to reduce
the amount to be paid to our executive officers, the
Compensation Committee considered a number of factors, including:
|
|
|
|
|
Our budgeted free cash flow of $18.0 million for 2009 was
an ambitious goal, as it exceeded our actual free cash flow for
each of the preceding five years. In fact, our budgeted free
cash flow for 2009 represented an increase of $64.6 million
from our use of cash of $46.6 million in 2008. And our
actual free cash flow for 2009 beat our budgeted free cash flow
by an additional $67.4 million.
|
|
|
|
In spite of a 7.6% reduction in our net sales, which declined
from $810.2 million in 2008 to $748.6 million in 2009,
we increased our adjusted EBITDA from $85.2 million in 2008
to $90.1 million in 2009, a $4.9 million increase.
|
|
|
|
The positive momentum that began with our aggressive measures in
2009 to reduce costs and to improve liquidity by controlling
working capital enabled us to complete our debt exchange in
October 2009 and continued into early 2010, culminating in the
successful refinancing of our senior notes, our new PIK notes
and our ABL facility on February 8, 2010. Our capital
structure is significantly improved as a result.
|
|
|
|
Between 2001 and 2008, our executive officers were not awarded,
or agreed not to accept, cash incentive compensation in three
years, and our CEO and COO declined annual incentives in a
fourth
|
37
|
|
|
|
|
year, even though small amounts had been earned in two of those
years under either the corporate or individual component of our
annual incentive plan.
|
|
|
|
|
|
As discussed under Executive Summary 2009
Executive Compensation Highlights above, our executive
officers experienced a reduction of between 18% and 36% in their
total direct compensation opportunity as a result of the 7.5%
reduction in their base salaries implemented in February 2009
and the change in methodology used by the Compensation Committee
for determining the number of NQSOs and RSUs awarded to our
executives in 2009.
|
|
|
|
Our shareholders reaped the benefit of our performance, since
our closing stock price increased from $1.25 on
December 31, 2008 to $7.65 on December 31, 2009, a
512% increase.
|
Taking all of these factors into account, the Compensation
Committee determined that it was not appropriate to exercise
negative discretion, with the result that each of the named
executives earned the following annual incentive compensation
for 2009:
|
|
|
|
|
Named Executive
|
|
Annual Incentive
|
|
G. Geswein
|
|
$
|
381,102
|
|
J. Meier
|
|
|
1,168,256
|
|
R. Reynolds
|
|
|
567,024
|
|
R. Rubio
|
|
|
218,735
|
|
K. Wilkes
|
|
|
288,591
|
|
Discretionary Cash Awards. In light of the
fact that maximum payouts were earned under the corporate
component of our 2009 SMIP and maximum or above-target payouts
were earned by the majority of our named executives under the
individual component of our 2009 SMIP, the Committee determined
that discretionary cash awards to our named executives were not
warranted.
Long-Term Performance-Based Compensation. The
long-term performance-based compensation opportunity provided to
our executive officers for performance during 2009 consisted of
the following components:
|
|
|
|
|
Performance shares awarded under the 2007 LTIP, which the
Compensation Committee adopted early in 2007. The 2007 LTIP
provided the opportunity to earn performance shares over a
single, three-year performance cycle beginning on
January 1, 2007 and ending December 31, 2009. The
performance measure under the 2007 LTIP was the ratio of
cumulative EBITDA over the performance cycle to the sum of
EBITDA budgeted for each year during the performance cycle.
|
|
|
|
Performance shares awarded under the 2008 LTIP, which the
Compensation Committee adopted early in 2008. The 2008 LTIP
provides the opportunity to earn performance shares over a
single, three-year performance cycle beginning on
January 1, 2008 and ending December 31, 2010. Because
the 2008 LTIP contemplates a single performance cycle, there
will be no payouts under the 2008 LTIP until early 2011, after
the performance cycle has ended and the Compensation Committee
has determined the extent to which the performance measure has
been achieved. The performance measure under the 2008 LTIP is
the ratio of cumulative EBITDA over the performance cycle to the
sum of EBITDA budgeted for each year during the performance
cycle.
|
For purposes of determining the extent to which performance
shares are earned under our 2007 LTIP and our 2008 LTIP, EBITDA
is calculated and adjusted as described under the heading
Annual Incentive Compensation
above. However, for purposes of determining the extent to
which performance shares are earned, EBITDA also may be adjusted
to take into account the impact of any acquisition or
disposition with respect to which EBITDA for the business that
is acquired or sold, as the case may be, exceeds,
$5.0 million.
|
|
|
|
|
With respect to our 2009 LTIP, which the Compensation Committee
adopted early in 2009, a performance component under which cash
awards are payable in early 2012, but only if and to the extent
the applicable performance measure is achieved over the one-year
performance cycle
|
38
|
|
|
|
|
beginning January 1, 2009. Because of the need to ensure
that we generated adequate cash flow to fund our operations and
service our debt, particularly in light of the factors discussed
above under Executive Summary Financial and
Operational Highlights for 2009, the Compensation
Committee elected to employ the same performance measure under
the 2009 LTIP as it employed with respect to the 2009 SMIP.
However, in order to collect the amount earned, each named
executive other than Messrs. Meier and Reynolds (who
currently are retirement-eligible) must remain continuously
employed by us through December 31, 2011.
|
On February 8, 2010, the Compensation Committee determined
that our cumulative adjusted EBITDA for the period
January 1, 2007 through December 31, 2009 was
$291.8 million, or 90.4% of the sum of EBITDA budgeted for
each year during that period. Accordingly, the Committee
determined that participants under the 2007 LTIP had earned
67.8% of the target number of performance shares awarded to them
for the period January 1, 2007 through December 31,
2009. As a result, in February 2010, we settled the earned
performance shares by issuing the following number of common
shares to the named executives:
|
|
|
|
|
Named Executive
|
|
No. of Shares(1)
|
|
G. Geswein
|
|
|
2,905
|
|
J. Meier
|
|
|
15,689
|
|
R. Reynolds
|
|
|
8,312
|
|
R. Rubio
|
|
|
1,274
|
|
K. Wilkes
|
|
|
4,288
|
|
|
|
|
(1) |
|
Each of the named executives other than Mr. Rubio elected
to have us withhold shares to cover taxes on these awards. Net
of the withheld shares, we issued to the named executives the
following number of shares: Mr. Geswein 1,970;
Mr. Meier 10,637 shares;
Mr. Reynolds 5,636 shares; and
Mr. Wilkes 2,907 shares. |
For the same reasons that the Compensation Committee awarded a
200% payout under the corporate component of the 2009 SMIP, the
Compensation Committee awarded a 200% payout under the cash
component of the 2009 LTIP. As a result, each of the named
executives is entitled to a payout in the following amounts
under the cash component of the 2009 LTIP:
|
|
|
|
|
Named Executive
|
|
Payout Amount
|
|
G. Geswein
|
|
$
|
270,106
|
|
J. Meier
|
|
|
993,600
|
|
R. Reynolds
|
|
|
499,834
|
|
R. Rubio
|
|
|
218,580
|
|
K. Wilkes
|
|
|
Forfeited
|
|
However, the payouts under the cash component of the 2009 LTIP
will not be made until early in 2012 and, in order to collect
the amount earned, the named executives generally must remain
continuously employed by Libbey through December 31, 2011.
With respect to Mr. Meier and Mr. Reynolds, we will be
obligated to pay the amount earned upon their respective
retirements, even if they retire prior to January 1, 2012.
Stock Options and RSUs. When the Compensation
Committee adopted our equity-based 2006 LTIP, it contemplated
that, for each three-year period covered by an LTIP, executives
would be entitled to grants of NQSOs and RSUs equal to a total
of 60% of their respective target LTIP opportunities. However,
in reaction to our low stock price and the limited number of
shares available for awards under our 2006 Omnibus Incentive
Plan, in 2009 we modified our LTIP by, among other things,
changing the methodology for determining the number of NQSOs and
RSUs awarded to our executives in 2009.
In 2009, the number of RSUs awarded was determined by dividing
the dollar value that the Compensation Committee sought to
transfer (40% of each executives target long-term
incentive opportunity) by the average month-end closing price of
our common stock over the
12-month
period beginning February 2008
39
and ending January 2009. The number of NQSOs awarded, which have
an exercise price equal to the closing price of our common stock
on February 12, 2009, and vest ratably over four years, was
determined by dividing the dollar value that the Compensation
Committee sought to transfer (20% of each executives
target long-term incentive opportunity) by the average month-end
Black Scholes value of the options over the same
12-month
period. According to the Compensation Committees
independent consultant, this change in methodology for
determining the number of RSUs and NQSOs awarded to our
executives under the 2009 LTIP reduced the economic value to our
named executives of the NQSOs and RSUs granted to them in 2009
by 88% and 83%, respectively.
What is the
Compensation Committees policy regarding deductibility of
compensation?
Pursuant to Section 162(m) of the Internal Revenue Code,
publicly-held corporations are prohibited from deducting
compensation paid to certain executive officers, as of the end
of the fiscal year, in excess of $1.0 million, unless the
compensation is performance-based. It is the
Compensation Committees policy that compensation paid to
our named executives should, to the extent it exceeds
$1.0 million in any year, qualify under Section 162(m)
as performance-based, provided that compliance with
Section 162(m) is consistent with our overall corporate tax
planning strategies and our executive compensation objectives,
as set forth in What are the objectives of
Libbeys executive compensation program? above.
How are
Libbeys directors compensated?
Our management directors do not receive additional compensation
for service on the Board of Directors. We pay the following
forms and amounts of compensation to our non-management
directors:
|
|
|
Annual Retainer:
|
|
$25,000
|
Equity Awards:
|
|
On the date of each annual meeting of shareholders, outright
grant of shares of common stock valued at $40,000 on the date of
grant(1)
|
Audit Committee Chair Retainer:
|
|
$7,500 per year
|
Compensation Committee Chair and Nominating and Governance
Committee Chair Retainers:
|
|
$5,000 per year
|
Regular Board Meeting Fees:
|
|
$1,500 per meeting
|
Regular Committee Meeting Fees:
|
|
$750 per meeting
|
Telephonic Board or Committee Meeting Fees:
|
|
$500 per meeting
|
Other Fees:
|
|
$500 per half day for performance of special Board or committee
business requested of the director
|
|
|
|
(1) |
|
In 2009, the number shares of common stock was determined by
dividing $40,000 by $1.80, the closing price of our common stock
on the date of grant. However, we granted each non-employee
director only 7,500 shares of our common stock since our
2006 Omnibus Incentive Plan prohibits us from granting to any
non-employee director more than 7,500 shares in any year.
We paid cash to each non-employee director in an amount equal to
the difference between $40,000 and $13,500 (the product of $1.80
and 7,500 shares). |
Because we recognize that our non-employee directors are
required to devote a significant amount of time to their duties
as directors, and because we believe that our non-employee
directors bring significant value to our shareholders, we seek
to provide our non-employee directors with market-competitive
compensation. We also seek to align the interests of our
non-employee directors with those of our shareholders by
providing equity-based compensation in the form of RSUs or
outright grants of common stock and by requiring that our
non-employee directors achieve and maintain a meaningful amount
of equity in Libbey. For more information with respect to our
stock ownership guidelines for non-employee directors, see
Stock
40
Ownership How much Libbey stock do our directors
and officers own? Stock Ownership Guidelines
above.
Directors may elect, pursuant to the Director DCP, to defer cash
and/or
equity compensation into any of 13 measurement funds. The
Director DCP, as well as the predecessor deferred compensation
plans under which non-employee directors were eligible to
participate, are unfunded plans, and the Company does not
guarantee an above-market return on amounts deferred under any
of these plans. Amounts deferred under the Director DCP, as well
as under a predecessor plan, are, at the election of the
applicable director, payable either in a lump sum or in
installments over a period of time selected by the director.
Amounts deferred under our first deferred compensation plan for
outside directors are payable in a lump sum upon retirement from
our Board or, if earlier, upon death of the director.
In addition to paying the retainers, fees and equity awards
listed above, we reimburse our non-management directors for
their travel expenses incurred in attending meetings of the
Board or its committees, as well as for fees and expenses
incurred in attending director education seminars and
conferences. The directors do not receive any other personal
benefits.
Potential
Payments Upon Termination or Change in Control
As discussed under In what forms did Libbey deliver
compensation to its executives in 2009, and what purposes do the
various forms of compensation serve? above, we have
employment agreements with our executive officers and change in
control agreements with our executive officers and certain other
key members of senior management. We first implemented
employment agreements for our executive officers in 1993, when
Libbey separated from its former parent, Owens-Illinois, Inc.
and became a public company, and we first implemented our change
in control agreements in 1998, when hostile takeovers were not
uncommon. In late 2008, we amended and restated our employment
and change in control agreements to incorporate a number of
changes, including the following:
|
|
|
|
|
If an executive is entitled, under his or her employment or
change in control agreement, to payments upon termination of his
or her employment, then payments of nonqualified deferred
compensation (as defined in Section 409A of the Internal
Revenue Code) will be delayed for six months following the
applicable executives termination of employment. Any
portion of the payment that is based upon a multiple of the
executives base salary, or any portion of the payment that
is made pursuant to our SERP, Executive Savings Plan or EDCP,
would be included in the Section 409A definition of
nonqualified deferred compensation.
|
|
|
|
Under the employment agreements, each executive officer is
assigned to one of two groups Group A or Group B.
The executive officers assigned to Group A are our CEO, our
chief operating officer and our chief financial officer. All of
the remaining executive officers are assigned to Group B. If we
were to give an executive notice of non-renewal under the
executives employment agreement, the executive would not
have good reason to terminate the agreement and
receive the severance and related benefits under the agreement
as long as we were to concurrently give notice of non-renewal
with respect to the employment agreements of the other executive
officers in his or her group. For example, if we were to give
each of our CEO, COO and CFO notice of non-renewal, by
September 30, 2010, that their employment agreements will
not be renewed for the 2011 calendar year, none of the CEO, COO
or CFO would be entitled to claim that the notice of non-renewal
provides them with good reason to terminate their
employment and receive the benefits provided under the
employment agreements. Special provisions apply to the COO and
CFO if, at the time we give them notice of non-renewal of their
employment agreements, John F. Meier has ceased to serve as CEO
and there is no written agreement in effect between us and the
individual selected to replace him as CEO on either an interim
or permanent basis.
|
|
|
|
The change in control agreements no longer obligate us to pay
severance to an executive who unilaterally terminates his or her
employment, without good reason, within 30 days
after the first anniversary of a change in control.
|
41
|
|
|
|
|
The employment agreements and change in control agreements limit
the extent to which we may be obligated to gross up
payments made to executives to cover the federal excise tax that
could be imposed upon payments under the agreements. We will not
be obligated to gross up the executives
payments to cover the excise tax if the present
value of the executives parachute
payments does not exceed 1.10 multiplied by three times
the executives base amount. (The terms
present value, parachute payments and
base amount are defined in Section 280G of the
Internal Revenue Code.) Instead, the executives payments
will be reduced so that no excise tax is payable.
|
|
|
|
We are obligated under the change in control agreements to pay
severance if we terminate an executives employment without
cause (a) after a potential change in
control but before the change in control occurs, or
(b) prior to a potential change in control, if
the executive reasonably demonstrates that the termination was
at the request of, or was induced by, a third party who has
taken steps reasonably calculated to effect a change in control.
Similarly, we are obligated under the change in control
agreements to pay severance if the executive terminates his or
her employment for good reason (a) after a
potential change in control but before the change in
control occurs, or (b) prior to a potential change in
control, if the executive reasonably demonstrates that the
events triggering the executives good reason were at the
request of, or were induced by, a third party who has taken
steps reasonably calculated to effect a change in control. The
Compensation Committee believes that providing for payments
under these circumstances appropriately protects the executives
against the possibility, however unlikely, that the Company,
believing that a change in control is imminent, would, before
consummating the change in control, attempt to rid itself of its
obligation to pay severance under the change in control
agreements by terminating an executive without
cause, or taking other actions that would trigger
good reason if they were to occur after consummation
of the change in control.
|
The employment and change in control agreements reflect the
continued belief of our Compensation Committee and Board that it
is in the best interests of our shareholders to provide our
executive officers with income replacement upon the occurrence
of any of the triggers described in the employment
and change in control agreements. That belief is based upon the
following:
|
|
|
|
|
Surveys demonstrate that a significant majority of companies of
similar size (as determined by revenues) and in similar
industries provide their executive officers with change in
control and other severance benefits. Accordingly, we would be
at a competitive disadvantage in attracting and retaining
high-caliber senior executives if we were to eliminate the
benefits provided by these agreements. The loss of a senior
executive to another company that provides these benefits could
adversely impact our ability to achieve our business strategies
and our succession planning for Libbeys future.
|
|
|
|
In periods of uncertainty concerning the future control of
Libbey or the future responsibilities or standing of our
respective executive officers, it is imperative that each of our
executive officers be focused on building value for our
shareholders rather than pursuing career alternatives.
|
|
|
|
Foreign countries, including all of the countries outside of the
U.S. in which we have operations, require that employers
provide employees in those countries, including executives, with
employment agreements and pay severance to employees, including
executives, upon termination of employment under most
circumstances. For example, when we hired Mr. Rubio on
July 1, 2009 as our Vice President, General Manager, Libbey
Mexico, we were obligated under the Federal Labor Law of Mexico
to provide him with an employment agreement that met certain
minimum requirements. At that time, the Compensation Committee
authorized us to enter into an employment agreement with
Mr. Rubio in substantially the same form as the employment
agreements relating to the executive officers assigned to Group
B. The Compensation Committee also authorized us to enter into a
change in control agreement with Mr. Rubio in substantially
the same form as the change in control agreements relating to
our other executive officers. We entered into those agreements
with Mr. Rubio effective January 1, 2010, when we
moved his employment from our Mexican subsidiary to our
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U.S. company to reflect his new responsibilities as Vice
President, General Manager, International Operations.
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Following are tables containing summaries of the material terms
of the employment and change in control agreements to which our
named executives are party and the rationale for the respective
benefits provided under those agreements. You should refer to
the entire agreements, the forms of which are attached as
exhibits to our
Forms 10-K
filed with the Securities and Exchange Commission on
March 16, 2009 (as to our named executives other than
Mr. Rubio) and March 15, 2010 (as to Mr. Rubio),
for a complete description of their terms.
Employment
Agreements
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Conditions to
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Triggers(1)
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Benefits
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Payment of Benefits
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Rationale
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Death of the executive officer
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Base salary through the date
of death
Annual and long-term incentive
compensation paid in a lump sum at target but prorated through
the date of death
In the case of Mr. Meier, two times his
annual base salary, and in the case of the other named
executives, one times his annual base salary, in each case at
the rate in effect on the date of death; payable in a lump
sum
Continuation of medical, prescription
drug, dental and vision benefits for covered dependents for a
period of 12 months following the date of death
Vesting, as of the date of death, of
previously unvested equity compensation plan awards (RSUs and
NQSOs). Those with option features will be exercisable for a
period of three years following the date of death or for such
longer period following the date of death as is specified by the
award
Benefits are payable within 60 days
after receipt of the written notice and evidence referred to
under the adjacent column entitled Conditions to
Payment of Benefits
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Our receipt of written notice of
appointment of a personal representative on behalf of the
executives estate, together with evidence of the personal
representatives authority to act
Our receipt from the personal
representative of a release of claims against the Company
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Provide, on a cost-effective basis,
death benefits that exceed the available benefits (limited to
$250,000) under our group life insurance policy for all U.S.
salaried employees. Benefits are consistent with death benefits
provided under executive life insurance policies provided to
executives by similar companies
Support a market-competitive
compensation package, thereby serving to attract and retain
talent and to motivate focused and sustained performance
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Conditions to
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Triggers(1)
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Benefits
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Payment of Benefits
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Rationale
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Permanent disability of the executive officer
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Any long-term disability
coverage in effect
Base salary accrued through the date of
termination, payable within five business days after
termination
Annual incentive compensation for the
year in which termination occurs; paid at target but prorated
(subject to a 50% minimum) through the date of termination;
payable between January 1 and March 15 of the year following the
year in which termination occurs
Performance-based equity compensation
under all plans in effect at the date of termination, paid based
upon the amount actually earned but prorated through the date of
termination; payable between January 1 and March 15 of the year
following the end of the applicable performance cycle
Two times (or, in the case of Mr. Meier,
three times) the sum of the executives (a) annual base
salary at the then current rate and (b) target annual incentive
opportunity at the time notice of termination is given; payable
upon first to occur of (1) death or (2) the first day of the
seventh month following the date of termination
Continuation of medical, prescription
drug, dental and life insurance benefits for a period of
24 months (or, in Mr. Meiers case, 36 months)
following the date of termination
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The named executives
execution and delivery to us of a release of all claims
The named executives obligations
to us to:
maintain the confidentiality
of our proprietary information
assign to us any inventions
and copyrights obtained in connection with his employment
assist us with any
litigation with respect to which the named executive has, or may
have reason to have, knowledge, information or expertise
not interfere with customer
accounts for 12 months
not compete for
12 months
for 12 months, not
divert business opportunities of which the named executive
became aware while an employee
not solicit our employees
for 12 months
not disparage us for
12 months
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Provide, on a cost-effective
basis, disability benefits under circumstances that may not be
covered by our standard disability policy or our enhanced
executive long-term disability coverage
Support a market-competitive
compensation package, thereby serving to attract and retain
talent and to motivate focused and sustained performance
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Conditions to
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Triggers(1)
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Benefits
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Payment of Benefits
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Rationale
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Vesting, as of the date of
termination, of previously unvested equity compensation plan
awards that are not performance-based (for example, RSUs and
NQSOs). Those awards having an option feature will be
exercisable for a period of three years following the date of
termination or for such longer period following the date of
termination as is specified by the award
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We terminate the executive officers employment without
cause(2)or the executive officer terminates his or her
employment for good reason(3)
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Same as for termination upon
permanent disability
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Same as for termination upon
permanent disability
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To promote sustained focus on building
shareholder value during periods of uncertainty as to
Libbeys future or the executives job standing or
responsibilities
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(1) |
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We are obligated to provide the benefits described in the
employment agreements if an executive officers employment
is terminated upon or as a result of the occurrence of any of
the events or circumstances described in this column. |
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Cause means any of: |
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the executive officers willful and continued failure
(other than as a result of incapacity due to physical or mental
illness or after the executive officer issues a notice of
termination for good reason) to substantially perform his or her
duties after our Board delivers to the executive officer a
written demand for substantial performance that specifically
identifies the manner in which the Board believes that the
executive officer has not substantially performed his or her
duties;
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the executive officers willful and continued failure
(other than as a result of incapacity due to physical or mental
illness or after the executive officer issues a notice of
termination for good reason) to substantially follow and comply
with the specific and lawful directives of our Board, as
reasonably determined by our Board, after our Board delivers to
the executive officer a written demand for substantial
performance that specifically identifies the manner in which our
Board believes that the executive officer has not substantially
followed or complied with the directives of the Board;
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the executive officers willful commission of an act of
fraud or dishonesty that results in material economic or
financial injury to Libbey; or
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the executive officers willful engagement in illegal
conduct or gross misconduct that is materially and demonstrably
injurious to Libbey.
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We cannot terminate an executive officer for cause unless and
until we deliver to the executive officer a copy of a
resolution, duly adopted by the affirmative vote of not less
than 3/4 of the entire membership of our Board at a meeting of
our Board, finding that, in the Boards good faith opinion,
the executive officer committed any of the conduct described in
the definition of cause and specifying, in
reasonable detail, the particulars of that conduct. We must
provide the executive officer with reasonable notice of the
meeting of the Board and the opportunity, together with the
executive officers legal counsel, to be heard before the
Board. We also must provide the executive officer with
reasonable opportunity to correct the conduct that he or she is
alleged to have committed.
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(3) |
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Good reason means any of the following, unless we have corrected
the circumstances fully (if they are capable of correction)
prior to the date of termination: |
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With respect to Mr. Meier only:
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He ceases to be our CEO reporting to the Board, or he fails to
be elected as a member of the Board.
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There is a change in the reporting or responsibilities of any
other executive officer that has not been approved by
Mr. Meier.
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With respect to each of our named executives other than
Mr. Meier, the named executive ceases to be an executive
officer reporting to another executive officer.
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With respect to each of our named executives, including
Mr. Meier:
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His base salary is reduced by a greater percentage than the
reduction applicable to any other executive officer.
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There is a reduction in the annual incentive compensation
opportunity or equity compensation opportunity established for
the position held by the named executive, and the reduction is
not applied in the same or similar manner to all other executive
officers.
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An executive benefit provided to the named executive is reduced
or eliminated and the reduction or elimination is not applicable
to all other executive officers in the same or similar manner.
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We materially breach the employment agreement and do not remedy
our breach within 30 days after we receive written notice
of breach from the named executive.
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We exercise our right not to extend the term of the named
executives employment agreement beyond the then current
term, unless we exercise that right with respect to the
employment agreements in effect with respect to the other
executive officers in the same group. In that connection, the
initial term of the employment agreements for the named
executives other than Mr. Rubio extended from
January 1, 2009 through December 31, 2009; the initial
term of Mr. Rubios employment agreement extends from
January 1, 2010 through December 31, 2010. In each
case, the term extends automatically for additional one-year
periods unless either we notify the named executive, or the
named executive notifies us, on or before September 30 of the
year in which the employment agreement is scheduled to expire,
that the agreement will not be further extended.
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In order to terminate his employment for good
reason, the named executive must assert the basis for
terminating his employment for good reason by
providing written notice to the Board within 90 days of the
date the named executive knew or should have known of the event
that is the basis for terminating for good reason.
Other obligations. If we terminate the named
executives employment with cause, or if the named
executive resigns or retires other than at our request or for
good reason, we nevertheless are obligated to pay or provide to
the named executive base salary, when due, through the date of
termination at the then current rate, plus all other amounts and
benefits to which the named executive is entitled under any
pension plan, retirement savings plan, equity participation
plan, stock purchase plan, medical benefits and other benefits
that we customarily provide or are required by law to provide at
the time the payments are due.
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Change in Control
Agreements
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Conditions to
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Triggers
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Benefits(1)
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Payment of Benefits
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Rationale
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A change in control(2) occurs
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Cash value of performance-based equity
compensation (for example, performance shares) to be paid at
target but prorated through the date of change in control
Annual incentive compensation for the
year in which the change in control occurs; paid at target but
prorated (subject to a 50% minimum) through the date of the
change in control
Accelerated vesting of NQSOs, but
cancellation of NQSOs as to which the exercise price exceeds the
closing stock price immediately prior to the change in
control
Value of unvested shares of restricted
stock and unvested RSUs to be frozen upon change in control, but
no payout unless and until vesting criteria of awards are met or
employment is terminated by us without cause or by
the executive for good reason pursuant to the
employment agreement or change in control agreement
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None
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Since a change in control frequently is
accompanied by a material shift in strategy, a significant
increase in leverage or other events that may impact the
likelihood that corporate performance metrics established early
in the year prior to the change in control will be achieved, it
is appropriate to pay, at the time of the change in control, a
prorated amount of incentive compensation that relates to
performance during a period that straddles the change in
control. Similarly, it is appropriate to accelerate vesting of
stock options so that they may be exercised, and the value
realized by the executive, at the time of the change in control.
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Conditions to
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Triggers
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Benefits(1)
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Payment of Benefits
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Rationale
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Without cause(3), we terminate
the executives employment (other than as a result of his
or her death or permanent disability) either
(a) after a potential change in control(4) occurs
but before the change in control occurs, or (b) prior to a
potential change in control, if the executive reasonably
demonstrates that the termination was at the request of, or was
induced by, a third party who has taken steps reasonably
calculated to effect a change in control, or (c) within two
years following a change in control
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Base salary through the date of
termination at the rate then in effect
A lump sum equal to three times the sum
of (a) the executives annual base salary in effect as of
the date of termination or immediately prior to the change in
control, whichever is greater, and (b) the greater of (1)
the executives target annual incentive compensation as in
effect as of the date of termination or immediately prior to the
change in control, whichever is greater, or (2) the
executives actual annual bonus for the year immediately
preceding the date of termination; payable on the first day of
the seventh month after termination
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Our receipt of an agreement, signed by
the executive, obligating him or her to:
maintain the confidentiality
of our proprietary information for two years after the date of
termination
not compete with us for a
period of 12 months after the date of termination
not solicit our employees
for a period of 24 months after the date of termination
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In periods of uncertainty concerning the
future control of Libbey or the future responsibilities or
standing of the executive, permits the executive to focus on
performance that increases shareholder value rather than
pursuing career alternatives
Supports a market-competitive
compensation package, thereby serving to attract and retain
talent
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Continuation of medical and dental
benefits for a period of 36 months following the date of
termination, subject to reduction or elimination to the extent
the executive receives comparable benefits under any other
employment that the executive obtains during the 36-month period.
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For one year following the date of
termination, financial planning services
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For two years following the date of
termination, outplacement services, subject to a maximum
out-of-pocket cost to us of $15,000
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Payment in cash of the value, frozen at
the time of the change in control, of restricted stock or RSUs
that were outstanding and unvested at the time of the change in
control; payable on the first day of the seventh month after
termination
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Conditions to
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Triggers
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Benefits(1)
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Payment of Benefits
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Rationale
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Full and immediate vesting of accrued
benefits under any qualified and unqualified pension,
profit-sharing, deferred compensation or supplemental plans that
we maintain for the executives benefit, plus a lump sum,
payable on the first day of the seventh month after termination,
equal to the greater of $250,000 or the present value of the
additional benefit that would have accrued had the executive
continued his or her employment for three additional years
following the date of termination.
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A tax gross-up(6)
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The executive terminates his or her
employment for good reason(5) either
(a) after a potential change in control but before the
change in control occurs, or (b) prior to a potential
change in control, if the executive reasonably demonstrates that
the events triggering the executives good reason were at
the request of, or were induced by, a third party who has taken
steps reasonably calculated to effect a change in control, or
(c) within two years following a change in control
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Same as for termination by the Company
without cause, as described above
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Same as for termination by the Company
without cause, as described above
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Same as for termination by the Company
without cause, as described above
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(1) |
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The benefits set forth in this column are payable upon the
occurrence of the corresponding triggers identified
in the Triggers column. |
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Change in control generally means any of the following events: |
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A person (other than Libbey, any trustee or other fiduciary
holding securities under one of Libbeys employee benefit
plans, or any corporation owned, directly or indirectly, by
Libbeys shareholders in substantially the same proportions
as their ownership of Libbeys common stock) becomes the
beneficial owner, directly or indirectly, of Libbey
securities representing 30% or more of the combined voting power
of our then-outstanding securities;
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The consummation of a merger or consolidation pursuant to which
Libbey is merged or consolidated with any other corporation (or
other entity), unless the voting securities of Libbey
outstanding immediately prior to the merger or consolidation
continue to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity)
more than
662/3%
of the
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combined voting power of securities of the surviving entity
outstanding immediately after the merger or consolidation;
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The consummation of a plan of complete liquidation or an
agreement for the sale or disposition of all or substantially
all of our assets; or
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During any period of two consecutive years (not including any
period prior to the execution of the change in control
agreement), Continuing Directors (as defined below) cease for
any reason to constitute at least a majority of the Board.
Continuing Directors means (i) individuals who were members
of the Board at the beginning of the two-year period referred to
above and (ii) any individuals elected to the Board, after
the beginning of the two-year period referred to above, by a
vote of at least 2/3 of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously approved in
accordance with this provision. However, an individual who is
elected to the Board after the beginning of the two-year period
referred to above will not be considered to be a Continuing
Director if the individual was designated by a person who has
entered into an agreement with us to effect a transaction that
otherwise meets the definition of a change in control.
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A person typically is considered to be the beneficial
owner of securities if the person has or shares the voting
power associated with those securities.
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Cause has the same meaning as it has under the employment
agreements. We cannot terminate an executive officer for cause
unless and until we deliver to the executive officer a copy of a
resolution, duly adopted by the affirmative vote of not less
than 3/4 of the entire membership of our Board at a meeting of
our Board, finding that, in the Boards good faith opinion,
the executive officer committed any of the conduct described in
the definition of cause and specifying, in
reasonable detail, the particulars of that conduct. We must
provide the executive officer with reasonable notice of the
meeting of the Board and the opportunity, together with the
executive officers legal counsel, to be heard before the
Board. We also must provide the executive officer with
reasonable opportunity to correct the conduct that he or she is
alleged to have committed. |
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Potential change in control means: |
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We enter into an agreement, the consummation of which would
result in a change in control;
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A person (which may include Libbey) publicly announces an
intention to take or consider taking actions that, if
consummated, would result in a change in control;
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Our Board adopts a resolution to the effect that, for purposes
of the change in control agreements, a potential change in
control has occurred; or
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A person (other than Zesiger Capital Group, which currently
holds almost 13% of our common stock) who is or becomes the
beneficial owner of 10% or more of the voting power of our
common stock increases its beneficial ownership by 5% or more,
or Zesiger Capital increases its beneficial ownership to 25% or
more of our common stock.
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Good reason means any of the following, unless we have corrected
the circumstances fully (if they are capable of correction)
prior to the date of termination: |
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We assign to the executive duties that are inconsistent with the
executives position immediately prior to the change in
control, or we significantly and adversely alter the nature or
status of the executives responsibilities or the
conditions of the executives employment from those in
effect immediately prior to the change in control (including if
we cease to be a publicly-held corporation), or we take any
other action that results in the material diminution of the
executives position, authority, duties or responsibilities;
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We reduce the executives annual base salary as in effect
on the date of the executives change in control agreement
and as increased from time to time thereafter;
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We relocate the offices at which the executive principally is
employed immediately prior to the date of the change in control
(which we refer to as the executives principal location)
to a location more than 30 miles from that location, or we
require the executive, without his or her written consent, to be
based anywhere other than his or her principal location, except
for required travel on business to an extent substantially
consistent with the executives present business travel
obligations;
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We fail to pay to the executive any portion of his or her
current compensation or to pay to him or her any portion of an
installment of deferred compensation under any deferred
compensation program within seven business days of the date on
which the compensation is due;
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We fail to continue in effect any material compensation or
benefit plan or practice in which the executive participates
immediately prior to the change in control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to the plan, or we fail to
continue the executives participation in the plan (or in
the substitute or alternative plan) on a basis that is not
materially less favorable, both in terms of the amount of
benefits provided and the level of the executives
participation relative to other participants, as existed at the
time of the change in control;
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We fail to continue to provide the executive with benefits
substantially similar in the aggregate to those enjoyed by the
executive under any of our life insurance, medical, health and
accident, disability, pension, retirement or other benefit plans
or practices in which the executive and his or her eligible
family members were participating at the time of the change in
control, or we take any action that would directly or indirectly
materially reduce any of those benefits, or we fail to provide
the executive with the number of paid vacation days to which the
executive is entitled on the basis of years of service with us
in accordance with our normal vacation policy in effect at the
time of the change in control or, if more favorable to the
executive, on the basis of the executives initial
employment with the Company;
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We fail to obtain a satisfactory agreement from any successor to
assume and agree to perform our obligations under the
executives change in control agreement; or
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We purport to terminate the executives employment without
complying with our obligations with respect to providing notice
of termination.
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(6) |
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No gross-up
is required if the present value of the
parachute payments payable to the executive or his
estate does not exceed 1.10 multiplied by three times the
executives base amount. The terms
present value, parachute payments and
base amount are defined in Section 280G of the
Internal Revenue Code. |
Enhancements
provided to Mr. Wilkes
In connection with Mr. Wilkes resignation, the
Compensation Committee decided to augment the benefits that we
were obligated to provide to Mr. Wilkes pursuant to his
employment agreement. In particular, the Compensation Committee
agreed to enhance Mr. Wilkes payout in the following
respects:
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Although Mr. Wilkes employment agreement entitled him
to annual incentive compensation for 2009 equal to his target
annual incentive opportunity, in light of the fact that
Mr. Wilkes was employed by us for the entire year and the
corporate component of our 2009 SMIP paid out at 200%, the
Compensation Committee determined that we should pay
Mr. Wilkes his actual annual incentive earned under our
2009 SMIP.
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The Committee determined that the salary cut implemented in
February of 2009 should not be taken into account when
calculating the multiple of annual incentive compensation to be
paid to Mr. Wilkes pursuant to his employment agreement.
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The Committee agreed to provide Mr. Wilkes with
outplacement and financial planning services having an aggregate
value of not more than $22,500.
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51
The incremental cost to us of these enhancements was
approximately $155,000. However, the Compensation Committee
believed that it was appropriate to provide these enhancements
to Mr. Wilkes in light of his significant contributions to
the Company during his 16 years of service, including his
tireless work on our behalf to expand our business
internationally. The Committee also acknowledged that, in spite
of the fact that Mr. Wilkess efforts throughout 2009
had contributed to our record-setting free cash flow for the
year, he would forfeit his right to receive a payout of the
$276,653 earned under the cash component of the 2009 LTIP
because he would not satisfy the vesting condition to that
payout.
Compensation
Committee Interlocks and Insider Participation
William A. Foley, Deborah G. Miller, Carol B. Moerdyk and John
C. Orr served on our Compensation Committee during 2009. None of
Mr. Foley, Ms. Miller, Ms. Moerdyk or
Mr. Orr has been an officer or employee of Libbey or its
subsidiaries.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed with
Libbeys management the Compensation Discussion and
Analysis set forth in this proxy statement. Taking all of these
reviews and discussions into account, the Compensation Committee
has recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in this proxy statement and
incorporated by reference in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009.
Carol B. Moerdyk, Chair
William A. Foley
Deborah G. Miller
John C. Orr
52
Summary
Compensation Table
The following narrative, tables and footnotes describe the
total compensation earned during 2009, 2008 and 2007
by Messrs. Geswein, Meier, Reynolds, Rubio and Wilkes.
Information for 2008 and 2007 was not provided for
Mr. Rubio, since he did not join Libbey until July 2009. We
refer to Messrs. Geswein, Meier, Reynolds, Rubio and Wilkes
as our named executives.
The total compensation presented below does not reflect the
actual compensation received by, or the target compensation of,
the named executives in 2009, 2008 or 2007. The actual value
realized by our named executives in 2009 from long-term
incentives (NQSOs, RSUs and performance shares) is presented in
the Option Exercises and Stock Vested in Fiscal 2009 Table
below. Target annual and long-term incentive awards for 2009 are
presented in the Grants of Plan-Based Awards Table below.
The individual components of the total compensation calculation
reflected in the Summary Compensation Table are as follows:
Salary. Base salary earned during 2009, 2008
and 2007.
Bonus. Cash awards made, at the discretion of
the Compensation Committee, in recognition of achievements that
were not contemplated by the individual component of the SMIP
but nevertheless played important roles in Libbeys ability
to achieve its results for the year in question. No bonuses were
paid to our named executives for 2009 or 2008 performance.
Stock Awards. The awards disclosed under the
heading Stock Awards consist of performance shares
and RSUs awarded during each of 2009, 2008 and 2007,
respectively. Details with respect to the awards are included in
the Grants of Plan-Based Awards Table below. The dollar amounts
for the awards represent the respective grant date fair values
of these awards under FASB ASC Topic 718 for each named
executive. The actual values received by the respective named
executives will depend upon the number of shares earned, the
number of RSUs that actually vest and the price of our common
stock when shares of our common stock are issued in settlement
of the performance shares or RSUs, as applicable.
Option Awards. The awards disclosed under the
heading Option Awards generally represent annual
grants of NQSOs. As to Mr. Geswein, the amounts for 2007
include an award of 50,000 NQSOs made in order to induce
Mr. Geswein to join Libbey as our Vice President and Chief
Financial Officer in May 2007. As to Mr. Rubio, the amounts
disclosed for 2009 include an award of 25,000 NQSOs made in
order to induce Mr. Rubio to join Libbey as our Vice
President, General Manager, Libbey Mexico, in July 2009. The
dollar amounts for the awards represent the grant date fair
values of these awards under FASB ASC Topic 718 for each named
executive. The actual values received by the respective named
executives will depend upon the number of NQSOs that actually
vest, the number of shares with respect to which NQSOs are
exercised and the price of our common stock on the date on which
the NQSOs are exercised.
Non-Equity Incentive Compensation. The awards
disclosed under the heading Non-Equity Incentive
Compensation consist of (a) amounts earned by the
named executives in 2009, 2008 and 2007 under our SMIP and
(b) amounts earned by the named executives under the cash
component of our 2009 LTIP. There were no awards paid for 2008
performance. The awards under our SMIP for 2009 and 2007
performance were paid in February of 2010 and 2008,
respectively. The awards under the cash component of our 2009
LTIP will not be paid until early 2012. In order to collect the
awards earned under the cash component of our 2009 LTIP, named
executives must remain continuously employed by us through
December 31, 2011. However, we are obligated to pay the
awards earned under the cash component of our 2009 LTIP to
Messrs. Meier and Reynolds upon their respective
retirements, even if they retire before January 1, 2012.
Change in Pension Value and Nonqualified Deferred
Compensation Earnings. The amounts disclosed
under the heading Change in Pension Value and Nonqualified
Deferred Compensation Earnings represent the actuarial
increase, if any, during each of 2009, 2008 and 2007 in the
pension value provided under our Libbey Inc. Salaried Cash
Balance Pension Plan, which we refer to as our Salary Plan, and
our Supplemental Retirement Benefit Plan, which we refer to as
our SERP. With respect to Messrs. Meier and Reynolds, the
amounts do not reflect the decline in actuarial value of their
pension benefits under our Salary Plan and SERP during 2009.
53
Because we do not guarantee any particular rate of return on
deferred compensation under our Executive Savings Plan or
Executive Deferred Compensation Plan, which we refer to as our
ESP and EDCP, respectively, there are no earnings on
nonqualified deferred compensation included in the amounts
disclosed.
All Other Compensation. The amounts disclosed
under the heading All Other Compensation include:
(a) annual company matching contributions under our 401(k)
savings plan (a broad-based plan open to all U.S. salaried
employees); (b) annual company matching contributions under
our ESP or EDCP, as the case may be; (c) the cost that we
paid for tax return preparation and financial planning for the
respective named executives, together with tax
gross-ups
on that cost; (d) for our
U.S.-based
named executives, our incremental cost for ground transportation
for personal and business trips from the Toledo, Ohio area to
the Detroit/Wayne County Metropolitan airport, and, for
Mr. Rubio, who was employed by our Mexican subsidiary and
based in Monterrey, Mexico, the cost that our Mexican subsidiary
incurred for a driver to provide secure ground transportation to
Mr. Rubio while traveling in the Monterrey, Mexico
vicinity, which has an elevated risk of kidnap for ransom;
(e) the annual premiums that we pay to provide executive
long-term disability coverage for each of the named executives
other than Mr. Rubio; (f) our cost of annual executive
physical examinations for the named executives; and (g) for
Mr. Geswein, our cost incurred in 2007 to relocate him, his
family and belongings to Toledo, Ohio, and related tax
gross-ups
on that cost. For Mr. Rubio, the amounts disclosed under
the heading All Other Compensation also include the
following: (a) contributions made on Mr. Rubios
behalf to Instituto Mexicano Del Seguro Social (Mexicos
equivalent to the U.S. Social Security Administration);
(b) amounts paid on Mr. Rubios behalf for
supplemental medical insurance provided by our Mexican
subsidiary; and (c) the amount payable by our Mexican
subsidiary to Mr. Rubios previous employer as partial
reimbursement for severance payable to Mr. Rubio in
connection with his resignation and decision to accept our offer
of employment. For Mr. Wilkes, the amounts disclosed under
the heading All Other Compensation also include the
Companys expense associated with all compensation payable
to Mr. Wilkes in connection with his December 31, 2009
resignation for good reason. For further information with
respect to those amounts, see the Potential Payments
Upon Termination Under Employment Agreements table
below.
SUMMARY
COMPENSATION TABLE
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
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Deferred
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
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|
Compensation
|
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All Other
|
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|
|
|
Name and Principal
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Position
|
|
Year
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
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($)(5)
|
|
|
($)(6)
|
|
|
($)
|
|
|
Gregory T. Geswein
|
|
|
2009
|
|
|
|
317,585
|
|
|
|
0
|
|
|
|
17,244
|
|
|
|
11,751
|
|
|
|
651,208
|
|
|
|
0
|
|
|
|
6,498
|
|
|
|
1,004,286
|
|
Vice President, Chief
|
|
|
2008
|
|
|
|
337,632
|
|
|
|
0
|
|
|
|
216,374
|
|
|
|
54,022
|
|
|
|
0
|
|
|
|
0
|
|
|
|
12,160
|
|
|
|
620,188
|
|
Financial Officer
|
|
|
2007
|
|
|
|
193,535
|
|
|
|
20,321
|
|
|
|
247,053
|
|
|
|
552,963
|
|
|
|
84,020
|
|
|
|
0
|
|
|
|
47,917
|
|
|
|
1,145,809
|
|
John F. Meier
|
|
|
2009
|
|
|
|
649,031
|
|
|
|
0
|
|
|
|
63,434
|
|
|
|
43,226
|
|
|
|
2,161,856
|
|
|
|
0
|
|
|
|
12,371
|
|
|
|
2,929,918
|
|
Chairman and Chief
|
|
|
2008
|
|
|
|
690,000
|
|
|
|
0
|
|
|
|
829,084
|
|
|
|
207,003
|
|
|
|
0
|
|
|
|
147,871
|
|
|
|
15,541
|
|
|
|
1,889,499
|
|
Executive Officer
|
|
|
2007
|
|
|
|
615,000
|
|
|
|
0
|
|
|
|
1,049,421
|
|
|
|
351,899
|
|
|
|
496,490
|
|
|
|
5,469
|
|
|
|
27,670
|
|
|
|
2,545,949
|
|
Richard I. Reynolds
|
|
|
2009
|
|
|
|
419,782
|
|
|
|
0
|
|
|
|
31,911
|
|
|
|
21,745
|
|
|
|
1,066,858
|
|
|
|
0
|
|
|
|
9,615
|
|
|
|
1,549,911
|
|
Executive Vice President
|
|
|
2008
|
|
|
|
446,280
|
|
|
|
0
|
|
|
|
411,104
|
|
|
|
102,643
|
|
|
|
0
|
|
|
|
91,990
|
|
|
|
14,509
|
|
|
|
1,066,526
|
|
and Chief Operating Officer
|
|
|
2007
|
|
|
|
425,016
|
|
|
|
28,848
|
|
|
|
560,730
|
|
|
|
188,638
|
|
|
|
251,821
|
|
|
|
84,424
|
|
|
|
20,116
|
|
|
|
1,559,593
|
|
Roberto B. Rubio(7)
|
|
|
2009
|
|
|
|
237,399
|
|
|
|
0
|
|
|
|
35,762
|
|
|
|
42,310
|
|
|
|
437,315
|
|
|
|
0
|
|
|
|
504,955
|
|
|
|
1,257,741
|
|
Vice President, General
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manager, International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth G. Wilkes(8)
|
|
|
2009
|
|
|
|
325,283
|
|
|
|
0
|
|
|
|
17,662
|
|
|
|
12,036
|
|
|
|
288,591
|
|
|
|
68,955
|
|
|
|
1,227,573
|
|
|
|
1,940,100
|
|
Vice President, General
|
|
|
2008
|
|
|
|
342,093
|
|
|
|
0
|
|
|
|
212,076
|
|
|
|
52,951
|
|
|
|
0
|
|
|
|
37,306
|
|
|
|
16,876
|
|
|
|
661,302
|
|
Manager, International
|
|
|
2007
|
|
|
|
325,670
|
|
|
|
26,113
|
|
|
|
288,090
|
|
|
|
96,794
|
|
|
|
151,892
|
|
|
|
36,030
|
|
|
|
21,580
|
|
|
|
946,169
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Geswein joined us on May 23, 2007. Mr. Rubio
joined our Mexican subsidiary on July 1, 2009. The amount
for Mr. Rubio represents base salary paid to Mr. Rubio
from July 1 through December 31, 2009, as well as other
fixed components of compensation that our Mexican subsidiary was
required under Mexican law to pay to Mr. Rubio. These
amounts were paid to Mr. Rubio in Mexican pesos, and the
amount included in this column is translated to U.S. currency
using the interbank exchange rate in effect at the time of
payment to Mr. Rubio. |
54
|
|
|
(2) |
|
Represents the grant date fair value, in accordance with FASB
ASC Topic 718, with respect to (a) performance shares
awarded during 2008 and 2007, respectively, based upon the
expectation that those performance shares would be earned at a
target payout; and (b) RSUs granted in 2009, 2008 and 2007,
respectively. Performance shares awarded during 2007 for the
2007-2009
performance cycle actually were earned at 67.8% of target. See
Compensation Discussion and Analysis What
compensation did Libbeys executives receive for
2009? Long-Term Performance-Based
Compensation above. Had a maximum payout been earned
with respect to performance shares awarded during 2007, the
grant date fair values, in accordance with FASB ASC Topic 718,
with respect to those performance shares would have been: |
|
|
|
|
|
|
|
Grant Date Fair Value
|
|
|
of Performance Shares
|
|
|
at Maximum Payout
|
Named Executive
|
|
($)
|
|
G. Geswein
|
|
|
233,396
|
|
J. Meier
|
|
|
592,384
|
|
R. Reynolds
|
|
|
313,856
|
|
R. Rubio
|
|
|
5,299
|
|
K. Wilkes
|
|
|
161,894
|
|
Although we currently do not expect that performance shares
awarded during 2008 for the
2008-2010
performance cycle will be earned at a maximum payout, if they
were, the grant date fair values, in accordance with FASB ASC
Topic 718, with respect to those performance shares would be:
|
|
|
|
|
|
|
Grant Date Fair Value
|
|
|
of Performance Shares
|
|
|
at Maximum Payout
|
Named Executive
|
|
($)
|
|
G. Geswein
|
|
|
216,374
|
|
J. Meier
|
|
|
829,084
|
|
R. Reynolds
|
|
|
411,104
|
|
R. Rubio
|
|
|
22,075
|
|
K. Wilkes(a)
|
|
|
142,091
|
|
|
|
|
(a) |
|
Because Mr. Wilkes resigned effective December 31,
2009, the amount set forth in this table represents 67% of the
maximum performance share award, since his award would be
prorated to reflect the period of his employment during the
1008-2010
performance cycle. |
|
|
|
|
|
For more information, see Footnote 12, Employee Stock
Benefit Plans, to the financial statements included in
our Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 15, 2010. |
|
(3) |
|
Represents the grant date fair value, in accordance with FASB
ASC Topic 718, with respect to NQSOs granted in 2009, 2008 and
2007, respectively, including as sign-on awards made to
Mr. Geswein in 2007 and Mr. Rubio in 2009. For more
information, see Footnote 12, Employee Stock Benefit
Plans, to the financial statements included in our
Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 15, 2010. |
|
(4) |
|
Represents the sum of (a) annual cash incentive
compensation paid in February 2010 and 2008 for performance
during 2009 and 2007, respectively; and (b) cash incentive
compensation payable under the performance component of our 2009
LTIP for the performance cycle beginning January 1, 2009
and ending December 31, 2009. No cash incentive
compensation was paid for performance during 2008. The cash
incentive compensation payable under the 2009 performance
component of our 2009 LTIP is subject to an additional vesting
requirement. In order to collect that award, named executives
must be continuously employed by us through December 31,
2011. We are obligated, however, to pay that award to
Messrs. Meier and Reynolds upon their respective
retirements, even if they retire prior to January 1, 2012.
Because Mr. Wilkes resigned effective December 31,
2009, he did not meet the vesting |
55
|
|
|
|
|
requirement and, accordingly, no amount was or is payable to him
under the performance component of the 2009 LTIP. |
|
(5) |
|
Represents the sum (but not less than $0) of the change in
pension value under our Salary Plan and our SERP. We do not
guarantee any particular rate of return on deferred compensation
under our ESP or EDCP. The rate of return depends upon the
performance of the fund in which the participants ESP or
EDCP account is deemed invested. We had no other nonqualified
plans pursuant to which our executives were entitled to defer
compensation earned prior to January 1, 2010. Neither
Mr. Geswein nor Mr. Rubio was eligible to participate
in our Salary Plan, and Mr. Rubio was not eligible to
participate in either the ESP or the EDCP in 2009. |
|
(6) |
|
Includes the following: (a) annual company matching
contributions to our 401(k) savings plan (a broad-based plan
open to all U.S. salaried employees); (b) annual company
matching contributions to our ESP or EDCP, as the case may be;
(c) the cost that we paid for tax return preparation and
financial planning for the respective named executives, together
with tax
gross-ups
on that cost; (d) for our
U.S.-based
named executives, our incremental cost for ground transportation
for personal and business trips from the Toledo, Ohio area to
the Detroit/Wayne County Metropolitan airport, and, for
Mr. Rubio, the cost that our Mexican subsidiary incurred
for a driver to provide secure ground transportation to
Mr. Rubio while traveling in the Monterrey, Mexico
vicinity, which has an elevated risk of kidnap for ransom;
(e) the annual premiums that we pay to provide executive
long-term disability coverage for each of the named executives
other than Mr. Rubio; (f) our cost of annual executive
physical examinations for the named executives; and (g) for
Mr. Geswein, our cost incurred in 2007 to relocate him, his
family and belongings to Toledo, Ohio, and related tax
gross-ups
on that cost. In addition, for Mr. Rubio, includes the
following: (a) contributions made on Mr. Rubios
behalf to Instituto Mexicano Del Seguro Social (Mexicos
equivalent to the U.S. Social Security Administration);
(b) amounts paid on Mr. Rubios behalf for
supplemental medical insurance provided by our Mexican
subsidiary; and (c) the amount payable by our Mexican
subsidiary to Mr. Rubios previous employer as partial
reimbursement for severance payable to Mr. Rubio in
connection with his resignation and decision to accept our offer
of employment. For Mr. Wilkes, (a) includes the
Companys expense associated with all compensation payable
to Mr. Wilkes in connection with his December 31, 2009
resignation for good reason and (b) excludes the value at
December 31, 2009 of RSUs as to which vesting was
accelerated to that date, and performance shares that were
earned under the 2007 LTIP as of that date, because the
cumulative grant date fair values of the RSUs and performance
shares, respectively, are included for the relevant year under
the column of this table headed Stock Awards. |
|
|
|
The following table provides additional detail with respect to
the perquisites that we provided to our named executives in 2009: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Return
|
|
Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preparation
|
|
Gross-Up on Tax
|
|
|
|
Executive
|
|
Annual
|
|
|
|
|
|
|
|
|
|
|
EDCP
|
|
and Financial
|
|
Return/
|
|
|
|
Long-Term
|
|
Executive
|
|
Supplemental
|
|
|
|
|
|
|
|
|
Matching
|
|
Planning
|
|
Financial
|
|
Ground
|
|
Disability
|
|
Physical
|
|
Medical
|
|
|
|
|
|
|
|
|
Contributions
|
|
Fees
|
|
Planning Fees
|
|
Transportation
|
|
Coverage
|
|
Examination
|
|
Insurance
|
|
Total
|
|
|
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)(a)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
G. Geswein
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
242
|
|
|
|
3,868
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,110
|
|
|
|
|
|
|
|
|
|
J. Meier
|
|
|
2,013
|
|
|
|
700
|
|
|
|
332
|
|
|
|
192
|
|
|
|
4,254
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7,491
|
|
|
|
|
|
|
|
|
|
R. Reynolds
|
|
|
1,302
|
|
|
|
605
|
|
|
|
287
|
|
|
|
0
|
|
|
|
4,265
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6,459
|
|
|
|
|
|
|
|
|
|
R. Rubio
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,174
|
|
|
|
0
|
|
|
|
0
|
|
|
|
781
|
|
|
|
4,955
|
|
|
|
|
|
|
|
|
|
K. Wilkes
|
|
|
1,009
|
|
|
|
1,479
|
|
|
|
703
|
|
|
|
0
|
|
|
|
3,325
|
|
|
|
2,310
|
|
|
|
0
|
|
|
|
8,826
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
For all named executives other than Mr. Rubio, includes
(i) for personal trips, the entire cost that we incurred
for such transportation and (ii) for business trips, the
amount in excess of the amount to which the respective named
executives would have been entitled to reimbursement for mileage
and parking under our travel policy applicable to all employees.
For Mr. Rubio, represents 50% of the cost that our Mexican
subsidiary incurred for the driver who provides the
transportation, since the driver transports customers and
suppliers and other employees during the remainder of his time. |
|
|
|
(7) |
|
Mr. Rubio joined us on July 1, 2009 as Vice President,
General Manager, Libbey Mexico. Following receipt of notice from
Mr. Wilkes on November 2, 2009 that he would be
resigning his position as Vice |
56
|
|
|
|
|
President, General Manager, International Operations effective
December 31, 2009, we appointed Mr. Rubio to that
position. |
|
(8) |
|
Mr. Wilkes resigned effective December 31, 2009. For
more information regarding the amounts included for 2009 under
the All Other Compensation column of this table, see
the Potential Payments Upon Termination Under
Employment Agreements table below. |
Grants of
Plan-Based Awards Table
During 2009, the Compensation Committee granted to our named
executives RSUs and NQSOs under our 2006 Omnibus Incentive Plan
and 2009 LTIP. The Compensation Committee also granted prorated
awards of performance shares to Mr. Rubio, who joined us in
July 2009, with respect to our 2007 LTIP and 2008 LTIP.
Recipients of RSUs and performance shares are not entitled to
dividends or voting rights with respect to the common shares
underlying the RSUs or performance shares unless and until they
are earned or vested. We do not engage in repricing of NQSOs,
nor have we repurchased underwater NQSOs. On February 8,
2010, the Compensation Committee approved the payment of cash
awards under our 2009 SMIP and the cash component of our 2009
LTIP.
Information with respect to each of these awards, including
information with respect to the performance measures applicable
to the cash awards under our SMIP and 2009 LTIP, and vesting
schedules with respect to RSUs and NQSOs and the cash component
of our 2009 LTIP, is set forth, on a
grant-by-grant
basis, in the following table and footnotes.
57
GRANTS OF
PLAN-BASED AWARDS TABLE
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
All
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Other
|
|
|
|
Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
Exercise
|
|
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
Number of
|
|
Number of
|
|
or Base
|
|
Stock
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under Non-Equity
|
|
Under Equity Incentive
|
|
Shares of
|
|
Securities
|
|
Price of
|
|
and
|
|
|
|
|
Award
|
|
Grant
|
|
Incentive Plan Awards(2)
|
|
Plan Awards(3)
|
|
Stock
|
|
Underlying
|
|
Option
|
|
Option
|
|
|
Plan
|
|
Date
|
|
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
or Units
|
|
Options
|
|
Awards
|
|
Awards
|
Name
|
|
Name
|
|
(1)
|
|
(1)
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)(4)
|
|
(#)(5)
|
|
($/Sh)
|
|
($)(6)
|
|
G. Geswein
|
|
2009 SMIP
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
95,276
|
|
|
|
190,551
|
|
|
|
381,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
(cash component)
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
67,526
|
|
|
|
135,053
|
|
|
|
270,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,116
|
|
|
|
|
|
|
|
|
|
|
|
(a)17,244
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,551
|
|
|
|
1.07
|
|
|
|
(b)11,751
|
|
J. Meier
|
|
2009 SMIP
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
292,064
|
|
|
|
584,128
|
|
|
|
1,168,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
(cash component)
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
248,400
|
|
|
|
496,800
|
|
|
|
993,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,284
|
|
|
|
|
|
|
|
|
|
|
|
(a)63,434
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,882
|
|
|
|
1.07
|
|
|
|
(b)43,226
|
|
R. Reynolds
|
|
2009 SMIP
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
157,418
|
|
|
|
314,837
|
|
|
|
629,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
(cash component)
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
124,958
|
|
|
|
249,917
|
|
|
|
499,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,823
|
|
|
|
|
|
|
|
|
|
|
|
(a)31,911
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,627
|
|
|
|
1.07
|
|
|
|
(b)21,745
|
|
R. Rubio
|
|
2009 SMIP
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
56,375
|
|
|
|
112,750
|
|
|
|
225,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 LTIP
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
940
|
|
|
|
1,879
|
|
|
|
3,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) 2,649
|
|
|
|
2008 LTIP
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,914
|
|
|
|
7,828
|
|
|
|
15,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)11,037
|
|
|
|
2009 LTIP
(cash component)
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
54,645
|
|
|
|
109,290
|
|
|
|
218,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,656
|
|
|
|
|
|
|
|
|
|
|
|
(a)22,075
|
|
|
|
2009 LTIP
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,078
|
|
|
|
1.41
|
|
|
|
(b)16,560
|
|
|
|
2009 LTIP
|
|
|
7/1/2009
|
|
|
|
7/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
1.41
|
|
|
|
(b)25,750
|
|
K. Wilkes
|
|
2009 SMIP
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
89,453
|
|
|
|
178,906
|
|
|
|
357,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
(cash component)(7)
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
69,163
|
|
|
|
138,326
|
|
|
|
276,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,507
|
|
|
|
|
|
|
|
|
|
|
|
(a)17,662
|
|
|
|
2009 LTIP
|
|
|
2/9/2009
|
|
|
|
2/12/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,952
|
|
|
|
1.07
|
|
|
|
(b)12,036
|
|
|
|
|
(1)
|
|
For Non-Equity Incentive Plan
Awards, the Award Date and the Grant Date for awards made under
the 2009 SMIP are the date on which the Compensation Committee
approved the 2009 SMIP. The Award Date and the Grant Date for
awards made under the cash component of the 2009 LTIP are the
date on which the Compensation Committee approved the 2009 LTIP.
For All Other Stock Awards and All Other Option Awards, the
Award Date is the date on which the Compensation Committee took
action, and the Grant Date is the date on which we determine the
number of NQSOs, RSUs or performance shares, as the case may be,
awarded. For all awards made to Mr. Rubio upon his hiring,
the Award Date and the Grant Date are July 1, 2009, the
date on which Mr. Rubio first reported to work for us. The
number of NQSOs and RSUs awarded to the executive officers
(other than Mr. Rubio) in February 2009 and to
Mr. Rubio in July 2009 under our 2006 Omnibus Incentive
Plan was determined by dividing the target dollar value of the
applicable component of equity to be awarded by (a) in the
case of NQSOs, the average Black Scholes value of the options on
the last day of each month during the
12-month
period beginning February 2008 and ending January 2009 or
(b) in the case of performance shares and RSUs, the average
closing price of Libbey common stock on the last day of each
month during the same
12-month
period. We inform grant recipients of their awards after we
determine the number of RSUs and/or NQSOs to be granted. For
awards made in February 2009, we determined the number of RSUs
and NQSOs to be granted on the first business day after we
announced our results of operations for the 2008 fiscal year.
|
58
|
|
|
(2) |
|
Represents the range of possible cash awards under (a) our
SMIP for performance during 2009 and (b) the cash component
of our 2009 LTIP. |
|
|
|
(a) |
|
Under our SMIP, each executive officer is eligible for an annual
incentive award in an amount up to 200% of the executive
officers target award, which in turn is a percentage of
the executives anticipated full-year base salary, as set
forth in the following table: |
|
|
|
|
|
|
|
Target Award as a
|
|
|
Percentage of Anticipated
|
|
|
Full-Year Base Salary
|
Named Executive
|
|
(%)
|
|
G. Geswein
|
|
|
60
|
%
|
J. Meier
|
|
|
90
|
%
|
R. Reynolds
|
|
|
75
|
%
|
R. Rubio
|
|
|
55
|
%
|
K. Wilkes
|
|
|
55
|
%
|
|
|
|
|
|
The Compensation Committee, desiring to have flexibility to
reward performance during a very challenging environment in
2009, chose not to employ a rigid payout scale under the
corporate component of the 2009 SMIP, which represents 70% of
the respective named executives target awards and is
dependent upon corporate-wide performance measures. Instead, the
Committee established guidelines for payouts but reserved the
discretion to adjust the payouts following an evaluation of the
effectiveness of the strategic business decisions made and
executed during the plan year by Libbey management to adapt to
changing business conditions and a challenging financial
environment. The amount disclosed under the
Threshold column is at the lower end of the
guidelines with respect to the corporate component. The amount
disclosed under the Target column is the midpoint in
the guidelines, and the amount disclosed under the
Maximum column is at the higher end of the
guidelines. For 2009, the performance measure under the
corporate component was the ratio of actual free cash flow to
budgeted free cash flow. The guidelines with respect to the
corporate component were as follows: |
|
|
|
|
|
|
|
Approximate Percent
|
|
|
|
|
of Budgeted
|
|
Approximate
|
|
Guideline Payout
|
Free Cash Flow
|
|
Free Cash Flow
|
|
as a Percent of Target
|
(%)
|
|
($)
|
|
(%)
|
|
75% 85%
|
|
$
|
13.5 million - $16.0 million
|
|
|
50%
|
90% 110%
|
|
$
|
16.0 million - $20.0 million
|
|
|
100%
|
Above 110%
|
|
Above $
|
20.0 million
|
|
|
Above Target
|
|
|
|
|
|
There was no particular threshold payout with respect to the 30%
of target awards under our 2009 SMIP that was dependent upon
achievement by our named executives of their respective
individual goals. However, payouts under each of the corporate
component and the individual component were subject to
achievement, on a corporate-wide basis, of at least
$60-70 million of adjusted EBITDA and at least
$60-65 million of cash generation, which we calculated as
follows: |
|
|
|
|
Adjusted EBITDA +/- changes in working capital (as defined below)
- capital expenditures = cash generation
|
|
|
|
|
We define working capital as net accounts receivable plus net
inventory, less accounts payable. |
|
(b) |
|
Under the cash component of our 2009 LTIP, each executive
officer was eligible for a cash award in an amount up to 200% of
the executive officers target award. Each executives
target award under the |
59
|
|
|
|
|
cash component was 40% of the executives target award
under all components of the 2009 LTIP, as set forth in the
following table: |
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
2009 LTIP
|
|
|
Target Award as a
|
|
Cash Component Target as
|
|
|
Percentage of Annualized
|
|
Percentage of Annualized
|
|
|
Base Salary on January 1, 2009
|
|
Base Salary on January 1, 2009
|
Named Executive
|
|
(%)
|
|
(%)
|
|
G. Geswein
|
|
|
100
|
%
|
|
|
40
|
%
|
J. Meier
|
|
|
180
|
%
|
|
|
72
|
%
|
R. Reynolds
|
|
|
140
|
%
|
|
|
56
|
%
|
R. Rubio
|
|
|
80
|
%
|
|
|
27
|
%
|
K. Wilkes
|
|
|
100
|
%
|
|
|
40
|
%
|
|
|
|
|
|
For purposes of the cash component of the 2009 LTIP, the
Compensation Committee employed the same performance measure
(actual to budgeted free cash flow), the same payout guidelines,
and the same adjusted EBITDA and cash generation financial
thresholds as it employed with respect to the corporate
component of the 2009 SMIP. In order to collect the award earned
under the cash component, named executives must be continuously
employed by us through December 31, 2011. We are obligated,
however, to pay the amounts earned by Messrs. Meier and
Reynolds upon their respective retirements, even if they retire
before January 1, 2012. |
|
|
|
(3) |
|
Represents, as to Mr. Rubio, awards of performance shares
relating to the
2007-2009
performance cycle under our 2007 LTIP and performance shares
relating to the
2008-2010
performance cycle under our 2008 LTIP. These awards were
prorated to reflect the portion of the performance cycle during
which Mr. Rubio may be employed by us. The performance
measure used to determine the extent to which performance shares
are earned is the ratio of our cumulative EBITDA over the
applicable performance cycle to the sum of budgeted EBITDA for
each year during the performance cycle, in each case as
calculated and adjusted as described under Compensation
Discussion and Analysis What compensation did
Libbeys executives receive for 2009? Long-Term
Performance-Based Compensation above. The scale with
respect to each of the
2007-2009
and
2008-2010
performance cycles is: |
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
Payout as
|
|
|
Budgeted EBITDA
|
|
Percentage of Target
|
Payout Level
|
|
(%)
|
|
(%)
|
|
Threshold
|
|
|
85
|
%
|
|
|
50
|
%
|
Target
|
|
|
100
|
%
|
|
|
100
|
%
|
Maximum
|
|
|
115
|
%
|
|
|
200
|
%
|
|
|
|
(4) |
|
Represents grants of RSUs made pursuant to our 2009 LTIP and our
2006 Omnibus Incentive Plan. With respect to each of the named
executives other than Mr. Rubio and Mr. Wilkes, the
grant vests 25% per year beginning on February 12, 2010.
With respect to Mr. Rubio, the grant vests 25% per year
beginning on July 1, 2010. With respect to Mr. Wilkes,
vesting was accelerated on December 31, 2009 in connection
with his resignation. |
|
(5) |
|
Represents grants of NQSOs made pursuant to our 2009 LTIP and
our 2006 Omnibus Incentive Plan. With respect to each of the
named executives other than Mr. Rubio and Mr. Wilkes,
the grant vests 25% per year beginning on February 12,
2010. With respect to Mr. Rubio, the grant vests as to
16,078 NQSOs at the rate of 25% per year beginning on
July 1, 2010 and cliff vests as to the remaining 25,000
NQSOs on the third anniversary of the grant date. With respect
to Mr. Wilkes, vesting was accelerated on December 31,
2009 in connection with his resignation. |
|
(6) |
|
Represents the grant date fair values, determined in accordance
with FASB ASC Topic 718, of (a) the RSUs, (b) the
NQSOs, (c) the performance shares granted to Mr. Rubio
pursuant to the 2007 LTIP, assuming a payout at target, and
(d) the performance shares granted to Mr. Rubio
pursuant to the 2008 LTIP, assuming a payout at target. |
60
|
|
|
(7) |
|
As a result of his resignation, which was effective
December 31, 2009, Mr. Wilkes failed to satisfy the
vesting requirement upon which the payout of this award was
conditioned. Accordingly, he forfeited his right to receive this
award. |
Outstanding
Equity Awards at Fiscal Year-End Table
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
Our named executives had the following types of equity awards
outstanding at the end of the 2009 fiscal year:
|
|
|
|
|
NQSOs granted under our 2006 Omnibus Incentive Plan and
predecessor plans;
|
|
|
|
RSUs granted under our 2006 Omnibus Incentive Plan; and
|
|
|
|
Performance share awards made under our 2006 Omnibus Incentive
Plan.
|
The following table shows, for each of the named executives,
(a) the number, exercise price and expiration date of NQSOs
that, as of December 31, 2009, were vested but not yet
exercised and of NQSOs that, as of December 31, 2009, were
not vested; (b) the number and market value of RSUs that
were not vested as of December 31, 2009; and (c) the
number and market value of shares of common stock underlying
performance shares that were awarded in 2008 and that were not
yet earned as of December 31, 2009:
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Unearned
|
|
or Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares,
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Units or
|
|
Unearned
|
|
|
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Other
|
|
Shares,
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Rights
|
|
Units or Other
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Units of
|
|
Units of
|
|
That
|
|
Rights
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
Stock That
|
|
Stock That
|
|
Have
|
|
That Have
|
|
|
Award
|
|
Grant
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
Not
|
|
Not
|
|
|
Date
|
|
Date
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
(1)
|
|
(2)
|
|
Exercisable
|
|
Unexercisable
|
|
($)
|
|
Date
|
|
(#)(3)
|
|
($)(4)
|
|
(#)(5)
|
|
($)(6)
|
|
G. Geswein
|
|
|
5/02/2007
|
|
|
|
5/23/2007
|
|
|
|
0
|
|
|
(c) 50,000
|
|
|
19.8500
|
|
|
|
5/23/2017
|
|
|
3,283
|
|
|
25,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,538
|
|
|
(d) 2,538
|
|
|
19.8500
|
|
|
|
5/23/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/04/2008
|
|
|
|
2/15/2008
|
|
|
|
1,849
|
|
|
5,520
|
|
|
15.3500
|
|
|
|
2/15/2018
|
|
|
5,286
|
|
|
40,438
|
|
|
|
3,524
|
|
|
|
26,959
|
|
|
|
|
2/09/2009
|
|
|
|
2/12/2009
|
|
|
|
0
|
|
|
16,551
|
|
|
1.0700
|
|
|
|
2/12/2019
|
|
|
16,116
|
|
|
123,287
|
|
|
|
|
|
|
|
|
|
J. Meier
|
|
|
9/08/2000
|
|
|
|
|
|
|
|
30,000
|
|
|
0
|
|
|
32.3125
|
|
|
|
9/09/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/13/2001
|
|
|
|
|
|
|
|
35,000
|
|
|
0
|
|
|
30.5500
|
|
|
|
11/14/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/20/2002
|
|
|
|
|
|
|
|
35,000
|
|
|
0
|
|
|
23.9300
|
|
|
|
11/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/15/2003
|
|
|
|
|
|
|
|
17,500
|
|
|
0
|
|
|
28.5300
|
|
|
|
12/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/2004
|
|
|
|
|
|
|
|
17,500
|
|
|
0
|
|
|
20.3900
|
|
|
|
12/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/08/2005
|
|
|
|
|
|
|
|
17,500
|
|
|
0
|
|
|
11.7900
|
|
|
|
12/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/05/2007
|
|
|
|
2/16/2007
|
|
|
|
14,808
|
|
|
(a) 14,807
|
|
|
12.8000
|
|
|
|
2/17/2017
|
|
|
(a) 15,426
|
|
|
118,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,058
|
|
|
(b) 9,029
|
|
|
12.8000
|
|
|
|
2/17/2017
|
|
|
(b) 9,331
|
|
|
71,382
|
|
|
|
|
|
|
|
|
|
|
|
|
2/04/2008
|
|
|
|
2/15/2008
|
|
|
|
7,051
|
|
|
21,151
|
|
|
15.3500
|
|
|
|
2/15/2018
|
|
|
20,254
|
|
|
154,943
|
|
|
|
13,503
|
|
|
|
103,298
|
|
|
|
|
2/09/2009
|
|
|
|
2/12/2009
|
|
|
|
0
|
|
|
60,882
|
|
|
1.0700
|
|
|
|
2/12/2019
|
|
|
59,284
|
|
|
453,523
|
|
|
|
|
|
|
|
|
|
R. Reynolds
|
|
|
9/08/2000
|
|
|
|
|
|
|
|
22,000
|
|
|
0
|
|
|
32.3125
|
|
|
|
9/09/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/13/2001
|
|
|
|
|
|
|
|
27,000
|
|
|
0
|
|
|
30.5500
|
|
|
|
11/14/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/20/2002
|
|
|
|
|
|
|
|
27,000
|
|
|
0
|
|
|
23.9300
|
|
|
|
11/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/15/2003
|
|
|
|
|
|
|
|
13,500
|
|
|
0
|
|
|
28.5300
|
|
|
|
12/16/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/2004
|
|
|
|
|
|
|
|
13,500
|
|
|
0
|
|
|
20.3900
|
|
|
|
12/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/08/2005
|
|
|
|
|
|
|
|
13,500
|
|
|
0
|
|
|
11.7900
|
|
|
|
12/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/05/2007
|
|
|
|
2/16/2007
|
|
|
|
7,846
|
|
|
(a) 7,844
|
|
|
12.8000
|
|
|
|
2/17/2017
|
|
|
(a) 8,172
|
|
|
62,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,805
|
|
|
(b) 4,902
|
|
|
12.8000
|
|
|
|
2/17/2017
|
|
|
(b) 5,066
|
|
|
38,755
|
|
|
|
|
|
|
|
|
|
|
|
|
2/04/2008
|
|
|
|
2/15/2008
|
|
|
|
3,496
|
|
|
10,488
|
|
|
15.3500
|
|
|
|
2/15/2018
|
|
|
10,043
|
|
|
76,829
|
|
|
|
6,696
|
|
|
|
51,224
|
|
|
|
|
2/09/2009
|
|
|
|
2/12/2009
|
|
|
|
0
|
|
|
30,627
|
|
|
1.0700
|
|
|
|
2/12/2019
|
|
|
29,823
|
|
|
228,146
|
|
|
|
|
|
|
|
|
|
R. Rubio
|
|
|
7/01/2009
|
|
|
|
7/01/2009
|
|
|
|
0
|
|
|
(e) 25,000
|
|
|
1.4100
|
|
|
|
7/01/2019
|
|
|
15,656
|
|
|
119,768
|
|
|
|
7,828
|
|
|
|
59,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f) 16,078
|
|
|
1.41
|
|
|
|
7/01/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K. Wilkes
|
|
|
9/08/2000
|
|
|
|
|
|
|
|
11,500
|
|
|
0
|
|
|
32.3125
|
|
|
|
9/09/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/13/2001
|
|
|
|
|
|
|
|
17,000
|
|
|
0
|
|
|
30.5500
|
|
|
|
11/14/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/20/2002
|
|
|
|
|
|
|
|
17,000
|
|
|
0
|
|
|
23.9300
|
|
|
|
11/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/15/2003
|
|
|
|
|
|
|
|
11,000
|
|
|
0
|
|
|
28.5300
|
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/2004
|
|
|
|
|
|
|
|
12,000
|
|
|
0
|
|
|
20.3900
|
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/08/2005
|
|
|
|
|
|
|
|
12,000
|
|
|
0
|
|
|
11.7900
|
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/05/2007
|
|
|
|
2/16/2007
|
|
|
|
15,595
|
|
|
0
|
|
|
12.8000
|
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/04/2008
|
|
|
|
2/15/2008
|
|
|
|
7,214
|
|
|
0
|
|
|
15.3500
|
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
|
1,535
|
|
|
|
11,743
|
|
|
|
|
2/09/2009
|
|
|
|
2/12/2009
|
|
|
|
16,952
|
|
|
0
|
|
|
1.0700
|
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The Award Date is the date on which the Compensation Committee
took action. Until 2006, the award date and the grant date
typically were the same. |
|
(2) |
|
See Compensation Discussion and Analysis
How does Libbey determine the forms and amounts of executive
compensation? Our Equity Grant Practices
above for information as to how we determine the number of
NQSOs, RSUs and performance shares awarded to our named
executives. We inform grant recipients of their awards after we
have determined the number of NQSOs, RSUs and/or performance
shares to be granted to them. For awards made in February 2009,
the grant date was the first business day after we announced our
results of operations for the 2008 fiscal year. |
|
(3) |
|
Represents RSUs awarded pursuant to our 2006 Omnibus Incentive
Plan. One share of our common stock underlies each RSU. |
62
|
|
|
(4) |
|
Represents the market value, as of December 31, 2009, of
unvested RSUs. We have estimated the market value by multiplying
the number of shares of common stock underlying the RSUs by
$7.65, the closing price of our common stock on
December 31, 2009. |
|
(5) |
|
Represents the number of shares of our common stock underlying
performance shares that were awarded under our 2008 LTIP for the
36-month
performance cycle ending December 31, 2010. The number of
shares is based upon achievement of the performance measure
described below at the threshold level of performance, since the
performance during the first two years of the three-year
performance cycle would result in a payout at less than
threshold if the performance cycle had ended on
December 31, 2009. Performance shares awarded with respect
to the performance cycle may be earned if and to the extent that
we achieve cumulative EBITDA for the applicable performance
cycle equal to at least 85% of the sum of EBITDA budgeted for
each year during the performance cycle, in each case as
calculated and adjusted as described under Compensation
Discussion and Analysis What compensation did
Libbeys executives receive for 2009? Long-Term
Performance-Based Compensation above. |
|
(6) |
|
Represents the payout value, as of December 31, 2009, of
unearned performance shares that were awarded under our 2008
LTIP for the
36-month
performance cycle ending December 31, 2010. We have
estimated the payout value by multiplying the number of shares
of common stock underlying the unearned performance shares by
$7.65, the closing price of our common stock on
December 31, 2009. |
The following table shows the vesting schedules with respect to
those NQSOs that were not yet exercisable, and those RSUs that
were not yet vested, as of December 31, 2009:
|
|
|
|
|
|
|
Option Awards (NQSOs) Vesting Schedule
|
|
Stock Awards (RSUs) Vesting Schedule
|
Grant Date
|
|
Vesting Schedule
|
|
Grant Date
|
|
Vesting Schedule
|
2/16/2007
|
|
(a) 50% were vested on February 16, 2009; an
additional 25% is scheduled to vest on each of February 16,
2010 and February 16, 2011.
|
|
2/16/2007
|
|
(a) 50% were vested on February 16, 2009; an additional 25% is
scheduled to vest on each of February 16, 2010 and February 16,
2011.
|
|
|
(b) 66% were vested on February 16, 2009; the
remaining NQSOs are scheduled to vest on February 16, 2010.
|
|
|
|
(b) 66% were vested on February 16, 2009; and the remaining RSUs
are scheduled to vest on February 16, 2010.
|
5/23/2007
|
|
(c) 100% are scheduled to vest on May 23, 2010.
(d) 50% were vested on May 23, 2009; an additional 25%
are scheduled to vest on each of May 23, 2010 and
May 23, 2011.
|
|
5/23/2007
|
|
50% were vested on May 23, 2009; an additional 25% are scheduled
to vest on each of May 23, 2010 and May 23, 2011.
|
2/15/2008
|
|
25% were vested on February 15, 2009; an additional 25% are
scheduled to vest on each of February 15, 2010,
February 15, 2011 and February 15, 2012.
|
|
2/15/2008
|
|
25% were vested on February 15, 2009; an additional 25% are
scheduled to vest on each of February 15, 2010, February 15,
2011 and February 15, 2012.
|
2/12/2009
|
|
25% are scheduled to vest on February 12, 2010; an
additional 25% are scheduled to vest on each of
February 12, 2011, February 12, 2012 and
February 12, 2013.
|
|
2/12/2009
|
|
25% are scheduled to vest on February 12, 2010; an additional
25% are scheduled to vest on each of February 12, 2011, February
12, 2012 and February 12, 2013.
|
7/01/2009
|
|
(e) 100% are scheduled to vest on July 1, 2012.
(f) 25% are scheduled to vest on each of July 1, 2010,
July 1, 2011, July 1, 2012 and July 1, 2013.
|
|
7/01/2009
|
|
25% are scheduled to vest on each of July 1, 2010, July 1, 2011,
July 1, 2012 and July 1, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63
Option Exercises
and Stock Vested for Fiscal 2009 Table
The following table sets forth information concerning the
exercise of stock options by the named executives in 2009, the
value of RSUs that vested in 2009 and the number and value of
shares of common stock underlying performance shares that the
named executives earned in 2009 under the 2007 LTIP.
OPTION EXERCISES
AND STOCK VESTED IN FISCAL 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
Value Realized
|
|
|
Shares
|
|
|
Value Realized
|
|
|
|
Acquired on
|
|
|
on
|
|
|
Acquired on
|
|
|
on
|
|
|
|
Exercise
|
|
|
Exercise
|
|
|
Vesting
|
|
|
Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
G. Geswein
|
|
|
0
|
|
|
|
0
|
|
|
|
6,309
|
|
|
|
34,422
|
|
J. Meier
|
|
|
0
|
|
|
|
0
|
|
|
|
39,485
|
|
|
|
182,043
|
|
R. Reynolds
|
|
|
0
|
|
|
|
0
|
|
|
|
20,813
|
|
|
|
96,330
|
|
R. Rubio
|
|
|
0
|
|
|
|
0
|
|
|
|
1,274
|
|
|
|
12,676
|
|
K. Wilkes
|
|
|
0
|
|
|
|
0
|
|
|
|
39,195
|
|
|
|
267,596
|
|
|
|
|
(1) |
|
Represents the value of the sum of (a) the number of
performance shares earned under the 2007 LTIP and (b) RSUs
that vested during 2009. For Mr. Wilkes, the vesting of all
RSUs that previously were unvested was accelerated to
December 31, 2009, the effective date of his resignation.
For RSUs that vested in 2009, the value was determined by
multiplying the number of shares by the closing price of our
common stock on the applicable vesting dates ($1.09 for RSUs
vesting on February 15 or February 16, 2009; $2.19 for RSUs
vesting on May 23, 2009; and $7.65 for RSUs vesting on
December 31, 2009). For performance shares that were earned
under our 2007 LTIP, the value was determined by multiplying the
number of shares by $9.95, the closing price of our common stock
on February 8, 2010, the date on which the Compensation
Committee determined the shares had been earned. |
Retirement
Plans
Executives hired before January 1, 2006 are eligible for
benefits under our Salary Plan and our SERP. The Salary Plan is
a qualified plan, and the SERP is an excess, non-qualified plan
that is designed to provide substantially identical retirement
benefits as the Salary Plan to the extent that the Salary Plan
cannot provide those benefits due to limitations set forth in
the Internal Revenue Code. Prior to January 1, 1998, the
Salary Plan and the SERP provided that benefits would be
determined based upon the highest consecutive three-year annual
earnings. Effective January 1, 1998, the Salary Plan and
the SERP were amended to provide that benefits no longer will be
based upon the highest consecutive three-year annual earnings
but will be determined by annual contribution credits equal to a
percentage of annual earnings plus interest. Employees who were
active employees, were at least age 45, had at least
10 years of service as of December 31, 1997, and had a
combined age and years of service of at least 65 as of
December 31, 1997, are eligible for a pension benefit under
the Salary Plan and SERP based on the greater of two benefit
formulas: (1) the cash balance formula, which is based upon
the value of a notional account that had an opening balance
determined in accordance with the final average pay formula
described below as of January 1, 1998, or (2) the
final average pay formula described below. Under the cash
balance formula, the account balance is increased each year with
a contribution amount based on the sum of age and years of
service with Libbey and with interest based upon the
30-year
Treasury rate.
The final average pay formula is as follows: [(A) × (B)
× (C)] + [(D) × (E) × (C)] + [(F) × (A)
× (G)]
Where:
(A) Monthly final average earnings for the three highest
consecutive calendar years prior to 2009
(B) 1.212%
64
(C) Years of credited service up to 35 years
(D) Monthly final average earnings above Social Security
Wage base at retirement
(E) 0.176%
(F) 0.5%
(G) Years of credited service over 35 years
Only base salary and amounts earned under the SMIP are included
in the calculation of final average earnings.
The retirement benefit may be adjusted if the employee has more
or less than 35 years of credited service or retires prior
to age 65. The Salary Plan and the SERP provide for
additional benefit accruals beyond age 65 and for annual
annuity benefits as well as an optional lump sum form of
benefit. The lump sum option is designed to be equivalent in
value to that of the lifetime annual annuity benefit.
Mr. Meier and Mr. Reynolds were active employees, were
at least age 45 and had more than 20 years of service
as of December 31, 1997. Accordingly, they are eligible for
a pension benefit under the Salary Plan and SERP based on the
greater of the two benefit formulas described above. Each of
Mr. Meier and Mr. Reynolds also is eligible for early
retirement, with an unreduced benefit, under the Salary Plan and
the SERP, because each of them is over the age of 55 and has
more than 30 years of service with Libbey and
Owens-Illinois, Inc., Libbeys former parent company.
Mr. Wilkes is entitled to a benefit computed only in
accordance with the cash balance formula. Neither
Mr. Geswein nor Mr. Rubio is eligible for a pension
benefit under either the Salary Plan or the SERP, because their
employment with Libbey did not begin until May 23, 2007 and
July 1, 2009, respectively.
The following table sets forth information concerning the
benefits provided to the named executives under the Salary Plan
and the SERP as of December 31, 2009, the date that we use
for pension plan measurement for financial statement reporting
purposes.
PENSION BENEFITS
IN FISCAL 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
Present Value of
|
|
Payments During
|
|
|
|
|
Credited Service
|
|
Accumulated Benefit
|
|
Last Fiscal Year
|
Name
|
|
Plan Name
|
|
(#)(1)
|
|
($)(2)
|
|
($)
|
|
G. Geswein
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
J. Meier
|
|
Salary Plan
|
|
|
39.25
|
|
|
|
1,263,063
|
|
|
|
0
|
|
|
|
SERP
|
|
|
39.25
|
|
|
|
3,690,255
|
|
|
|
0
|
|
R. Reynolds
|
|
Salary Plan
|
|
|
39.83
|
|
|
|
1,244,485
|
|
|
|
0
|
|
|
|
SERP
|
|
|
39.83
|
|
|
|
1,983,151
|
|
|
|
0
|
|
R. Rubio
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
K. Wilkes
|
|
Salary Plan
|
|
|
16.42
|
|
|
|
194,615
|
|
|
|
0
|
|
|
|
SERP
|
|
|
16.42
|
|
|
|
148,937
|
|
|
|
0
|
|
|
|
|
(1) |
|
Represents actual years of service to Libbey and Owens-Illinois
Inc., our former parent company. We have not granted additional
years of service to any of our executives. |
|
(2) |
|
Amounts were determined based on the assumptions outlined in our
audited financial statements for the year ended
December 31, 2009, except that assumptions relating to
expected retirement age are as follows. Participants who are
eligible for pension benefits under the Salary Plans final
average pay formula (namely, Messrs. Meier and Reynolds)
are assumed to retire at the earliest age at which they can
receive an unreduced benefit under the Salary Plan.
Mr. Wilkes is assumed to receive benefits under the cash
balance design at his normal retirement age of 65. |
65
Nonqualified
Deferred Compensation in Fiscal 2009 Table
The following table sets forth information with respect to our
ESP and our EDCP. The ESP was the only nonqualified deferred
compensation plan under which employees could defer compensation
earned prior to January 1, 2009. The EDCP was the only
nonqualified deferred compensation plan under which employees
could defer compensation earned in 2009:
NONQUALIFIED
DEFERRED COMPENSATION IN FISCAL 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
|
|
Aggregate
|
|
|
|
|
Contributions in
|
|
Contributions in
|
|
Aggregate Earnings
|
|
Withdrawals/
|
|
Aggregate Balance
|
|
|
Last FY
|
|
Last FY
|
|
in Last FY
|
|
Distributions
|
|
at Last FYE
|
Name
|
|
(1)
|
|
($)(2)
|
|
($)(3)
|
|
($)
|
|
(4)
|
|
G. Geswein
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
J. Meier
|
|
$
|
37,663
|
|
|
$
|
995,613
|
|
|
|
105,429
|
|
|
|
0
|
|
|
$
|
641,055
|
|
|
|
|
23,451 RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,451 RSUs
|
|
R. Reynolds
|
|
$
|
10,488
|
|
|
$
|
501,135
|
|
|
$
|
64,492
|
|
|
|
0
|
|
|
$
|
321,328
|
|
R. Rubio
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
K. Wilkes
|
|
$
|
6,880
|
|
|
$
|
1,009
|
|
|
$
|
19,280
|
|
|
|
0
|
|
|
$
|
155,578
|
|
|
|
|
34,416 RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,416 RSUs
|
|
|
|
|
(1) |
|
As to Mr. Wilkes, includes RSUs that vested upon his
December 31, 2009 resignation and are deferred under the
EDCP. The grant date fair values of these RSUs are included in
the Summary Compensation Table above under the column headed
Stock Awards. |
|
(2) |
|
As to Messrs. Meier and Reynolds, $2,013 and $1,302,
respectively, is included in the column headed All
Other Compensation in the Summary Compensation Table
above. The balance is included in the column headed
Non-Equity Incentive Plan Compensation in the
Summary Compensation Table above. As to Mr. Wilkes, all of
this amount is included in the column headed All Other
Compensation in the Summary Compensation Table above. |
|
(3) |
|
Not included in the column headed Change in Pension
Value and Nonqualified Deferred Compensation Earnings
in the Summary Compensation Table because earnings are not
at an above-market rate. |
|
(4) |
|
Of the total amounts shown in this column, the following amounts
have been reported as Salary, Stock
Awards or Non-Equity Incentive Plan
Compensation in the Summary Compensation Table in this
proxy statement for the last fiscal year and previous fiscal
years: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
Fair Value of
|
|
Non-Equity Incentive
|
|
|
Salary
|
|
Stock Awards
|
|
Plan Compensation
|
Named Executive
|
|
($)
|
|
($)(a)
|
|
($)(b)
|
|
J. Meier
|
|
|
37,663
|
|
|
|
317,141
|
|
|
|
993,600
|
|
R. Reynolds
|
|
|
10,488
|
|
|
|
0
|
|
|
|
499,834
|
|
K. Wilkes
|
|
|
6,880
|
|
|
|
264,175
|
|
|
|
0
|
|
|
|
|
|
(a)
|
Represents the aggregate grant date fair values of RSUs that
vested during 2009 and were deferred under the EDCP, including,
as to Mr. Wilkes, RSUs with respect to which vesting was
accelerated to the effective date of his resignation.
|
|
|
(b)
|
Represents awards earned under the cash component of our 2009
LTIP. These amounts are not payable to Messrs. Meier and
Reynolds until the first to occur of (a) January 1,
2012 or (b) their respective dates of retirement.
|
The ESP, which was frozen at the end of 2008, was a mirror plan
of our qualified 401(k) savings plan. Its purpose was to restore
certain benefits that would have been available to executives
under our 401(k) plan but for IRS limitations on qualified
plans. These limits include the annual maximum recognizable
compensation for retirement plans and the restrictions on excess
contributions by highly compensated
66
employees. In addition to restoring the benefits (including the
benefit of our matching contribution) that otherwise would be
lost by virtue of these IRS limitations on qualified plans, the
EDCP enables executives to save additional amounts, including
equity compensation, on a tax-deferred basis.
Under the EDCP, our named executives and other members of senior
management may elect to defer base pay, cash incentive and bonus
compensation and equity compensation into an account that is
deemed invested in one of 13 measurement funds, including a
Libbey Inc. common stock measurement fund. Equity compensation
in all events will be deemed invested in the Libbey Inc. common
stock measurement fund. We selected these funds to provide
measurement options similar to the investment options provided
under our 401(k) plan. Participants make deferral elections with
respect to cash compensation and RSUs prior to the year in which
they are earned or they vest. They make deferral elections with
respect to performance share compensation on a date that is not
later than six months prior to the end of the relevant
performance cycle.
Participants can defer (a) up to 60% of the amount by which
base salary exceeds required payroll obligations and 401(k) plan
contributions; (b) up to 60% of the amount by which cash
incentive or bonus compensation exceeds required payroll
obligations; and (c) up to 100% of equity compensation that
is earned or vests during the year to which the deferral
relates. We provide matching contributions on excess
contributions of base salary in the same manner as we provide
matching contributions under our 401(k) plan. The matching
contributions are deemed invested in accordance with the
participants election as to his or her own contributions.
The balance credited to a participants account, including
the matching contributions that we make, is 100% vested at all
times. However, the EDCP is not funded and, as a result, EDCP
account balances are subject to the claims of our creditors.
We are obligated to pay the account balance in a lump sum made
on, or in installments that begin on, the distribution date
elected by the participant. However, if a participant dies prior
to the date on which his or her account balance is distributed
in full, we are obligated to distribute the account balance in a
lump sum to the participants beneficiaries no later than
60 days after the participants death. If a
participant ceases to be an employee of Libbey prior to his or
her 62nd birthday, we are obligated to pay the participant his
or her account balance in a lump sum within 60 days after
the date of his or her separation from service, unless the
participant is a specified employee for purposes of
Internal Revenue Code Section 409A. In that event, we are
obligated to pay the participant his or her account balance on
the first day of the seventh month after his or her separation
from service. If a participant ceases to be an employee of
Libbey on or after his or her 62nd birthday, we are obligated to
distribute the account balance either in a lump sum or in
installments, as elected by the participant, on or beginning on
the distribution date elected by the participant. In that event,
the distribution date cannot be later than the
January 1st immediately following the
participants 75th birthday. If, however, the executive is
a specified employee for purposes of Internal
Revenue Code Section 409A, we cannot distribute the account
balance, or begin distributing the account balance, to the
participant prior to the first day of the seventh month after
the participants separation from service. Finally, if a
change in control, as defined in the EDCP, occurs, a
participants entire account balance will be distributed to
him or her within 30 days after the date of the change in
control.
EDCP hardship distributions are permitted, but there are no loan
provisions. All EDCP distributions are fully taxable. Rollovers
to defer taxes are not permitted.
Potential
Payments Upon Termination or Change in Control
As discussed under Compensation Discussion and
Analysis Potential Payments Upon Termination or
Change in Control, we have employment agreements with
our executive officers and change in control agreements with our
executive officers and certain other key members of senior
management. The following tables provide information with
respect to the amounts payable to each of the named executives
based upon the following significant assumptions:
|
|
|
|
|
The following tables assume that Mr. Rubios
employment and change in control agreements were in effect on
December 31, 2009.
|
67
|
|
|
|
|
For purposes of the Potential Payments Upon Termination Under
Employment Agreements table, we have assumed that the employment
of the respective named executives was terminated on
December 31, 2009 under the various scenarios described in
that table. With respect to Mr. Wilkes, the amounts under
the scenario entitled Voluntary termination for Good
Reason or involuntary termination without Cause are the
amounts actually accrued, including the enhancements described
under Compensation Discussion and Analysis
Potential Payments Upon Termination or Change in
Control Enhancements Provided to
Mr. Wilkes above.
|
|
|
|
For purposes of the Potential Payments Upon Change in Control
table, we have assumed that a change in control occurred on
December 31, 2009, but that none of the named executives
was terminated in connection with that change in control.
|
|
|
|
For purposes of the Potential Payments Upon Termination in
Connection with Change in Control table, we have assumed that a
change in control occurred on December 31, 2009 and that
the employment of the respective named executives was terminated
on December 31, 2009 under the various scenarios described
in that table.
|
POTENTIAL
PAYMENTS UPON TERMINATION UNDER EMPLOYMENT AGREEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
Long-Term
|
|
|
Acceleration of
|
|
|
|
|
|
|
|
|
|
Base
|
|
|
Incentive
|
|
|
Incentive
|
|
|
Unvested Equity
|
|
|
Misc.
|
|
|
|
|
|
|
Salary
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Awards
|
|
|
Benefits
|
|
|
Total
|
|
Named Executive
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
Gregory T. Geswein
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
337,632
|
|
|
|
190,551
|
|
|
|
81,099
|
|
|
|
232,193
|
|
|
|
12,000
|
|
|
|
853,475
|
|
Permanent disability
|
|
|
675,264
|
|
|
|
571,653
|
|
|
|
22,223
|
|
|
|
232,193
|
|
|
|
26,676
|
|
|
|
1,528,009
|
|
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
|
|
675,264
|
|
|
|
571,653
|
|
|
|
22,223
|
|
|
|
232,193
|
|
|
|
26,676
|
|
|
|
1,528,009
|
|
Involuntary termination for Cause
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
John F. Meier
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
1,380,000
|
|
|
|
548,128
|
|
|
|
1,309,040
|
|
|
|
866,316
|
|
|
|
12,000
|
|
|
|
4,151,484
|
|
Permanent disability
|
|
|
2,070,000
|
|
|
|
2,336,512
|
|
|
|
1,113,621
|
|
|
|
866,316
|
|
|
|
36,803
|
|
|
|
6,423,251
|
|
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
|
|
2,070,000
|
|
|
|
2,336,512
|
|
|
|
1,113,621
|
|
|
|
866,316
|
|
|
|
36,803
|
|
|
|
6,423,251
|
|
Involuntary termination for Cause
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Richard I. Reynolds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
446,280
|
|
|
|
314,837
|
|
|
|
580,730
|
|
|
|
429,672
|
|
|
|
12,000
|
|
|
|
1,783,518
|
|
Permanent disability
|
|
|
892,560
|
|
|
|
944,510
|
|
|
|
563,421
|
|
|
|
429,672
|
|
|
|
24,535
|
|
|
|
2,854,697
|
|
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
|
|
892,560
|
|
|
|
944,510
|
|
|
|
563,421
|
|
|
|
429,672
|
|
|
|
24,535
|
|
|
|
2,854,697
|
|
Involuntary termination for Cause
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Roberto B. Rubio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
410,000
|
|
|
|
130,569
|
|
|
|
9,746
|
|
|
|
376,095
|
|
|
|
16,500
|
|
|
|
987,661
|
|
Permanent disability
|
|
|
820,000
|
|
|
|
391,708
|
|
|
|
9,746
|
|
|
|
376,095
|
|
|
|
35,676
|
|
|
|
1,634,353
|
|
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
|
|
820,000
|
|
|
|
391,708
|
|
|
|
9,746
|
|
|
|
376,095
|
|
|
|
35,676
|
|
|
|
1,634,353
|
|
Involuntary termination for Cause
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Kenneth G. Wilkes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
|
345,816
|
|
|
|
178,906
|
|
|
|
83,786
|
|
|
|
329,477
|
|
|
|
16,500
|
|
|
|
954,484
|
|
Permanent disability
|
|
|
691,632
|
|
|
|
536,717
|
|
|
|
32,803
|
|
|
|
329,477
|
|
|
|
33,535
|
|
|
|
1,624,164
|
|
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
|
|
691,632
|
|
|
|
668,989
|
|
|
|
32,803
|
|
|
|
329,477
|
|
|
|
56,035
|
|
|
|
1,778,936
|
|
Involuntary termination for Cause
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1) |
|
Represents (a) in the event of termination due to death,
two times base salary in the case of Mr. Meier and one
times base salary in the case of the other named executives (in
each case at the rate in effect on |
68
|
|
|
|
|
December 31, 2009, the date of termination), and
(b) in the event of termination due to permanent
disability, voluntary termination for good reason or involuntary
termination without cause, three times 2009 base salary in the
case of Mr. Meier and two times 2009 base salary in the
case of the other named executives (in each case at the rate in
effect on the date of termination). Since termination is assumed
to have occurred on December 31, 2009, we have assumed that
all 2009 base salary has been paid when due. The base salary and
annual incentive compensation components are payable in a lump
sum, with the payment being made on the first day of the seventh
month following termination, except if termination is a result
of the named executives death, in which case the payment
would be made within 60 days after Libbey receives written
notice of the appointment of a personal representative for the
named executives estate. |
|
(2) |
|
In the case of termination due to death, represents the target
annual incentive for 2009 performance under our SMIP. In the
case of termination due to permanent disability, by us without
cause or by the executive for good reason, represents the sum of
(a) the named executives target award for the year in
which termination occurs and (b) a multiple of the
executives target award for 2009 under our SMIP. The
multiple is three for Mr. Meier and two for each of the
other named executives. Because termination is assumed to occur
on December 31, 2009, the named executives target
award for 2009 is not prorated. If termination were to occur
during a year, the named executives target award for 2009
would be prorated, but would not be less than 50% of the target
award unless termination is a result of death. |
|
(3) |
|
Represents, in the event of termination due to death, the sum of
(a) the estimated value of performance shares, paid at
target, under the 2007 LTIP for the performance cycle ending
December 31, 2009, (b) the estimated value of a
prorated award of performance shares, paid at target, for the
performance cycle beginning January 1, 2008 and (c) as
to Messrs. Meier and Reynolds only, the actual award earned
under the cash component of our 2009 LTIP. In the event of
termination due to permanent disability, voluntary termination
for good reason or involuntary termination without cause,
represents the sum of (a) the estimated value of shares of
common stock issued as payment for performance shares actually
earned under the 2007 LTIP for the performance cycle ending
December 31, 2009 and (b) as to Messrs. Meier and
Reynolds only, the actual award earned under the cash component
of our 2009 LTIP. In the event of termination due to permanent
disability, voluntary termination for good reason or involuntary
termination without cause, performance shares for incomplete
performance cycles are paid out only if and when earned. We have
estimated the values of the performance shares on
December 31, 2009 by multiplying the number of shares by
$7.65, the closing price of our common stock on
December 31, 2009. |
|
(4) |
|
Represents the sum of (a) the estimated value of common
stock underlying RSUs that were granted in 2007, 2008 and 2009
and that had not vested as of December 31, 2009 and
(b) the
in-the-money/intrinsic
value of unvested NQSOs as of December 31, 2009. We have
estimated the value of common stock underlying unvested RSUs by
multiplying the number of RSUs by $7.65, the closing price of
our common stock on December 31, 2009. Only NQSOs granted
in 2009 had an exercise price below $7.65. Accordingly, we
determined the
in-the-money/intrinsic
value of those NQSOs by multiplying the number of them by the
amount by which $7.65 exceeds the exercise price. |
|
(5) |
|
Represents the sum of (a) the estimated cost of medical,
prescription drug, dental and vision benefits for the named
executive and/or his covered dependents for
(i) 12 months following the date of termination if
termination is a result of death or (ii) 24 months
(or, in Mr. Meiers case, 36 months) following
the date of termination if termination is a result of permanent
disability, voluntary termination for good reason or involuntary
termination without cause; and (b) in the event of
termination as a result of permanent disability, voluntary
termination for good reason or involuntary termination without
cause, the estimated cost of continued life insurance coverage,
for a period of 24 months (or, in Mr. Meiers
case, 36 months) following the date of termination, under
our group life insurance policy applicable to all salaried
employees. As to Mr. Wilkes, Miscellaneous Benefits also
include, in the case of Voluntary termination for Good Reason or
Involuntary termination without Cause, outplacement and
financial planning services at an aggregate estimated cost of
$22,500. |
|
(6) |
|
Does not include any tax
gross-up
because the excise tax contemplated by Section 4999 of the
Internal Revenue Code does not apply in the absence of a change
in control. Does not include any qualified or |
69
|
|
|
|
|
nonqualified pension benefit or other deferred compensation to
which any of the named executives otherwise may be entitled upon
their retirement or other termination of employment. For further
information regarding those benefits, see Retirement
Plans and Nonqualified Deferred Compensation
above. |
POTENTIAL
PAYMENTS UPON CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
Equity Incentive
|
|
|
Unvested Stock
|
|
|
|
|
|
|
Compensation
|
|
|
Plan Awards
|
|
|
Options
|
|
|
Total
|
|
Named Executive
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
G. Geswein
|
|
|
190,551
|
|
|
|
81,099
|
|
|
|
110,726
|
|
|
|
382,376
|
|
J. Meier
|
|
|
584,128
|
|
|
|
315,440
|
|
|
|
400,617
|
|
|
|
1,300,185
|
|
R. Reynolds
|
|
|
314,837
|
|
|
|
162,425
|
|
|
|
201,526
|
|
|
|
678,788
|
|
R. Rubio
|
|
|
112,750
|
|
|
|
54,497
|
|
|
|
256,327
|
|
|
|
423,574
|
|
K. Wilkes
|
|
|
178,908
|
|
|
|
83,786
|
|
|
|
111,544
|
|
|
|
374,236
|
|
|
|
|
(1) |
|
Represents the executives target award for 2009 under our
SMIP, based upon actual base salary earned during 2009. Because
a change in control is assumed to occur on December 31,
2009, the amount is not prorated. If termination were to occur
during a year, the amount would be prorated, but in no event
would be less than 50% of the target award used for purposes of
determining this amount. |
|
(2) |
|
Represents the sum of (a) the value of performance shares
paid at target under our 2007 LTIP for the performance cycle
ending December 31, 2009; and (b) the value of
performance shares paid at target (on a prorated basis) as of
December 31, 2009 under our 2008 LTIP for the performance
cycle ending December 31, 2010. We have estimated the value
of the performance shares on December 31, 2009 by
multiplying the number of shares by $7.65, the closing price of
our common stock on December 31, 2009. |
|
(3) |
|
Represents the
in-the-money/intrinsic
value of unvested NQSOs based upon the closing price of our
stock on December 31, 2009 ($7.65 per share). |
POTENTIAL
PAYMENTS UPON TERMINATION
IN CONNECTION WITH CHANGE IN CONTROL(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
Stock and
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Cash
|
|
|
Misc.
|
|
|
Plan
|
|
|
Tax
|
|
|
|
|
|
|
Base Salary
|
|
|
Compensation
|
|
|
Equivalent Awards
|
|
|
Benefits
|
|
|
Benefits
|
|
|
Gross-Up
|
|
|
Total
|
|
Named Executive
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
($)(7)
|
|
|
($)
|
|
|
G. Geswein
|
|
|
1,012,896
|
|
|
|
571,653
|
|
|
|
458,946
|
|
|
|
55,941
|
|
|
|
250,000
|
|
|
|
878,830
|
|
|
|
3,228,266
|
|
J. Meier
|
|
|
2,070,000
|
|
|
|
1,752,384
|
|
|
|
1,791,464
|
|
|
|
52,688
|
|
|
|
250,000
|
|
|
|
1,984,028
|
|
|
|
7,900,564
|
|
R. Reynolds
|
|
|
1,338,840
|
|
|
|
944,510
|
|
|
|
906,095
|
|
|
|
52,593
|
|
|
|
250,000
|
|
|
|
1,202,406
|
|
|
|
4,694,444
|
|
R. Rubio
|
|
|
1,230,000
|
|
|
|
338,250
|
|
|
|
338,347
|
|
|
|
69,441
|
|
|
|
250,000
|
|
|
|
854,987
|
|
|
|
3,081,025
|
|
K. Wilkes
|
|
|
1,037,448
|
|
|
|
536,717
|
|
|
|
494,586
|
|
|
|
66,967
|
|
|
|
250,000
|
|
|
|
842,481
|
|
|
|
3,234,654
|
|
|
|
|
(1) |
|
Represents amounts payable if, within two years after the change
in control, we terminate the employment of the named executive
without cause or the named executive terminates his employment
for good reason. In certain circumstances these amounts may be
payable to the named executive if his employment is terminated
prior to the change in control based upon an event that would
meet the definition of cause or good reason if the event were to
occur within two years after the change in control. |
|
(2) |
|
Represents three times base salary in effect on
December 31, 2009 and is payable in a lump sum on the first
day of the seventh month following termination of employment. We
have assumed that all 2009 base salary has been paid when due. |
70
|
|
|
(3) |
|
Represents three times the respective named executives
target annual incentive awards for 2009 performance, since the
named executives did not earn annual incentive awards for 2008
performance. Target annual incentive compensation is a
percentage of base salary actually earned during the year, as
reflected by
W-2 wages.
For information with respect to the target percentages of the
respective named executives, see footnote 2(a) to the Grants of
Plan-Based Awards table above. |
|
(4) |
|
The change in control is assumed to have occurred concurrently
with termination of employment on December 31, 2009.
Pursuant to the change in control agreements, the cash value of
unvested RSUs outstanding on the date of the change in control
is determined based upon the closing price of Libbeys
common stock on the last trading day immediately preceding the
change in control. That value is frozen. Upon termination by
Libbey without cause or by the named executive for good reason
within two years after the change in control (and in certain
circumstances prior to the change in control), that value is
paid to the named executive in cash. Similarly, the earned cash
component of the 2009 LTIP is paid in cash upon termination. The
estimated value of unvested RSUs for purposes of this table is
based upon the closing price of Libbeys common stock on
December 31, 2009, or $7.65 per share. |
|
(5) |
|
Represents the sum of (a) the estimated cost of medical,
prescription drug, dental and vision benefits for the named
executive and his covered dependents for 36 months
following the date of termination, at an assumed annual cost of
$12,000 for Messrs. Geswein, Meier and Reynolds and $16,500
for Messrs. Rubio and Wilkes; (b) the estimated cost
of continued life insurance coverage, for a period of
36 months following the date of termination, under our
group life insurance policy applicable to all salaried
employees; (c) the estimated cost to provide outplacement
services for two years following the date of termination, at a
maximum cost to the Company of $15,000 per named executive; and
(d) the estimated cost to provide one year of financial
planning services of the nature and scope provided to the
respective named executives during 2009. |
|
(6) |
|
Represents a lump sum equal to the greater of (i) $250,000
or (ii) the additional benefits to which each named
executive would have been entitled under the Companys
qualified pension plan if he had remained employed by the
Company for an additional three (3) years. Does not include
any other qualified or nonqualified pension benefit or other
deferred compensation to which any of the named executives
otherwise may be entitled upon their retirement or other
termination of employment. For further information regarding
those benefits, see Retirement Plans and
Nonqualified Deferred Compensation above. |
|
(7) |
|
The present value of the parachute
payments payable to each of the named executives exceeded
1.10 multiplied by three times the base amount of
the respective named executives (with the terms present
value, parachute payments and base
amount being defined in Section 280G of the Internal
Revenue Code). Accordingly, the Company would be obligated to
fully gross up the amounts payable to the respective named
executives to cover the excise taxes (but not ordinary income
taxes) assessed against them. |
71
Non-Management
Directors Compensation in 2009
In 2009, our non-management directors received the following
compensation:
DIRECTOR
COMPENSATION FOR YEAR ENDED DECEMBER 31, 2009
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Change in Pension
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Value and
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Nonqualified
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Fees Earned or
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Deferred
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All Other
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Paid in Cash
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Stock Awards
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Compensation
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Compensation
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Total
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Name
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($)(1)
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($)(2)
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Earnings(3)
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($)
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($)
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Carlos V. Duno
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$
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87,375
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$
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13,500
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$
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0
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$
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0
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$
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100,875
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William A. Foley
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102,750
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13,500
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0
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0
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116,250
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Jean-René Gougelet
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77,125
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13,500
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0
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0
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90,625
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Peter C. McC. Howell
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95,000
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13,500
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0
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0
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108,500
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Deborah G. Miller
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80,875
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13,500
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0
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0
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94,375
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Carol B. Moerdyk
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105,125
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13,500
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0
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0
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118,625
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John C. Orr
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71,125
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13,500
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0
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0
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84,625
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Terence P. Stewart(4)
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63,875
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13,500
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0
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0
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77,375
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(1) |
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Includes compensation deferred into the Libbey Inc. common stock
measurement fund pursuant to the Director DCP. |
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(2) |
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Represents the grant date fair value, determined in accordance
with FASB ASC Topic 718, of awards of stock made to each
non-management director on May 7, 2009. On that date, we
awarded each non-management director stock having a value of
$13,500. On the date of each annual meeting of shareholders, we
typically award each non-management director shares of Libbey
Inc. common stock having a value of $40,000, and we determine
the number of shares of common stock to be issued by dividing
$40,000 by the closing price of our common stock on the date of
our annual meeting of shareholders. On May 7, 2009, the
closing price of our common stock was $1.80, which would have
resulted in our issuance to each non-management director of
22,222 shares of stock. Our 2006 Omnibus Incentive Plan,
however, limits the number of shares that we may issue to
non-management directors in any year. As a result, we issued to
each director only 7,500 shares of Libbey Inc. common
stock, and we paid the remaining $26,500 to each non-management
director in cash. |
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(3) |
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We do not maintain a pension plan for our non-management
directors. We do not guarantee any particular rate of return on
any compensation deferred pursuant to our deferred compensation
plans. Dividends on compensation deferred into the Libbey Inc.
phantom stock or measurement fund under our deferred
compensation plans for non-management directors accrue only if
and to the extent payable to holders of our common stock.
Compensation deferred into interest-bearing accounts under our
deferred compensation plans for non-management directors does
not earn an above-market return, as the applicable interest rate
is the yield on
10-year
treasuries. Compensation deferred into other measurement funds
under our deferred compensation plans for non-management
directors does not earn an above-market return as that
compensation earns a return only if and to the extent that the
net asset value of the measurement fund into which the
compensation is deemed invested actually increases. |
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(4) |
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For additional information with respect to compensation payable
to Mr. Stewarts law firm for services provided to
Libbey, see Libbey Corporate Governance
Certain Relationships and Related Transactions What
transactions involved directors or other related
parties? |
CERTAIN LEGAL
PROCEEDINGS
We are not a party to any litigation, the outcome of which, if
decided adversely to us, reasonably could be expected to have a
material adverse effect on Libbey.
72
PROPOSAL 1
ELECTION OF DIRECTORS
Each year the shareholders are asked to elect the members of a
class for a term of three years. Currently, the term of office
for members of Class II of the Board of Directors will
expire on the date of the Annual Meeting in 2010. The members of
Class II are Carlos V. Duno, Peter C. McC. Howell, John C.
Orr and Richard I. Reynolds. The Board of Directors has fixed
the number of directors to be elected at the 2010 Annual Meeting
at four and has nominated Messrs. Duno, Howell, Orr and
Reynolds for election to Class II. Those persons who are
elected directors at the 2010 Annual Meeting will hold office
until their terms expire on the date of the 2013 Annual Meeting
or until the election and qualification of their successors. The
terms of office of the members of Class III and
Class I of the Board of Directors will expire on the date
of the Annual Meeting in 2011 and 2012, respectively.
Information regarding Messrs. Duno, Howell, Orr and
Reynolds is set forth above under Libbey Corporate
Governance Who are the current members of
Libbeys Board of Directors?
So far as the Board has been advised, only the four persons
named above as nominees will be nominated for election as
directors at the Annual Meeting. Shares represented by proxies
in the accompanying form will be voted for the election of these
four nominees unless authority to vote for any or all of these
nominees is withheld. The nominees have consented to being named
in this proxy statement and to serve if elected. If any of them
should become unavailable prior to the Annual Meeting, the proxy
will be voted for a substitute nominee or nominees designated by
the Board of Directors or the number of directors may be reduced
accordingly. The Board, however, expects each of the nominees to
be available. As long as a quorum is present, directors shall be
elected by a majority of the votes of the shares present in
person or represented by proxy at the meeting. A shareholder
entitled to vote for the election of directors may withhold
authority to vote for any or all of the nominees.
The Board of Directors recommends a vote FOR this
proposal.
PROPOSAL 2
APPROVAL OF AMENDED AND RESTATED
LIBBEY INC. 2006 OMNIBUS INCENTIVE PLAN
We are submitting for shareholder approval the Amended and
Restated Libbey Inc. 2006 Omnibus Incentive Plan (the
Amended Omnibus Plan).
Why is Libbey
submitting the Amended Omnibus Plan for shareholder
approval?
We currently provide equity-based compensation under the terms
of our 2006 Omnibus Incentive Plan. As of March 19, 2010,
only 176,272 shares remained available for grant under our
2006 Omnibus Incentive Plan, with 1,835,674 shares subject
to outstanding awards under it. Because we have only
176,272 shares remaining available for grant under our 2006
Omnibus Incentive Plan, our Compensation Committees
ability to provide competitive, performance-based equity
compensation that aligns our executives interests with
those of our shareholders is limited. In fact, we did not have a
sufficient number of shares remaining available for grant in
2010 to make the grants of RSUs that our Compensation Committee
approved in February 2010. As a result, those awards are subject
to approval by you of our Amended Omnibus Plan. We are
committed, however, to ensuring that our stock usage rate, which
we refer to as our burn
rate2,
with respect to Awards granted in 2010 through 2012 remains
below the average burn rate published by Institutional
Shareholder Services with respect to our Global Industry
Classification Standard Industry Group for 2009 and 2010.
2 The
burn rate (also commonly known as the run rate) is
defined as a fraction, the numerator of which is the total
number of shares subject to equity awards in the form of stock
awards and stock options granted in the year, and the
denominator of which is the number of common shares outstanding
at the end of the year.
73
What are the key
features of the Omnibus Plan?
The principal features of the Amended Omnibus Plan are
summarized below, but the summary is qualified in its entirety
by reference to the Amended Omnibus Plan itself. A copy of the
Amended Omnibus Plan, marked to show changes from our 2006
Omnibus Incentive Plan, is attached to this proxy statement as
Appendix A.
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In an effort to control stock overhang (defined generally as the
percentage of Libbeys total equity that is subject to
outstanding options, or is available for the grant of options,
to
employees),3
only 1,460,000 additional shares will be authorized for issuance
under the Amended Omnibus Plan. Shares that, as of the effective
date of the Amended Omnibus Plan, are available for grant under
our 2006 Omnibus Incentive Plan also will be available for grant
under the Amended Omnibus Plan.
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The Amended Omnibus Plan provides for the grant of options (both
nonqualified and incentive stock options), stock appreciation
rights, which we refer to as SARs, restricted stock, restricted
stock units, performance shares, performance units, cash based
awards and other stock-based awards. We refer to grants of
options, SARs, restricted stock, restricted stock units,
cash-based awards and other stock-based awards collectively as
Awards.
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The Amended Omnibus Plan is intended to qualify certain Awards
as performance-based compensation for purposes of retaining the
deductibility of certain compensation over $1,000,000 for the
covered executives under Section 162(m) of the Code.
Accordingly, the Amended Omnibus Plan sets forth the following
limits on Awards:
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The maximum aggregate number of shares subject to Awards made to
non-employee directors is 150,000, and the maximum aggregate
number of shares subject to Awards to any one non-employee
director in any calendar year is 7,500;
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The maximum aggregate number of shares subject to stock options
or SARS granted to any one participant in any calendar year is
300,000;
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The maximum aggregate grant of Awards of restricted stock,
restricted stock units, performance units or performance shares
to any one participant in any calendar year is
200,000 shares (or, in the case of performance units, the
value of 200,000 shares determined as of the date of
payment);
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The maximum aggregate amount of any cash-based or other
stock-based Award made to any one participant in any calendar
year is $3,000,000 or 200,000 shares, as determined on the
date of payment.
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Under the Amended Omnibus Plan, shares covered by an Award will
be counted as used only to the extent the shares actually are
issued. The following shares related to Awards will be available
again for grant under the Amended Omnibus Plan:
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Shares related to Awards that terminate without issuance of
shares, whether by expiration, forfeiture, cancellation or
otherwise;
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Shares related to Awards that are settled in cash in lieu of
shares;
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Shares related to Awards that, prior to issuance of shares, are
exchanged, with the Compensation Committees permission,
for Awards not involving shares;
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Shares that are tendered as payment for the option price for any
stock option Award granted under the Amended Omnibus Plan, or
for payment of withholding taxes with respect to any Award
granted under the Amended Omnibus Plan;
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3 On
March 19, 2010, the closing price of a share of our common
stock on the NYSE Amex exchange was $13.10. That price is well
below the grant prices for a significant percentage of the stock
options that have been granted and remain outstanding. As a
result, those stock options are unlikely ever to be exercised.
These underwater stock options contribute
significantly to our overhang.
74
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If a SAR is exercised and settled in shares, the difference
between the total shares exercised and the net shares delivered,
with the result being that only the number of shares actually
issued upon exercise of a SAR are counted against the shares
available under the Omnibus Plan.
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The Amended Omnibus Plan does not permit stock option repricing,
discounted stock options, reload stock options or the
Companys exchange for cash of underwater stock options.
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The Amended Omnibus Plan is described in more detail under
What are the key terms of the Amended Omnibus
Plan? below.
What is the
purpose of the Amended Omnibus Plan?
As indicated above, the purpose of the Amended Omnibus Plan is
to enable the Compensation Committee of our Board of Directors
to make Awards to attract and retain our employees and
non-employee directors, to further align their interests with
those of our shareholders and to closely link executive
compensation with our performance.
What shares of
common stock are available for Awards under the Amended Omnibus
Plan?
The shares of our common stock available under the Amended
Omnibus Plan may be either previously authorized and unissued
shares or treasury shares.
Can there be
adjustments in the number and kind of shares granted under the
Amended Omnibus Plan?
In the event of a corporate event or transaction, including
merger, consolidation, reorganization, recapitalization,
separation, partial or complete liquidation, stock split, stock
dividend, reverse stock split, split up, spin-off or other
distribution of stock or property, combination of shares,
exchange of shares or other similar change in capital structure,
the Compensation Committee may, in its discretion, adjust the
number and kind of shares granted under the Amended Omnibus
Plan, the number and kind of shares subject to Awards and the
exercise or grant price of outstanding stock options or SARs.
What are the key
terms of the Amended Omnibus Plan?
Administration. The Omnibus Plan is generally
administered by the Compensation Committee of our Board of
Directors, or any subcommittee thereof, although the full Board
of Directors may function as the Committee. The Committee is
authorized to determine (a) the individuals, who we refer
to as Participants, who will receive Awards, (b) when they
will receive Awards, (c) the number of shares to be subject
to each Award, (d) the price of the Awards granted,
(e) payment terms, (f) payment method and (g) the
expiration date applicable to each Award. The Committee is also
authorized to adopt, amend and rescind rules relating to the
administration of the Amended Omnibus Plan. From time to time
the Committee may delegate its authority to grant or amend
awards to Libbeys officers, but the delegation must set
forth the total number of Awards the officer may grant, and the
officer must report periodically to the Committee regarding the
nature and scope of the Awards granted. The Committee may not,
however, delegate to senior executives of the company who are
subject to Section 16 of the Securities Exchange Act of
1934, as amended, authority to grant to, or to amend awards
previously granted to, any individual who is subject to
Section 162(m) of the Code.
Amendment and Termination. The Committee may
at any time amend, modify, suspend or terminate the Amended
Omnibus Plan or any Award made under the Amended Omnibus Plan,
but the Committee may not, without shareholder approval except
as described above under Can there be adjustments in
the number and kind of shares granted under the Amended Omnibus
Plan?, (a) reprice, replace or regrant, through
cancellation and substitution of another Award, options or SARs,
(b) lower the option price or grant price of an option or
SAR or (c) exchange for cash underwater options or SARs. If
shareholder approval for any amendment to the Amended Omnibus
Plan is required by law, regulation or stock exchange rule, then
neither the Committee nor Libbey is authorized to amend the
Amended Omnibus Plan without shareholder
75
approval. However, the Board of Directors may amend the Amended
Omnibus Plan or an Award to comply with law and administrative
regulations.
Eligibility. Awards under the Amended Omnibus
Plan may be granted to our employees or employees of any of our
present or future subsidiaries, and to any directors who are not
our employees. More than one Award may be granted to an employee
or to a nonemployee director. All salaried employees and
non-employee directors are eligible to participate in the
Amended Omnibus Plan, although we generally limit awards to our
senior management group of approximately 45 employees and
our eight non-employee directors.
Vesting. Except with respect to a maximum of
5% of the shares authorized for issuance under the Amended
Omnibus Plan, full-value Awards that vest on the basis of
continued service to or employment with Libbey must provide for
vesting that is no more rapid than pro rata over a three-year
period, and full-value Awards that vest upon the attainment of
performance goals must provide for a performance period of at
least 12 months. However, the Compensation Committee may,
in its discretion, accelerate the vesting of full-value Awards
upon the applicable Participants death, disability or
retirement, or upon a change in control.
Awards. Each Award will be set forth in a
separate agreement with the person receiving the Award and will
indicate the type, terms and conditions of the Award. The
following briefly describes the characteristics of each type of
Award that may be made under the Amended Omnibus Plan.
Stock Options. Stock options granted
under the Amended Omnibus Plan may be either
non-qualified or incentive stock
options. Non-qualified stock options are options not intended to
receive the favorable tax treatment for participants applicable
to incentive stock options under the Code. At the time of grant,
the Committee will establish the provisions of each stock
option, including:
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the exercise price (which cannot be less than fair market value),
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whether it is a non-qualified or incentive stock option,
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the terms and conditions for exercise of the option; and
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the duration of the option, although, except for nonqualified
options granted to Participants who are not U.S. residents,
no option will be exercisable more than 10 years after the
date of grant.
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However, there are certain requirements under the Code that
apply to incentive stock options, including requirements that
incentive stock options: (1) must have an exercise price
per share of stock of not less than 100% of the fair market
value on the date of grant; (2) may only be granted to
employees; and (3) may not have a term longer than ten
years after the date of grant. In the case of an incentive stock
option granted to an individual who owns, or is deemed to own,
at least 10% of the total combined voting power of all classes
of our stock, the exercise price must be at least 110% of the
fair market value of the stock underlying the subject options on
the date of grant, and the incentive stock option must expire no
later than the fifth anniversary of the date of its grant.
The exercise price for options, together with any applicable tax
required to be withheld, must be paid in full at the time of
exercise:
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by cash or cash equivalents,
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by shares previously owned by the participant valued at fair
market value on the date of exercise,
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by a broker-assisted cashless exercise procedure,
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by a combination of any of the above methods, or
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by any other method approved or accepted by the Committee.
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Stock Appreciation Rights. SARs granted
by the Committee will provide for payments to the holder based
upon increases in the price of our common stock over a set base
price. Payment for SARs
76
may be made in cash or shares or in a combination of cash and
shares, as determined by the Committee at the time of grant. A
SAR may be granted either in conjunction with an option or
independently. At the time of grant, the Committee will
establish the provisions of each SAR, including:
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the base price (which cannot be less than fair market value),
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the terms and conditions for exercise of the SAR; and
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the duration of the SAR, although, except for SARS granted to
Participants who are not U.S. residents, no SAR will be
exercisable more than 10 years after the date of grant.
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Otherwise, the Amended Omnibus Plan does not impose any
restriction on the exercise of SARs or the amount of gain that
can be realized. However, the Committee may restrict the shares
received upon exercise of a SAR.
Restricted Stock. Restricted stock is
the grant of shares that are nontransferable and may be subject
to substantial risk of forfeiture until specific conditions are
met. During the period of restriction, Participants holding
shares of restricted stock may have full voting and dividend
rights with respect to the shares. The restrictions on the
restricted stock will lapse based upon conditions determined by
the Committee at the time of grant. The restrictions can be
time- or performance-based, including based on the performance
criteria described in Performance Units/ Performance
Shares below.
Restricted Stock Units. Restricted
stock units give the Participant the right to receive shares at
some designated time in the future, subject to the satisfaction
of conditions determined by the Committee at the time of grant.
The conditions can be time- or performance-based, including
based on the performance criteria described in
Performance Units/Performance Shares below.
Performance Units/ Performance Shares.
Performance Units give the Participant the right to receive an
amount designated as a unit at the end of a
specified performance period, provided that specified
performance measures are satisfied. Performance Shares give the
Participant the right to receive shares or cash based on the
value of shares of our common stock at the end of a specified
performance period, provided that specified performance measures
are satisfied. The performance periods and performance measures
are determined by the Committee at the time of grant, but the
performance measures are limited to the following performance
measures:
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Net earnings or net income (before or after taxes);
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Earnings per share;
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Net sales or revenue growth;
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Net operating profit;
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Return measures (including, but not limited to, return on
assets, capital, invested capital, equity, sales or revenue);
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Cash flow (including, but not limited to, operating cash flow,
free cash flow, cash flow return on equity and cash flow return
on investment);
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Earnings before or after taxes, interest, depreciation
and/or
amortization;
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Gross or operating margins;
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Productivity ratios;
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Share price (including, but not limited to, growth measures and
total shareholder return);
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Expense targets;
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Cost reductions or savings;
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Performance against operating budget goals;
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77
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Margins;
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Operating efficiency;
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Funds from operations;
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Market share;
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Customer satisfaction;
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Working capital targets; and
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Economic value added or
EVA®
(net operating profit after tax minus the sum of capital
multiplied by the cost of capital).
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Any performance measures may be used to measure, in absolute
terms, our performance as a whole or the performance of any of
our subsidiaries, affiliates or business units, or any
combination of them, as the Committee determines to be
appropriate. Alternatively, the performance measures may be used
to measure performance as compared to any incremental increase,
or as compared to the performance of a group of comparator
companies, or to any published or special index that the
Committee deems appropriate.
Other Cash Based and Other Stock Based
Awards. From time to time, the Committee may
grant Awards denominated in cash or other types of equity-based
or equity-related awards that are not otherwise described above.
Awards may be designed to comply with or take advantage of
applicable local laws of jurisdictions other than the
U.S. These other Awards will have such terms as the
Committee determines at the time and may include payment upon
meeting performance goals based on the performance measures
described under Performance Units/Performance
Shares above.
Nonemployee Director Awards. The
Nominating and Governance Committee of the Board of Directors
may establish the amount and types of Awards that may be granted
to our nonemployee directors on a periodic and nondiscriminatory
basis, as well as any additional amounts based upon:
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The number of committees of the Board on which a director serves,
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Service as chair of a committee of the Board,
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Service as Chair of the Board, and
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First election or appointment to the Board.
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The terms of the Awards shall be set by the Nominating and
Governance Committee, but cannot otherwise be inconsistent with
the terms of the Amended Omnibus Plan.
Dividend Equivalents. Dividend
equivalents give the participant the right to receive dividends
on stock subject to another type of Award, or, if the grant is
independent of another Award, on a number of shares set by the
Committee at the time of the grant of the dividend equivalent. A
dividend equivalent may be payable at the same time dividends
are otherwise payable on the shares or at the time the shares
subject to a corresponding Award are otherwise deliverable, if
later. No dividend equivalents may be granted with respect to
Awards of Options or SARs.
Change in Control. All options and SARs will
become fully vested and exercisable, and all other Awards that
are not then vested but vest based solely upon continued service
to or employment with Libbey will become vested and payable in
full, upon the occurrence of a change in control (as defined in
the Amended Omnibus Plan), unless the Participant is provided
with a replacement award that relates to a publicly traded
security with a value and terms and conditions that are at least
equal to the value of the Award being replaced. In connection
with any change in control, the Committee, in its sole
discretion, may (1) provide for the cancellation or
termination of any Award in exchange for a cash payment (or
delivery of shares of stock, other securities or a combination
of stock or other securities equivalent to the cash payment), or
(2) provide that the time period in which a Participant may
exercise options or SARs shall be extended, but not beyond the
original expiration date.
78
Miscellaneous Provisions. Generally, no Award
granted under the Amended Omnibus Plan may be sold, pledged,
assigned or transferred in any manner other than by will or the
laws of descent and distribution, unless and until the Award has
been exercised, or the shares underlying the Awards have been
issued, and all restrictions applicable to the shares have
lapsed. The Committee may allow Awards other than incentive
stock options to be transferred without value subject to such
terms and conditions as the Committee may prescribe.
We may deduct or withhold, or require a Participant to remit,
the minimum statutory amount of taxes required to be withheld
under federal, state, local or foreign law upon a taxable event
occurring under the Amended Omnibus Plan or any Award. A
Participant may elect irrevocably to satisfy his or her
withholding requirement by having us withhold shares otherwise
deliverable under the Award. The number of shares to be withheld
must have a fair market value equal to the tax required to be
withheld.
The Amended Omnibus Plan must be approved by the shareholders.
If approved, the Amended Omnibus Plan will become effective upon
approval. No Awards may be granted under the Amended Omnibus
Plan after ten years from its effective date, but any Awards
outstanding upon its termination will remain effective for the
remainder of their term.
The Committee may specify in the Award that a Participant will
forfeit the Award, or any previously delivered shares, due to
termination for cause or for violation of our material policies
or any noncompete, confidentially or other restrictive covenants
by which the Participant is bound. The issuance of shares
pursuant to an Award will be subject to compliance with all
laws, rules and regulations of any governmental agency or
securities exchange.
What are the
Federal income tax consequences of the Amended Omnibus Plan and
Awards made under it?
The tax consequences of the Amended Omnibus Plan under current
U.S. federal law are summarized in the following
discussion. This discussion is limited to the general tax
principles applicable to the Amended Omnibus Plan, and is
intended for general information only. State and local income
taxes, as well as foreign income taxes, are not discussed. Tax
laws are complex and subject to change and may vary depending on
individual circumstances and from locality to locality. The tax
information summarized is not tax advice.
Nonqualified Stock Options. For
U.S. federal income tax purposes, an optionee generally
will not recognize taxable income at the time a non-qualified
stock option is granted under the Amended Omnibus Plan. Upon
exercise of a non-qualified stock option, the optionee will
recognize ordinary income, and we generally will be entitled to
a deduction. The amount of income recognized (and the amount
deductible by Libbey) generally will be equal to the excess, if
any, of the fair market value of the shares at the time of
exercise over the aggregate exercise price paid for the shares,
regardless of whether the exercise price is paid in cash or in
shares or other property. An optionees basis for the stock
for purposes of determining his or her gain or loss upon a
subsequent disposition of the shares generally will be the fair
market value of the stock on the date of exercise of the
non-qualified stock option, and any subsequent gain or loss
generally will be taxable as capital gain or loss.
Incentive Stock Options. An optionee generally
will not recognize taxable income either at the time an
incentive stock option is granted or when it is exercised.
However, the amount by which the fair market value of the shares
at the time of exercise exceeds the exercise price will be an
item of tax preference to the optionee for purposes
of alternative minimum tax. Generally, upon the sale or other
taxable disposition of the shares acquired upon exercise of an
incentive stock option, the optionee will recognize taxable
income. If shares acquired upon the exercise of an incentive
stock option are held for the longer of two years from the date
of grant or one year from the date of exercise, the gain or loss
(in an amount equal to the difference between the fair market
value on the date of sale and the exercise price) upon
disposition will be treated as a long-term capital gain or loss,
and we will not be entitled to any deduction. If this holding
period is not met and the stock is sold for a gain, then the
difference between the option price and the fair market value of
the stock on the date of exercise will be taxed as ordinary
income, and any gain over that will be eligible for long- or
short-term capital gain treatment. If the holding period is not
met and the shares are disposed of for less
79
than the fair market value on the date of exercise, then the
amount of ordinary income is limited to the excess, if any, of
the amount realized over the exercise price paid. We generally
will be entitled to a deduction in the amount of any ordinary
income recognized by the optionee.
Stock Appreciation Rights. No taxable income
is generally recognized upon the receipt of a SAR. Upon exercise
of a SAR, the cash or the fair market value of the shares
received generally will be taxable as ordinary income in the
year of such exercise. Libbey generally will be entitled to a
compensation deduction for the same amount that the recipient
recognizes as ordinary income.
Restricted Stock. A Participant to whom
restricted stock is issued generally will not recognize taxable
income upon the issuance of the restricted stock, and we
generally will not then be entitled to a deduction, unless the
Participant makes an election under Section 83(b) of the
Code. However, when restrictions on shares of restricted stock
lapse and the shares are no longer subject to a substantial risk
of forfeiture, the Participant generally will recognize ordinary
income, and we generally will be entitled to a deduction for an
amount equal to the excess of the fair market value of the
shares at the date the restrictions lapse over the purchase
price of the shares. If the Participant makes an election under
Section 83(b) of the Code, then the Participant generally
will recognize ordinary income at the date of issuance equal to
the excess, if any, of the fair market value of the shares at
that date over the purchase price for the shares, and we will be
entitled to a deduction for the same amount.
Restricted Stock Unit. A Participant will
generally not recognize taxable income upon the grant of a
restricted stock unit. However, when the shares are delivered to
the Participant, the value of the shares at that time will be
taxable to the Participant as ordinary income. Generally, Libbey
will be entitled to a deduction for an amount equal to the
amount of ordinary income recognized by the Participant.
Performance Unit/ Performance Shares. A
Participant who has been granted an Award of performance units
or performance stock generally will not recognize taxable income
at the time of grant, and Libbey will not be entitled to a
deduction at that time. When an award is paid, whether in cash
or shares, the Participant generally will recognize ordinary
income, and Libbey will be entitled to a corresponding deduction.
Section 162(m) Limitation. In general,
under Section 162(m), income tax deductions of
publicly-held corporations may be limited to the extent total
compensation (including base salary, annual bonus, stock option
exercises and non-qualified benefits paid) for certain executive
officers exceeds $1,000,000 (less the amount of any excess
parachute payments as defined in Section 280G of the
Code) in any one year. However, under Section 162(m), the
deduction limit does not apply to certain
performance-based compensation that is established
by an independent compensation committee and that is adequately
disclosed to, and approved by, shareholders. In particular,
Awards of stock options and SARs under the Amended Omnibus Plan
will satisfy the performance-based compensation
exception if the awards are made by a qualifying compensation
committee, the Amended Omnibus Plan sets the maximum number of
shares that can be granted to any person within a specified
period and the compensation is based solely on an increase in
the stock price after the grant date (i.e., the option exercise
price is equal to or greater than the fair market value of the
stock subject to the award on the grant date). Awards of
restricted stock, restricted stock units, performance units,
performance share and other cash-based or equity-based awards
granted under the Amended Omnibus Plan may qualify as
qualified performance-based compensation for
purposes of Section 162(m) if the Awards are granted or
vest upon pre-established objective performance measures based
on the performance goals described above under
Performance Units/ Performance Shares.
We have attempted to structure the Amended Omnibus Plan in such
a manner that the Committee can establish the terms and
conditions of Awards granted under the Amended Omnibus Plan so
that the remuneration attributable to the Awards will be subject
to the $1,000,000 limitation. We have not, however, requested a
ruling from the IRS or an opinion of counsel regarding this
issue. This discussion will neither bind the IRS nor preclude
the IRS from taking a contrary position with respect to the
Amended Omnibus Plan.
80
Plan
Benefits
The number of Awards that an employee may receive under the
Amended Omnibus Plan is in the discretion of the Committee and
therefore generally cannot be determined in advance. However, as
indicated above under Why is Libbey submitting the
Amended Omnibus Plan for shareholder approval?, we did
not have sufficient shares remaining available for issuance
under the Omnibus Plan to make the grants of RSUs that our
Compensation Committee approved in February 2010. In addition,
we anticipate that, on the date of our 2010 Annual Meeting of
shareholders, we will award stock valued at $40,000 to each
non-employee director. Accordingly, the following table sets
forth (a) awards that were approved by the Compensation
Committee on February 8, 2010, subject to approval by our
shareholders of the Amended Omnibus Plan, and (b) awards to
be made to our non-employee directors on May 6, 2010:
NEW PLAN
BENEFITS
Amended and
Restated Libbey Inc.
2006 Omnibus Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Dollar Value
|
|
Units
|
Name and Position(1)
|
|
($)(2)
|
|
(#)(3)
|
|
G. Geswein
|
|
|
220,879
|
|
|
|
16,861
|
|
J. Meier
|
|
|
812,488
|
|
|
|
62,022
|
|
R. Reynolds
|
|
|
408,733
|
|
|
|
31,201
|
|
R. Rubio
|
|
|
268,209
|
|
|
|
20,474
|
|
All Executive Officers as a Group
|
|
|
2,499,532
|
|
|
|
190,804
|
|
Non-Executive Officers as a Group
|
|
|
72,613
|
|
|
|
5,543
|
|
Non-Employee Directors as a Group
|
|
|
320,000
|
|
|
|
24,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Wilkes resigned effective December 31, 2009.
Accordingly, we do not expect to make any awards to him under
the Amended Omnibus Plan. |
|
(2) |
|
With respect to awards to the executive officers, the value was
determined using the closing price of our common stock on the
NYSE Amex exchange on February 8, 2010, the date on which
the Compensation Committee approved the awards. With respect to
the awards to the non-employee directors, the value is the
intended value of $40,000 for each of our eight non-employee
directors. |
|
(3) |
|
With respect to awards to the executive officers, the number of
units is the actual number of RSUs approved by the Compensation
Committee on February 8, 2010. With respect to awards to
the non-employee directors, the number of units is estimated
based upon the closing price of our common stock on the NYSE
Amex exchange on March 19, 2010. |
81
Compensation
Plans
The following table provides certain information, as of
December 31, 2009, about our common stock that may be
issued under our existing equity compensation plans:
Equity
Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
to be Issued upon
|
|
|
Weighted-Average
|
|
|
Remaining Available
|
|
|
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
for Future Issuance
|
|
|
|
|
|
|
Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
Under Equity
|
|
|
|
|
Plan Category
|
|
Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Compensation Plans(1)
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
|
|
|
Equity compensation plans approved by security holders
|
|
|
1,652,867
|
|
|
$
|
17.15
|
|
|
|
303,743
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,652,867
|
|
|
$
|
17.15
|
|
|
|
303,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Of the securities remaining available for future issuance as of
December 31, 2009, grants for 182,807 securities were made
by the Compensation Committee in February 2010. |
As of March 19, 2010, the number of securities to be issued
upon exercise of outstanding stock options granted under our
2006 Omnibus Incentive Plan was 1,835,674, as to which the
weighted average exercise price was $20.6073 and the weighted
average life was 5.87 years.
The Board of
Directors recommends a vote FOR this proposal.
PROPOSAL 3
RATIFICATION OF AUDITORS
The Audit Committee has appointed Ernst & Young LLP to
serve as our independent auditors for our 2010 fiscal year.
Although ratification by the shareholders is not required by
law, the Board of Directors believes that you should be given
the opportunity to express your views on the subject. Unless
otherwise directed, proxies in the accompanying form will be
voted for ratification.
The Board of
Directors recommends a vote FOR this proposal.
OTHER
BUSINESS
As of the date of this proxy statement, neither the Board nor
management knows of any other business that will be presented
for consideration at the Annual Meeting. However, if other
proper matters are presented at the meeting, it is the intention
of the proxy committee to take such action as shall be in
accordance with their judgment on such matters. All other
matters to be voted upon by shareholders will require a majority
vote of common stock represented in person or by proxy.
GENERAL
INFORMATION
Availability of
List of Shareholders:
A complete list of shareholders entitled to vote at the Annual
Meeting will be maintained at the Companys principal
executive offices at 300 Madison Avenue, Toledo, Ohio for a
period of at least 10 days prior to the Annual Meeting.
82
Solicitation
Costs:
The Company has retained Georgeson Shareholder to solicit the
submission of proxies authorizing the voting of shares in
accordance with the Board of Directors recommendations.
The Company has agreed to pay a fee of $8,000, plus expenses for
out-of-pocket
costs for Georgesons services. Certain of the
Companys officers and employees may solicit the submission
of proxies authorizing the voting of shares in accordance with
the Board of Directors 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 or telegram. Arrangements have been made
with Broadridge Investor Communication Solutions, Inc. to
perform a broker-nominee search. Arrangements also have 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 will pay
the cost of preparing and mailing this proxy statement and other
costs of the proxy solicitation made by the Companys Board
of Directors.
Reports to
Shareholders:
The Company has mailed this proxy statement and a copy of its
2009 Annual Report to each shareholder entitled to vote at the
Annual Meeting. Included in the 2009 Annual Report are the
Companys consolidated financial statements for the year
ended December 31, 2009.
A copy of the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009, including the
financial statement schedules, as filed with the Securities and
Exchange Commission, may be obtained without charge by sending a
written request to Libbey Inc., Attention: Investor Relations,
Kenneth A. Boerger, Vice President and Treasurer, 300 Madison
Avenue, P.O. Box 10060, Toledo, Ohio
43699-0060.
By Order of the Board of Directors,
SUSAN ALLENE KOVACH, Secretary
Toledo, Ohio
March 30, 2010
83
Contents
|
|
|
|
|
Article 1. Establishment, Purpose, and Duration
|
|
|
A-2
|
|
Article 2. Definitions
|
|
|
A-2
|
|
Article 3. Administration
|
|
|
A-6
|
|
Article 4. Shares Subject to this Plan and Maximum
Awards
|
|
|
A-7
|
|
Article 5. Eligibility and Participation
|
|
|
A-9
|
|
Article 6. Stock Options
|
|
|
A-9
|
|
Article 7. Stock Appreciation Rights
|
|
|
A-10
|
|
Article 8. Restricted Stock and Restricted Stock Units
|
|
|
A-12
|
|
Article 9. Performance Units/Performance Shares
|
|
|
A-13
|
|
Article 10. Cash Based Awards and Other
Stock Based Awards
|
|
|
A-13
|
|
Article 11. Transferability of Awards
|
|
|
A-14
|
|
Article 12. Performance Measures
|
|
|
A-14
|
|
Article 13. Nonemployee Director Awards
|
|
|
A-15
|
|
Article 14. Dividend Equivalents
|
|
|
A-16
|
|
Article 15. Beneficiary Designation
|
|
|
A-16
|
|
Article 16. Rights of Participants
|
|
|
A-16
|
|
Article 17. Change of Control
|
|
|
A-16
|
|
Article 18. Amendment, Modification, Suspension, and
Termination
|
|
|
A-17
|
|
Article 19. Withholding
|
|
|
A-18
|
|
Article 20. Successors
|
|
|
A-18
|
|
Article 21. General Provisions
|
|
|
A-1821
|
|
A-1
Amended and
Restated
Libbey Inc. 2006 Omnibus
Incentive
Plan
Article 1.
Establishment, Purpose, and Duration
1.1 Establishment. Libbey Inc., a
Delaware corporation (the Company),
establishes an incentive compensation plan to be known as the
Amended and Restated Libbey Inc. 2006 Omnibus Incentive
Plan (the Plan), as set forth in this
document. The Plan amends and restates the Libbey Inc. 2006
Omnibus Incentive Plan (the 2006 Plan).
This Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares, Performance
Units, Cash-Based Awards and Other Stock-Based Awards.
This Plan shall become effective upon shareholder approval (the
Effective Date) and shall remain in effect as
provided in Section 1.3 hereof.
1.2 Purpose of this Plan. The purpose of this Plan is
to enable the Company to obtain and retain the services of
Employees and Non-employee Directors considered essential to the
long-range success of the Company, to provide a means whereby
Employees and Non-employee Directors develop a sense of
proprietorship and personal involvement in the development and
financial success of the Company, and to encourage them to
devote their best efforts to the business of the Company,
thereby advancing the interests of the Company and its
shareholders.
1.3 Duration of this Plan. Unless sooner terminated
as provided in this Plan, this Plan shall terminate ten
(10) years from the Effective Date. After this Plan is
terminated, no Awards may be granted, but Awards previously
granted shall remain outstanding in accordance with their
applicable terms and conditions and this Plans terms and
conditions. Notwithstanding the foregoing, no Incentive Stock
Options may be granted more than ten (10) years after the
earlier of (a) adoption of this Plan by the Board, or
(b) the Effective Date.
Article 2.
Definitions
Whenever used in this Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the
initial letter of the word shall be capitalized.
2.1 Affiliate means any corporation or
other entity (including, but not limited to, a partnership or a
limited liability company) that is affiliated with the Company
through stock or equity ownership, or otherwise, and is
designated as an Affiliate for purposes of this Plan by the
Committee. For purposes of granting Options or Stock
Appreciation Rights, an entity may not be considered an
Affiliate if it results in noncompliance with Code
Section 409A.
2.2 Annual Award Limit or
Annual Award Limits has the meaning set forth
in Section 4.3.
2.3 Award means, individually or
collectively, a grant under this Plan of Nonqualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units,
Cash-Based Awards or Other Stock-Based Awards, in each case
subject to the terms of this Plan.
2.4 Award Agreement or
Agreement means either (i) a written
agreement entered into by the Company and a Participant setting
forth the terms and provisions applicable to an Award granted
under this Plan or (ii) a written statement issued by the
Company to a Participant describing the terms and provisions of
the Award, including any amendment or modification thereof. The
Committee may provide for the use of electronic, internet or
other non-paper Award Agreements and the use of electronic,
internet or other non-paper means for the acceptance of the
Award Agreements and actions under them by a Participant.
2.5 Beneficial Owner or
Beneficial Ownership has the meaning ascribed
to that term in
Rule 13d-3
of the General Rules and Regulations under the Exchange Act.
2.6 Board or Board of
Directors means the Board of Directors of the Company.
A-2
2.7 Cash-Based Award means an Award,
denominated in cash, granted to a Participant as described in
Article 10.
2.8 Change in Control means any of the
following events:
(a) Any Person (as defined below) is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the
combined voting power of the Companys then-outstanding
securities. For purposes of this Plan, the term
Person is used as that term is used in
Sections 13(d) and 14(d) of the Exchange Act; provided,
however, that the term shall not include (i) the Company,
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or (ii) any
corporation owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their
ownership of stock of the Company, and provided further that
this subsection (a) shall not apply to any Person who is
the Beneficial Owner, directly or indirectly, of securities of
the Company representing twenty percent (20%) or more of the
combined voting power of the Companys then-outstanding
securities as of the Effective Date of this Plan if and for so
long as that Person does not beneficially own, or increase its
beneficial ownership to, twenty-five percent (25%) or more of
the combined voting power of the Companys then-outstanding
securities;
(b) During any period of two (2) consecutive years
beginning after the Effective Date of this Plan, Continuing
Directors (excluding any Directors designated by a Person who
has entered into an agreement with the Company to effect a
transaction described in Sections 2.8(a), (c) or (d))
cease for any reason to constitute at least a majority of the
Board;
(c) The consummation of a merger or consolidation of the
Company with any other corporation or other entity, unless,
after giving effect to the merger or consolidation, the voting
securities of the Company outstanding immediately prior to the
merger or consolidation continue to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than sixty-six and
two-thirds percent
(662/3%)
of the combined voting power of the voting securities of the
Company or the surviving entity outstanding immediately after
the merger or consolidation; or
(d) The shareholders of the Company
approve Consummation of a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Companys assets; or.
(e) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing ten percent (10%) or more of the combined voting
power of the Companys then-outstanding securities (a
10% Owner) and (i) the identity of the Chief
Executive Officer of the Company is changed during the period
beginning sixty (60) days before the attainment of the ten
percent (10%) Beneficial Ownership and ending two (2) years
thereafter or (ii) individuals constituting at least
one-third (1/3) of the Directors at the beginning of the period
cease for any reason to serve as Directors during the period
beginning sixty (60) days before the attainment of the ten
percent (10%) Beneficial Ownership and ending two (2) years
thereafter; provided, however, that this subsection (e)
shall not apply to any Person who is a ten percent (10%) Owner
as of the Effective Date of this Plan so long as that Person
does not increase its Beneficial Ownership by five percent (5%)
or more over the percentage owned by that Person as of the
Effective Date of the Plan.
2.9 Code means the U.S. Internal
Revenue Code of 1986, as amended from time to time. For purposes
of this Plan, references to sections of the Code shall be deemed
to include references to any applicable regulations under the
Code and any successor or similar provision.
2.10 Committee means the Compensation
Committee of the Board or a subcommittee thereof, or any other
committee designated by the Board to administer this Plan. The
members of the Committee shall be appointed from time to time
by, and shall serve at the discretion of, the Board. If the
Committee does not exist or cannot function for any reason, the
Board may take any action under the Plan that otherwise would be
the responsibility of the Committee.
A-3
2.11 Company means Libbey Inc., a
Delaware corporation, and any successor to as provided in
Article 20.
2.12 Continuing Directors means
individuals who both (a) as of the end of the period in
question are Directors of the Company or whose election or
nomination for election by the Companys shareholders has
been approved by a vote of at least two-thirds (2/3) of the
Directors of the Company then in office and (b) either
(i) at the beginning of the period in question or
(ii) after the beginning but prior to the end of the period
in question were Directors of the Company or whose election or
nomination for election by the Companys shareholders was
approved by a vote of at least two-thirds (2/3) of the Directors
of the Company in office at the beginning of the period.
2.13 Covered Employee means any Employee
who is or may become a Covered Employee, as defined
in Code Section 162(m), and who is designated, either as an
individual Employee or class of Employees, by the Committee
within the shorter of (i) ninety (90) days after the
beginning of the Performance Period or (ii) twenty-five
percent (25%) of the Performance Period has elapsed, as a
Covered Employee under this Plan for the applicable
Performance Period.
2.14 Director means any individual who
is a member of the Board of Directors of the Company.
2.15 Dividend Equivalent means a right
to receive the equivalent value (in cash or Shares) of dividends
paid on common stock, awarded under Article 14.
2.16 DRO means a domestic relations
order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules
under such statute.
2.17 Effective Date has the meaning set
forth in Section 1.1.
2.18 Employee means any individual
designated as an employee of the Company, its Affiliates
and/or its
Subsidiaries on the payroll records thereof.
2.19 Exchange Act means the Securities
Exchange Act of 1934, as amended from time to time, or any
successor act thereto.
2.20 Extraordinary Items means
(i) extraordinary, unusual
and/or
nonrecurring items of gain or loss; (ii) gains or losses on
the disposition of a business; (iii) changes in tax or
accounting regulations or laws; or (iv) the effect of a
merger or acquisition. Extraordinary Items must be identified in
the audited financial statements, including footnotes, or
Management Discussion and Analysis section of the Companys
annual report.
2.21 Fair Market Value or
FMV means a price that is based on the
opening, closing, actual, high, low or average selling prices of
a Share reported on the New York Stock Exchange
(NYSE) or other established stock exchange (or
exchanges) on the applicable date, the preceding trading day,
the next preceding trading day, the next succeeding trading day
or an average of trading days, as determined by the Committee in
its discretion. Unless the Committee determines otherwise, Fair
Market Value shall be deemed to be equal to the closing price of
a Share on the trading day previous to the
applicable date, or if shares were not traded on the
trading day previous to the applicable date,
then on thenext preceding trading day. If
Shares are not publicly traded at the time a determination of
their value is required to be made under this Plan, then the
determination of their Fair Market Value shall be made by the
Committee in such manner as it deems appropriate, provided that,
in the case of Options and Stock Appreciation Rights, the
determination shall be made in compliance with Code
Section 409A. The definition(s) of FMV shall be specified
in each Award Agreement and may differ depending on whether FMV
is in reference to the grant, exercise, vesting, settlement or
payout of an Award.
2.22 Full Value Award means an Award
other than in the form of an ISO, NQSO or SAR.
2.23 Grant Price means the price
established at the time of grant of an SAR pursuant to
Article 7.
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2.24 Incentive Stock Option or
ISO means an Option that is granted under
Article 6 to an Employee, that is designated as an
Incentive Stock Option and that is intended to meet the
requirements of Code Section 422 or any successor provision.
2.25 Insider means an individual who is,
on the relevant date, an officer or Director of the Company, or
the Beneficial Owner of more than ten percent (10%) of any class
of the Companys equity securities that are registered
pursuant to Section 12 of the Exchange Act, as determined
by the Board in accordance with Section 16 of the Exchange
Act.
2.26 Nominating and Governance Committee
means the Nominating and Governance Committee of the Board
or a subcommittee thereof, or any other committee designated by
the Board to administer the pay of Non-employee Directors
pursuant to this Plan. The members of the Committee shall be
appointed from time to time by, and shall serve at the
discretion of, the Board. If the Nominating and Governance
Committee does not exist or cannot function for any reason, the
Board may take any action under the Plan that otherwise would be
the responsibility of the Nominating and Governance Committee.
2.27 Non-employee Director means a
Director who is not an Employee.
2.28 Nonemployee Director Award means
any NQSO, SAR or Full Value Award granted, whether singly, in
combination, or in tandem, to a Non-employee Director.
2.29 Nonqualified Stock Option or
NQSO means an Option that is not intended to
meet the requirements of Code Section 422 or that otherwise
does not meet those requirements.
2.30 Option means an option granted to a
Participant to purchase the Companys Shares, including an
Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6.
2.31 Option Price means the price at
which a Participant may purchase a Share pursuant to an Option.
2.32 Other Stock-Based Award means an
equity-based or equity-related Award that is not otherwise
described by the terms of this Plan and that is granted pursuant
to Article 10.
2.33 Participant means any eligible
individual, as determined in accordance with Article 5, to whom
an Award is granted.
2.34 Performance-Based Compensation
means compensation under an Award that is intended to
satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered Employees.
However, nothing in this Plan shall be construed to mean that an
Award that does not satisfy the requirements for
performance-based compensation under Code Section 162(m)
does not constitute performance-based compensation for other
purposes, including Code Section 409A.
2.35 Performance Measures means the
measures, as described in Article 12, on which the
performance goals are based. Performance Measures must be
approved by the Companys shareholders pursuant to this
Plan in order to qualify Awards as Performance-Based
Compensation.
2.36 Performance Period means the period
of time during which the performance goals must be met in order
to determine the degree of payout
and/or
vesting with respect to an Award.
2.37 Performance Share means an Award
that is granted pursuant to Article 9, is subject to the
terms of this Plan and is denominated in Shares, the value of
which at the time it is payable is determined as a function of
the extent to which the corresponding performance criteria have
been achieved.
2.38 Performance Unit means an Award
that is granted pursuant to Article 9, is subject to the
terms of this Plan and is denominated in units, the value of
which at the time it is payable is determined as a function of
the extent to which corresponding performance criteria have been
achieved.
2.39 Period of Restriction means the
period during which Restricted Stock or Restricted Stock Units
are subject to a substantial risk of forfeiture based on the
passage of time, the achievement of performance
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goals or the occurrence of other events as determined by the
Committee, in its discretion, as provided in Article 8.
2.40 Plan means the Libbey Inc. 2006
Omnibus Incentive Plan.
2.41 Plan Year means the calendar year.
2.42 Prior Plans means
the Libbey Inc. Amended and Restated Stock Option Plan
for Key Employees and the Amended and Restated 1999
Equity Participation Plan of Libbey Inc.
2.43 Restricted Stock means an Award
granted to a Participant pursuant to Article 8.
2.44 Restricted Stock Unit means an
Award that is granted to a Participant pursuant to
Article 8 but as to which no Shares actually are awarded to
the Participant on the date of grant.
2.45 Share means a share of common stock
of the Company, $.01 par value per share.
2.46 Stock Appreciation Right or
SAR means an Award, designated as a SAR,
pursuant to the terms of Article 7.
2.47 Subsidiary means any corporation or
other entity, whether domestic or foreign, in which the Company
directly or indirectly owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of
stock.
2.48 Substitute Award means an Award
granted under this 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 SAR.
2.49 Termination of Employment means the
time when the Employee-employer relationship between a
Participant and the Company or any Subsidiary is terminated for
any reason, with or without cause. Termination of Employment
includes, but is not limited to, termination by resignation,
discharge, death, disability or retirement, but excludes, at the
discretion of the Committee, (a) termination where there is
a simultaneous reemployment or continuing employment of a
Participant by the Company or any Subsidiary,
(b) termination that results in temporary severance of the
Employee-employer relationship, and (c) termination where
there is simultaneous establishment of a consulting relationship
by the Company or a Subsidiary with a former Employee. The
Committee, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of
Employment, including, without limitation, the question of
whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave
of absence constitutes a Termination of Employment; provided,
however, that, with respect to Incentive Stock Options, unless
otherwise determined by the Committee in its discretion, a leave
of absence, change in status from an Employee to an independent
contractor, or other change in the Employee-employer
relationship shall constitute a Termination of Employment if and
to the extent that the leave of absence, change in status or
other change interrupts employment for the purposes of
Section 422(a)(2) of the Code and the then applicable
regulations and revenue rulings under that Section of the Code.
Article 3.
Administration
3.1 General. The Committee shall be
responsible for administering this Plan, subject to this
Article 3 and the other provisions of this Plan. The
Committee may employ attorneys, consultants, accountants, agents
and other individuals, any of whom may be an Employee, and the
Committee, the Company and its officers and Directors shall be
entitled to rely upon the advice, opinions, or valuations of any
such individuals. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding
upon the Participants, the Company, and all other interested
individuals.
3.2 Authority of the Committee. The
Committee shall have full and exclusive discretionary power to
interpret the terms and the intent of this Plan and any Award
Agreement or other agreement or document
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ancillary to or in connection with this Plan, to determine
eligibility of Employees for Awards and to adopt such rules,
regulations, forms, instruments and guidelines for administering
this Plan as the Committee may deem necessary or proper. That
authority shall include, but not be limited to, selecting which
Employees are Award recipients, establishing all Award terms and
conditions, including the terms and conditions set forth in
Award Agreements, granting Awards as an alternative to or as the
form of payment for grants or rights earned or due under
compensation plans or arrangements of the Company, construing
any ambiguous provision of the Plan or any Award Agreement, and,
subject to Article 18, adopting modifications and
amendments to this Plan or any Award Agreement, including
without limitation, any that are necessary to comply with the
laws of the countries and other jurisdictions in which the
Company, its Affiliates
and/or its
Subsidiaries operate.
3.3 Delegation. The Committee may
delegate to one or more of its members or to one or more
officers of the Company,
and/or its
Subsidiaries and Affiliates, or to one or more agents or
advisors, such administrative duties or powers as the Committee
may deem advisable, and the Committee or any individuals to whom
it has delegated duties or powers may employ one or more
individuals to render advice with respect to any responsibility
the Committee or those individuals may have under this Plan. The
Committee may, by resolution, authorize one or more officers of
the Company to do one or both of the following on the same basis
as can the Committee: (a) designate Employees to be
recipients of Awards; and (b) determine the size of any
such Awards; provided, however, that (i) in the case of
Awards to be granted to Employees who are considered Insiders,
the Committee shall not delegate these responsibilities to any
officer; (ii) the resolution providing the authorization
sets forth the total number of Awards the officer(s) may grant;
and (iii) the officer(s) shall report periodically to the
Committee regarding the nature and scope of the Awards granted
pursuant to the delegated authority.
Article 4.
Shares Subject to this Plan and Maximum Awards
4.1 Number of Shares Available for Awards.
(a) There is hereby reserved for issuance under the Plan an
aggregate of one million four hundred sixty thousand
(1,460,000) Shares of Libbey Inc. common stock. The
Shares authorized under this Plan are in addition to the number
of Shares previously reserved and available for issuance under
the Prior Plans. In connection with
approvingthisthe 2006 Plan,
and contingent upon receipt of shareholder approval of
this plan, the Board of Directorshas
approved a merger of the Prior Plans into
the 2006 Plan. this plan, so
thatAccordingly, on and after the date this Plan
is approved by shareholders, the maximum number of Shares
reserved for issuance under this Plan shall not exceed the total
number of Shares approved under this Plan and the Shares
previously approved and available for issuance under the Prior
Plans and the 2006 Plan, reduced by any
awards made from the Prior2006
Plans during the period beginning
January 1, 20062010.
(b) The maximum number of Shares that may be issued
pursuant to ISOs under this Plan shall be one
millionfivefour hundred sixty
thousand (1,500,001,460,000) Shares.
(c) The maximum number of Shares that may be granted to
Non-employee Directors shall be 150,000 Shares, and no
Non-employee Director may receive Awards subject to more than
7,500 Shares in any Plan Year.
(d) Except with respect to a maximum of five percent (5%)
of the shares authorized for issuance under this Plan, any Full
Value Awards that vest on the basis of the Participants
continued employment with or service to the Company shall not
provide for vesting that is any more rapid than annual pro rata
vesting over a three- (3) year period, and any Full Value
Awards that vest upon the attainment of performance goals shall
provide for a performance period of at least twelve
(12) months. Notwithstanding the foregoing, the Committee
may permit the acceleration of vesting of Full Value Awards in
the event of the Participants death, disability or
retirement, or in the event of a Change in Control.
4.2 Share Usage. Shares covered by an
Award shall be counted as used only to the extent they are
actually issued. Any Shares related to Awards under this Plan or
under the Prior Plans or 2006
Plan that terminate by expiration, forfeiture, cancellation
or otherwise without the issuance of the Shares, or are settled
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in cash in lieu of Shares, or are exchanged with the
Committees permission, prior to the issuance of Shares,
for Awards not involving Shares, shall be available again for
grant under this Plan. Moreover, if the Option Price of any
Option granted under this Plan or the tax withholding
requirements with respect to any Award granted under this Plan
are satisfied by tendering Shares to the Company (by either
actual delivery or by attestation), the tendered Shares shall
again be available for grant under this Plan. Furthermore, if a
SAR is exercised and settled in Shares, the difference between
the total Shares exercised and the net Shares delivered shall
again be available for grant under this Plan, with the result
being that only the number of Shares issued upon exercise of a
SAR are counted against the Shares available. The Shares
available for issuance under this Plan may be authorized and
unissued Shares or treasury Shares.
4.3 Annual Award Limits. Unless and until
the Committee determines that an Award to a Covered Employee
shall not be designed to qualify as Performance-Based
Compensation, the following limits (each an Annual
Award Limit and, collectively, Annual Award
Limits) shall apply to grants of Awards under this
Plan:
(a) Options: The maximum aggregate number
of Shares subject to Options granted in any one Plan Year to any
one Participant shall be three hundred thousand (300,000).
(b) SARs: The maximum number of Shares
subject to Stock Appreciation Rights granted in any one Plan
Year to any one Participant shall be three hundred thousand
(300,000).
(c) Restricted Stock or Restricted Stock
Units: The maximum aggregate grant with respect
to Awards of Restricted Stock or Restricted Stock Units in any
one Plan Year to any one Participant shall be two hundred
thousand (200,000) Shares.
(d) Performance Units or Performance
Shares: The maximum aggregate Award of
Performance Units or Performance Shares that a Participant may
receive in any one Plan Year shall be two hundred thousand
(200,000) Shares, or equal to the value of two hundred thousand
(200,000) Shares determined as of the date of payout.
(e) Cash-Based Awards and Other Stock-Based
Awards: The maximum aggregate amount awarded or
credited with respect to Cash-Based or Other Stock-Based Awards
to any one Participant in any one Plan Year may not exceed the
value of three million dollars ($3,000,000) or two hundred
thousand (200,000) Shares determined as of the date of payout.
4.4 Adjustments in Authorized Shares. In
the event of any corporate event or transaction (including, but
not limited to, a change in the Shares or the capitalization of
the Company), such as a merger, consolidation, reorganization,
recapitalization, separation, partial or complete liquidation,
stock dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of the
Company, combination of Shares, exchange of Shares, dividend in
kind, or other like change in capital structure, number of
outstanding Shares or distribution (other than normal cash
dividends) to shareholders of the Company, or any similar
corporate event or transaction, the Committee, in its sole
discretion, in order to prevent dilution or enlargement of
Participants rights under this Plan, shall substitute or
adjust, as applicable, the number and kind of Shares that may be
issued under this Plan or under particular forms of Awards, the
number and kind of Shares subject to outstanding Awards, the
Option Price or Grant Price applicable to outstanding Awards,
the Annual Award Limits, and other value determinations
applicable to outstanding Awards.
The Committee, in its sole discretion, also may make appropriate
adjustments in the terms of any Awards under this Plan to
reflect or relate to the changes or distributions and to modify
any other terms of outstanding Awards, including modifications
of performance goals and changes in the length of Performance
Periods. Notwithstanding anything in this Plan to the contrary,
the Committee may not take any action described in this
Section 4.4 if the action would result in a violation of
the requirements of Code Section 409A. The determination of
the Committee as to the foregoing adjustments, if any, shall be
conclusive and binding on Participants under this Plan.
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Subject to the provisions of Article 18 and notwithstanding
anything else in this Plan to the contrary, the Board or the
Committee may authorize the issuance of Awards under this Plan
in connection with the assumption of, or substitution for,
outstanding benefits previously granted to individuals who
become Employees of Libbey Inc. or any Subsidiary as a result of
any merger, consolidation, acquisition of property or stock, or
reorganization, upon such terms and conditions as the Committee
may deem appropriate, subject to compliance with the rules under
Code Sections 409A, 422, and 424, as and where applicable.
Any Substitute Awards granted under the Plan shall not count
against the share limitations set forth in Section 4.3
hereof, to the extent permitted by Section 303A.08 of the
Corporate Governance Standards of the New York Stock Exchange.
Article 5.
Eligibility and Participation
5.1 Eligibility. Individuals eligible to
participate in this Plan include all Employees and Non-employee
Directors.
5.2 Actual Participation. Subject to the
provisions of this Plan, the Committee from time to time may
select from all eligible individuals those individuals to whom
Awards shall be granted and shall determine, in its sole
discretion, the nature of, any and all terms permissible by law
with respect to, and the amount of each Award.
Article 6.
Stock Options
6.1 Grant of Options. Subject to the
terms and provisions of this Plan, Options may be granted to
Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the
Committee in its sole discretion, provided that ISOs may be
granted only to eligible Employees of the Company or of any
parent or Subsidiary (as permitted under Code Sections 422
and 424). However, an Employee who is employed by an Affiliate
and/or
Subsidiary may be granted Options only to the extent the
Affiliate
and/or
Subsidiary is part of: (i) the Companys controlled
group of corporations or (ii) a trade or business under
common control, as of the date of grant, as determined within
the meaning of Code Section 414(b) or 414(c) and
substituting for this purpose ownership of at least fifty
percent (50%) of the Affiliate
and/or
Subsidiary to determine the members of the controlled group of
corporations and the entities under common control.
6.2 Award Agreement. Each Option grant
shall be evidenced by an Award Agreement that shall specify the
Option Price, the maximum duration of the Option, the number of
Shares to which the Option pertains, the conditions upon which
an Option shall become vested and exercisable, and such other
provisions as the Committee shall determine and as are not
inconsistent with the terms of this Plan. The Award Agreement
also shall specify whether the Option is intended to be an ISO
or a NQSO.
6.3 Option Price. The Option Price for
each grant of an Option under this Plan shall be determined by
the Committee in its sole discretion and shall be specified in
the Award Agreement; provided, however, the Option Price must be
at least equal to one hundred percent (100%) of the FMV of the
Shares as determined on the date of grant.
Notwithstanding this Section 6.3 to the contrary, in the
case of an Option that is a Substitute Award, the price per
share of the Shares subject to the Option may be less than the
Fair Market Value per Share on the date of grant; provided,
however, that X shall not exceed Y, where X is the amount, if
any, by which the aggregate Fair Market Value (as of the date
the Substitute Award is granted) of the Shares subject to the
Substitute Award exceeds the aggregate option price thereof, and
Y is the amount, if any, by which the aggregate Fair Market
Value (determined by the Committee as of the time immediately
preceding the transaction giving rise to the Substitute Awards)
of the Shares of the predecessor entity that were subject to the
grant assumed or substituted for the Company exceeds the
aggregate option price of such Shares.
6.4 Term of Options. Each Option granted
to a Participant shall expire at such time as the Committee
shall determine at the time of grant; provided, however, no
Option shall be exercisable later than the tenth (10th)
anniversary date of its grant. Notwithstanding the foregoing,
the Committee has the authority to grant
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to Participants who are not residents of the United States
Nonqualified Stock Options that have a term greater than ten
(10) years.
6.5 Exercise of Options. Options granted
under this Article 6 shall be exercisable at such times and
be subject to such restrictions and conditions as the Committee
shall in each instance approve. The terms and restrictions
applicable to Options need not be the same for each grant or for
each Participant.
6.6 Payment. Options granted under this
Article 6 shall be exercised by the delivery to the Company
or an agent designated by the Company of a notice of exercise in
a form specified or accepted by the Committee, or by complying
with any alternative procedures authorized by the Committee. The
notice of exercise shall set forth the number of Shares with
respect to which the Option is to be exercised and be
accompanied by full payment for the Shares.
Payment of the Option Price shall be a condition to the issuance
of the Shares as to which an Option shall be exercised. The
Option Price of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by
tendering (either by actual delivery or attestation) previously
acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the Option Price; (c) by a
cashless (broker-assisted) exercise; (d) by a combination
of (a), (b)
and/or (c);
or (e) any other method approved or accepted by the
Committee, in its sole discretion.
Subject to any governing rules or regulations, as soon as
practicable after receipt of written notification of exercise
and full payment (including satisfaction of any applicable tax
withholding), the Company shall deliver to the Participant
evidence of book entry Shares or, upon the Participants
request, Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).
Unless otherwise determined by the Committee, all payments under
all of the methods indicated above shall be paid in United
States dollars.
6.7 Restrictions on Share
Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of
an Option granted under this Article 6 as it may deem
advisable, including, without limitation, minimum holding period
requirements or restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market
upon which the Shares are then listed
and/or
traded, or under any blue sky or state securities laws
applicable to the Shares.
6.8 Termination of Employment. Each
Participants Award Agreement shall set forth the extent to
which the Participant shall have the right to exercise the
Option following Termination of Employment or termination of
services to the Company, its Affiliates
and/or its
Subsidiaries, as the case may be. These provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued
pursuant to this Article 6, and may reflect distinctions
based on the reasons for termination.
6.9 Notification of Disqualifying
Disposition. If any Participant shall make any
disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Code Section 421(b)
(relating to certain disqualifying dispositions), the
Participant shall notify the Company of such disposition within
ten (10) days thereof.
6.10 No Other Feature of Deferral. No
Option granted pursuant to this Plan shall provide for any
feature for the deferral of compensation other than the deferral
of recognition of income until the exercise of the Option.
Article 7.
Stock Appreciation Rights
7.1 Grant of SARs. Subject to the terms
and conditions of this Plan, SARs may be granted to Participants
at any time and from time to time as shall be determined by the
Committee. However, an Employee who is employed by an Affiliate
and/or
Subsidiary may be granted SARs only to the extent the Affiliate
and/or
Subsidiary is: (i) part of the Companys controlled
group of corporations or (ii) a trade or business under
common control, as of the date of grant, as determined within
the meaning of Code Section 414(b) or 414(c) and
substituting for this purpose ownership of at least fifty
percent (50%) of the
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Affiliate
and/or
Subsidiary to determine the members of the controlled group of
corporations and the entities under common control.
Subject to the terms and conditions of this Plan, the Committee
shall have complete discretion in determining the number of SARs
granted to each Participant and, consistent with the provisions
of this Plan, in determining the terms and conditions pertaining
to the SARs.
The Grant Price for each grant of a SAR shall be determined by
the Committee and shall be specified in the Award Agreement;
provided, however, the Grant Price on the date of grant must be
at least equal to one hundred percent (100%) of the FMV of the
Shares as determined on the date of grant.
Notwithstanding this Section 7.1 to the contrary, in the
case of a SAR that is a Substitute Award, the Grant Price of the
Shares subject to the SAR may be less than the Fair Market Value
per Share on the date of grant; provided, however, that the X
shall not exceed Y, where X is the amount, if any, by which the
aggregate Fair Market Value (as of the date on which the
Substitute Award is granted) of the Shares subject to the
Substitute Award exceeds the aggregate Grant Price with respect
to the Shares subject to the Substitute Award and Y is the
amount, if any, by which the aggregate Fair Market Value
(determined by the Committee as of the time immediately
preceding the transaction giving rise to the Substitute Awards),
of the Shares of the predecessor entity that were subject to the
grant assumed or substituted for the Company exceeds the
aggregate Grant Price of the Shares.
7.2 SAR Agreement. Each SAR Award shall
be evidenced by an Award Agreement that shall specify the Grant
Price, the term of the SAR and such other provisions as the
Committee shall determine.
7.3 Term of SAR. The term of a SAR
granted under this Plan shall be determined by the Committee, in
its sole discretion, and, except as determined otherwise by the
Committee and specified in the SAR Award Agreement, no SAR shall
be exercisable later than the tenth (10th) anniversary date of
its grant. Notwithstanding the foregoing, the Committee has the
authority to grant to Participants who are not residents of the
United States SARs that have a term greater than ten
(10) years.
7.4 Exercise of SARs. SARs may be
exercised upon whatever terms and conditions the Committee, in
its sole discretion, imposes.
7.5 Settlement of SARs. Upon the exercise
of a SAR, a Participant shall be entitled to receive payment
from the Company in an amount equal to the product of the excess
of the Fair Market Value of a Share on the date of exercise over
the Grant Price and the number of Shares with respect to which
the SAR is exercised.
At the discretion of the Committee, the payment upon SAR
exercise may be in cash, Shares or any combination of cash and
Shares, or in any other manner approved by the Committee in its
sole discretion. The Committees determination regarding
the form of SAR payout shall be set forth in the Award Agreement
pertaining to the grant of the SAR.
7.6 Termination of Employment. Each Award
Agreement shall set forth the extent to which the Participant
shall have the right to exercise the SAR following Termination
of Employment with, or provision of services to, the Company,
its Affiliates
and/or its
Subsidiaries, as the case may be. These provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants,
need not be uniform among all SARs issued pursuant to this Plan,
and may reflect distinctions based on the reasons for
termination.
7.7 Other Restrictions. The Committee
shall impose such other conditions
and/or
restrictions on any Shares received upon exercise of a SAR
granted pursuant to this Plan as it may deem advisable or
desirable. These restrictions may include, but shall not be
limited to, a requirement that the Participant hold the Shares
received upon exercise of a SAR for a specified period of time.
7.8 No Other Feature of Deferral. No SAR
granted pursuant to this Plan shall provide for any feature for
the deferral of compensation other than the deferral of
recognition of income until the exercise of the SAR.
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Article 8.
Restricted Stock and Restricted Stock Units
8.1 Grant of Restricted Stock or Restricted Stock
Units. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock
and/or
Restricted Stock Units to Participants in such amounts as the
Committee shall determine.
8.2 Restricted Stock or Restricted Stock Unit
Agreement. Each grant of Restricted Stock
and/or
Restricted Stock Units shall be evidenced by an Award Agreement
that shall specify the Period(s) of Restriction, the number of
Shares of Restricted Stock or the number of Restricted Stock
Units granted, and such other provisions as the Committee shall
determine.
8.3 Other Restrictions. The Committee
shall impose such other conditions
and/or
restrictions on any Shares of Restricted Stock or Restricted
Stock Units granted pursuant to this Plan as it may deem
advisable, including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, restrictions
based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of
the performance goals, time-based restrictions, restrictions
under applicable laws or under the requirements of any stock
exchange or market upon which the Shares are listed or traded,
or holding requirements or sale restrictions placed on the
Shares by the Company upon vesting of the Restricted Stock or
Restricted Stock Units.
To the extent deemed appropriate by the Committee, the Company
may retain the certificates representing Shares of Restricted
Stock in the Companys possession until such time as all
conditions
and/or
restrictions applicable to the Shares have been satisfied or
have lapsed.
Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock Award shall
become freely transferable by the Participant after all
conditions and restrictions applicable to the Shares have been
satisfied or have lapsed (including satisfaction of any
applicable tax withholding obligations), and Restricted Stock
Units shall be paid in cash, Shares or a combination of cash and
Shares as the Committee, in its sole discretion, shall determine.
8.4 Certificate Legend. In addition to
any legends placed on certificates pursuant to Section 8.3,
each certificate representing Shares of Restricted Stock granted
pursuant to this Plan may bear a legend such as the following or
as otherwise determined by the Committee in its sole discretion:
The sale or transfer of Shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of
law, is subject to certain restrictions on transfer as set forth
in the Libbey Inc. 2006 Omnibus Incentive Plan, and in the
associated Award Agreement. A copy of this Plan and the Award
Agreement may be obtained from Libbey Inc.
8.5 Voting Rights. Unless otherwise
determined by the Committee and set forth in a
Participants Award Agreement, to the extent permitted or
required by law, Participants holding Shares of Restricted Stock
granted pursuant to this Plan may be granted the right to
exercise full voting rights with respect to those Shares during
the Period of Restriction. A Participant shall have no voting
rights with respect to any Restricted Stock Units granted
pursuant to this Plan.
8.6 Termination of Employment. Each Award
Agreement shall set forth the extent to which the Participant
shall have the right to retain Restricted Stock
and/or
Restricted Stock Units following Termination of Employment with,
or provision of services to, the Company, its Affiliates
and/or its
Subsidiaries, as the case may be. These provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to this Plan,
and may reflect distinctions based on the reasons for
termination.
8.7 Section 83(b) Election. The
Committee may provide in an Award Agreement that the Award of
Restricted Stock is conditioned upon the Participant making or
refraining from making an election with respect to the Award
under Code Section 83(b). If a Participant makes an
election pursuant to Code Section 83(b) concerning a
Restricted Stock Award, the Participant shall be required to
file promptly a copy of the election with the Company.
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Article 9.
Performance Units/Performance Shares
9.1 Grant of Performance Units/Performance
Shares. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may
grant Performance Units
and/or
Performance Shares to Participants in such amounts and upon such
terms as the Committee shall determine.
9.2 Value of Performance Units/Performance
Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time
of grant. Each Performance Share shall have an initial value
equal to the Fair Market Value of a Share on the date of grant.
The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will
determine the value
and/or
number of Performance Units/Performance Shares that will be paid
out to the Participant.
9.3 Earning of Performance Units/Performance
Shares. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of
Performance Units/Performance Shares shall be entitled to
receive payout on the value and number of Performance
Units/Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent
to which the corresponding performance goals have been achieved.
9.4 Form and Timing of Payment of Performance
Units/Performance Shares. Payment of earned
Performance Units/Performance Shares shall be as determined by
the Committee and as evidenced in the Award Agreement. Subject
to the terms of this Plan, the Committee, in its sole
discretion, may pay earned Performance Units/Performance Shares
in the form of cash or in Shares (or in a combination thereof)
equal to the value of the earned Performance Units/Performance
Shares at the close of the applicable Performance Period, or as
soon as practicable after the end of the Performance Period. Any
Shares may be granted subject to any restrictions deemed
appropriate by the Committee. The determination of the Committee
with respect to the form of payout of the Awards shall be set
forth in the Award Agreement pertaining to the grant of the
Award.
9.5 Termination of Employment. Each Award
Agreement shall set forth the extent to which the Participant
shall have the right to retain Performance Units
and/or
Performance Shares following Termination of Employment with, or
provision of services to, the Company, its Affiliates
and/or its
Subsidiaries, as the case may be. These provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Performance
Units or Performance Shares issued pursuant to this Plan, and
may reflect distinctions based on the reasons for termination.
Article 10.
Cash-Based Awards and Other Stock-Based Awards
10.1 Grant of Cash-Based Awards. Subject
to the terms and provisions of the Plan, the Committee, at any
time and from time to time, may grant Cash-Based Awards to
Participants in such amounts and upon such terms as the
Committee may determine.
10.2 Other Stock-Based Awards. The
Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of
this Plan (including the grant or promise to deliver or offer
for sale of unrestricted Shares) in such amounts and subject to
such terms and conditions as the Committee shall determine.
Other Stock-Based Awards may involve the transfer of actual
Shares to Participants, or payment in cash or otherwise of
amounts based on the value of Shares, and may include, without
limitation, Awards designed to comply with or take advantage of
the applicable local laws of jurisdictions other than the United
States.
10.3 Value of Cash-Based and Other Stock-Based
Awards. Each Cash-Based Award shall specify a
payment amount or payment range as determined by the Committee.
Each Other Stock-Based Award shall be expressed in terms of
Shares or units based on Shares, as determined by the Committee.
The Committee may establish performance goals in its discretion.
If the Committee exercises its discretion to establish
performance goals, the number
and/or value
of Cash-Based Awards or Other Stock-Based Awards that will be
paid out to the Participant will depend on the extent to which
the performance goals are met.
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10.4 Payment of Cash-Based Awards and Other Stock-Based
Awards. Payment, if any, with respect to a
Cash-Based Award or an Other Stock-Based Award shall be made, in
accordance with the terms of the Award, in cash or Shares as the
Committee determines.
10.5 Termination of Employment. The
Committee shall determine the extent to which the Participant
shall have the right to receive Cash-Based Awards or Other
Stock-Based Awards following Termination of Employment with, or
provision of services to, the Company, its Affiliates
and/or its
Subsidiaries, as the case may be. These provisions shall be
determined in the sole discretion of the Committee, may be
included in an agreement entered into with each Participant,
need not be uniform among all Awards of Cash-Based Awards or
Other Stock-Based Awards issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination.
Article 11.
Transferability of Awards
11.1 Transferability. Except as provided
in Section 11.2 below, during a Participants
lifetime, his or her Awards shall be exercisable only by the
Participant. Awards shall not be transferable other than by will
or the laws of descent and distribution or, subject to the
consent of the Committee, pursuant to a DRO; no Awards shall be
subject, in whole or in part, to attachment, execution or levy
of any kind; and any purported transfer in violation of this
Section 11.1 shall be null and void. The Committee may
establish such procedures as it deems appropriate for a
Participant to designate a beneficiary to whom any amounts
payable or Shares deliverable in the event of, or following, the
Participants death may be provided.
11.2 Committee Action. The Committee may,
in its discretion, determine that notwithstanding
Section 11.1, any or all Awards (other than ISOs) shall be
transferable to and exercisable by such transferees, and subject
to such terms and conditions, as the Committee may deem
appropriate; provided, however, no Award may be transferred for
value (as defined in the General Instructions to
Form S-8).
Article 12.
Performance Measures
12.1 Performance Measures. The
performance goals upon which the payment or vesting of an Award
to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following
Performance Measures:
(a) Net earnings or net income (before or after taxes);
(b) Earnings per share;
(c) Net sales or revenue growth;
(d) Net operating profit;
(e) Return measures (including, but not limited to, return
on assets, capital, invested capital, equity, sales or revenue);
(f) Cash flow (including, but not limited to, operating
cash flow, free cash flow, cash flow return on equity and cash
flow return on investment);
(g) Earnings before or after taxes, interest, depreciation
and/or
amortization;
(h) Gross or operating margins;
(i) Productivity ratios;
(j) Share price (including, but not limited to, growth
measures and total shareholder return);
(k) Expense targets;
(l) Cost reductions or savings;
(m) Performance against operating budget goals;
(n) Margins;
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(o) Operating efficiency;
(p) Funds from operations;
(q) Market share;
(r) Customer satisfaction;
(s) Working capital targets; and
(t) Economic value added or
EVA®
(net operating profit after tax minus the sum of capital
multiplied by the cost of capital).
Any Performance Measure(s) may be used to measure the
performance of the Company, Subsidiary
and/or
Affiliate as a whole or any business unit of the Company,
Subsidiary
and/or
Affiliate, or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparator companies,
or published or special index that the Committee, in its sole
discretion, deems appropriate, or the Company may select
Performance Measure (j) above as compared to various stock
market indices. The Committee also has the authority to provide
for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified
in this Article 12.
12.2 Evaluation of Performance. The
Committee may provide in any such Award that any evaluation of
performance may include or exclude any of the following events
that occurs during a Performance Period: (a) asset
write-downs, (b) litigation or claim judgments or
settlements, (c) the effect of changes in tax laws,
accounting principles or other laws or provisions affecting
reported results, (d) any reorganization and restructuring
programs, (e) Extraordinary Items, (f) acquisitions or
divestitures, and (g) foreign exchange gains and losses. To
the extent the inclusions or exclusions affect Awards to Covered
Employees, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility.
12.3 Adjustment of Performance-Based
Compensation. Awards that are intended to qualify
as Performance-Based Compensation may not be adjusted upward.
The Committee shall retain the discretion to adjust the Awards
downward, either on a formula or discretionary basis or any
combination, as the Committee determines.
12.4 Committee Discretion. If applicable
tax and/or
securities laws change to permit Committee discretion to alter
the governing Performance Measures without obtaining shareholder
approval of the changes, the Committee shall have sole
discretion to make the changes without obtaining shareholder
approval provided the exercise of such discretion does not
violate Code Section 409A. In addition, if the Committee
determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation, the Committee may
make the grants without satisfying the requirements of Code
Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 12.1.
Article 13.
Non-employee Director Awards
Non-employee Directors may be granted Awards pursuant to this
Plan only in accordance with this Article 13. Awards
granted to Non-employee Directors pursuant to this Plan shall
not be subject to managements discretion. From time to
time, the Nominating and Governance Committee shall set the
amount(s) and type(s) of Awards that shall be granted to all
Non-employee Directors on a periodic, nondiscriminatory basis
pursuant to the Plan, as well as any additional amount(s), if
any, to be awarded, also on a periodic, nondiscriminatory basis,
based on each of the following: (a) the number of
committees of the Board on which a Non-employee Director serves,
(b) service of a Non-employee Director as the chair of a
committee of the Board, (c) service of a Non-employee
Director as Chairman of the Board, or (d) the first
selection or appointment of an individual to the Board as a
Non-employee Director. Subject to the limits set forth in
Section 4.1(c) and the foregoing, the Nominating and
Governance Committee shall grant these Awards to Non-employee
Directors and any Non-employee Chairman of the Board, and grant
new Non-
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employee Director Awards, as it shall from time to time
determine. The terms and conditions of any grant to any
Non-employee Director shall be set forth in an Award Agreement.
Article 14.
Dividend Equivalents
Any Participant selected by the Committee may be granted
Dividend Equivalents on Shares 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.
However, no Dividend Equivalents may be granted on any Award of
Options or SARs.
Article 15.
Beneficiary Designation
Each Participant under this Plan may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under this Plan is to be
paid in case of his death before he receives any or all of the
benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form
prescribed by the Committee, and shall be effective only when
filed by the Participant in writing with the Company during the
Participants lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights
remaining unexercised at the Participants death shall be
paid to or exercised by the Participants executor,
administrator or legal representative.
Article 16.
Rights of Participants
16.1 Employment. Nothing in this Plan or
an Award Agreement shall interfere with or limit in any way the
right of the Company, its Affiliates
and/or its
Subsidiaries to terminate any Participants employment or
service on the Board or to the Company at any time or for any
reason not prohibited by law, nor confer upon any Participant
any right to continue his employment or service as a Director
for any specified period of time.
Neither an Award nor any benefits arising under this Plan shall
constitute an employment contract with the Company, its
Affiliates
and/or its
Subsidiaries. Accordingly, subject to Articles 3 and 18,
this Plan and the benefits under it may be terminated at any
time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company,
its Affiliates
and/or its
Subsidiaries.
16.2 Participation. No individual shall
have the right to be selected to receive an Award under this
Plan, or, having been so selected, to be selected to receive a
future Award.
16.3 Rights as a Shareholder. Except as
otherwise provided in this Plan, a Participant shall have none
of the rights of a shareholder with respect to Shares covered by
any Award until the Participant becomes the record holder of the
Shares.
Article 17.
Change in Control
17.1 Change of Control of the
Company. Notwithstanding any other provision of
this Plan to the contrary, the provisions of this
Article 17 shall apply in the event of a Change of Control,
unless otherwise determined by the Committee in connection with
the grant of an Award as reflected in the applicable Award
Agreement.
Upon a Change of Control, all then-outstanding Options and SARs
shall become fully vested and exercisable immediately, and all
other Awards that are not then vested and as to which vesting
depends upon only the satisfaction of a service obligation by a
Participant to the Company, Subsidiary or Affiliate shall vest
in full and be free of restrictions related to the vesting of
the Awards, except to the extent that another Award meeting the
requirements of Section 17.2 (a Replacement
Award) is provided to the Participant to replace the
Award in question (the Replaced Award).
The treatment of any other Awards shall be as determined by the
Committee in connection with the grant thereof, as reflected in
the applicable Award Agreement.
Except to the extent that a Replacement Award is provided to the
Participant, the Committee may, in its sole discretion:
(i) determine that any or all outstanding Awards granted
under the Plan, whether or not exercisable, will be canceled and
terminated and that in connection with the cancellation and
termination
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the holder of the Award may receive for each Share of Common
Stock subject to the Awards a cash payment (or the delivery of
shares of stock, other securities or a combination of cash,
stock and securities equivalent to the cash payment) equal to
the difference, if any, between the consideration received by
shareholders of the Company in respect of a Share of Common
Stock in connection with the transaction and the product of the
purchase price, if any, per share under the Award and the number
of Shares of Common Stock subject to the Award; provided,
however, that if the product is zero or less, or to the extent
that the Award is not then exercisable, the Awards will be
canceled and terminated without payment therefor; or
(ii) provide that the period to exercise Options or SARs
granted under the Plan shall be extended (but not beyond the
expiration of the Option or SAR).
17.2 Replacement Awards. An Award shall
meet the conditions of this Section 17.2 (and hence qualify
as a Replacement Award) if: (i) it has a value at least
equal to the value of the Replaced Award as determined by the
Committee in its sole discretion; (ii) it relates to
publicly traded equity securities of the Company or its
successor pursuant to the Change in Control or another entity
that is affiliated with the Company or its successor following
the Change in Control; and (iii) its other terms and
conditions are not less favorable to the Participant than the
terms and conditions of the Replaced Award (including the
provisions that would apply in the event of a subsequent Change
of Control). Without limiting the generality of the foregoing,
the Replacement Award may take the form of a continuation of the
Replaced Award if the requirements of the preceding sentence are
satisfied. The determination as to whether the conditions of
this Section 17.2 are satisfied shall be made by the
Committee, as constituted immediately before the Change of
Control, in its sole discretion.
17.3 Termination of Employment. Upon a
Termination of Employment or, in the case of Directors, a
termination of service as a Director, of a Participant occurring
in connection with or during the period of two (2) years
after the Change in Control, other than for Cause, (i) all
Replacement Awards held by the Participant shall become fully
vested and (if applicable) exercisable and free of restrictions,
and (ii) all Options and SARs held by the Participant
immediately before the termination of employment or termination
of service as a Director that the Participant held as of the
date of the Change in Control or that constitute Replacement
Awards shall remain exercisable for not less than one
(1) year following the termination or until the expiration
of the stated term of the Option or SAR, whichever period is
shorter; provided that, if the applicable Award Agreement
provides for a longer period of exercisability, that provision
shall control.
Article 18.
Amendment, Modification, Suspension, and Termination
18.1 Amendment, Modification, Suspension, and
Termination. Subject to Section 18.3, the
Committee may, at any time and from time to time, alter, amend,
modify, suspend or terminate this Plan and any Award Agreement
in whole or in part; provided, however, that, without the prior
approval of the Companys shareholders and except as
provided in Section 4.4, Options or SARs issued under this
Plan will not be repriced, replaced or regranted through
cancellation and substitution of another Award, or by lowering
the Option Price of a previously granted Option or the Grant
Price of a previously granted SAR, or by exchange for
cash, and no amendment of this Plan shall be made without
shareholder approval if shareholder approval is required by law,
regulation or stock exchange rule.
18.2 Awards Previously
Granted. Notwithstanding any other provision of
this Plan to the contrary (other than Section 18.3), no
termination, amendment, suspension or modification of this Plan
or an Award Agreement shall adversely affect in any material way
any Award previously granted under this Plan, without the
written consent of the Participant holding the Award.
18.3 Amendment to Conform to
Law. Notwithstanding any other provision of this
Plan to the contrary, the Board of Directors may amend the Plan
or an Award Agreement, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of
conforming the Plan or an Award Agreement to any present or
future law relating to plans of this or similar nature
(including, but not limited to, Code Section 409A), and to
the administrative regulations and rulings promulgated under the
present or future law.
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Article 19.
Withholding
19.1 Tax Withholding. The Company shall
have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, the minimum statutory
amount to satisfy federal, state and local taxes, domestic or
foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of this Plan.
19.2 Share Withholding. With respect to
withholding required upon the exercise of Options or SARs, upon
the lapse of restrictions on Restricted Stock and Restricted
Stock Units, or upon the achievement of performance goals
related to Performance Shares, or any other taxable event
arising as a result of an Award granted pursuant to this Plan,
Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or
in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to
the minimum statutory total tax that could be imposed on the
transaction. All such elections shall be irrevocable, made in
writing and signed by the Participant, and shall be subject to
any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.
Article 20.
Successors
All obligations of the Company under this Plan with respect to
Awards granted pursuant to this Plan shall be binding on any
successor to the Company, whether the existence of the successor
is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the
business
and/or
assets of the Company.
Article 21.
General Provisions
21.1 Forfeiture Events.
(a) The Committee may specify in an Award Agreement that
the Participants rights, payments and benefits with
respect to an Award shall be subject to reduction, cancellation,
forfeiture or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. These events may
include, but shall not be limited to, termination of employment
for cause, termination of the Participants provision of
services to the Company, Affiliate
and/or
Subsidiary, violation of material Company, Affiliate
and/or
Subsidiary policies, breach of noncompetition, confidentiality
or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is
detrimental to the business or reputation of the Company, its
Affiliates
and/or its
Subsidiaries.
(b) If the Company is required to prepare an accounting
restatement due to the material noncompliance of the Company, as
a result of misconduct, with any financial reporting requirement
under the securities laws, and if the Participant knowingly or
grossly negligently engaged in the misconduct, or knowingly or
grossly negligently failed to prevent the misconduct, or if the
Participant is one of the individuals subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002, the Participant shall reimburse the Company the amount of
any payment in settlement of an Award earned or accrued during
the twelve (12) month period following the first public
issuance or filing with the United States Securities and
Exchange Commission (whichever just occurred) of the financial
document embodying the financial reporting requirement.
21.2 Legend. The certificates for Shares
may include any legend that the Committee deems appropriate to
reflect any restrictions on transfer of the Shares.
21.3 Gender and Number. Except where
otherwise indicated by the context, any masculine term used in
this Plan also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
21.4 Severability. In the event any
provision of this Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the
remaining parts of this Plan, and this Plan shall be construed
and enforced as if the illegal or invalid provision had not been
included.
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21.5 Requirements of Law. The granting of
Awards and the issuance of Shares under this Plan shall be
subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national
securities exchanges as may be required.
21.6 Delivery of Title. The Company shall
have no obligation to issue or deliver evidence of title for
Shares issued under this Plan prior to:
(a) Obtaining any approvals from governmental agencies that
the Company determines are necessary or advisable; and
(b) Completion of any registration or other qualification
of the Shares under any applicable national or foreign law or
ruling of any governmental body that the Company determines to
be necessary or advisable.
21.7 Inability to Obtain Authority. The
inability of the Company to obtain from any regulatory body
having jurisdiction such authority as the Companys counsel
deems to be necessary to the lawful issuance and sale of any
Shares under this Plan, shall relieve the Company of any
liability in respect of the failure to issue or sell the Shares
as to which requisite authority shall not have been obtained.
21.8 Investment Representations. The
Committee may require any individual receiving Shares pursuant
to an Award under this Plan to represent and warrant in writing
that the individual is acquiring the Shares for investment and
without any present intention to sell or distribute the Shares.
21.9 Employees Based Outside of the United
States. Notwithstanding any provision of this
Plan to the contrary, in order to comply with the laws in other
countries in which the Company, its Affiliates
and/or its
Subsidiaries operate or in which Employees or Directors of the
Company, its Affiliates
and/or its
Subsidiaries are located, the Committee, in its sole discretion,
shall have the power and authority to:
(a) Determine which Affiliates and Subsidiaries shall be
covered by this Plan;
(b) Determine which Employees
and/or
Directors outside the United States are eligible to participate
in this Plan;
(c) Modify the terms and conditions of any Award granted to
Employees
and/or
Directors outside the United States to comply with applicable
foreign laws;
(d) Establish subplans and modify exercise procedures and
other terms and procedures, to the extent the actions may be
necessary or advisable. Any
sub-plans
and modifications to Plan terms and procedures established under
this Section 21.9 by the Committee shall be attached to
this Plan document as appendices; and
(e) Take any action, before or after an Award is made, that
it deems advisable to obtain approval or comply with any
necessary local government regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any
actions under this Section 21.9, and no Awards shall be
granted, that would violate applicable law.
21.10 Uncertificated Shares. To the
extent that this Plan provides for issuance of certificates to
reflect the transfer of Shares, the transfer of the Shares may
be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.
21.11 Unfunded Plan. Participants shall
have no right, title or interest in or to any investments that
the Company
and/or its
Subsidiaries
and/or its
Affiliates may make to aid it in meeting its obligations under
this Plan. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between
the Company and any Participant, beneficiary, legal
representative or any other individual. To the extent that any
individual acquires a right to receive payments from the
Company, its Subsidiaries
and/or its
Affiliates under this Plan, the right shall be no greater than
the right of an unsecured general creditor of the Company, a
Subsidiary or an Affiliate, as the case may be. All payments to
be made under this Plan shall be paid from the general funds of
the Company, a Subsidiary or an Affiliate, as the case may be,
and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of the
amounts except as expressly set forth in this Plan.
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21.12 No Fractional Shares. No fractional
Shares shall be issued or delivered pursuant to this Plan or any
Award. The Committee shall determine whether cash, Awards or
other property shall be issued or paid in lieu of fractional
Shares or whether fractional Shares or any rights to fractional
Shares shall be forfeited or otherwise eliminated.
21.13 Retirement and Welfare
Plans. Neither Awards made under this Plan nor
Shares or cash paid pursuant to Awards may be included as
compensation for purposes of computing the benefits
payable to any Participant under the Companys or any
Subsidiarys or Affiliates retirement plans (both
qualified and non-qualified) or welfare benefit plans unless the
other plan expressly provides that the compensation shall be
taken into account in computing a Participants benefit.
21.14 Deferred Compensation. It is
intended that any Award made under this Plan that results in the
deferral of compensation (as defined under Code
Section 409A) complies with the requirements of Code
Section 409A.
21.15 Nonexclusivity of this Plan. The
adoption of this Plan shall not be construed as creating any
limitations on the power of the Board or Committee to adopt the
other compensation arrangements as it may deem desirable for any
Participant.
21.16 No Constraint on Corporate
Action. Nothing in this Plan shall be construed
to: (i) limit, impair or otherwise affect the
Companys or a Subsidiarys or an Affiliates
right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure,
or to merge or consolidate, or dissolve, liquidate, sell or
transfer all or any part of its business or assets; or
(ii) limit the right or power of the Company or a
Subsidiary or an Affiliate to take any action that the entity
deems to be necessary or appropriate.
21.17 Governing Law. The Plan and each
Award Agreement shall be governed by the laws of the State of
Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or
interpretation of this Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Award Agreement,
recipients of an Award under this Plan are deemed to submit to
the exclusive jurisdiction and venue of the federal or state
courts of Delaware, to resolve any and all issues that may arise
out of or relate to this Plan or any related Award Agreement.
21.18 Indemnification. Subject to
requirements of Delaware law, each individual who is or shall
have been a member of the Board, or a Committee appointed by the
Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be
indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or
reasonably incurred by him or her 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 taken or failure to act under this Plan and
against and from any and all amounts paid by him or her in
settlement thereof, with the Companys approval, or paid by
him or her in satisfaction of any judgment in any such action,
suit or proceeding against him or her, provided he or she shall
give 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/her own
behalf, unless the loss, cost, liability or expense is a result
of his/her
own willful misconduct or except as expressly provided by
statute.
The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which the individuals may
be entitled under the Companys 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.
21.19 No Guarantee of Favorable Tax
Treatment. Although the Company intends to
administer the Plan so that Awards will be exempt from, or will
comply with, the requirements of Code Section 409A, the
Company does not warrant that any Award under the Plan will
qualify for favorable tax treatment under Code Section 409A
or any other provision of federal, state, local or foreign law.
The Company shall not be liable to any Participant for any tax
the Participant might owe as a result of the grant, holding,
vesting, exercise or payment of any Award under the Plan.
A-20
LIBBEY INC.
P.O. BOX 10060
TOLEDO, OH 43699-0060
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 cut-off 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. To sign up for
electronic delivery, please follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive or access proxy materials
electronically in future years.
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 postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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To withhold authority to vote for any individual |
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nominee(s), mark For All Except and write the |
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The Board of Directors recommends that you |
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number(s) of the nominee(s) on the line below. |
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vote FOR the following: |
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1. Election
of Directors
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01 Carlos V. Duno
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02 Peter C. McC. Howell
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03 John C. Orr
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04 Richard I. Reynolds |
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The Board of Directors recommends you vote FOR the following proposal(s):
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Abstain |
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Approval of the Amended and Restated Libbey Inc. 2006 Omnibus Incentive Plan
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Ratification of the appointment of Ernst & Young LLP as Libbeys independent auditors for the fiscal year ending December 31,
2010.
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NOTE: The Directors up for election are Class II directors. Such other business as may properly
come before the meeting or any
adjournment thereof.
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Please sign exactly as your name(s) appear(s) hereon. When
signing as attorney, executor, administrator, or other
fiduciary, 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.
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Signature
[PLEASE SIGN WITHIN BOX]
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0000057051_1 R2.09.05.010
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The
Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com.
LIBBEY INC.
Annual Meeting of Shareholders
May 6, 2010 2:00 PM
This proxy is solicited by the Board of Directors
The shareholder(s) hereby appoint(s) John F. Meier and Susan Allene Kovach, or either of them,
as proxies, each with the power to appoint (his/her) substitute, and hereby authorizes them to
represent and to vote, as designated on the reverse side of this ballot, all of the shares of
common stock of LIBBEY INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting
of shareholder(s) to be held at 02:00 PM, EST on May 6, 2010, at 335 N. St. Clair, Toledo, Ohio,
and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such
direction is made, this proxy will be voted in accordance with the Board of Directors
recommendations.
Continued and to be signed on reverse side
0000057051_2 R2.09.05.010