Edgar Filing: LIBBEY INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 14A
(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12

Libbey Inc.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.

[ ] 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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LIBBEY INC.
P.O. BOX 10060
300 MADISON AVENUE
TOLEDO, OHIO 43699-0060

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON MAY 5, 2005

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Dear Fellow Libbey Stockholder:

We will hold our 2005 Annual Meeting of Libbey stockholders on Thursday,
May 5, 2005, at 2:00 p.m., Eastern Time, at the Libbey Corporate Showroom, 228
North Huron Street, Toledo, Ohio.

At the meeting, stockholders will:

- elect three directors for a term of three years, and

- transact such other business as properly may come before the meeting.

The Board of Directors has nominated three of our nine directors for
election this year. They are all Class III directors, which means that their
terms will expire at the 2008 annual meeting. You can read about them, and about
the other directors who will continue in office, in the proxy statement.

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 10, 2005. 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.

We hope you will vote by marking, signing and returning your proxy or
voting instruction card as soon as possible, whether or not you plan to attend
the meeting.

Management sincerely appreciates your support.

Sincerely,

John F. Meier
Chairman of the Board of Directors and
Chief Executive Officer

By Order of the Board of Directors,

Susan Allene Kovach
Secretary

March 30, 2005
Toledo, Ohio

LIBBEY INC.

PROXY STATEMENT

We have sent you this proxy statement because the Board of Directors of
Libbey Inc. ("Libbey" or the "Company") 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 stockholders. The
members of the proxy committee are John F. Meier, Richard I. Reynolds and Susan
Allene Kovach. They will vote your shares as you instruct.

We will hold the meeting at the Libbey Corporate Showroom, 228 North Huron
Street, Toledo, Ohio, on May 5, 2005, at 2:00 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 stockholders of this proxy statement and the
enclosed proxy on or about March 30, 2005.

QUESTIONS AND ANSWERS

WHO MAY VOTE?

You may vote if you were a holder of Libbey common stock at the close of
business on March 10, 2005.

WHAT MAY I VOTE ON?

You may vote on the election of three nominees -- William A. Foley, Deborah
G. Miller and Terence P. Stewart -- to serve as Class III directors.

HOW DOES THE BOARD RECOMMEND THAT I VOTE?

The Board recommends that you vote FOR each of the nominees for director.

HOW DO I VOTE?

You may vote by marking, signing and dating the enclosed proxy card or
voting instruction card and returning it in the prepaid envelope. The proxy
committee will vote your shares in accordance with your directions. If you
return a proxy card but do not mark the boxes showing how you wish to vote, the
proxy committee will vote your shares FOR the proposal, but only if you have
signed and dated the card. Unsigned proxy cards will not be voted at all. If you
are a stockholder of record (that is, if you are registered on our books), you
also may vote in person by attending the meeting.

MAY I CHANGE MY VOTE?

If you are a stockholder of record, you may change your vote or revoke your
proxy, at any time before your shares are voted at the meeting, by:

- sending us a proxy card dated later than your last vote,

- notifying the Secretary of Libbey in writing, or

- voting at the meeting.

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.

HOW MANY OUTSTANDING SHARES OF LIBBEY COMMON STOCK ARE THERE?

At the close of business on March 10, 2005, which is the record date for
the meeting, there were 13,831,129 shares of the Company's 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 Libbey's 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.

HOW WILL VOTES BE COUNTED?

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 the presence of a quorum, but as unvoted for
purposes of determining the matter to which the abstention applies. 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 the Company's Retirement Savings Plan and Supplemental Retirement Plan
will be voted by the trustee in accordance with written instructions from
participants in these plans 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 each respective
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 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 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 Board's recommendation or, if no
recommendation is given, in the discretion of the proxy committee.

WHEN MUST STOCKHOLDER PROPOSALS BE SUBMITTED FOR THE 2006 ANNUAL MEETING?

A stockholder desiring to submit a proposal for inclusion in the Company's
Proxy Statement for the 2006 Annual Meeting must deliver the proposal so that it
is received by the Company no later than November 30, 2005. Any proposal
submitted outside the processes of Rule 14a-8 under the Exchange Act will be
considered untimely if submitted after February 13, 2006. The Company requests
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.

STOCK OWNERSHIP

WHO ARE THE LARGEST OWNERS OF LIBBEY STOCK?

The following table shows information with respect to the persons known to
the Company to be the beneficial owners of more than five percent of its common
stock as of December 31, 2004.

AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ----------------- --------

Ariel Capital Management, LLC(1) 2,731,805 19.82
200 E. Randolph Drive, Suite 2900
Chicago, IL 60601

Barclays Global Investors, NA. and
Barclays Global Fund Advisors(2) 803,270 5.8
45 Fremont Street
San Francisco, CA 94105

Capital Group International, Inc.(3) 780,200 5.7
11100 Santa Monica Boulevard
Los Angeles, CA 90025

Farallon Capital Partners, L.P. 797,000 5.8
Farallon Capital Institutional Partners, L.P.
Farallon Capital Institutional Partners II,
L.P.
Farallon Capital Institutional Partners III,
L.P.
Tinicum Partners, L.P.
Farallon Capital Management, L.L.C.(4)
One Maritime Plaza, Suite 1325
San Francisco, CA 94111

FMR Corp.(5) 786,300 5.703
82 Devonshire Street
Boston, MA 02109

NJF Investment Group L.P.(6) 963,300 6.9
2121 San Jacinto Street, Suite 1840
Dallas, TX 75201

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(1) Amendment No. 12 to Schedule 13G filed with the Securities and Exchange
Commission on behalf of Ariel Capital Management, LLC, an investment
advisor, indicates that, as of December 31, 2004, Ariel Capital Management,
LLC is the beneficial owner of 2,731,805 common shares, with sole
dispositive power with respect to 2,731,805 common shares and sole voting
power with respect to 1,723,080 common shares. The schedule further states
that all securities reported in the schedule are owned by investment
advisory clients of Ariel Capital Management, LLC, no one of which to the
knowledge of Ariel Capital Management, LLC owns more than 5% of the class.

(2) Schedule 13G filed with the Securities and Exchange Commission on behalf of
Barclays Global Investors, NA and Barclays Global Fund Advisors states that
Barclays Global Investors, NA is the beneficial owner of 450,633 common
shares, with sole voting power with respect to 387,980 common shares and
sole dispositive power with respect to 450,633 common shares, and that
Barclays Global Fund Advisors is the beneficial owner of 352,637 common
shares, with sole voting and sole dispositive power over all such shares.

The schedule further states that the shares reported are held by the company
in trust accounts for the economic benefit of the beneficiaries of those
accounts.

(3) Amendment No. 8 to Schedule 13G filed with the Securities and Exchange
Commission on behalf of Capital Group International, Inc., the parent
holding company of a group of investment management companies, and Capital
Guardian Trust Company, indicates that, as of December 31, 2004, Capital
Group International, Inc. has beneficial ownership of 780,200 common shares,
with sole dispositive power with respect to 780,200 common shares and sole
voting power with respect to 518,930 common shares, and that Capital
Guardian Trust Company has beneficial ownership of 719,420 common shares,
with sole dispositive power with respect to 719,420 common shares and sole
voting power with respect to 469,560 common shares. Capital Guardian Trust
Company, a bank, is deemed to be the beneficial owner of these shares as a
result of serving as investment manager of various institutional accounts.
Capital Group International, Inc. and Capital Guardian Trust Company
disclaim beneficial ownership.

(4) Amendment No. 1 to Schedule 13G filed with the Securities and Exchange
Commission by Farallon Capital Partners, L.P. ("Farallon"), Farallon Capital
Institutional Partners, L.P. ("Farallon I"), Farallon Capital Institutional
Partners II, L.P. ("Farallon II"), Farallon Capital Institutional Partners
III, L.P. ("Farallon III"), Tinicum Partners, L.P. ("Tinicum" and together
with Farallon, Farallon I, Farallon II and Farallon III, the "Partnerships")
and Farallon Capital Management, L.L.C. ("Farallon Management") indicates
that, as of December 31, 2004, Farallon is the direct owner of 174,700
common shares, with shared voting and dispositive power over those shares;
Farallon I is the direct owner of 153,900 common shares, with shared voting
and dispositive power over those shares; Farallon II is the direct owner of
20,800 common shares, with shared voting and dispositive power over those
shares; Farallon III is the direct owner of 22,500 common shares, with
shared voting and dispositive power over those shares; and Tinicum is the
direct owner of 8.700 common shares, with shared voting and dispositive
power over those shares. The schedule further indicates that, as general
partner of the Partnerships, Farallon Partners, L.L.C. (the "General
Partner") is the beneficial owner of the 380,600 common shares held by the
Partnerships, with shared voting and dispositive power over those shares,
and that Farallon Management is the beneficial owner of 416,400 common
shares that are directly owned by certain accounts that it manages. The
schedule also discloses that certain sub-advisors, as well as certain
managing members of the subadvisors, the General Partner and Farallon
Management, are beneficial owners with respect to certain of these shares.

(5) Amendment No. 1 to Schedule 13G filed with the Securities and Exchange
Commission by FMR Corp., a parent holding company, on behalf of FMR Corp.,
Edward C. Johnson 3d, Abigail P. Johnson, Fidelity Management & Research
Company and Fidelity Low Priced Stock Fund, indicates that, as of December
31, 2004, Fidelity Management & Research Company ("Fidelity"), a
wholly-owned subsidiary of FMR Corp. and an investment adviser, is the
beneficial owner of 786,300 common shares as a result of acting as
investment adviser to various investment companies. The ownership of one
investment company, Fidelity Low Priced Stock Fund, amounts to 786,300
shares or 5.703% of the common stock outstanding. The schedule further
indicates that each of Edward C. Johnson 3d, FMR Corp., through its control
of Fidelity, and the Funds, has sole power to dispose of the 786,300 common
shares owned by the Fidelity Funds, and that neither FMR Corp. nor Edward C.
Johnson 3d, Chairman of FMR Corp., has the sole power to vote or direct the
voting of the shares owned directly by the Fidelity Funds, such power
residing in the Funds' Boards of Trustees.

(6) Amendment No. 1 to Schedule 13G filed with the Securities and Exchange
Commission on behalf of NJF Investment Group L.P. indicates that, as of
December 31, 2004, NJF Investment Group L.P. has beneficial ownership of
963,300 common shares, with sole dispositive power with respect to 963,300
common shares, sole voting power with respect to 577,800 common shares and
shared voting power with respect to 385,500 common shares. The schedule
further states that it is filed on behalf of NJF Investment Group L.P.

and/or certain investment advisory clients or discretionary accounts and
that, as a result of its role as investment advisor, NJF Investment Group
L.P. may be deemed to be the beneficial owner of the shares.

HOW MUCH STOCK DO LIBBEY'S DIRECTORS AND OFFICERS OWN?

In July 2004, Libbey's Board, in recognition of its belief that the
financial interests of directors should be aligned with those of Libbey's
stockholders, adopted guidelines pursuant to which each director of the Company
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 Libbey common stock, through
deferral of director compensation into an account, the value of which is based
upon the value of Libbey's common stock plus dividends (as described under
"Libbey Corporate Governance -- How are Libbey's directors compensated?" below),
or through a combination of these means. For those directors who already have
served two full terms, or whose second terms are nearing completion, and who, as
of the date on which the guidelines were adopted, had not achieved the requisite
stock ownership, the Nominating and Governance Committee of the Board has
discretion to establish transition plans.

The following table shows, as of March 10, 2005, the number of shares of
Libbey common stock, and percentage of all issued and outstanding shares of
Libbey common stock, beneficially owned (unless otherwise indicated) by our
directors, the executive officers named in the Executive Summary Compensation
Table below and all directors and executive officers of the Company as a group.
The Company's 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 Retirement Savings 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(1) OF CLASS
------------------------ ----------------- --------

Carlos V. Duno................................ 1,000 *

William A. Foley(2)........................... 100 *

Daniel P. Ibele(3)............................ 55,236 *

Susan A. Kovach(3)............................ 5,311 *

Peter C. McC. Howell(2)(4).................... 1,750 *

John F. Meier(3)(5)........................... 237,462 1.71

Deborah G. Miller(2).......................... 2,000 *

Carol B. Moerdyk(2)........................... 900 *

Gary L. Moreau................................ 500 *

Richard I. Reynolds(3)........................ 117,369 *

Terence P. Stewart(2)......................... 928 *

Kenneth G. Wilkes(3).......................... 96,125 *

Arthur H. Smith(6)............................ 128,267 *

Directors & Executive Officers as a
Group(3)(2)................................. 910,170 6.58

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(1) For purposes of this table, a person or group of persons is deemed, as of a
given date, to have beneficial ownership of any shares that such person has
the right to acquire within 60 days after that date. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above on a given date, any security that the person has the
right to acquire within 60 days of that date is deemed outstanding, but is

not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person not owning a similar right. The information
includes all currently exercisable options granted to Messrs. Meier,
Reynolds, Wilkes, Ibele and Smith and Ms. Kovach. The number of shares
beneficially owned includes shares subject to options as follows: Mr.
Meier--193,500; Mr. Reynolds--139,200; Mr. Wilkes--78,700; Ms.
Kovach--5,000; Mr. Ibele--49,200; Mr. Smith--101,500; and all executive
officers as a group--746,130.

(2) Pursuant to the Directors' Deferred Compensation Plan described under
"Libbey Corporate Governance--How are Libbey's directors compensated?"
below, each director may elect to defer all or a portion of the annual
retainer and fees paid to the director into an account, the value of which
is based upon the value of Libbey's common stock plus dividends. As of March
10, 2005, the balances in the accounts of Messrs. Foley, Howell and Stewart,
Ms. Miller and Ms. Moerdyk were equal to the following number of shares,
which are not included in the above table: Mr. Foley--11,203 shares; Mr.
Howell--4,422 shares; Ms. Miller--2,084 shares; Ms. Moerdyk--9,166 shares;
and Mr. Stewart--8,536 shares.

(3) The table includes the number of equivalent shares of common stock that
Messrs. Meier, Reynolds, Wilkes, Ibele and Smith, Ms. Kovach and all
officers as a group held in the Libbey Inc. Retirement Savings Plan as of
March 10, 2005.

(4) Includes 750 shares held by family members of Mr. Howell. Mr. Howell
disclaims any beneficial interest in such shares.

(5) Includes 8,406 shares held by family members of Mr. Meier. Mr. Meier
disclaims any beneficial interest in such shares.

(6) Mr. Smith served as Vice President, General Counsel and Secretary of the
Company until June 30, 2004, when he retired after 36 years of service to
the Company.

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, Libbey believes that, during the fiscal year
ending December 31, 2004, 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, except that one share purchase
transaction by Ms. Miller was not reported on a timely-filed Form 4, but
subsequently was reported on Form 4.

LIBBEY CORPORATE GOVERNANCE

WHO ARE THE CURRENT MEMBERS OF LIBBEY'S BOARD OF DIRECTORS?

Libbey's Certificate of Incorporation and By-Laws provide that the Board of
Directors is divided into three classes. The following table shows information
with respect to the members of the Board of Directors on the date of this proxy
statement:

BOARD COMMITTEE DIRECTOR
DIRECTOR AGE EXPERIENCE ASSIGNMENTS SINCE
-------- --- ---------- --------------- --------

Carlos V. Duno (Class II)......... 57 CDuno Consulting, CEO and Owner, Member, Audit 2003
November 2004 to present; Clean Committee;
Fuels Technology, Chairman & CEO, Member,
from June 2001 to October 2004; Nominating and
Vitro, S.A., Monterrey, Mexico, Governance
President Business Development Committee
and Planning, from 1995 to 2001.

BOARD COMMITTEE DIRECTOR
DIRECTOR AGE EXPERIENCE ASSIGNMENTS SINCE
-------- --- ---------- --------------- --------

William A. Foley (Class III)...... 57 Partner, Learning Dimensions LLC Chair, 1994
and Entrenu Holdings LLC; Compensation
Chairman and Chief Executive Committee;
Officer of LESCO Inc. from July Member,
1993 to April 2002. Nominating and
Governance
Committee

Peter C. McC. Howell (Class II)... 55 From 1997 to present, advisor to Member, Audit 1993
various business enterprises in Committee;
the areas of acquisitions, Chair,
marketing and financial Nominating and
reporting; Chairman and Chief Governance
Executive Officer of Signature Committee
Brands USA, Inc. (formerly known
as Health o meter, Inc.) from
August 1994 to August 1997;
President, Chief Executive
Officer and a director of Mr.
Coffee, inc. from 1989 to 1994.
Mr. Howell is a member of the
board of directors of Pure Cycle
Corporation (NASDAQ: PCYO) and
Global Lite Array.

John F. Meier (Class I)........... 57 Chairman of the Board and Chief 1987
Executive Officer of Libbey since
June 1993; Director, Cooper Tire
and Rubber Company (NYSE: CTB),
since 1997.

Deborah G. Miller (Class III)..... 55 Chief Executive Officer of Member, 2003
Enterprise Catalyst Group, a Compensation
consulting firm specializing in Committee;
high technology and biotechnology Member,
transformational applications, Nominating and
from 2003 to present; President Governance
and Chief Executive Officer of Committee
Egenera from April 2002 to 2003;
from November 2001 to March 2002,
Chief Executive Officer, On
Demand Software; from May 2001 to
September 2001, Chief Executive
Officer, OPI Software; from
September 1999 to April 2001,
Chief Executive Officer, CoVia;
and from September 1998 to
September 1999, President and
Chief Operating Officer, 2Bridge
Software. Ms. Miller also serves
on the board of directors of
Sentinal Group Funds, Inc.

BOARD COMMITTEE DIRECTOR
DIRECTOR AGE EXPERIENCE ASSIGNMENTS SINCE
-------- --- ---------- --------------- --------

Carol B. Moerdyk (Class I)........ 54 Senior Vice President, Chair, Audit 1998
International, OfficeMax, Committee;
Incorporated, from August 2004 to Member,
present; Senior Vice President, Compensation
Administration, Boise Cascade Committee
Office Products Corporation, from
January 2004 to August 2004;
Senior Vice President, North
American and Australasian
Contract Operations, Boise
Cascade Office Products
Corporation from 1998 through
2003; Chief Financial Officer,
Boise Cascade Office Products
Corporation, from 1995 to 1998.

Gary L. Moreau (Class I).......... 50 Writer, lecturer and advisor Member, Audit 1996
primarily in the areas of Committee;
management and corporate Member,
governance; President of Pratt's Compensation
Hollow Advisors LLC (business Committee
consulting) from 1999 to 2003;
President and Chief Executive
Officer of Lionel L.L.C. from
1996 to 1999; President and Chief
Operating Officer of Oneida Ltd.
from 1991 to 1996. Mr. Moreau is
a member of the board of
directors of GSW Inc. (Toronto
Stock Exchange: GSW.A and
GSW.SV.B)

Richard I. Reynolds (Class II).... 58 Executive Vice President and 1993
Chief Operating Officer of Libbey
from November 1995 to present;
Vice President and Chief
Financial Officer of Libbey from
1993 to 1995

Terence P. Stewart (Class III).... 56 Managing partner of Stewart and 1997
Stewart, a Washington, D.C.-based
law firm that specializes in
trade and international law
issues, where he has been
employed since 1976

DOES LIBBEY HAVE CORPORATE GOVERNANCE GUIDELINES?

Libbey's Board of Directors has adopted Corporate Governance Guidelines
that govern Libbey's Board of Directors. Libbey's Corporate Governance
Guidelines, as well as the charters for each of the Audit, Compensation and
Nominating and Governance committees, are available on Libbey's website
(www.libbey.com).

HOW ARE LIBBEY'S DIRECTORS COMPENSATED?

In 2004 non-management directors received a retainer at the annual rate of
$21,000 per annum, which was increased to $25,000 per annum effective July 20,
2004; a fee for attendance at telephonic Board and committee meetings of $500
per meeting; a fee for attendance at other Board meetings of $1,500 per meeting;
a fee for attendance at other committee meetings of $750 per meeting; and a fee
of $500 per half day for performance of special Board or committee business
requested of the director, such as a meeting with a prospective Board member or
an outside consultant on behalf of the Board or a committee. The chairpersons of
the Audit, Compensation and Nominating and Governance committees receive an
additional fee in the amount of $3,000 per annum; however,

effective July 20, 2004, the additional fee payable to the chairpersons of the
Compensation and Nominating and Governance Committees was increased to $5,000,
and the additional fee payable to the chairperson of the Audit Committee was
increased to $7,500 per annum.

The retainer and all fees are payable in cash or, pursuant to the
Directors' Deferred Compensation Plan, subject to deferral into an account, the
value of which is based upon the value of Libbey's common stock plus dividends.
In 2004, each of the directors except Mr. Moreau and Mr. Duno elected to defer
all or a portion of the retainer and fees. Management directors do not receive
additional compensation for service on the Board of Directors.

In addition to the retainers and fees listed above, the Company reimburses
the 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.

WHAT IS THE ROLE OF THE BOARD'S COMMITTEES?

The Board of Directors currently has 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 updated the Audit Committee Charter in 2004. The Audit Committee
Charter is available on Libbey's website (www.libbey.com).

The functions of the Audit Committee are described under the heading
"Audit-Related Matters; Report of the Audit Committee" below. The Audit
Committee met six times during 2004. On February 1, 2005, 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, the listing standards of the New York Stock
Exchange and Libbey's Corporate Governance Guidelines. The Board has further
determined that Ms. Moerdyk, the current chair of the Audit Committee, Mr.
Howell, the immediate past chair of the Audit Committee, and Mr. Moreau are
qualified as audit committee financial experts, as defined in SEC regulations,
and that each of Ms. Moerdyk, Mr. Howell, Mr. Duno and Mr. Moreau is financially
literate and has accounting and related financial management expertise.

Compensation Committee. The functions of the Compensation Committee are
described under the heading "Executive Compensation; Report of the Compensation
Committee" below. The Compensation Committee met three times during 2004. On
February 1, 2005, 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 New York Stock Exchange and Libbey's Corporate Governance
Guidelines.

Nominating and Governance Committee. The Nominating and Governance
Committee is responsible for developing and implementing policies and practices
relating to corporate governance, including reviewing and monitoring
implementation of Libbey's Corporate Governance Guidelines. The Committee also
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 Chief Executive Officer. The Committee also is
responsible for succession planning and reporting to the Board trends in
director compensation practices and the competitiveness of the Company's
director compensation practices. The Nominating and Governance Committee met
five times in 2004. On February 1, 2005, 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 New York Stock Exchange and
Libbey's Corporate Governance Guidelines.

WHO COORDINATES EXECUTIVE SESSIONS OF THE BOARD'S NON-MANAGEMENT DIRECTORS?

At each regularly scheduled meeting of the Board, the Board (excluding
management directors) meets in executive session outside the presence of
management. In order to provide continuity, the Board has designated Gary L.
Moreau to coordinate these executive sessions.

HOW DOES THE BOARD SELECT NOMINEES FOR THE BOARD?

New directors are selected 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 the Company's
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 stockholders 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:

- Board members must possess the highest professional and personal ethics
and values, consistent with longstanding company values and standards;

- Board members must possess broad experience at the policy-making level in
business, government, education, technology or public interest;

- Board members must possess a commitment to enhancing shareholder value;

- Board members must possess and devote sufficient time to carry out their
duties and to provide insight and practical wisdom based upon experience;

- Board members must possess expertise in areas that add strategic value to
the Board, given the then-current composition of the Board, including,
among other areas of expertise, experience as a chief executive officer
or chief operating officer of a public company; expertise in finance,
information technology, marketing, operations or supply chain management;
and/or knowledge of business in foreign locations strategic to the
Company's then-current or potential future operations.

In addition, the Board seeks directors who, as compared to then-existing
members of the Board, are diverse with respect to geography, employment, race or
gender.

The Committee also 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, 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.

HOW DOES THE BOARD DETERMINE WHICH DIRECTORS ARE CONSIDERED INDEPENDENT?

In 2004 the Board adopted its Corporate Governance Guidelines, which, among
other things, combine the Board's previously adopted Mission Statement and

Libbey Inc. Guidelines for its Board of Directors. The Board intends that the
Corporate Governance Guidelines meet or exceed the listing standards adopted by
the New York Stock Exchange.

Pursuant to the Corporate Governance Guidelines, 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 the Company and its subsidiaries and affiliates,
including those reported under the heading "Certain Relationships and Related
Transactions--What related transactions involved directors?" below. The Board
also examined the existence or absence of any transactions or relationships
between directors or their affiliates and members of Libbey's 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 the Company or its management. Specifically, the
Guidelines preclude a determination by the Board that a director is independent
if there is any business relationship between the Company and the particular
director or an organization of which the particular director is a shareholder,
partner or officer, irrespective as to how de minimis the relationship may be,
or if the director otherwise does not meet the independence requirements set
forth in the listing standards of the New York Stock Exchange.

As a result of this review, the Board has affirmatively determined that
Carlos V. Duno, William A. Foley, Peter C. McC. Howell, Deborah G. Miller, Carol
B. Moerdyk and Gary L. Moreau are independent of the Company 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.

HOW OFTEN DID THE BOARD MEET DURING FISCAL 2004?

The Board of Directors met nine times during 2004. Five of these meetings
were regularly scheduled meetings and four of them were special meetings. During
2004, each incumbent member of the Board of Directors attended 75% or more of
the aggregate number of meetings of the Board, and each incumbent member of the
Board of Directors attended at least 75% of the aggregate number of meetings of
the committees of the Board that he or she was eligible to attend, except that
Carlos V. Duno attended 25% of the meetings of the Nominating and Governance
Committee, and 60% of the meetings of the Audit Committee, that he was eligible
to attend during 2004.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS--WHAT RELATED PARTY TRANSACTIONS
INVOLVED DIRECTORS?

During 2004 the law firm of Stewart and Stewart, of which Mr. Stewart is
managing partner, received fees of approximately $376,237 from the Company for
legal services in connection with various international trade matters, including
the international trade aspects of other legal matters. The Company anticipates
that it will continue to utilize the legal services of Stewart and Stewart in
the future in connection with international trade matters.

HOW DO STOCKHOLDERS COMMUNICATE WITH THE BOARD?

Stockholders and other parties interested in communicating directly with
the non-management directors as a group may do so by writing to Non-Management
Directors, 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 received by the Company and 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 Secretary, deals with the
function of the Board or committees thereof or that the Secretary otherwise
determines requires the attention of the Board. Directors may, at any time,
review a log of all correspondence received by the Company that is 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 Libbey's internal
auditors and Audit Committee and are handled in accordance with procedures
established by the Audit Committee with respect to such matters.

ARE LIBBEY'S CORPORATE GOVERNANCE GUIDELINES, CODE OF BUSINESS CONDUCT AND
ETHICS AND COMMITTEE CHARTERS AVAILABLE TO STOCKHOLDERS?

Libbey's Corporate Governance Guidelines and Code of Business Conduct and
Ethics (which applies to all of Libbey's 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 Libbey's website
(www.libbey.com).

ARE LIBBEY'S DIRECTORS REQUIRED TO ATTEND LIBBEY'S ANNUAL MEETING OF
STOCKHOLDERS?

While historically Libbey's directors have not been required to attend
Libbey's annual meeting of stockholders, beginning in 2003 a meeting of the
Board of Directors has been scheduled to take place at the same location and on
the same day as the annual meeting of stockholders, and the Company anticipates
that this practice will continue. Accordingly, Libbey anticipates that a
substantial majority of its directors will be present at the annual meeting of
stockholders to be held on May 5, 2005. In 2004, all members of the Board of
Directors attended Libbey's annual meeting of stockholders.

AUDIT-RELATED MATTERS

WHO ARE LIBBEY'S AUDITORS?

Upon the recommendation of the Audit Committee, the Board of Directors has
selected Ernst & Young LLP as independent auditors for the Company for the
fiscal year ending December 31, 2005.

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 2004 AND 2003?

Fees for services rendered by Ernst & Young LLP for the years ended
December 31, 2004 and 2003 are as follows:

Audit Fees. Audit fees for the fiscal years ended December 31, 2004 and
December 31, 2003 were $803,136 and $453,895, respectively. Fees for audit
services for the fiscal year ended December 31, 2003 include fees associated
with the annual audit of financial statements and the review of the Company's
quarterly reports on Form 10-A and annual report on Form 10-K. Fees for audit
services for the fiscal year ended December 31, 2004 include fees associated
with the annual audit of the Company's internal controls, which was required for
the first time in 2004 under the Sarbanes Oxley Act of 2002, in addition to the
annual audit of financial statements and the reviews of the Company's quarterly
reports on Form 10-Q and annual report on Form 10-K.

Audit-Related Fees. Audit-related fees for the fiscal years ended December
31, 2004 and December 31, 2003 were $154,332 and $66,755, respectively.
Audit-related fees principally include fees for audits of the Company's benefit
plans, acquisition due diligence procedures and consultations on accounting and
auditing matters.

Tax Fees. Tax fees for the fiscal years ended December 31, 2004 and
December 31, 2003 were $9,350 and $38,156, respectively. Tax services relate to
expatriate compliance and consulting services, foreign Sales Corporation
consulting services, and Mexican tax consulting services in 2003. Of those
amounts, for the fiscal years ended December 31, 2004 and December 31, 2003,
$9,350 and $8,230, respectively, related to tax compliance and preparation, and
the balance related to other tax fees.

All Other Fees. There were no fees in the "all other" category in either
year.

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 firm's independence in the
conduct of its audit functions. The Audit Committee's 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.

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 Company filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
Report by reference therein.

The Audit Committee oversees the integrity of the Company's financial
statements on behalf of the Board of Directors; the adequacy of the Company's
systems of internal controls; the Company's compliance with legal and regulatory
requirements; the qualifications and independence of the Company's independent
auditors; and the performance of the Company's independent auditors and of the
Company's internal audit function.

In fulfilling its oversight responsibilities, the Audit Committee has
direct responsibility for, among other things:

- confirming the independence of the Company's independent auditors;

- the appointment, compensation and retention of the Company's independent
auditors;

- reviewing the scope of the audit services to be provided by the Company's
independent auditors, including the adequacy of staffing and
compensation;

- approving non-audit services;

- overseeing management's relationship with the Company's independent
auditors;

- overseeing management's implementation and maintenance of effective
systems of internal and disclosure controls; and

- reviewing the Company's internal audit program.

The Audit Committee reviews and discusses with management and the
independent auditors all annual and quarterly financial statements prior to
their issuance. The Audit Committee's 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 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 the Company's accounting principles; the adequacy and
effectiveness of the Company's 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 auditor's independence from management and the
Company, 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 the Annual Report on Form 10-K for the year ended
December 31, 2004 for filing with the Securities and Exchange Commission.

Carol B. Moerdyk, Chair
Carlos V. Duno
Peter C. McC. Howell
Gary L. Moreau

EXECUTIVE COMPENSATION

REPORT OF THE COMPENSATION COMMITTEE

The following Report of the Compensation Committee and the performance
graph included elsewhere in this proxy statement do not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
Report or the performance graph by reference therein.

The Compensation Committee of the Board has furnished the following report
on executive compensation for fiscal year 2004.

WHAT ARE THE OBJECTIVES OF THE COMPANY'S EXECUTIVE COMPENSATION POLICIES?

The Company's compensation program for executive officers is designed and
administered to attract, retain and motivate highly qualified executives, and to
align their interests with the long-term interests of the Company's
stockholders, by providing appropriate, competitive compensation and financial
rewards. The ultimate goal of the Company's executive compensation program is to
increase stockholder value by providing the executives with appropriate
incentives to achieve the Company's business objectives, particularly in light
of the highly competitive business environment and industry in which the Company
operates. The Compensation Committee believes that it can best accomplish this
goal by structuring an executive compensation program that rewards executives
for superior performance, as measured by financial and non-financial factors,
including major compensation components that are linked directly to increases in
recognized measures of stockholder value.

WHAT ARE THE COMPONENTS OF LIBBEY'S EXECUTIVE OFFICER COMPENSATION?

Executive officer compensation consists of annual base salary, annual cash
incentive awards and long-term incentive compensation awards. Perquisites for
executives are very limited and consist only of payment for annual executive
physical examinations and for certain financial planning and tax preparation
services. In 2004, only one of the named executive officers availed himself of

the annual executive physical examination perquisite, at a total cost to the
Company of approximately $1,181, and five of the named executive officers
availed themselves of the tax preparation service perquisite, at a total cost to
the Company of approximately $5,286 (including taxes payable with respect to
this perquisite). None of the named executive officers utilized the financial
planning service in 2004. Although the Company owns a fractional interest in
aircraft for business use by the Company's employees, the Company's executive
officers do not have personal access to those aircraft. Moreover, the Company
does not provide its executive officers with automobiles or automobile
allowances or club memberships or club allowances.

HOW ARE BASE SALARIES FOR LIBBEY'S EXECUTIVE OFFICERS DETERMINED?

The base salaries of Libbey's executive officers are set at levels intended
to be competitive with companies within the industry and with companies of
comparable size. The peer group used by the Company to compare executive officer
compensation includes, but is not limited to, the peer group used by the Company
to measure the performance of its stock as set forth under "Comparison of
Cumulative Total Returns" below. Because there are few companies that have
capital structures, size, diversity and scope of business that are comparable to
the Company's, the Compensation Committee has expanded, for purposes of the
compensation comparisons, the number of peer companies to fifteen companies,
seven of which are, from a revenue perspective, larger and more diverse than the
Company and eight of which are, from a revenue perspective, smaller than the
Company. The Compensation Committee reviews base salaries annually and makes
adjustments, in light of past individual performance as measured by both
qualitative and quantitative factors and the potential for making significant
contributions in the future, to ensure that salary levels remain appropriate and
competitive. Individual factors are more significant than overall Company
performance in a particular year in determining base salary levels and the rate
of any increase in base salary levels. In performing this task and all of its
other responsibilities for executive compensation, the Compensation Committee
has sole authority to, and does, to the extent it deems necessary or desirable,
retain and consult with outside professional advisors, although the Compensation
Committee does not believe that it should accord undue weight to the advice of
outside professional advisors.

HOW IS PERFORMANCE-BASED COMPENSATION DETERMINED?

The Compensation Committee believes that the executives' incentive
compensation should be linked directly to achievement of specified financial and
non-financial objectives by the Company. Accordingly, Company performance is
more significant than individual performance in determining short-term and
long-term incentive compensation payouts.

Each executive officer is eligible, under the Company's Senior Management
Incentive Plan, for an annual cash incentive award in an amount up to a target
percentage of the executive officer's base salary. The annual cash incentive
award payments are made from a pool that is funded based upon Libbey's
achievement of specified financial and non-financial performance measures
determined early in the year to which the incentive payment relates. Depending
upon the particular financial performance measure in question, funding levels
range from 0% if the Company fails to achieve at least 80-95% of the targeted
financial measure in question, to 50% if the Company achieves 90-97.5% of
target, to 200% if the Company achieves 105-110% of target. The Compensation
Committee relies heavily, but not exclusively, on the particular performance
criteria established each year. The Compensation Committee exercises discretion
in light of these measures and in view of its compensation objectives to
determine overall funding and individual incentive award amounts. In no event
may the incentive payments exceed 200% of the target amounts.

For 2004, the performance measures included components based upon income
from operations (representing 30% of each executive officer's potential award),
operating cash flow (representing 30% of each executive officer's potential
award) and net sales (representing 20% of each executive officer's potential
award), in each case as measured against the Company's annual budget. The 2004
incentive measures also included a discretionary component (representing 20% of

each executive officer's potential award) based upon the respective executives'
contributions to the Company's other financial and non-financial objectives,
such as quality of service and products, customer satisfaction, adherence to or
furtherance of the Company's legal and ethical policies, product development,
market share, improvement in financial indicators of the Company's success other
than the financial measures indicated above and effective response to adverse
economic conditions or to events beyond the Company's control.

For 2004, the Company did not achieve the desired performance targets with
respect to income from operations and operating cash flow. However, the Company
achieved over 100% of its performance target with respect to the net sales
component. With respect to the discretionary component, the Compensation
Committee considered the progress that the Company made in 2004 in implementing
its strategic initiatives, including the Company's comprehensive realignment of
its manufacturing platform, as approved by the Board and announced by the
Company in August 2004, as well as the Company's expansion of its international
manufacturing and distribution platforms. The Compensation Committee and the
remainder of the Board firmly believe that implementation of the manufacturing
platform realignment, which represents an aggressive effort to lower the
Company's overall cost structure and strengthen the Company's position as a
global producer and distributor of glass tableware, is critical to the Company's
long-term competitiveness and profitability. Accordingly, the Compensation
Committee believes that the difficult and demanding decisions and actions taken
to implement the realignment should be recognized and taken into consideration
in determining the payout levels under the discretionary component. However, the
Compensation Committee also believes that consideration should be given to the
negative near-term impact that these actions may have on the Company's financial
performance measures. Accordingly, the Compensation Committee rewarded each
executive officer for meeting the net sales component and for partially meeting
the discretionary component of the annual incentive plan for 2004.

The following chart sets forth the resulting annual cash incentive awards
made to the named executive officers for 2004:

TARGET INCENTIVE ACTUAL ACTUAL ANNUAL
AWARD AS A ANNUAL INCENTIVE AWARD
PERCENTAGE OF INCENTIVE AS A PERCENTAGE
NAME AND POSITION BASE SALARY AWARD OF BASE SALARY
----------------- ---------------- --------- ---------------

John F. Meier 60% $100,024 18.1%
Chairman and Chief Executive Officer
Richard I. Reynolds 50% 59,032 15.1%
Executive Vice President and Chief
Operating Officer
Kenneth G. Wilkes 45% 38,949 13.6%
Vice President and General Manager--
International Operations
Daniel P. Ibele 40% 27,926 12.1%
Vice President, General Sales Manager
Susan A Kovach(1) 35% 23,291 10.6%
Vice President, General Counsel and
Secretary
Arthur H. Smith(1) 35% 12,465 10.6%
Vice President, General Counsel and
Secretary

---------------

(1) Ms. Kovach served as Vice President, Associate General Counsel and Assistant
Secretary of the Company from January 1, 2004 through June 30, 2004. She was
promoted to Vice President, General Counsel and Secretary effective July 1,
2004, upon the retirement of Arthur H. Smith.

The Compensation Committee believes that an equity participation incentive
plan is an important element of long-term compensation. The value of such plans

for the executives is tied directly to stock price increases and thus provides
strong incentives for increasing stockholder value. Long-term compensation
consists of awards under The Amended and Restated 1999 Equity Participation Plan
of Libbey Inc. as well as cash awards based upon performance against three-year
goals under the Libbey Inc. Long-Term Incentive Compensation Plan ("LTIP").

The Amended and Restated 1999 Equity Participation Plan of Libbey Inc.,
approved by the stockholders in 2004, is a broad-based plan that covers
executive officers and other management personnel and that permits the Company
to grant stock options to incentivize employees and to provide additional
flexibility, if circumstances of the Company's business and opportunities
warrant, to grant other forms of equity-based compensation. The Compensation
Committee bases the number of shares covered by option grants in large part upon
the respective individuals' potential to contribute to the earnings growth of
the Company. The Compensation Committee sets option exercise prices at market
value on the date of grant in order to focus management's attention on
sustaining earnings performance over an extended term. The Compensation
Committee typically awards nonqualified stock options that vest over a 4-year
period, with the first installment vesting one year from the date of grant.
Because the executives may not exercise options until they vest, and because the
exercise price of the options is the fair market value on the date of grant, the
executives will not realize any benefit as a result of the options in the
absence of Libbey stock price appreciation over a period of time.

The Compensation Committee also administers the LTIP, which is designed to
pay a cash award equal to a percentage of the participant's base salary if the
performance criteria established by the Compensation Committee are met over a
rolling three-year award period. For the period 2002-2004, the performance
criteria included a targeted aggregate increase of 36% in economic value added
("EVA(R)"(1)) of the Company for its consolidated operations and investments,
including capital invested in the Company's joint ventures. However, no payouts
were earned under the Libbey Long Term Incentive Plan with respect to 2004
because the Company did not meet the performance criteria of the plan. In fact,
the LTIP performance criteria were not achieved during 2002 or 2003 and, as a
result, there were no payouts pursuant to the LTIP during those years, either.
Pending completion of a review by the Compensation Committee, with the
assistance of Towers Perrin, its independent consultant, of the equity and
long-term incentive compensation components of executive officer compensation,
the Compensation Committee has suspended the LTIP. The review, which is not yet
complete, includes consideration as to whether the LTIP is accomplishing its
purpose and providing appropriate incentives to the executive officers. The
review also includes consideration as to whether it would be appropriate and
desirable to replace or augment stock option grants with restricted stock awards
that would vest only if the executive officers were to remain with the Company
for a specified period of time and only if the Company were to achieve certain
specified performance targets.

HOW IS COMPENSATION FOR LIBBEY'S CHIEF EXECUTIVE OFFICER DETERMINED?

The compensation policies described above apply equally to the compensation
of the Chief Executive Officer ("CEO"). The Compensation Committee is directly
responsible for determining the salary level of the CEO and for all awards and
grants to the CEO under the incentive components of the compensation program.
The Compensation Committee believes that the challenges that the Company faces,
particularly as a result of increasing foreign competition in the tableware
industry, require that the CEO demonstrate significant leadership skills and
innovation, as well as the willingness to take prudent risks. The challenges
faced by the tableware industry are evidenced by the fact that, during the past
three years, a number of Libbey's competitors, including companies that
historically have been included in the Company's peer group, have experienced
significant operational and financial problems and, as a result, have sought the
protection of the bankruptcy laws or have undergone recapitalizations or been
sold or otherwise divested. During that same period, the Company's operating
performance has continued to place the Company among the world's leading

---------------

(1) EVA(R) is a registered trademark of Stern Stewart & Co.

glass tableware producers. Nevertheless, the Compensation Committee--and in fact
the entire Board-recognizes that accomplishment of the Company's strategic
initiatives is critical to the Company's future profitability and
competitiveness. Accordingly, the Compensation Committee and the Board believe
that these initiatives to restructure the Company's cost and manufacturing
platform, and to execute the Company's strategy to expand its marketing and
manufacturing internationally, are among the most significant efforts ever
undertaken by the Company. Accordingly, the overall compensation package for the
CEO is designed to motivate and reward the CEO for driving the Company to
strengthen its competitive position in the worldwide glass tableware market, and
a significant portion of the CEO's compensation is incentive-based, providing
greater compensation as direct and indirect measures of stockholder value
increase.

In 2004, the incentive components of the CEO's compensation package
consisted of the annual incentive award, participation in the Libbey Inc.
Long-Term Incentive Compensation Plan and stock options. The factors described
above for all executive officers are also used in determining the level of
awards, grants and payouts under these plans for the CEO.

The Compensation Committee believes that the CEO's compensation for 2004
was directly related to the size and the overall performance of the Company as
measured by financial criteria and important qualitative factors related to the
achievement by the Company of the strategic initiatives referred to above. No
long-term incentive compensation, other than the grant of options, was paid to
the CEO with respect to 2004.

WHAT ACTIONS HAS THE COMPENSATION COMMITTEE TAKEN TO ENSURE THAT EXECUTIVE
COMPENSATION IS REASONABLE?

The Compensation Committee has reviewed benchmarking studies setting forth,
with respect to the peer companies referred to under "How are base salaries for
Libbey's executive officers determined?" above, the compensation paid by the
peer companies to their respective chief executive officers and chief operating
officers and other selected executives. Furthermore, the Compensation Committee
has considered internal "pay equity"--in other words, the relative differences
between the CEO's compensation and the compensation of the other named executive
officers and other executive officers.

The Compensation Committee has reviewed tally sheets affixing dollar
amounts to all components of the named executive officers' 2004 compensation,
including salary, bonus, equity and long-term incentive compensation, realized
and unrealized gains on stock option grants, the dollar value to the respective
executives and cost to the Company of perquisites and other personal benefits,
and the actual projected payout obligations under the Company's retirement
plans, including the Company's Supplemental Executive Retirement Plan ("SERP,"
as described in "Retirement Plans" below) and executive savings plan, and under
several potential severance and change-in-control scenarios. In that connection,
it is important to note that neither the Compensation Committee nor the Board
has granted any special "credits" to any of the named executive officers under
the Supplement Executive Retirement Plan and that all payout obligations are
based solely upon the actual periods of service of the respective named
executive officers (35 years each in the case of Mr. Meier and Mr. Reynolds) to
the Company and its former parent.

Based upon the tally sheets reviewed by the Compensation Committee, Mr.
Meier would be entitled to the benefits set forth below if, on December 31,
2005, Mr. Meier's employment were terminated under the following three
scenarios:

Termination for Good Reason or without Cause. If Mr. Meier were to terminate
his employment for "good reason," or if the Company were to terminate his

employment without "cause," in each case as defined in Mr. Meier's employment
agreement described under "Employment Agreements" below, he would be entitled
immediately to the following compensation:

- Mr. Meier would be entitled to payment of his base and incentive
compensation through the date of termination, plus three times the sum of
his annual base compensation at the rate then in effect. The Compensation
Committee anticipates that decisions as to 2005 base compensation for
each of Mr. Meier and the other named executive officers will be made on
or about June 15, 2005. Based upon Mr. Meier's 2004 base compensation,
the amount to which Mr. Meier would be entitled (exclusive of his base
compensation through December 31, 2005) would be $1,656,125.

- Mr. Meier would be entitled to payment of three times his annual
incentive award, payable at the lesser of his annual target or the
average percentage of the target paid to all other officers.

- Mr. Meier would be entitled to payment of his long-term incentive
compensation under any plan in effect as of December 31, 2005. As noted
above, the Compensation Committee has suspended the LTIP pending
completion of the committee's review of equity-based and long-term
compensation.

- Mr. Meier would be entitled to continuation of his medical, prescription
drug, dental and life insurance benefits for a period of 36 months.

- Mr. Meier would retain balances in the Company's 401(k) savings plan and
the executive savings plan totaling $1,163,683 as of December 31, 2004,
and he would be entitled to a lump sum or annual pension benefit under
the Libbey Inc. Salaried Cash Balance Pension Plan ("Salary Plan") and
the SERP. Based upon Mr. Meier's 35 years of service, his estimated lump
sum payment under the Salary Plan and the SERP, as of December 31, 2005,
is $5,396,899.

- Mr. Meier would be entitled immediately, and for a period of three years
after termination, to exercise all stock options granted in prior years
(all of which previously have been disclosed). The following table
reflects the gain, if any, with respect to those stock options assuming
that Libbey's common stock price on December 31, 2005 is equal to the
lowest closing price of Libbey common stock during 2004 ($17.20 per
share), the average closing price of Libbey common stock during 2004
($23.75) and the highest closing price of Libbey common stock during 2004
($30.65), respectively.

NUMBER OF SHARES VALUE AT LOWEST VALUE AT AVERAGE VALUE AT HIGHEST
UNDERLYING GRANT DATE STOCK PRICE STOCK PRICE STOCK PRICE
OPTION GRANT DATE OUTSTANDING OPTIONS EXERCISE PRICE(1) ($17.20/SHARE) ($23.75/SHARE) ($30.65/SHARE)
----------------- ------------------- ----------------- --------------- ---------------- ----------------

December 2, 1996..... 25,000 $26.88 $0 $ 0 $ 94,250
June 5, 1998......... 30,000 $38.44 $0 $ 0 $ 0
August 24, 1999...... 30,000 $31.38 $0 $ 0 $ 0
September 8, 2000.... 30,000 $32.31 $0 $ 0 $ 0
November 13, 2001.... 35,000 $30.55 $0 $ 0 $ 3,500
November 20, 2002.... 35,000 $23.93 $0 $ 0 $235,200
December 15, 2003.... 17,500 $28.53 $0 $ 0 $ 37,100
December 10, 2004.... 17,500 $20.39 $0 $58,800 $179,550
------- ------ -- ------- --------
TOTALS............. 220,000 N/A $0 $58,800 $549,600
======= ====== == ======= ========

---------------

(1) Represents the fair market value on the date of grant.

Termination by the Company for Cause. If, on or before December 31, 2005, the
Company were to terminate Mr. Meier's employment for "cause," as defined under
Mr. Meier's employment agreement described under "Employment Agreements" below,
Mr. Meier would be entitled to his base compensation through the date of
termination, but would not be entitled to any additional base or incentive
compensation. He also would be entitled to his balances in the 401(k) savings
plan and the executive savings plan and the pension benefits described under

"Termination for Good Reason or without Cause" above. Mr. Meier would be
entitled only to such medical coverage continuation as is required by law, and
he would forfeit all unvested stock options granted in prior years. He would be
entitled for a period of three years after termination to exercise stock options
that previously had vested. The following table reflects the gain, if any, with
respect to those vested stock options assuming that Libbey's common stock price
on December 31, 2005 is equal to the lowest closing price of Libbey common stock
during 2004 ($17.20 per share), the average closing price of Libbey common stock
during 2004 ($23.75) and the highest closing price of Libbey common stock during
2004 ($30.65), respectively.

December 2, 1996..... 25,000 $26.88 $0 $ 0 $ 94,250
June 5, 1998......... 30,000 $38.44 $0 $ 0 $ 0
August 24, 1999...... 30,000 $31.38 $0 $ 0 $ 0
September 8, 2000.... 30,000 $32.31 $0 $ 0 $ 0
November 13, 2001.... 35,000 $30.55 $0 $ 0 $ 3,500
November 20, 2002.... 28,000 $23.93 $0 $ 0 $188,160
December 15, 2003.... 10,500 $28.53 $0 $ 0 $ 22,260
December 10, 2004.... 7,000 $20.39 $0 $23,520 $ 71,820
------- ------ -- ------- --------
TOTALS............. 195,500 N/A $0 $23,520 $379,990
======= ====== == ======= ========

---------------

(1) Represents the fair market value on the date of grant.

Termination following Change in Control. If, prior to December 31, 2005, a
"Change in Control" were to occur (as described under "Change in Control
Agreements" below) and if, on December 31, 2005, Mr. Meier were to terminate his
employment for "good reason," or if the Company were to terminate his employment
without "cause," in each case pursuant to and as defined in Mr. Meier's change
in control agreement, he would be entitled to the following benefits:

- Mr. Meier would be entitled to payment of his base compensation through
the date of termination, plus three times the sum of his annual base
compensation at the rate then in effect. The Compensation Committee
anticipates that decisions as to 2005 base compensation for each of Mr.
Meier and the other named executive officers will be made on or about
June 15, 2005. Based upon Mr. Meier's 2004 base compensation, the amount
to which Mr. Meier would be entitled (exclusive of his base compensation
through December 31, 2005) would be $1,656,125.

- Mr. Meier would be entitled to payment of three times the greater of his
target annual bonus or his annual bonus for 2004. Mr. Meier's target
annual bonus is 60% of his base compensation. Based upon Mr. Meier's 2004
base compensation, his target annual bonus would be $318,250, which is
greater than his annual bonus for 2004; accordingly, he would be entitled
to $954,750.

- Mr. Meier would be entitled to his balances in the 401(k) savings plan
and the executive savings plan, as well as the pension benefits described
under "Termination for Good Reason or without Cause" above; however, the
lump sum benefit would be increased by approximately $168,728. He also
would be entitled to medical and health benefits for three years
following termination, reduced to the extent comparable benefits are
received from another employer, as well as outplacement and financial
planning services.

- The benefits payable to Mr. Meier are net of any applicable federal
excise taxes.

Based upon this review, the Compensation Committee finds that the total
compensation (and, in the case of severance and change-in-control scenarios, the
potential payouts), in the aggregate, and the mix of components of that
compensation, with respect to Mr. Meier and the other named executive officers
to be reasonable and not excessive.

WHAT IS THE COMPENSATION COMMITTEE'S POLICY REGARDING DEDUCTIBILITY OF
COMPENSATION?

Pursuant to Section 162(m) of the Internal Revenue Code of 1986, as
amended, publicly-held corporations are prohibited from deducting compensation
paid to the named executive officers, as of the end of the fiscal year, in
excess of $1 million, unless the compensation is "performance-based." It is the
Compensation Committee's policy that the compensation paid to executive officers
qualify for deductibility to the extent not inconsistent with Libbey's
fundamental compensation policies. In furtherance of this policy, the
stockholders have approved The Amended and Restated 1999 Equity Participation
Plan of Libbey Inc. to satisfy Section 162(m)'s performance-based compensation
requirements.

William A. Foley, Chairman
Deborah G. Miller
Carol B. Moerdyk
Gary L. Moreau

EXECUTIVE EMPLOYMENT AGREEMENTS:

Libbey entered into new employment agreements in 2004 (the "New Employment
Agreements") with each of the Company's executive officers. Under the New
Employment Agreements, the executive officers are entitled to receive their base
salaries and to participate in designated benefit plans of the Company. Each
employment agreement provides that the officer's employment is not for any
specified term and may be terminated at any time. Each New Employment Agreement
provides that, in the event of the relevant officer's termination other than for
"cause" (as defined in the agreements), payment of base salary, annual incentive
compensation and certain employee benefits will continue for three years in Mr.
Meier's case and two years in the case of the other executive officers who are
parties to the New Employment Agreements. In addition, the New Employment
Agreements provide for the acceleration of vesting of stock options upon the
relevant officer's termination other than for "cause." The employment agreements
also provide that the officer's base salary may be adjusted periodically and
that benefit plans in which the officer is entitled to participate may be
adjusted or terminated by the Company at any time, but that no vested or accrued
benefit may be adversely affected.

CHANGE IN CONTROL AGREEMENTS

To induce and help assure continuity of management and operations, the
Company has entered into agreements (the "Agreements") with certain executives,
including the executive officers named in the Executive Summary Compensation
Table, to provide for certain severance benefits if an executive's employment is
terminated following a Change in Control (as defined in the Agreements).

Under the Agreements with the named executive officers, benefits are paid
if, after a Change in Control, the Company terminates a named executive officer
other than for Cause (as defined in the Agreements) or disability or if the
named executive officer terminates employment for "Good Reason" (as specified in
the Agreements) or for any reason within a period of thirty days following the
first anniversary of a Change in Control. These severance benefits include: (a)
the executive's salary through the termination date; (b) severance pay equal to
three times the named executive's annual base salary and three times the greater
of the target annual bonus or the annual bonus for the prior year; (c)
acceleration of the vesting of stock options; (d) medical and health benefits
for three years following termination, reduced to the extent comparable benefits

are received from another employer; (e) outplacement and financial planning
services; and (f) full vesting in, and additional three-year accrual of benefits
under, the Company's qualified and non-qualified retirement plans and any
additional amount necessary to provide a minimum lump sum benefit of $250,000
under these plans. The Agreements provide that the benefits are net of any
applicable federal excise tax and that the Company will pay legal fees and
expenses incurred by the named executive to enforce his or her rights under the
Agreements.

EXECUTIVE SUMMARY COMPENSATION TABLE

The following table shows the annual and long-term compensation paid by the
Company for the last three completed fiscal years to the Company's Chief
Executive Officer ("CEO") and the four most highly compensated executive
officers other than the CEO in 2004 (collectively, including the CEO, the "named
executive officers").

LONG TERM
COMPENSATION AWARDS
OTHER ----------------------- PAYOUTS
ANNUAL COMPENSATION ANNUAL RESTRICTED SHARES ------- ALL OTHER
--------------------------- COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) SATION(3) AWARDS OPTIONS PAYOUTS SATION(4)
--------------------------- ---- --------- -------- --------- ---------- ---------- ------- ---------

John F. Meier.............. 2004 $552,375 $100,024 $ 575 0 17,500 0 $16,547
Chairman of the Board 2003 $530,417 $ 0 $ 565 0 17,500 0 $15,912
and Chief Executive 2002 $500,000 $123,300 $ 288 0 35,000 0 $15,000
Officer
Richard I. Reynolds........ 2004 $391,201 $ 59,032 $ 690 13,500 0 $11,584
Executive Vice 2003 $376,938 $ 0 $ 790 0 13,500 0 $11,306
President and 2002 $360,688 $ 74,121 $ 348 0 27,000 0 $10,821
Chief Operating Officer
Kenneth G. Wilkes.......... 2004 $286,790 $ 38,949 $2,026 0 12,000 0 $ 8,323
Vice President and 2003 $276,069 $ 0 $2,024 0 11,000 0 $ 7,934
General Manager -- 2002 $242,091 $ 39,800 $ 834 0 17,000 0 $ 7,263
International Operations
Daniel P. Ibele............ 2004 $231,327 $ 27,926 $1,931 0 11,000 0 $ 6,150
Vice President, 2003 $221,951 $ 0 $1,392 0 9,500 0 $ 6,658
General Sales Manager 2002 $210,824 $ 34,009 $ 672 0 13,500 0 $ 6,325
Susan Allene Kovach(5)..... 2004 $220,500 $ 23,291 $ 0 0 9,500 0 $43,424
Vice President, General 2003 $ 9,545 $ 0 $ 0 0 12,500 0 $ 0
Counsel and Secretary 2002 $ 0 $ 0 $ 0 0 0 0 $ 0
Arthur H. Smith(6)......... 2004 $118,010 $ 12,645 $64.32 7,500 0 0 $ 3,540
Vice President, General 2003 $228,637 $ 0 $ 0 0 12,000 0 $ 6,859
Counsel and Secretary 2002 $216,774 $ 55 $ 0 0 18,000 0 $ 6,503

---------------

(1) Includes amounts deferred at the election of the named executive officer
pursuant to the salary reduction provisions of benefit plans.

(2) The amounts disclosed in this column represent awards under the Senior
Management Incentive Plan.

(3) The amounts disclosed in this column represent amounts reimbursed for the
payment of tax preparation services and taxes payable on the value of those
services. In each year, the aggregate incremental cost of perquisites and
other personal benefits for any executive officer did not exceed the lesser
of $50,000 or 10% of base salary plus bonus.

(4) The amounts disclosed in this column represent matching cash contributions
to the Libbey Inc. Retirement Savings Plan, a defined contribution plan, and
the Libbey Inc. Executive Savings Plan, a non-qualified plan designed to
provide similar benefits to the extent such benefits cannot, under
limitations of the Internal Revenue Code, be provided by the Libbey Inc.
Retirement Savings Plan. In addition, as to Ms. Kovach, the amounts
disclosed in this column include $37,596 in relocation benefits that the

Company provided to her, pursuant to the Company's relocation policy
applicable to transferring employees, in connection with her move to Toledo,
Ohio, where the Company's headquarters are located.

(5) Ms. Kovach served as Vice President, Associate General Counsel and Assistant
Secretary of the Company from January 1, 2004 through June 30, 2004. She was
promoted to Vice President, General Counsel and Secretary effective July 1,
2004, when Arthur H. Smith retired.

(6) Mr. Smith served as Vice President, General Counsel and Secretary of the
Company until June 30, 2004, when Mr. Smith retired from the Company after
36 years of service.

OPTION GRANTS DURING FISCAL 2004

The following table sets forth information on stock option grants to the
named executive officers during 2004 pursuant to The Amended and Restated 1999
Equity Participation Plan of Libbey Inc. The Company has not granted stock
appreciation rights to any of the named executive officers.

GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------- ----------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION GRANT DATE
NAME GRANTED (#) FISCAL YEAR PRICE DATE PRESENT VALUE(1)
---- ----------- ------------ -------- ---------- ----------------

John F. Meier.................. 17,500 11.20 $20.39 12/11/14 $123,816
Richard I. Reynolds............ 13,500 8.64 $20.39 12/11/14 $ 95,515
Kenneth G. Wilkes.............. 12,000 7.68 $20.39 12/11/14 $ 84,902
Daniel P. Ibele................ 11,000 7.04 $20.39 12/11/14 $ 77,827
Susan Allene Kovach............ 9,500 6.08 $20.39 12/11/14 $ 67,214
Arthur H. Smith................ 0 0 N/A N/A $ 0

---------------

(1) Options are granted at the fair market value at the date of the grant and
become exercisable to the extent of 40% of the grant on the first
anniversary of the grant and thereafter an additional 20% of the grant
becomes exercisable on each of the second, third and fourth anniversaries of
the grant.

Present value is calculated using the Black-Scholes option pricing model.
Assumptions used in calculating the reported values include (a) an expected
volatility based on the monthly change for the period June 18, 1993 through
the date of the grant (December 10, 2005 in the case of all named executive
officers except Mr. Smith), (b) a weighted average risk-free rate of return
of 3.0%, (c) dividend yield of 2.0% and (d) a time of exercise of 9 years.
No adjustments were made for non-transferability or forfeiture.

OPTION EXERCISES AND VALUES FOR FISCAL 2004

The following table sets forth information concerning the exercise of stock
options by the named executive officers in 2004 and the aggregate dollar value
of unexercised options held at the end of 2004 by the named executive officers.
The value is based upon a share price of $22.21, the closing price on the New
York Stock Exchange on December 31, 2004.

UNDERLYING OPTIONS IN-THE-MONEY OPTIONS
SHARES ACQUIRED VALUE AT FY-END AT FY-END
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- -------- ---------------------------- ----------------------------

John F. Meier........ 5,000 $12,775 193,500 49,000 $0 $31,850
Richard I.
Reynolds........... 0 $ 0 139,200 37,800 $0 $24,570
Kenneth G. Wilkes.... 2,000 $ 2,450 78,700 28,800 $0 $21,840
Daniel P. Ibele...... 700 $ 8,277 49,200 24,800 $0 $ 9,618
Susan Allene Kovach.. 0 $ 0 5,000 17,000 $0 $17,290
Arthur H. Smith...... 2,000 $18,530 101,500 0 $0 $ 0

RETIREMENT PLANS

The Company maintains a qualified retirement plan, the Salary Plan, for its
salaried employees, including executive officers, and the SERP, which is an
excess, non-qualified plan designed to provide substantially identical
retirement benefits to the extent that such benefits cannot, under the
limitations of the Internal Revenue Code, be provided by the Salary Plan. The
retirement plans were amended effective January 1, 1998 so that benefits will no
longer be determined by the highest consecutive three-year annual earnings but
will be determined by annual Company contribution credits equal to a percentage
of annual earnings plus interest. Employees with 10 years of service with Libbey
and who are age 55, or who are age 45 and have a combined age and years of
service equal to 65, as of December 1997, will receive, commencing upon
retirement, the greater of their cash balance account or a special minimum
benefit ("Special Minimum Benefit") computed pursuant to the formula in effect
prior to the amendment, for service prior to December 31, 2007.

The following table illustrates the estimated annual retirement benefits
that would be provided by the Special Minimum Benefit under the Salary Plan and
the SERP in various average earnings classifications upon normal retirement at
age 65 for those executive officers named in the Executive Summary Compensation
Table (other than Mr. Smith, who retired July 1, 2004 after 36 years of service
to the Company) for whom the Special Minimum Benefit is anticipated to apply,
namely Messrs. Meier and Reynolds:

HIGHEST
CONSECUTIVE
THREE-YEAR YEARS OF CREDITED SERVICE
AVERAGE -------------------------------------------------------------------
EARNINGS 15 20 25 30 35 40 45
----------- ------- ------- ------- ------- ------- ------- -------

$ 100,000 18,444 24,592 30,740 36,888 43,036 45,536 48,306
$ 125,000 23,649 31,532 39,415 47,298 55,181 58,306 61,431
$ 150,000 28,854 38,472 48,090 57,708 67,326 71,076 74,826
$ 175,000 34,059 45,412 56,765 68,118 79,471 83,846 88,221
$ 200,000 39,264 52,352 65,440 78,528 91,616 96,616 101,616
$ 225,000 44,469 59,292 74,115 88,938 103,761 109,386 115,011
$ 250,000 49,674 66,232 82,790 99,348 115,906 122,156 128,406
$ 300,000 60,084 80,112 100,140 120,168 140,196 147,696 155,196
$ 400,000 80,904 107,872 134,840 161,808 188,776 198,776 208,776
$ 450,000 91,314 121,752 152,190 182,628 213,066 224,316 235,566
$ 500,000 101,724 135,632 169,540 203,448 237,356 249,856 262,356
$ 600,000 122,544 163,392 204,240 245,088 285,936 300,936 315,936
$ 700,000 143,364 191,152 238,940 286,728 334,516 352,016 369,516
$ 800,000 164,184 218,912 273,640 328,368 383,096 403,096 423,096
$ 900,000 185,044 246,672 308,340 370,008 431,676 454,176 476,676
$1,000,000 205,824 274,432 343,040 411,648 480,256 505,256 530,256
$1,100,000 226,644 302,192 377,740 453,288 528,836 556,336 583,836
$1,200,000 247,464 329,952 412,440 494,928 577,416 607,416 637,416

At December 31, 2004, Messrs. Meier, Reynolds, Wilkes and Ibele and Ms.
Kovach had total Credited Service under the Salary Plan and the SERP of 34
years, 34 years, 11 years and 21 years and 1 year, respectively.

The above pension table sets forth benefits calculated on a straight-life
annuity basis and reflects the greater of the regular benefit, the Special
Minimum Benefit or the "grandfathered" benefit available under the formula in
effect prior to January 1, 1998. The regular benefit and the Special Minimum
Benefit do not contain an offset for social security or other amounts, whereas
the "grandfathered" benefit does provide for a partial offset for social
security benefits.

Annual covered earnings include base salary and amounts earned under the
Senior Management Incentive Plan. The covered compensation under the Special
Minimum Benefit of the retirement plan is the highest consecutive three-year
average of those amounts. 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.

Under the amended retirement plans effective January 1, 1998, each
participant in the plans on December 31, 1997 is credited with an opening cash
balance equal to the single sum amount of the participant's accrued benefit as
of December 31, 1997, based upon retirement at age 65 and actuarial assumptions
as to rate of interest and mortality. For each plan year beginning January 1,
1998, the Company makes an annual contribution credit to the participant's cash
balance account in accordance with the following table, and the cash balance
account is credited with interest annually at the 30-year Treasury Securities
rate in effect in October of the preceding plan year, with a minimum of 5
percent and a maximum of 10 percent. Normal retirement age is 65 under the
amended retirement plans. Company contributions and interest are credited with
respect to service beyond the age of 65. The estimated annual benefit payable to
Messrs. Wilkes and Ibele and Ms. Kovach commencing upon retirement is $212,581
for Mr. Wilkes, $263,157 for Mr. Ibele and $115,449 for Ms. Kovach, based upon
assumptions that salary increases will be 3 percent annually, that the target
incentives under the Senior Management Incentive Plan will be earned annually
and that the applicable rate of interest will be 7 percent annually after 2001.

SUM OF AGE CONTRIBUTION PERCENTAGE OF CONTRIBUTION PERCENTAGE OF
AND YEARS OF COMPENSATION UNDER COMPENSATION AT OR ABOVE
BENEFIT SERVICE SOCIAL SECURITY WAGE BASE SOCIAL SECURITY WAGE BASE
--------------- -------------------------- --------------------------

0 but less than 30............................. 1.5% 3.0%
30 but less than 34............................ 1.7 3.4
34 but less than 38............................ 1.9 3.8
38 but less than 42............................ 2.1 4.2
42 but less than 46............................ 2.3 4.6
46 but less than 50............................ 2.7 5.4
50 but less than 60............................ 3.2 6.4
60 but less than 70............................ 4.0 8.0
70 but less than 80............................ 5.5 11.0
80 but less than 90............................ 7.0 12.7
90 and over.................................... 9.0 14.7

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

William A. Foley, Deborah G. Miller, Carol B. Moerdyk and Gary L. Moreau
served on Libbey's Compensation Committee during 2004. None of the Compensation
Committee members has been an officer or employee of the Company or its
subsidiaries.

COMPARISON OF CUMULATIVE TOTAL RETURNS

The graph below compares the total stockholder return on Libbey common
stock to the cumulative total return for the Standard & Poor's SmallCap 600
Index ("S&P SmallCap 600"), a broad market index; the Standard & Poor's SmallCap
Housewares & Specialties Index, a capitalization-weighted index that measures
the performance of the housewares sector of the Standard & Poor's SmallCap Index
("Housewares-Small"); and the Company's peer group. The indices reflect the
year-end market value of an investment in the stock of each company in the
index, including additional shares assumed to have been acquired with cash
dividends, if any.

Companies in the peer group used by the Company were chosen based upon
their lines of business or product end uses being comparable to those of the
Company. The peer group is limited to those companies for whom market quotations
are available and consists of Lancaster Colony Corp. and Oneida Ltd.

The graph assumes a $100 investment in Libbey stock on January 1, 2000 and
also assumes investments of $100 in each of the S&P SmallCap 600, the
Housewares-Small index and the peer group, respectively, on January 1, 2000. The
value of these investments on December 31 of each year from 2000 through 2004 is
shown in the table below the graph.

TOTAL SHAREHOLDER RETURN

(PERFORMANCE GRAPH)

INDEXED RETURNS

Base
Period Years Ending
------ ------------------------------------------
Dec Dec Dec Dec Dec Dec
Company Name/Index 99 00 01 02 03 04
------------------ ------ ------ ------ ------ ------ ------

LIBBEY INC..................................... 100 106.73 115.77 93.09 103.58 82.20
S&P SMALLCAP 600 INDEX......................... 100 111.80 119.11 101.68 141.13 173.09
S&P 600 HOUSEWARES & SPECIALTIES............... 100 82.98 97.81 102.32 113.97 110.92
PEER GROUP..................................... 100 86.93 101.48 110.09 121.82 115.12

CERTAIN LEGAL PROCEEDINGS

Libbey is not a party to any litigation, the outcome of which, if decided
adversely to Libbey, reasonably could be expected to have a material adverse
effect on Libbey.

PROPOSAL--ELECTION OF DIRECTORS

Each year the stockholders are asked to elect the members of a class for a
term of three years. Currently, the term of office for members of Class III of
the Board of Directors will expire on the date of the Annual Meeting in 2005.
The members of Class III are William A. Foley, Deborah G. Miller and Terence P.
Stewart. The Board of Directors has fixed the number of directors to be elected
at the 2005 Annual Meeting at three and has nominated William A. Foley, Deborah
G. Miller and Terence P. Stewart for election to Class III. Those persons who
are elected directors at the 2005 Annual Meeting will hold office until their
terms expire on the date of the 2008 Annual Meeting or until the election and
qualification of their successors. The terms of office of the members of Class I
and Class II of the Board of Directors will expire, respectively, on the date of
the Annual Meeting in 2006 and 2007. Information regarding Messrs. Foley and
Stewart and Ms. Miller is set forth above under the heading "Governance of the
Company--Who are the current members of the Board?"

So far as the Board has been advised, only the three 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 three nominees unless authority to vote for any or all of
these nominees is withheld. The nominees have consented to being named herein
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
stockholder entitled to vote for the election of directors may withhold
authority to vote for any or all of the nominees.

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 stockholders will require a majority vote of common stock represented in
person or by proxy.

GENERAL INFORMATION

AVAILABILITY OF LIST OF STOCKHOLDERS:

A complete list of stockholders entitled to vote at the Annual Meeting will
be maintained at the Company's principal executive offices at 300 Madison
Avenue, Toledo, Ohio for a period of at least ten days prior to the Annual
Meeting.

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 $6,500, plus
expenses for out-of-pocket costs for Georgeson's services. Certain of the
Company's 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 Corporate
Investor Communications, 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 Company's Board
of Directors.

REPORTS TO STOCKHOLDERS:

The Company has mailed this proxy statement and a copy of its 2004 Annual
Report to each stockholder entitled to vote at the Annual Meeting. Included in
the 2004 Annual Report are the Company's consolidated financial statements for
the year ended December 31, 2004.

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2004, 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, 2005

LIBBEY INC.
TOLEDO, OH

ANNUAL MEETING OF SHAREHOLDERS

THURSDAY, MAY 5, 2005
2:00 P.M., LOCAL TIME

. DETACH PROXY CARD HERE .
--------------------------------------------------------------------------------
Sign, Date and Return the
Proxy Card in the [X]
Enclosed Envelope. Votes MUST be indicated
(x) in Black or Blue ink.

1. Election of Directors

FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below for all nominees listed below

The nominees for the board of directors are: William A. Foley,
Deborah G. Miller and Terence P. Stewart

To change your address, please mark this box. [ ]

*Exceptions__________________________________________________________________
(INSTRUCTIONS: To vote your shares for all Director nominees, mark "For" box
on Item 1. To withhold voting for all nominees mark "Withhold" box. If you do
not wish your shares voted for a particular nominee, enter the name(s) of the
exception(s) in the space provided above.)

To include any comments, please mark this box. [ ]

2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.

SCAN LINE (FPO)

Please sign exactly as name(s) appear hereon. Joint owners should each sign
personally. When signing as executor, administrator, corporation officer,
attorney, agent, trustee, guardian or in other representative capacity, please
state your full title as such.

----------------------------------------- ---------------------------------
Date Share Owner sign here Co-Owner sign here

Page 1

LIBBEY INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
--------------------------------------------------------------------------------

The undersigned hereby appoints each of John F. Meier, Richard I. Reynolds and
Susan Allene Kovach, as proxy, with full power of substitution, to vote all
shares of Common Stock of Libbey Inc. held of record by the undersigned on March
10, 2005, at the Annual Meeting of Stockholders to be held on May 5, 2005 and at
any adjournment thereof, upon the matters referred to on the reverse side and
described in the proxy statement furnished herewith, and in their discretion,
upon any other matters which may properly come before the meeting. If no
directions are given, the proxies will vote FOR the election of all listed
director nominees and in the proxies' discretion on any other matters that may
properly come before the meeting.

THE BOARD OF DIRECTORS OF LIBBEY INC. RECOMMENDS A VOTE FOR ELECTION OF ALL
LISTED DIRECTOR NOMINEES.

Please sign on the reverse side of this card and return it promptly in the
enclosed postage-paid envelope.

(Continued, and please sign on reverse side)

LIBBEY INC.
P.O. BOX 11036
NEW YORK, NY 10203-0035

Page 2

LIBBEY INC.
TOLEDO, OH

ANNUAL MEETING OF SHAREHOLDERS

THURSDAY, MAY 5, 2005
2:00 P.M., LOCAL TIME

. DETACH PROXY CARD HERE .
--------------------------------------------------------------------------------

Sign, Date and Return the
Proxy Card in the [X]
Enclosed Envelope. Votes MUST be indicated
(x) in Black or Blue ink.

1. Election of Directors

FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below for all nominees listed below

Nominees: William A. Foley, Deborah G. Miller and Terence P. Stewart

To change your address, please mark this box. [ ]

2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.

SCAN LINE (FPO)

----------------------------------------- ---------------------------------
Date Share Owner sign here Co-Owner sign here

Page 1

LIBBEY INC.

To: JPMorgan Chase Bank, Trustee of:
- Libbey Inc. Retirement Savings Plan
- Libbey Inc. Supplemental Retirement Plan
--------------------------------------------------------------------------------
As a participant in one or more of the above plans, I hereby direct the Trustee
to vote all common shares of Libbey Inc. allocated to my account as of March 10,
2005, as indicated on the reverse side, at the annual meeting of shareholders to
be held on May 5, 2005, or any adjournment thereof. If no directions are given
and the signed card is returned, the Trustee will vote my allocated shares FOR
the election of all listed director nominees.

THE BOARD OF DIRECTORS OF LIBBEY INC. RECOMMENDS A VOTE FOR ELECTION OF ALL
LISTED DIRECTOR NOMINEES.

Please sign on the reverse side of this card and return it promptly in the
enclosed postage-paid envelope. If you do not return this card by April 29,
2005, the shares allocated to your account will be voted in the manner that the
majority of the shares for which instruction cards received by the Trustee are
voted.

LIBBEY INC.
P.O. BOX 11076
NEW YORK, NY 10203-0076

Page 2