Libbey Inc. 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2006
LIBBEY INC.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
Delaware
|
|
1-12084
|
|
34-1559357 |
(State of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer identification No.) |
|
|
|
300 Madison Avenue
Toledo, Ohio
|
|
43604 |
(Address of principal executive offices)
|
|
(Zip Code) |
Registrants telephone number, including area code: (419) 325-2100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligations of the registrant under any of the following provisions (see General Instructions A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Material Definitive Agreement
As indicated in Libbeys proxy statement filed with the Securities and
Exchange Commission on March 29, 2006, the Compensation Committee of the Board
of Directors of Libbey Inc. has determined, based upon the results of a
comprehensive study performed by Hewitt Associates for the Committee, that:
|
|
|
The average target bonus opportunities and 2004 actual bonuses for
Libbeys executives were 32% and 80%, respectively, below market, and
target bonus opportunities and actual bonuses for Libbeys named
executive officers were even further below market. |
|
|
|
|
The average value of long-term incentive opportunities provided by
Libbey is more than 80% below market. |
The Committee believes that it is in the best interests of Libbeys
stockholders to provide an overall compensation package for Libbeys Chief
Executive Officer and other executives that is designed to motivate and reward
them for achieving the strategic initiatives that are critical to Libbeys
future profitability and competitiveness.
Accordingly, on March 31, 2006, the Compensation Committee of the Board of
Directors of Libbey Inc. established the following performance measures and
targets in connection with the Senior Management Incentive Plan, which is an
annual incentive plan pursuant to which cash awards may be made, and long-term
incentive plan:
Senior Management Incentive Plan. The target awards for the named executive
officers, as a percentage of base compensation, are as follows:
|
|
|
|
|
Named Executive Officer
|
|
Bonus Target
|
|
|
|
|
|
John F. Meier
|
|
|
90 |
% |
Chairman and CEO |
|
|
|
|
|
|
|
|
|
Richard I. Reynolds
|
|
|
75 |
% |
Executive
Vice President and
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
Kenneth G. Wilkes
|
|
|
55 |
% |
Vice President, General Manager
International Operations |
|
|
|
|
|
|
|
|
|
Daniel P. Ibele
|
|
|
50 |
% |
Vice President, General Sales Manager |
|
|
|
|
|
|
|
|
|
Susan Allene Kovach
|
|
|
45 |
% |
Vice
President, General Counsel
and Secretary |
|
|
|
|
The performance measures for 2006 include a component based upon income
from operations (IFO), representing 40% of each executive officers potential
award. The portion of annual cash incentive award payments for 2006 that are
attributable to this component will be made from a pool that will be funded
based upon achievement of the stated goal. There will be no payout with respect
to this component unless Libbey achieves at least 85% of budgeted 2006
IFO. The
executive officers targeted awards may be paid if Libbey achieves 100% of
budgeted 2006 IFO. The maximum award payable under this component, representing
200% of base compensation, may be paid if Libbey achieves 115% of budgeted 2006
IFO.
The performance measures also include an individual component, representing
60% of each executive officers target award. Each executive is eligible for a
payout with respect to the individual component if two conditions are satisfied:
|
|
|
Libbey achieves actual IFO for 2006 that is at least 60% of budgeted
2006 IFO; and |
|
|
|
|
The executive has achieved at least 85% of specified objectives that
have been tailored specifically for the position that he or she holds.
Examples of these objectives include quantifiable improvement in
financial indicators of Libbeys success other than corporate-wide
budgeted IFO, such as achievement by particular business units of
budgeted IFO, achievement of budgeted net sales and margins and
achievement of other specified goals of strategic importance to
Libbey. |
The maximum award payable to an executive under the individual component,
representing 200% of the portion of the executives target award attributable to
the individual component, may be earned if the executive achieves 135% of his or
her specified objectives.
The 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 annual incentive payments exceed
200% of the target amounts.
Long-Term Incentive Plan. On March 31, 2006, the Compensation Committee
also:
|
|
|
Established the target awards under Libbeys long-term incentive plan; |
|
|
|
|
Established three performance cycles under that plan (a 2006
performance cycle, a 2006-2007 performance cycle and a 2006-2008
performance cycle); |
|
|
|
|
Established the performance measure for 2006; and |
|
|
|
|
Approved the issuance of performance shares for the 2006 performance
cycle. |
Under the long-term incentive plan, the target awards for the named
executive officers, as a percentage of base compensation, are as follows:
|
|
|
|
|
Named Executive Officer
|
|
Target
|
|
|
|
|
|
John F. Meier
|
|
|
150 |
% |
Chairman and CEO |
|
|
|
|
|
|
|
|
|
Richard I. Reynolds
|
|
|
115 |
% |
Executive
Vice President and
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
Kenneth G. Wilkes
|
|
|
80 |
% |
Vice President, General Manager
International Operations |
|
|
|
|
|
|
|
|
|
Daniel P. Ibele
|
|
|
70 |
% |
Vice President, General Sales Manager |
|
|
|
|
|
|
|
|
|
Susan Allene Kovach
|
|
|
50 |
% |
Vice
President, General Counsel
and Secretary |
|
|
|
|
For the 2006 performance cycle, if Libbey achieves earnings before
interest, taxes, depreciation and amortization (EBITDA) equal to at least 85% of
budgeted 2006 EBITDA, each executive is eligible for an award equal to 50% of
his or her target award. If Libbey achieves EBITDA equal to at last 110% of
budgeted EBITDA, each executive is eligible for an award up to 200% of his or
her target award.
The Compensation Committee anticipates that awards will be paid through a
mix of performance shares, restricted stock and stock options. The Committee
intends to phase in the portion of each executives target award represented by
performance shares. For 2006, the Committee has approved issuance to the named
executive officers of the following number of performance shares:
|
|
|
|
|
Named Executive Officer
|
|
No. of
Performance
Shares
|
|
|
|
|
|
John F. Meier
|
|
|
30,809 |
|
Chairman and CEO |
|
|
|
|
|
|
|
|
|
Richard I. Reynolds
|
|
|
12,165 |
|
Executive
Vice President and
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
Kenneth G. Wilkes
|
|
|
4,358 |
|
Vice President, General Manager
International Operations |
|
|
|
|
|
|
|
|
|
Daniel P. Ibele
|
|
|
2,665 |
|
Vice President, General Sales Manager |
|
|
|
|
|
|
|
|
|
Susan Allene Kovach
|
|
|
1,359 |
|
Vice
President, General Counsel and Secretary |
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned here unto duly authorized.
|
|
|
|
|
|
|
|
LIBBEY INC.
Registrant |
|
|
|
|
|
|
|
|
|
|
Date: April 10, 2006
|
|
By:
|
|
/s/ Scott M. Sellick |
|
|
|
|
|
|
|
|
|
Scott M. Sellick
Vice President, Chief Financial Officer
(Principal Accounting Officer) |