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PROXY STATEMENT AND NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS |
NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | |||
Libbey Corporate Showroom | Wednesday, May 17, 2017 | ||
335 North St. Clair Street | 2:00 p.m. Eastern Daylight Saving Time | ||
Toledo, Ohio 43604 | |||
Record Date: Close of business on March 20, 2017 | |||
• | elect three directors, each for a term of three years; |
• | vote, on an advisory basis, to approve executive compensation; |
• | vote, on an advisory basis, to recommend the frequency of advisory votes on executive compensation; |
• | vote to ratify the appointment of Deloitte & Touche LLP as our independent auditors for the 2017 fiscal year; and |
• | transact such other business as properly may come before the meeting. |
PROXY STATEMENT SUMMARY |
Meeting Date: | Wednesday, May 17, 2017, at 2 p.m., local time |
Location: | Libbey Corporate Showroom 335 North St. Clair Street Toledo, Ohio 43604 |
Record Date: | Close of business on March 20, 2017 |
Proposal | Voting Options | Board Recommendation | ||
Election of William A. Foley, Deborah G. Miller and Steve Nave to serve as Class III directors | For, Withhold (as to any nominee) or Abstain | FOR each of Mr. Foley, Ms. Miller and Mr. Nave | ||
RESOLVED, that the stockholders of the Company approve, on an advisory and non-binding basis, the compensation of the Company’s named executives, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, pursuant to Item 402 of Regulation S-K | For, Against or Abstain | FOR | ||
Recommend, on an advisory and non-binding basis, the frequency - every 3 years, 2 years or 1 year - with which shareholders of the Company should have future advisory say-on-pay votes | 3 years, 2 years, 1 year or Abstain | 1 YEAR | ||
Ratification of the appointment of Deloitte & Touche LLP as Libbey’s independent auditors for the 2017 fiscal year | For, Against or Abstain | FOR |
• | William A. Foley was appointed CEO (in addition to his role as Chairman of the Board). Mr. Foley has been a member of our Board since 1994 and Chairman since 2011. |
• | John C. Orr, a member of our Board since 2008, was appointed to the newly created role of Lead Independent Director. |
• | Of our eight current directors: |
◦ | Seven are independent as defined in the NYSE MKT Company Guide |
◦ | Three have tenures of less than five years |
◦ | Four are women |
◦ | Two are minorities |
• | In light of Theo Killion's retirement from the Board, our Board has nominated Steve Nave to stand for election at the 2017 Annual Meeting. |
◦ | In addition to strengthening our relationships with customers, we ramped up our new product development and conducted significant market research to ensure that we can bring to market the innovative products that our customers want; |
PROXY STATEMENT SUMMARY |
◦ | We launched two new foodservice stemware collections, Neo and Contour, using our state-of-the-art ClearFire® glass composition; |
◦ | We began development of our e-commerce strategy; |
◦ | We started our furnace consolidation effort to optimize our capacity footprint and better align our capacity with demand; and |
◦ | We streamlined our product portfolio and improved inventory control processes. |
◦ | 2016 net sales of $793.4 million reflected a decrease of 3.5% from prior year, primarily due to foreign currency fluctuation. |
◦ | Net income was $10.1 million in 2016, compared to $66.3 million in 2015, reflecting the non-repeating $43.8 million tax benefit included in 2015. |
◦ | Our Adjusted EBITDA (calculated as shown in Appendix A) for 2016 was $109.8 million, compared to $116.1 million in 2015. |
◦ | Our stock price decreased from $21.32 on December 31, 2015 to $19.46 on December 31, 2016, reflecting annual total shareholder return (TSR) of (6)%, as shown in the chart below. |
Company / Index | Base Period Dec 2011 | Indexed Returns Years Ending | ||||
Dec 2012 | Dec 2013 | Dec 2014 | Dec 2015 | Dec 2016 | ||
Libbey Inc. | 100 | 151.88 | 164.84 | 246.78 | 169.64 | 158.93 |
Russell 2000 Index | 100 | 116.35 | 161.52 | 169.43 | 161.95 | 196.45 |
Peer Group | 100 | 118.33 | 173.49 | 156.65 | 155.96 | 203.80 |
PROXY STATEMENT SUMMARY |
Peer Group | ||||
Actuant Corporation | Ethan Allen Interiors Inc. | Lifetime Brands, Inc. | ||
Barnes Group Inc. | Flexsteel Industries, Inc. | Lindsay Corporation | ||
Bassett Furniture Industries, Inc. | Graco, Inc. | Myers Industries, Inc. | ||
Callaway Golf Company | Helen of Troy Limited | Oxford Industries, Inc. | ||
Chart Industries, Inc. | Integra LifeSciences Holdings Corp. | Trex Company, Inc. | ||
Coherent, Inc. | iRobot Corporation | TriMas Corporation | ||
ESCO Technologies Inc. | La-Z-Boy Incorporated |
◦ | We fell short of target with respect to the financial performance measures under our 2016 Senior Management Incentive Plan ("SMIP") and our 2014 Long-Term Incentive Plan ("LTIP") |
◦ | We distributed $12.1 million of free cash flow through share repurchases and dividends; |
◦ | We repaid $24.4 million of debt; and |
◦ | We reduced trade working capital (defined as net inventory plus net accounts receivable less accounts payable) by $17.3 million. |
◦ | Initial base salary of $825,000; |
◦ | 2016 SMIP target opportunity equal to 100% of actual base earnings; |
◦ | 2016 LTIP target opportunity equal to 300% of annual base salary; and |
◦ | Prorated target opportunities under performance cash component of the 2014 LTIP and 2015 LTIP equal to $326,700 and $653,400, respectively. |
◦ | Severance equal to 2x base salary + 2x annual incentive target; |
◦ | Prorated annual incentive under the 2016 SMIP, based on forecasted Company performance; |
◦ | Prorated performance cash incentives under the 2014 LTIP, 2015 LTIP and 2016 LTIP, based on forecasted Company performance; |
◦ | Accelerated vesting of all cash-settled RSUs and cash-settled SARs; |
◦ | Accelerated vesting of all other unvested equity awards scheduled to vest by June 30, 2016; |
◦ | Outplacement services for 24 months, not to exceed $75,000 in total; and |
◦ | Continuation of health and life insurance benefits for 18 months. |
PROXY STATEMENT SUMMARY |
PROXY STATEMENT SUMMARY |
What We Do | What We Don't Do | |||
ü | We tie pay to performance by ensuring that a significant portion of executive pay is performance-based and at-risk. We set clear financial goals for corporate performance, and we differentiate based on individual performance against objectives determined early in the year. | x | We do not regularly provide tax gross-ups except on relocation assistance. | |
x | We do not maintain compensation programs that we believe create undue risks for our business. | |||
ü | Periodically, we review market data relative to our peer group of companies, and we utilize tally sheets to ensure compensation opportunities are consistent with the Compensation Committee's intent. | x | We do not provide significant additional benefits to executive officers that differ from those provided to all other U.S. employees. | |
x | We do not permit repricing of stock options or SARs, nor do we permit buyouts of underwater stock options or SARs. | |||
ü | We mitigate undue risk by emphasizing long-term incentives and using caps on potential payouts under both our annual and long-term incentive plans, clawback provisions in our Omnibus Incentive Plan, reasonable retention strategies, performance targets and appropriate Board and management processes to identify and manage risk. | |||
x | We do not permit hedging, pledging or engaging in transactions involving derivatives of our stock. | |||
x | Effective with Mr. Foley's hire on January 12, 2016, we do not have an employment agreement or change in control agreement with our CEO, nor is our CEO covered by our Executive Severance Compensation Policy. | |||
ü | We have modest post-employment and change in control arrangements that apply to our executive officers, with severance multiples of less than or equal to 2x. | |||
ü | We utilize "double-trigger" vesting of equity awards and non-equity incentives after a change in control. | |||
x | We do not have employment agreements with our non-CEO executive officers. | |||
ü | We provide only minimal perquisites that we believe have a sound benefit to our business. | |||
ü | We have stock ownership / retention requirements to enhance alignment of our executives’ interests with those of our shareholders. | |||
ü | Our Compensation Committee retains an external, independent compensation consultant and other external advisors as needed. |
TABLE OF CONTENTS |
Page | |
QUESTIONS AND ANSWERS ABOUT THE MEETING | |
Who may vote? | |
What may I vote on, what are my voting options, and how does the Board recommend that I vote? | |
How do I vote? | |
May I change my vote? | |
How many outstanding shares of Libbey common stock are there? | |
How big a vote do the proposals need in order to be adopted? | |
What constitutes a quorum? | |
How will votes be counted? | |
What are broker non-votes? | |
How will voting be conducted on other matters raised at the meeting? | |
When must shareholder proposals be submitted for the 2018 Annual Meeting? | |
LIBBEY CORPORATE GOVERNANCE | |
Proposal 1 - Election of Directors | |
Who are the members of our Board of Directors? | |
How is our Board leadership structured? | |
Does Libbey have Corporate Governance Guidelines? | |
What are the roles of the Board's committees? | |
How does our Board oversee risk? | |
How does our Board select nominees for the Board? | |
How does our Board determine which directors are independent? | |
How often did our Board meet during fiscal 2016? | |
Certain Relationships and Related Transactions | |
How do shareholders and other interested parties communicate with the Board? | |
Are Libbey's directors required to attend Libbey's annual meeting of shareholders? | |
COMPENSATION-RELATED MATTERS | |
Proposal 2 - Advisory Say-on-Pay | |
Proposal 3 - Say-on-Pay Frequency | |
Compensation Discussion and Analysis | |
Executive Summary | |
Compensation Philosophy | |
In what forms did Libbey deliver pay to its executives in 2016, and what purpose do the various forms of pay serve? | |
How does Libbey determine the forms and amounts of executive pay? | |
What pay did Libbey's executives receive for 2016? | |
What is the Compensation Committee's policy regarding deductibility of compensation? | |
Does Libbey assess compensation-related risks? | |
Potential payments upon termination or change in control | |
Compensation Committee Interlocks and Insider Participation | |
Compensation Committee Report |
TABLE OF CONTENTS |
Page | |
Tables | |
Summary Compensation Table | |
Grants of Plan-Based Awards Table | |
Outstanding Equity Awards at Fiscal Year-End Table | |
Option Exercises and Stock Vested for Fiscal 2016 Table | |
Pension Benefits in Fiscal 2016 Table | |
Nonqualified Deferred Compensation in Fiscal 2016 Table | |
Potential Payments Upon Termination of Employment Table | |
Non-Management Directors' Compensation in 2016 | |
Director Compensation for Year Ended December 31, 2016 Table | |
AUDIT-RELATED MATTERS | |
Proposal 4 - Ratification of Auditors | |
Who are Libbey's auditors? | |
What fees did Libbey pay to its auditors for Fiscal 2016 and Fiscal 2015? | |
Report of the Audit Committee | |
STOCK OWNERSHIP | |
Who are the largest owners of Libbey stock? | |
How much stock do our directors and officers own? | |
Section 16(a) Beneficial Ownership Reporting Compliance | |
GENERAL INFORMATION | |
Certain Legal Proceedings | |
Other Business | |
Solicitation Costs | |
Reports to Shareholders | |
APPENDIX A | |
APPENDIX B |
QUESTIONS AND ANSWERS ABOUT THE MEETING |
LIBBEY INC. | ||
PROXY STATEMENT |
Proposal | Voting Options | Board Recommendation | ||
Election of William A. Foley, Deborah G. Miller and Steve Nave to serve as Class III directors | For, Withhold (as to any nominee) or Abstain | FOR each of Mr. Foley, Ms. Miller and Mr. Nave | ||
RESOLVED, that the stockholders of the Company approve, on an advisory and non-binding basis, the compensation of the Company’s named executives, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, pursuant to Item 402 of Regulation S-K | For, Against or Abstain | FOR | ||
Recommend, on an advisory and non-binding basis, the frequency - every 3 years, every 2 years or 1 year - with respect to which shareholders should have future non-binding say-on-pay votes | 3 years, 2 years, 1 year or Abstain | 1 YEAR | ||
Ratification of the appointment of Deloitte & Touche LLP as Libbey’s independent auditors for the 2017 fiscal year | For, Against or Abstain | FOR |
QUESTIONS AND ANSWERS ABOUT THE MEETING |
( | Vote by telephone: Call on a touch-tone telephone, toll-free 1-800-690-6903, 24 hours a day, seven days a week, until 11:59 p.m., eastern daylight saving time, on May 16, 2017. Make sure you have your proxy card, notice document or email that you received and follow the simple instructions provided. | |
: | Vote over the internet: Go to www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m., eastern daylight saving time, on May 16, 2017. Make sure you have available the proxy card, notice document or email that you received and follow the simple instructions provided. | |
* | Vote by mail: If you received printed copies of the proxy materials by mail, you may mark, date and sign the enclosed proxy card and return it in the postage-paid envelope that was provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity. | |
Ä | Vote in person at the annual meeting: Bring the proxy card, notice document or email you received and bring other proof of identification and request a ballot at the meeting. |
• | sending us a proxy card dated later than your last vote; |
• | notifying the Secretary of Libbey in writing; or |
• | voting at the meeting. |
QUESTIONS AND ANSWERS ABOUT THE MEETING |
Proposal | Required Vote | |
Proposal 1 — Election of William A. Foley, Deborah G. Miller and Steve Nave as Class III directors | Since the election of directors is uncontested, each director must receive the vote of the majority of the votes cast with respect to such director’s election. | |
Proposal 2 — Advisory Say-on-Pay | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. | |
Proposal 3 — Frequency of Future Say-on-Pay Votes | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. | |
Proposal 4 — Ratification of Independent Auditors | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. |
LIBBEY CORPORATE GOVERNANCE |
PROPOSAL 1 — ELECTION OF DIRECTORS |
LIBBEY CORPORATE GOVERNANCE |
Standing for Election - Class III | |||
![]() | William A. Foley Age 69 Chairman since 2011 Director since 1994 | Director Qualifications: • Consumer product marketing experience, particularly in the glass tableware industry • Significant organizational leadership and management skills • Public company board and corporate governance experience | |
Professional Experience: Mr. Foley has been Libbey's Chief Executive Officer since January 12, 2016. Since 2011, he also has served as Chairman of the Board, on which he has served as a director since 1994. Mr. Foley served as Chairman and Chief Executive Officer of Blonder Accents, LLC from June 2011 until November 2011 and served as Chairman and Chief Executive Officer of Blonder Company from 2008 until June 2011. Previously, Mr. Foley was President and a director of Arhaus, Inc.; co-founder of Learning Dimensions LLC; Chairman and Chief Executive Officer of LESCO Inc.; and Chairman and Chief Executive Officer of Think Well Inc. Mr. Foley also fulfilled the roles of Vice President, General Manager for The Scotts Company Consumer Division, and Vice President and General Manager of Rubbermaid Inc.'s Specialty Products division. Mr. Foley spent the first 14 years of his career with Anchor Hocking Corp. in various positions, including Vice President of Sales & Marketing of the Consumer and Industrial Products Group. Education: Mr. Foley holds a bachelor's degree from Indiana University and an M.B.A. from Ohio University. Public Company Boards: Mr. Foley is currently on the Board of Directors of Myers Industries, Inc. (NYSE: MYE), and has previous experience on the board of LESCO Inc. | |||
![]() | Deborah G. Miller Age 67 Director since 2003 | Director Qualifications: • Global management experience • Sales and marketing ingenuity • Extensive information technology experience | |
Professional Experience: From 2003 to the present, Ms. Miller has been the Chief Executive Officer of Enterprise Catalyst Group, a management consulting firm specializing in high technology and biotechnology transformational applications. Ms. Miller was also President, Chief Executive Officer and Chairman of Ascendent Systems, a provider of enterprise voice mobility solutions, from 2005 to 2007. Ms. Miller has more than 30 years of global management experience, including roles as Chief Executive Officer of Maranti Networks; President and Chief Executive Officer of Egenera; Chief Executive Officer of On Demand Software; and various positions with IBM. Throughout her career, Ms. Miller has contributed to the success of international business enterprises with her innovative approach to sales and marketing. Education: Ms. Miller has a bachelor’s degree from Wittenberg University, of which she is an Emeritus member of the Board of Directors. Public Company Boards: Ms. Miller has been a member of the Board of Directors of Sentinel Group Funds, Inc. (SENCX) since 1995. | |||
LIBBEY CORPORATE GOVERNANCE |
![]() | Steve Nave Age 47 Nominated in 2017 | Director Qualifications: • Extensive e-commerce experience • Deep knowledge of retail and consumer products industries • Significant executive leadership experience • Brand marketing expertise | |
Professional Experience: Mr. Nave currently serves as President and Chief Executive Officer and a director of Bluestem Group Inc., a holding company whose businesses include Bluestem Brands, Inc., a multi-brand, online retailer of a broad selection of name-brand and private label general merchandise through 16 unique retail brands. Mr. Nave has held his current position since November 2014, when a subsidiary of Bluestem Group Inc. acquired Bluestem Brands, Inc. From December 2012 until assuming his current role, Mr. Nave served as President and Chief Executive Officer and a director of Bluestem Brands, Inc. Prior to Bluestem, Mr. Nave held several executive leadership positions with Walmart.com, from its launch in 2000 until 2011, including Chief Financial Officer, Chief Operating Officer, and most recently as its chief executive, as well as serving as a senior officer of Wal-Mart Stores, Inc. From 1995 to 2000 he served in both the Audit and Mergers & Acquisitions practices of Ernst & Young, LLP, serving clients in the Retail & Consumer Products and Technology industries. Mr. Nave previously served on the board of directors of Shopzilla, Inc., a leading source of sales and consumer feedback for online merchants and retail advertisers in the United States and Europe. Education: Mr. Nave has a bachelor’s degree in Accounting from Oklahoma State University. Public Company Boards: None. | |||
Continuing Directors - Classes I and II | |||
![]() | Carlos V. Duno Class II Age 69 Director since 2003 | Director Qualifications: • Strategic planning in international organizations • Glass industry experience, both at Vitro S.A. and as a former director of Anchor Glass Container Corporation | |
Professional Experience: Mr. Duno is the Owner and Chief Executive Officer of The Hire Firm (since 2006), the premier recruiting and staffing firm in northern New Mexico, and Owner and Chief Executive Officer of CDuno Consulting (since 2004). From 2001 to 2004, Mr. Duno served as Chairman of the Board and Chief Executive Officer of Clean Fuels Technology, a leading developer of emulsified fuels for transportation and power generation applications. Mr. Duno’s glass industry experience began during his six years as President of Business Development and Planning for Vitro S.A. in Monterrey, Mexico from 1995 to 2001. Mr. Duno’s earlier professional experience included a two-year term as Vice President Strategic Planning for Scott Paper Company and several years with McKinsey & Co. and Eli Lilly. Education: Mr. Duno holds a B.S. in industrial engineering from the National University of Mexico, and an M.B.A. in finance and an M.S. in industrial engineering, both from Columbia University. He also is certified in leadership and transition coaching by the Hudson Institute of Coaching. Public Company Boards: None. | |||
LIBBEY CORPORATE GOVERNANCE |
![]() | Ginger M. Jones Class II Age 52 Director since 2013 | Director Qualifications: • Experience as chief financial officer of a public company with over $2 billion in revenues • Significant executive leadership experience in financial strategy and experience in public audit functions, resulting in her qualification as an audit committee financial expert • Experience in global supply chain | |
Professional Experience: Ms. Jones is the Vice President, Chief Financial Officer of Cooper Tire & Rubber Company (NYSE: CTB), where she has served since December 2014. She joined Cooper from Plexus Corp. (NASDAQ: PLXS), a global electronics, engineering and manufacturing services company, where she served as Chief Financial Officer since 2007 and was responsible for all finance, treasury, investor relations and information technology functions. A certified public accountant, Ms. Jones began her career with Deloitte & Touche, culminating in her role as audit manager for audits of middle market companies. Education: She holds a bachelor’s degree in accounting from the University of Utah and an M.B.A. from The Ohio State University Fisher College of Business. Public Company Boards: None. | |||
![]() | Eileen A. Mallesch Class II Age 61 Director since 2016 | Director Qualifications: • Significant financial and enterprise risk management expertise • Public company board and corporate governance experience • Experience with mergers, acquisitions and divestitures • International business experience • Foodservice and consumer products industry knowledge | |
Professional Experience: Ms. Mallesch served as Senior Vice President and Chief Financial Officer of the property and casualty insurance business of Nationwide Insurance from 2005 to 2009. Previously, Ms. Mallesch was employed by General Electric, where she served as Senior Vice President and Chief Financial Officer of Genworth Financial Life Insurance Company from 2003 to 2005; Vice President and Chief Financial Officer of GE Financial Employer Services Group from 2000 to 2003; and Controller for GE Americom from 1998 to 2000. Ms. Mallesch’s positions before 2000 include International Business Area Controller, Energy Ventures for Asea Brown Boveri, Inc., a multinational power and automation technologies company, and financial management positions with PepsiCo, Inc. (NYSE: PEP). Ms. Mallesch is a certified public accountant and began her career as a senior auditor with Arthur Andersen. Education: Ms. Mallesch holds a bachelor's degree in accounting from City University of New York. Public Company Boards: Ms. Mallesch currently serves on the boards of directors of Fifth Third Bancorp (NASDAQ:FITB) (since 2016), State Auto Financial Corp. (NASDAQ: STFC) (since 2010) and Bob Evans Farms, Inc. (NASDAQ: NOBE) (since 2008). | |||
LIBBEY CORPORATE GOVERNANCE |
![]() | Carol B. Moerdyk Class I Age 66 Director since 1998 | Director Qualifications: • Significant financial expertise, developed through her experience as a CFA and public company chief financial officer • Public company board and corporate governance experience • Executive leadership and U.S. and international operations experience | |
Professional Experience: Ms. Moerdyk retired from OfficeMax Incorporated (formerly Boise Cascade Office Products Corporation) in 2007. At OfficeMax, she served as Senior Vice President, International from August 2004 until her retirement. Previously, she held various roles at Boise Cascade Office Products Corporation, including Senior Vice President Administration, Senior Vice President North American and Australasian Contract Operations, and Chief Financial Officer. Ms. Moerdyk began her professional career as an assistant professor of finance at the University of Maryland. Education: Ms. Moerdyk is a Chartered Financial Analyst and holds a bachelor’s degree from Western Michigan University and a Ph.D. Candidate’s Certificate in finance from the University of Michigan. Public Company Boards: Ms. Moerdyk has served on the Board of Directors of American Woodmark Corporation (NASDAQ: AMWD) since 2005. | |||
![]() | John C. Orr Class I Age 66 Lead Director since 2016 Director since 2008 | Director Qualifications: • Extensive international manufacturing and plant management experience • Extensive organizational leadership experience • Public company board and corporate governance experience | |
Professional Experience: From 2005 until his retirement in December 2015, Mr. Orr served as President, Chief Executive Officer, and a director of Myers Industries, Inc. (NYSE: MYE), an international manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets. Before assuming those positions, Mr. Orr was President and Chief Operating Officer of Myers Industries and General Manager of Buckhorn Inc., a Myers Industries subsidiary. Mr. Orr’s earlier career included 28 years with The Goodyear Tire and Rubber Company, where he gained experience in production and plant management at facilities throughout North America and Australia, eventually holding such positions as Director of Manufacturing in Latin America and Vice President Manufacturing for the entire company worldwide. Education: Mr. Orr holds a B.S. in communication from Ohio University and has additional training from Harvard Business School in business strategy, finance and operations. Public Company Boards: Mr. Orr served on the Board of Myers Industries, Inc. (NYSE: MYE) from May 2005 to December 2015. |
LIBBEY CORPORATE GOVERNANCE |
• | Advising the Chairman and CEO as to an appropriate schedule of Board meetings, to ensure that the non-employee directors can perform their duties responsibly while not interfering with on-going company operations; |
• | Approving with the Chairman and CEO the information, agenda and schedules for the Board and Committee meetings; |
• | Advising the Chairman and CEO as to the quality, quantity and timeliness of the information submitted by management that is necessary or appropriate for the non-employee directors to effectively and responsibly perform their duties; |
• | Recommending to the Chairman the retention of advisors and consultants to report directly to the Board; |
• | Calling meetings of the non-employee directors; |
• | Developing the agendas for and serving as Chairman of the executive sessions of the Board's non-employee directors; |
• | Serving as principal liaison between the non-employee directors and the Chairman and CEO on sensitive issues; |
• | Recommending to the Nominating and Governance Committee the membership of various Board Committees, as well as the selection of Committee chairperson; |
• | Serving as Chairman of the Board when the Chairman is not present; |
• | Serving as ex-officio member of each committee and regularly attending committee meetings; and |
• | Lead Independent Director Evaluation of the CEO, including an annual evaluation of the CEO's interactions with the directors and ability to lead and direct the full Board. |
LIBBEY CORPORATE GOVERNANCE |
Standing Committee | Key Functions | Number of 2016 Meetings | |||
Audit Committee | 7 | ||||
Compensation Committee | • | Consider the potential impact of our executive pay program on our risk profile | 5 | ||
• | Review executive pay at comparable companies and recommend to the Board pay levels and incentive compensation plans for our executives | ||||
• | Review and approve goals and objectives relevant to the targets of the executive incentive compensation plans | ||||
• | Establish the CEO’s pay, and in determining the long-term incentive compensation component of the CEO’s pay, consider the Company’s performance, relative shareholder return, the value of similar awards to chief executive officers at comparable companies and the awards given to our CEO in prior years | ||||
• | Annually evaluate the Compensation Committee's performance and effectiveness | ||||
• | Produce an annual report on executive compensation for inclusion in the proxy statement or annual report on Form 10-K, as required by the SEC | ||||
• | Approve award grants under our equity participation plans and oversee and administer these plans | ||||
Nominating and Governance Committee | • | Develop and implement corporate governance policies and practices | 5 | ||
• | Establish a selection process for new directors to meet the needs of the Board, for evaluating and recommending candidates for Board membership, for assessing the Board's performance and reviewing that assessment with the Board and for establishing objective criteria to evaluate the CEO's performance | ||||
• | Review director pay and recommend to the Board pay levels for our non-management directors | ||||
• | Review plans for both emergency and orderly succession of the CEO |
Audit Committee | Compensation Committee | Nominating and Governance Committee | ||||||||||
Director | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | ||||||
Carlos V. Duno | Chair | Chair | Member | Member | ||||||||
William A. Foley(1) | ||||||||||||
Ginger Jones(2)(3) | Chair | Chair | Member | Member | ||||||||
Theo Killion(3)(4) | Member | Member | ||||||||||
Eileen A. Mallesch(2)(3) | Member | Member | Member | Member | ||||||||
Deborah G. Miller(3) | Member | Member | Member | Member | ||||||||
Carol B. Moerdyk | Member | Member | Member | Member | ||||||||
John C. Orr(2)(3) | Member | Member | Chair | Chair |
(1) | Mr. Foley ceased to be a non-management director on January 12, 2016, when he was appointed as our CEO. Accordingly, Mr. Foley no longer serves on any committees. |
(2) | Determined by the Board to be qualified as an audit committee financial expert, as defined in SEC regulations. |
(3) | Determined by the Board to be financially sophisticated and literate and to have accounting and related financial management expertise, as those qualifications are interpreted by the Board in its business judgment. |
(4) | Mr. Killion will not stand for reelection at our 2017 Annual Meeting of shareholders. |
LIBBEY CORPORATE GOVERNANCE |
Requisite Characteristics for Board Candidates | |||
• | the highest professional and personal ethics and values, consistent with long-standing Libbey values and standards | ||
• | broad experience at the policy-making level in business, government, education, technology or public interest | ||
• | commitment to enhancing shareholder value | ||
• | devotion of sufficient time to carry out the duties of Board membership and to provide insight and practical wisdom based upon experience | ||
• | expertise in areas that add strategic value to the Board. For example, e-commerce experience, consumer products experience; omni-channel experience; brand marketing experience; diversity of race, ethnicity, gender, age, cultural background or professional experience; broad international exposure or specific in-depth knowledge of a key geographic growth area; shared leadership model experience; extensive knowledge of the Company's business or in a similar type industry or manufacturing environment; mergers and acquisitions; global business integration experience; significant sophisticated financial understanding or experience; global supply chain expertise; transformative change management experience; information technology or enterprise risk management implementation experience; sitting chief executive officer or chief financial officer of a public company; financial acumen; investor relations experience; and risk oversight or management experience. | ||
• | serve on the boards of directors of no more than three other public companies and, if intending to serve on the Audit Committee of the Board, serve on the audit committees of no more than two other public companies |
LIBBEY CORPORATE GOVERNANCE |
LIBBEY CORPORATE GOVERNANCE |
COMPENSATION-RELATED MATTERS |
PROPOSAL 2 — ADVISORY SAY-ON-PAY VOTE |
Pay Objective | Supportive Components of 2016 Pay Program | ||
Support our business strategy; drive long-term performance and shareholder value | • | Annual and long-term incentive plan performance measures focused on growing our business profitably, improving our ability to generate cash and improving our return on invested capital (ROIC) | |
• | Individual objectives heavily focused on developing and executing our strategy | ||
Align interests of executives and shareholders | • | Performance-based annual and long-term incentive plans | |
• | 80% of our CEO's target pay opportunity is "at-risk" | ||
• | Growth in our stock price is required in order to deliver any value to named executives under NQSOs and SARs | ||
• | RSUs directly align interests of executives and shareholders | ||
• | Stock ownership / retention guidelines designed to require our executives to own meaningful amounts of our stock | ||
Attract and retain highly talented and experienced senior executives who are key to implementing our strategy and achieving future success | • | Market-driven total pay package | |
• | NQSO and RSU grants that vest ratably over four years, and special "new hire" awards to attract top talent | ||
Align executive pay program with corporate governance best practices | • | Limited perquisites (tax return preparation and financial planning, executive health screening program, limited ground transportation and airline club membership) | |
• | Limited severance pay arrangements | ||
• | No regular tax gross-ups except on relocation assistance | ||
• | Stock ownership / retention guidelines designed to require executives to own meaningful amounts of our stock | ||
• | Annual and long-term incentive awards and RSU, SAR and NQSO awards are subject to clawback |
COMPENSATION-RELATED MATTERS |
PROPOSAL 3 — SAY-ON-PAY FREQUENCY |
• | In our last frequency advisory vote in 2011, "1 year" received a majority of the votes cast by shareholders. |
• | An annual advisory say-on-pay vote allows our shareholders to provide us with their direct input on our executive compensation as disclosed in the proxy statement every year and will be most useful to the Board. |
COMPENSATION-RELATED MATTERS |
Named Executive | Title | |
William A. Foley(1) | Chairman and Chief Executive Officer | |
Stephanie A. Streeter(2) | former Chief Executive Officer | |
Sherry Buck(3) | former Vice President, Chief Financial Officer | |
Annunciata (Nucci) Cerioli | Vice President, Chief Supply Chain Officer | |
Susan A. Kovach | Vice President, General Counsel and Secretary | |
Salvador Miñarro Villalobos | Vice President, General Manager, U.S. and Canada | |
James H. White(4) | former Vice President, Chief Operating Officer |
(1) | Effective January 12, 2016. |
(2) | Ms. Streeter's employment ended January 11, 2016. |
(3) | Ms. Buck's employment ended December 31, 2016. |
(4) | Mr. White's employment ended March 31, 2016. |
• | In addition to strengthening our relationships with customers, we ramped up our new product development and conducted significant market research to ensure that we can bring to market the innovative products that our customers want; |
• | In that connection, we launched two new foodservice stemware collections, Neo and Contour, using our state-of-the-art ClearFire® glass composition; |
• | We began development of our e-commerce strategy; |
• | We started our furnace consolidation effort to optimize our capacity footprint and better align our capacity with demand; and |
• | We streamlined our product portfolio and improved inventory control processes. |
• | In the foodservice channel of distribution, declining restaurant traffic resulting from a continued move away from dining in restaurants to dining at home; |
• | In the retail channel of distribution, an increasing shift away from brick-and-mortar stores toward e-commerce; |
• | In all of our channels of distribution, a highly competitive pricing environment; |
• | A two-week work stoppage at our Toledo manufacturing facility that negatively impacted gross profit by $4.2 million, net sales by an estimated $7 million to $9 million, and pre-tax income by approximately $7 million to $8 million. Additionally, the estimated lost sales negatively impacted adjusted EBITDA (calculated as shown in Appendices A and B) by approximately $3 million to $4 million; |
• | Significant volatility in foreign currency exchange rates, in particular with respect to the Mexican peso and the euro; and |
COMPENSATION-RELATED MATTERS |
• | Prior-year (2015) results that benefited from non-repeating items such as the release in the fourth quarter of 2015 of our U.S. deferred tax valuation allowance, which favorably impacted 2015 net income by approximately $43.8 million. |
• | Although 2016 net sales were $793.4 million, a decrease of 3.5% year-over-year (or a decrease of 1.1% excluding the impact of currency), we achieved an increase in net sales in the foodservice channel. Despite ongoing decline in restaurant traffic trends, our U.S. and Canada foodservice sales grew 2.3%, which we believe indicates that Libbey is continuing to win market share. |
• | Net income was $10.1 million in 2016, compared to $66.3 million in 2015. |
• | Our Adjusted EBITDA (calculated as shown on Appendices A and B) for 2016 was $109.8 million, compared to $116.1 million in 2015. |
• | Our stock price decreased from $21.32 on December 31, 2015 to $19.46 on December 31, 2016, reflecting annual total shareholder return (TSR) of (6)%, as shown in the chart on page (ii). |
• | When Mr. Foley was hired as CEO in January, the Committee approved an initial base salary of $825,000, a target SMIP opportunity of 100% and a target LTIP opportunity of 300%, all of which are consistent with the compensation package that had been provided to Ms. Streeter. Because Mr. Foley was retired at the time of his appointment as CEO and intends to retire once again when his employment with Libbey ends (regardless of when or how it ends), the Committee chose not to give Mr. Foley an employment agreement or change in control agreement. |
• | In February, the Committee approved the designs for our 2016 SMIP and the performance cash component of our 2016 LTIP. The 2016 SMIP design uses two performance measures: revenue growth (net sales) and adjusted cash earnings. Like the 2015 LTIP, the performance cash component of the 2016 LTIP is based on a single performance metric: return on invested capital (ROIC). See Appendices A and B for calculations of each of these performance measures. |
• | Also in February, the Committee awarded RSUs and NQSOs with ratable, four-year vesting. |
• | The Committee approved base salary increases, effective April 1, 2016, equal to 2.0% for each of the named executives other than Ms. Streeter and Mr. White (who were no longer employed by the Company at that date) and Mr. Foley. |
• | Effective June 1, 2016, the Committee approved an additional increase in Ms. Cerioli's base salary from $408,002 to $440,004. |
• | The Committee believed it appropriate to limit payouts under our SMIP to no more than 69.5% of target before application of any modifier for individual performance. After application of the modifier for individual performance, no named executive received a payout under the SMIP greater than 69.5%. Adjusted cash earnings is calculated as shown in Appendix B. |
• | Because our adjusted EBITDA margin and net debt to adjusted EBITDA ratio for the 2014-2016 performance cycle were below target, payouts under our 2014 LTIP were only 74.4% of target. Adjusted EBITDA and net debt are calculated as shown in Appendix A. |
COMPENSATION-RELATED MATTERS |
• | Competitiveness - Overall, the mix and levels of compensation should be reasonably comparable to appropriate peer companies so that the Company can continue to attract, retain and motivate high performing executives in an environment where companies are increasingly competing for high-caliber talent. Recognizing that Libbey's size, manufacturing asset intensity and multi-channel characteristics make identifying appropriate peer companies especially challenging, the general guideline is to target compensation at the median; however, individual positions may have target compensation mix and/or levels above or below the median depending on an evaluation of relevant factors, including experience, performance, time in position, and what is needed to attract the best talent for key positions, particularly when the Company recruits from much larger companies. |
• | Pay for Performance - Major components of compensation should be tied to the Company's overall performance. Base salary and annual incentive compensation also should be tied to the performance of the individual executive and his or her specific business unit or function. |
• | Values - While the Company’s pay for performance philosophy should reward the achievement of financial and strategic objectives, the manner in which results are achieved is also important in assessing base salary adjustments and annual performance bonus payments. Therefore, while not always directly quantifiable, the manner in which the executive achieves results through collaboration and leadership - in keeping with the Company’s set of core values, notably teamwork, performance, continuous improvement, respect, development, and customer focus - are key considerations in the individual performance review process. |
• | Judgment - In assessing the executive’s contributions to the Company’s performance, the Committee looks to results-oriented performance measures, but also considers the long-term impact of an executive’s decisions. The CEO and Committee use their judgment and experience to evaluate whether an executive’s actions were aligned with the Company’s values and cultural elements. |
• | Accountability for Short- and Long-Term Performance - Annual and long-term incentives should reward an appropriate balance of short- and long-term financial and strategic business results, with an emphasis on managing the business for the long term. Such incentives should have a clear, direct and balanced link to the Company’s financial and strategic objectives. |
• | Alignment to Shareholders’ Interests - Long-term incentives should align the interests of individual executives with the long-term interests of the Company’s shareholders. |
• | Simplicity - The Company strives to the extent practicable to make its compensation programs straightforward, simple to understand, and easy to administer and evaluate for competitiveness and appropriateness. |
• | Reasonableness - Indirect executive compensation programs are designed to be reasonable and appropriate, with executive perquisites applied conservatively but judiciously. |
COMPENSATION-RELATED MATTERS |
Foley Pay Opportunity at Target | Other Named Executives' Pay Opportunity at Target(1) | |
![]() | ![]() |
(1) | Excludes Ms. Streeter, our former CEO, whose employment ended January 11, 2016. |
Type of Pay | Element | Key Characteristics | Objectives | |||
Base salary | Base salary | Fixed component; reviewed annually | Talent attraction and retention | |||
Incentive-Based Pay | Annual cash incentive award under our 2016 SMIP | At-risk variable pay opportunity for short-term performance; no guaranteed minimum payout; maximum payout equal to 225% of target | Talent attraction and retention; motivation; alignment with key business and financial objectives and strategies; alignment with shareholder interests | |||
Long-term performance cash incentive awards under our 2016 LTIP | Formula-driven, at-risk cash award that comprises 40% of LTIP opportunity; no guaranteed minimum payout; maximum payout equal to 200% of target | Talent attraction and retention; motivation; alignment with key business and financial objectives and strategies; alignment with shareholder interests | ||||
Time-Based Pay | NQSOs granted under our 2016 LTIP | Comprise 20% of LTIP opportunity; exercise price equal to closing stock price on grant date; generally awarded annually; vest ratably over four years beginning on a date not earlier than the first anniversary of the date the award is approved; expire ten years from grant date | Talent attraction and retention; motivation; alignment with shareholder interests | |||
RSUs granted under our 2016 LTIP | Comprise 40% of LTIP opportunity; vest ratably over four years beginning on a date not earlier than the first anniversary of the date the award is approved; no dividends or voting rights with respect to unvested RSUs | Talent attraction and retention; motivation; alignment with shareholder interests |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
• | For 2016, the maximum number of shares underlying RSUs, NQSOs and/or SARs that the CEO was authorized to award to all eligible individuals was 150,000; |
• | The exercise price of any NQSOs and/or SARs awarded could not be less than the closing price of the Company's common stock on the grant date; |
• | The RSUs, NQSOs and/or SARs awarded could vest no more rapidly than ratably on the first, second and third anniversaries of the grant date; |
• | The CEO was authorized to make awards only outside "quiet periods"; |
• | The CEO was required to report at least quarterly to the Compensation Committee regarding the nature and scope of awards made pursuant to this authority; and |
COMPENSATION-RELATED MATTERS |
• | The agreements pursuant to which RSUs, NQSOs, and/or SARs were granted must be in substantially the same form approved by the Committee from time to time. |
• | we are required, as a result of misconduct, to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the securities laws; and |
• | the award recipient knowingly engaged, or was grossly negligent in engaging, in the misconduct, or knowingly failed, or was grossly negligent in failing, to prevent the misconduct or is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002. |
Annualized Salary Before Increase | Annualized Salary After Increase | |||
Named Executive | ($) | ($) | ||
S. Buck | 475,000 | 484,500 | ||
A. Cerioli | 400,002 | 408,002 | ||
S. Kovach | 336,520 | 343,250 | ||
S. Miñarro | 350,040 | 357,041 |
COMPENSATION-RELATED MATTERS |
Revenue Growth (Net Sales) | Adjusted Cash Earnings | |||||||
Full Year Net Sales (dollars in thousands) | Percent of Targeted Net Sales | Performance Level | Payout Percentage | Full Year Cash Earnings (dollars in thousands) | Percent of Targeted Cash Earnings | Performance Level | Payout Percentage | |
$880,000 | 104.9% | Maximum | 200% | $131,076 | 110.0% | Maximum | 200% | |
$839,138 | 100.0% | Target | 100% | $119,160 | 100.0% | Target | 100% | |
$800,000 | 95.3% | Threshold | 40% | $95,328 | 80.0% | Threshold | 50% | |
< $800,000 | < 95.3% | Below Threshold | 0% | < $95,328 | < 80.0% | Below Threshold | 0% |
Named Executive | Target Award as a Percentage of Full-Year Base Salary | |
W. Foley | 100% | |
S. Streeter | 100% | |
S. Buck | 70% | |
A. Cerioli | 60% | |
S. Kovach | 50% | |
S. Miñarro | 60% | |
J. White | 75% |
COMPENSATION-RELATED MATTERS |
Item | Amount of Adjustment to Company-Wide Cash Earnings | |||
Expense in connection with executive terminations | $ | 3,554,000 | ||
Income related to natural gas contract hedge ineffectiveness | (1,860,000 | ) | ||
2010 Mexican tax assessment | 1,085,000 | |||
Total | $ | 2,779,000 |
Preliminary Financial Performance Payout Score as % of Target | ||||
Revenue Growth | Adjusted Cash Earnings | Total | ||
47.5 | 99.0 | 73.25 |
Final Financial Performance Payout Score as % of Target | ||||
Revenue Growth | Adjusted Cash Earnings | Total | ||
40.0 | 99.0 | 69.5 |
COMPENSATION-RELATED MATTERS |
Named Executive | SMIP 2016 Payout ($) | ||
W. Foley | 556,000 | ||
S. Streeter | 24,057 | ||
S. Buck | 234,554 | ||
A. Cerioli | 141,670 | ||
S. Kovach | 118,695 | ||
S. Miñarro | 148,156 | ||
J. White | 68,414 |
Named Executive | 2016 Target Long-Term Award as a Percentage of Annualized Base Salary (%) | 2016 LTIP Performance Cash Target as Percentage of Annualized Base Salary (%) | ||
W. Foley | 300 | 120 | ||
S. Streeter | 300 | 120 | ||
S. Buck | 140 | 56 | ||
A. Cerioli | 120 | 48 | ||
S. Kovach | 95 | 38 | ||
S. Miñarro | 120 | 48 | ||
J. White | 150 | 60 |
• | A performance component under our 2014 LTIP (for the 2014-2016 performance cycle) that provides for cash awards based on our performance, over the three-year performance cycle, against the following equally weighted performance measures: (1) a profitability measure - namely, the extent to which we achieve our targeted adjusted EBITDA margin over the performance cycle; and (2) a financial leverage measure - namely, the extent to which we achieve our targeted net debt to adjusted EBITDA ratio over the performance cycle. The targeted adjusted EBITDA margin over the performance cycle was 15.3% and the targeted net debt to adjusted EBITDA ratio was 2.82. |
• | A performance component under our 2015 LTIP (for the 2015-2017 performance cycle) and 2016 LTIP (for the 2016-2018 performance cycle) that provides for cash awards if and to the extent we achieve our targeted return on invested capital (ROIC) for each of the three one-year performance periods included in the three-year performance cycle. Because of ROIC's relationship to total shareholder return, using ROIC as a performance measure emphasizes our philosophy that compensation should align with the long-term interests of our shareholders. The scale used to determine the payout score for each of the three one-year performance periods is reset for each performance period to correlate with targeted ROIC for that year. The amount of the final payout, if any, will be determined based on the average of the three discrete, single-year payout scores. |
COMPENSATION-RELATED MATTERS |
◦ | For any performance cycle of which 2015 is a part, our 2015 ROIC target was 12.9%. We achieved ROIC of 10.9% in 2015, resulting in a payout score for the 2015 calendar year of 0%, as determined according to the following scale: |
Basis Points Above or Below 2015 Targeted ROIC | Payout Score (%) | |||
+50 | 200 | |||
0 | 100 | |||
-70 | 50 | |||
Less than -70 | 0 |
◦ | For any performance cycle of which 2016 is a part, our 2016 ROIC target was 10.8%. In setting the target, the Committee considered the Company's prior year performance and alignment with the Company's annual operating plan and long-term strategic initiatives. The slowing global economy, decline in restaurant traffic, shift in retail sales toward e-commerce, and competitive pricing environment of 2015 were expected to continue in 2016. The realities of the business environment led the Company to shift its priorities from aggressive growth toward improving marketing and new product development capabilities and innovation, improving customer relationships, and simplifying the business - all of which would support future sustainable, profitable growth. The Committee believed that a 2016 ROIC target of 10.8% would prove sufficiently challenging to achieve. In February 2017, the Committee determined that we had achieved 2016 ROIC of 9.9%, resulting in a payout score for the 2016 calendar year of 55%, as determined according to the following scale: |
Basis Points Above or Below 2016 Targeted ROIC | Payout Score (%) | |||
+100 | 200 | |||
0 | 100 | |||
-150 | 25 | |||
Less than -150 | 0 |
Item | Amount of Adjustment to Company-Wide EBITDA | |||
Product portfolio optimization | $ | 5,693,000 | ||
Income related to natural gas contract hedge ineffectiveness | (1,860,000 | ) | ||
Toledo Plant work stoppage | 4,162,000 | |||
Executive terminations | 4,460,000 | |||
Pension settlements | 168,000 | |||
Total | $ | 12,623,000 |
COMPENSATION-RELATED MATTERS |
Adjusted EBITDA Margin | Net Debt to Adjusted EBITDA Ratio | |||||
Percent of Targeted Adjusted EBITDA Margin | Performance Level | Payout Percentage | Percent of Targeted Net Debt to Adjusted EBITDA Ratio | Performance Level | Payout Percentage | |
115% | Maximum | 200 | 115% | Maximum | 200 | |
100% | Target | 100 | 100% | Target | 100 | |
80% | Threshold | 50 | 80% | Threshold | 50 | |
<80% | Below Threshold | 0 | <80% | Below Threshold | 0 |
Final Payout Score as % of Target | ||||
Adjusted EBITDA Margin | Net Debt to Adjusted EBITDA Ratio | Total | ||
80.6% | 68.2% | 74.4% |
Named Executive | 2014 LTIP Cash Payout ($) | ||
W. Foley(1) | 245,520 | ||
S. Streeter(2) | 406,027 | ||
S. Buck | 151,657 | ||
A. Cerioli(1) | 72,342 | ||
S. Kovach | 90,559 | ||
S. Miñarro | 92,950 | ||
J. White(1) | 58,590 |
(1) | Prorated to reflect the portion of the performance cycle during which the named executive was employed. |
(2) | Ms. Streeter's payout amount was calculated at the time of her termination based on the most recent forecasts available. The payout amount was then prorated to reflect the portion of the performance cycle during which she was employed. This final payout amount was paid to her in March 2016. |
COMPENSATION-RELATED MATTERS |
• | An appropriate mix of fixed and variable, short-term and long-term, and cash and equity compensation; |
• | Compensation Committee discretion regarding individual executive awards; |
• | Oversight by non-participants in the plans; |
• | Long-term compensation awards and vesting periods that encourage a focus on sustained, long-term results; |
• | Executive incentive awards are subject to forfeiture and clawback; |
• | Prohibition against hedging, pledging and engaging in transactions involving derivatives of our stock; |
• | Stock ownership / retention requirements for our executives; and |
• | "Double-trigger" vesting of equity awards and non-equity incentives after a change in control. |
COMPENSATION-RELATED MATTERS |
• | Accrued Benefits. |
• | Cash severance equal to two times the sum of (a) her annual base salary in effect on the date of termination; and (b) her target 2016 SMIP opportunity, with such amount being payable in equal monthly installments over a period of 24 months. |
• | Annual incentive award under our 2016 SMIP based on Ms. Streeter's base salary earnings for 2016 and forecasted Company performance as of the end of January 2016. |
• | Performance-based cash compensation under our 2014 LTIP, 2015 LTIP and 2016 LTIP, based on forecasted Company performance as of the end of January 2016, and prorated to Ms. Streeter's termination date. |
• | Accelerated vesting of all cash-settled retention RSUs and cash-settled retention SARs. |
• | Accelerated vesting of all other unvested equity awards that were scheduled to vest on or before June 30, 2016. |
• | Executive-level outplacement services selected by Ms. Streeter, with the aggregate cost to Libbey not to exceed $75,000. |
• | Continuation of medical, prescription drug, dental and life insurance benefits for a period of 18 months, with Ms. Streeter continuing to pay employee contributions. |
• | Our receipt of a release of claims against Libbey; |
• | Confidentiality obligations; |
• | Obligation to assign intellectual property rights; |
• | Obligation to assist with litigation as to which Ms. Streeter has knowledge; and |
• | 24-month obligation not to: (a) interfere with customer accounts; (b) compete; (c) divert business opportunities; (d) solicit our employees; nor (e) disparage us. |
(1) | Cause means (a) willful and continuous failure to substantially perform duties; (b) willful and continuous failure to substantially follow and comply with directives of the Board; (c) commission of an act of fraud or dishonesty that results in a material adverse effect on us or commission of an act in material violation of our Code of Business Ethics and Conduct; or (d) willful, illegal conduct or gross misconduct that is materially and demonstrably injurious to us. |
COMPENSATION-RELATED MATTERS |
• | Accrued Benefits; and |
• | For the year in which termination occurs, a prorated award under our SMIP based on actual performance. |
• | A prorated target award under the performance cash component of the LTIP for any performance cycle in effect on the date of death or permanent disability, paid as soon as administratively feasible; and |
• | Immediate vesting of all NQSOs and RSUs. |
• | As to performance-based cash compensation under our LTIP, payment of the amount actually earned for each performance cycle in effect on the date of termination, prorated to the termination date; provided, however, that the amounts will not be prorated if the termination is in connection with a change in control; and |
• | Immediate vesting of all NQSOs and RSUs scheduled to vest within one year of the termination date; provided, however, that all unvested NQSOs and RSUs will vest if the termination is in connection with a change in control. |
• | As to performance-based cash compensation under our LTIP, payment of the amount actually earned for each performance cycle in effect on the date of termination, prorated to the termination date. |
• | parties to change in control agreements, the forms of which are substantially similar to each other, that provide for payments under the circumstances described below in the event of a termination of employment in connection with a Change in Control; and |
• | covered by our Executive Severance Compensation Policy, which provides for certain separation benefits in the event of termination of employment without Cause absent a Change in Control. |
COMPENSATION-RELATED MATTERS |
Event | Benefits | Conditions to Payment of Benefits | Rationale | ||||||
Death or Permanent Disability | • | Accrued Benefits | None | • | To compensate for service to us | ||||
• | A prorated target award under the LTIP performance cash component for any performance cycle in effect on the date of death or permanent disability | ||||||||
• | Aids in attracting and retaining executives | ||||||||
• | Accelerated vesting of all unvested RSUs and NQSOs | • | Consistent with competitive market practice | ||||||
Quit for Good Reason (No Change in Control) | • | Accrued Benefits | None | • | To compensate for service to us | ||||
• | As to performance-based compensation under our LTIP, payment of the amount actually earned for each performance cycle in effect on the date of termination, prorated to the date of termination(1) | ||||||||
• | Aids in attracting and retaining executives | ||||||||
• | Consistent with competitive market practice |
COMPENSATION-RELATED MATTERS |
Event | Benefits | Conditions to Payment of Benefits | Rationale | ||||||
Termination without Cause (No Change in Control) | • | Accrued Benefits | • | Release of claims against Libbey | • | To compensate for service to us and bridge the gap between employment with us and the executive's next job | |||
• | For the year in which termination occurs, a prorated SMIP award based on actual performance(1) | ||||||||
• | Confidentiality obligations | ||||||||
• | Base salary continuation for 12 months | • | Obligation to assign intellectual property rights | ||||||
• | Lump sum payment equal to the executive's SMIP target award. Paid on the first payroll date after termination | ||||||||
• | Obligation to assist with litigation as to which the executive has knowledge | • | Aids in attracting and retaining executives | ||||||
• | As to LTIP performance-based cash compensation, payment of the amount actually earned for each performance cycle in effect on termination date, prorated to termination date(1) | ||||||||
• | To provide compensation in exchange for restrictive covenants that protect Libbey's future interests | ||||||||
• | Immediate vesting of all NQSOs and RSUs scheduled to vest within one year of termination | • | 12-month obligation not to interfere with customer accounts, compete, divert business opportunities, solicit our employees, or disparage us | ||||||
• | Continuation of medical, dental, prescription drug and life insurance coverage for 12 months, subject to payment by the executive of premiums at employee rates | ||||||||
• | Consistent with competitive market practice | ||||||||
• | For a period of one year from termination, executive level outplacement services at the rate for Shields Meneley Partners or equivalent | ||||||||
Termination without Cause or Quit for Good Reason in connection with a Change in Control | • | Accrued Benefits | • | Release of claims against Libbey | • | Aids in attracting and retaining executives | |||
• | For the year in which termination occurs, a prorated SMIP award based on actual performance(1) | ||||||||
• | Confidentiality obligations | ||||||||
• | To provide compensation in exchange for restrictive covenants that protect Libbey’s future interests | ||||||||
• | As to LTIP performance cash compensation under, payment of the amount actually earned for each performance cycle in effect on the date of termination(1) | • | Obligation to assign intellectual property rights | ||||||
• | Obligation to assist with litigation as to which the executive has knowledge | ||||||||
• | Accelerated vesting of all unvested equity awards | ||||||||
• | Consistent with competitive market practice | ||||||||
• | Lump-sum payment of two times the sum of the executive’s annual base salary in effect on the date notice of termination is given plus the executive’s target SMIP opportunity for the year in which the notice of termination is given(2) | ||||||||
• | 12-month obligation not to interfere with customer accounts, compete, divert business opportunities, solicit our employees, or disparage us | ||||||||
• | Executive level outplacement services by a provider approved by Libbey, with the cost being limited to 15% of the executive’s base salary at the time of termination | ||||||||
• | Financial planning services, with the cost to Libbey not to exceed $10,000 | ||||||||
• | Continuation of medical, prescription drug, dental and life insurance benefits for a period of 18 months or until the executive obtains medical or life insurance through a future employer, with the executive continuing to pay the employee’s portion of the cost of such insurance | ||||||||
COMPENSATION-RELATED MATTERS |
(1) | Amounts paid under our SMIP and the performance cash component of our LTIP will be paid between January 1 and March 15 of the year following the end of the relevant performance cycle. |
(2) | Lump-sum cash payments will be paid no later than five days after termination of employment except to the extent the payments are subject to a six-month delay under Internal Revenue Code Section 409A, in which case payment will be on the first day of the seventh month after the executive's termination of employment. |
• | A person (other than Libbey, any trustee or other fiduciary holding securities under one of our employee benefit plans, or any corporation owned, directly or indirectly, by our shareholders in substantially the same proportions as their ownership of our common stock) becomes the ‘‘beneficial owner,’’ directly or indirectly, of our securities representing 30% or more of the combined voting power of our then-outstanding securities; |
• | The consummation of a merger or consolidation pursuant to which we are merged or consolidated with any other corporation (or other entity), unless our voting securities outstanding immediately prior to the merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3% of the combined voting power of securities of the surviving entity outstanding immediately after the merger or consolidation; |
• | A plan of complete liquidation or an agreement for the sale or disposition of all or substantially all of our assets is consummated; or |
• | During any period of two consecutive years (not including any period prior to the execution of the agreement), Continuing Directors (as defined below) cease for any reason to constitute at least a majority of our Board. Continuing Directors means (i) individuals who were members of the Board at the beginning of the two-year period referred to above and (ii) any individuals elected to the Board, after the beginning of the two-year period referred to above, by a vote of at least 2/3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously approved in accordance with this provision. However, an individual who is elected to the Board after the beginning of the two-year period referred to above will not be considered to be a Continuing Director if the individual was designated by a person who has entered into an agreement with us to effect a transaction that otherwise meets the definition of a change in control. |
COMPENSATION-RELATED MATTERS |
Carlos V. Duno, Chair | |
Ginger M. Jones | |
Theo Killion | |
Eileen A. Mallesch | |
Carol B. Moerdyk |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Compensation ($)(5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | |||||||||||||||||
William A. Foley | 2016 | 804,185 | 0 | 1,037,687 | 532,688 | 801,520 | 0 | 110,050 | 3,286,130 | |||||||||||||||||
Chairman and Chief | ||||||||||||||||||||||||||
Executive Officer(8) | ||||||||||||||||||||||||||
Stephanie A. Streeter | 2016 | 21,166 | 0 | 0 | 0 | 653,666 | 0 | 3,301,516 | 3,976,348 | |||||||||||||||||
Chief Executive | 2015 | 792,438 | 0 | 960,406 | 517,050 | 728,386 | 0 | 73,677 | 3,071,957 | |||||||||||||||||
Officer(9) | 2014 | 768,750 | 0 | 4,436,131 | 413,043 | 941,390 | 0 | 44,259 | 6,603,573 | |||||||||||||||||
Sherry Buck | 2016 | 482,125 | 0 | 257,312 | 143,125 | 386,211 | 0 | 47,115 | 1,315,888 | |||||||||||||||||
Vice President, Chief | 2015 | 462,500 | 0 | 245,784 | 132,320 | 221,129 | 0 | 41,651 | 1,103,384 | |||||||||||||||||
Financial Officer(10) | 2014 | 386,907 | 0 | 217,148 | 112,263 | 311,530 | 0 | 35,988 | 1,063,836 | |||||||||||||||||
Annunciata Cerioli | 2016 | 424,670 | 0 | 185,728 | 103,312 | 214,012 | 0 | 60,679 | 988,401 | |||||||||||||||||
Vice President, Chief | 2015 | 377,646 | 0 | 244,588 | 77,851 | 86,713 | 0 | 27,435 | 814,233 | |||||||||||||||||
Supply Chain | 2014 | 29,170 | 252,289 | 246,591 | 70,866 | 13,714 | 0 | 0 | 612,630 | |||||||||||||||||
Officer(11) | ||||||||||||||||||||||||||
Susan A. Kovach | 2016 | 341,568 | 0 | 123,696 | 68,809 | 209,254 | 21,812 | 34,191 | 799,330 | |||||||||||||||||
Vice President, | 2015 | 334,070 | 0 | 128,214 | 69,025 | 123,403 | 0 | 24,320 | 679,032 | |||||||||||||||||
General Counsel & | 2014 | 325,117 | 25,000 | 129,672 | 67,034 | 189,097 | 29,532 | 19,442 | 784,894 | |||||||||||||||||
Secretary | ||||||||||||||||||||||||||
Salvador Miñarro | 2016 | 355,291 | 0 | 162,528 | 90,407 | 241,106 | 0 | 98,845 | 948,177 | |||||||||||||||||
Villalobos | 2015 | 373,902 | 0 | 617,047 | 93,409 | 143,209 | 0 | 71,138 | 1,298,705 | |||||||||||||||||
Vice President, | ||||||||||||||||||||||||||
General Manager | ||||||||||||||||||||||||||
U.S. & Canada(12) | ||||||||||||||||||||||||||
James H. White | 2016 | 131,250 | 0 | 304,720 | 169,491 | 127,004 | 0 | 1,041,734 | 1,774,199 | |||||||||||||||||
Vice President, Chief | 2015 | 246,591 | 0 | 1,561,933 | 148,879 | 80,949 | 0 | 13,980 | 2,052,332 | |||||||||||||||||
Operating Officer(13) |
(1) | As to Mr. Miñarro for 2015, represents base salary paid from January 1 through March 31, 2015, as well as other fixed components of pay that our Mexican subsidiary was required under Mexican law to pay Mr. Miñarro, totaling $111,372. These amounts were paid to Mr. Miñarro in Mexican pesos, and the amount included in this column was translated to U.S. currency using the interbank exchange rate in effect at the time of payment to Mr. Miñarro. The remaining $262,530 represents the base salary paid to Mr. Miñarro after he assumed his executive officer role on April 1, 2015. |
(2) | As to Ms. Cerioli for 2014, represents: (a) $70,000 signing bonus; and (b) $182,289 minimum guaranteed incentive under the 2014 SMIP. The balance of Ms. Cerioli's 2014 SMIP award is included in the "Non-Equity Incentive Compensation" column. As to Ms. Kovach for 2014, represents a special award made in April 2014 in recognition of leadership related to our 2014 refinancing. |
(3) | Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to RSUs granted in 2016, 2015 and 2014, respectively. As to Mr. Foley, also represents the grant date fair value, determined in accordance with FASB ASC Topic 718, of awards of stock made to non-management directors on May 10, 2016. On that date, we awarded certain non-management directors stock having a grant date fair value of $80,007, or $17.58 per share. Although Mr. Foley ceased to be a non-management director when he was appointed CEO on January 12, 2016, this stock award was attributable to service as a non-management director during the 2015 fiscal year. As to all RSU awards in 2016, 2015 and 2014 other than the special retention awards of 115,687 cash-settled RSUs made to Ms. Streeter in February 2014, the awards vest ratably over a four-year period from the date of grant. The special retention award of 115,687 cash-settled RSUs made to Ms. Streeter in February 2014 were scheduled to cliff vest on December 31, |
COMPENSATION-RELATED MATTERS |
(4) | Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to NQSOs granted in 2016, 2015 and 2014, respectively. The awards vest ratably over a four-year period from the date of grant. When Ms. Buck resigned effective December 31, 2016, all unvested NQSOs were forfeited. When Mr. White's employment ended on March 31, 2016, vesting was accelerated with respect to all NQSOs that otherwise would have vested by March 31, 2017, and all other unvested NQSOs were forfeited. For more information, see Footnote 12, ‘‘Employee Stock Benefit Plans,” to the consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 3, 2017. The actual values received by the respective named executives depend on the number of NQSOs that actually vest, the number of shares with respect to which NQSOs are exercised and the price of our common stock on the date on which the NQSOs are exercised. |
(5) | Represents (a) amounts earned by the named executives in 2016, 2015 and 2014 under our SMIP and (b) for 2016, 2015 and 2014, amounts earned by the named executives under the performance cash component of our 2014 LTIP, 2013 LTIP and 2012 LTIP, respectively. The awards under our SMIP were paid in March of 2017, 2016 and 2015, respectively, and the awards under the performance cash component of our 2014 LTIP, 2013 LTIP and 2012 LTIP were paid in March of 2017, March of 2016 and February of 2015, respectively. As to Ms. Streeter for 2016, also includes amounts earned by her under the performance cash component of our 2015 LTIP and 2016 LTIP. The awards to Ms. Streeter under our 2015 SMIP, 2016 SMIP and the performance cash component of our 2013 LTIP, 2014 LTIP, 2015 LTIP and 2016 LTIP were paid to her in March 2016 upon her termination. |
(6) | Represents the actuarial increase in pension value under our Salary Plan and our SERP. In 2015, the net pension value under our Salary Plan and our SERP declined for all named executives who are participants under those plans; as a result, for 2015 the amount of the actuarial increase is $0. We do not guarantee any particular rate of return on deferred compensation under our Executive Savings Plan ("ESP") or our EDCP. The rate of return depends upon the performance of the fund in which the participant's ESP or EDCP account is deemed invested. Accordingly, the amounts included in this column do not include above-market earnings on nonqualified deferred compensation. Ms. Kovach is the only named executive who is eligible to participate in the Salary Plan and SERP. |
(7) | For 2016, includes: (i) annual company matching contributions to our 401(k) savings plan (a broad-based plan open to all U.S. salaried employees); (ii) for Ms. Streeter and Mr. White, our expense associated with the compensation payable to them in connection with their terminations of employment; and (iii) the following perquisites: |
Named Executive | EDCP Matching Contribution ($)(a) | Tax Prep / Financial Planning ($)(b) | Housing Allowance or Relocation Assistance ($)(c) | Tax Gross-Up ($)(d) | Ground Transport ($)(e) | Airline Club Membership ($) | Annual Executive Physical Exam ($) | Legal Fees ($)(f) | Vacation ($)(g) | Total ($) | ||||||||||||||||||||
W. Foley | 30,938 | 11,699 | 49,416 | 2,185 | 1,365 | 495 | 2,739 | 0 | 0 | 98,837 | ||||||||||||||||||||
S. Streeter | 0 | 537 | 0 | 0 | 109 | 0 | 0 | 0 | 0 | 646 | ||||||||||||||||||||
S. Buck | 12,113 | 14,000 | 0 | 0 | 1,036 | 479 | 0 | 0 | 3,587 | 31,215 | ||||||||||||||||||||
A. Cerioli | 8,800 | 13,772 | 13,551 | 7,949 | 707 | 0 | 0 | 0 | 0 | 44,779 | ||||||||||||||||||||
S. Kovach | 4,291 | 14,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 18,291 | ||||||||||||||||||||
S. Miñarro | 0 | 3,255 | 51,192 | 10,195 | 342 | 0 | 0 | 23,126 | 0 | 88,110 | ||||||||||||||||||||
J. White | 0 | 0 | 0 | 0 | 1,569 | 0 | 0 | 0 | 0 | 1,569 |
(a) | Annual company matching contributions to our EDCP |
(b) | The cost we paid for tax return preparation and financial planning for the respective named executives |
(c) | As to Mr. Foley, represents an allowance for housing in the Toledo, Ohio area since Mr. Foley's primary home is in the Cleveland, Ohio metropolitan area. As to Ms. Cerioli, represents relocation assistance provided in connection with her hire. As to Mr. Miñarro, represents relocation assistance provided in connection with his promotion to his current role. |
(d) | As to Mr. Foley and Ms. Cerioli, represents tax gross-ups on a housing allowance and relocation assistance, respectively. As to Mr. Miñarro, represents tax gross-ups on relocation assistance ($7,093) and foreign tax return preparation ($3,102). |
(e) | Includes our incremental cost for ground transportation for personal and business trips from the Toledo, Ohio, area to the Detroit / Wayne County Metropolitan Airport. For personal trips, includes the entire cost that we incurred for such transportation. For business trips, includes the amount in excess of the amount to which the respective named executives would have been entitled as reimbursement for mileage and parking under our travel policy applicable to all employees. |
COMPENSATION-RELATED MATTERS |
(f) | Represents payment of legal expenses that Mr. Miñarro incurred in connection with immigration matters relating to his and his family's relocation to the U.S. from Mexico. |
(g) | Reimbursement of expenses Ms. Buck incurred for a vacation in 2016. |
(8) | Mr. Foley assumed his role as CEO effective January 12, 2016. |
(9) | Ms. Streeter's employment ended January 11, 2016. |
(10) | Ms. Buck's employment ended December 31, 2016. |
(11) | Ms. Cerioli was hired on December 1, 2014. |
(12) | Mr. Miñarro was named Vice President, General Manager, U.S. and Canada, on April 1, 2015. He previously served as Vice President, General Manager, Latin America. |
(13) | Mr. White was hired on July 13, 2015. His employment ended March 31, 2016. |
COMPENSATION-RELATED MATTERS |
Estimated Possible Payouts under Non-Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | |||||||||||||||||||||||
Named Executive | Plan Name | Award Date(1) | Grant Date(1) | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||||||
W. Foley | 2016 SMIP | 1/11/2016 | 165,000 | 825,000 | 1,856,250 | ||||||||||||||||||||||
2016 LTIP (cash) | 1/11/2016 | 247,500 | 990,000 | 1,980,000 | |||||||||||||||||||||||
2015 LTIP (cash) | 1/11/2016 | 326,700 | 653,400 | 1,306,800 | |||||||||||||||||||||||
2014 LTIP (cash) | 1/11/2016 | 81,675 | 326,700 | 653,400 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 1/11/2016 | 2/25/2016 | 59,855 | 957,680 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 1/11/2016 | 2/25/2016 | 126,598 | 17.13 | 532,688 | ||||||||||||||||||||||
2016 Omnibus Plan | 10/28/2014 | 5/10/2016 | 4,551 | 80,007 | |||||||||||||||||||||||
S. Streeter | 2016 SMIP | 1/11/2016 | 24,057 | ||||||||||||||||||||||||
2016 LTIP (cash) | 1/11/2016 | 9,623 | |||||||||||||||||||||||||
S. Buck | 2016 SMIP | 2/8/2016 | 67,498 | 337,488 | 759,348 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 66,500 | 266,000 | 532,000 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 16,082 | 257,312 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 34,015 | 17.13 | 143,125 | ||||||||||||||||||||||
A. Cerioli | 2016 SMIP | 2/8/2016 | 48,720 | 243,601 | 548,102 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 48,000 | 192,001 | 384,002 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 11,608 | 185,728 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 24,553 | 17.13 | 103,312 | ||||||||||||||||||||||
S. Kovach | 2016 SMIP | 2/8/2016 | 34,157 | 170,784 | 384,264 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 31,970 | 127,878 | 255,756 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 7,731 | 123,696 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 16,353 | 17.13 | 68,809 | ||||||||||||||||||||||
S. Miñarro | 2016 SMIP | 2/8/2016 | 42,635 | 213,175 | 479,644 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 42,005 | 168,019 | 336,038 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 10,158 | 162,528 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 21,486 | 17.13 | 90,407 | ||||||||||||||||||||||
J. White | 2016 SMIP | 2/8/2016 | 79,931 | 399,656 | 899,226 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 78,750 | 315,000 | 630,000 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 19,045 | 304,720 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 40,281 | 17.13 | 169,491 |
COMPENSATION-RELATED MATTERS |
(1) | For Non-Equity Incentive Plan Awards made to all named executives other than Mr. Foley and Ms. Streeter, the Award Date and the Grant Date for awards made under the 2016 SMIP and the performance cash component of the 2016 LTIP are the date on which the Compensation Committee approved the 2016 SMIP and the performance cash component of our 2016 LTIP. For Non-Equity Incentive Plan Awards made to Mr. Foley, the Award Date and the Grant Date are the date on which the Board approved Mr. Foley's participation in, and target opportunities under, the 2016 SMIP and 2016 LTIP. For Non-Equity Incentive Plan Awards made to Ms. Streeter, the Award Date and the Grant Date are the date on which the Board approved the Mutual Separation Agreement and Release pursuant to which Ms. Streeter was awarded these exact amounts. For All Other Stock Awards and All Other Option Awards, the Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of NQSOs or RSUs, as the case may be, awarded. The number of NQSOs and RSUs awarded to the named executives in February 2016 under our 2016 LTIP was determined by dividing the target dollar value of the applicable component of equity to be awarded by (a) in the case of NQSOs, the Black-Scholes value of the options, determined using the average closing price of Libbey common stock over a period of 20 consecutive trading days ending on the grant date and capping the volatility at 50%, or (b) in the case of RSUs, the average closing price of Libbey common stock over the 20 consecutive trading-day period ending February 25, 2016. The number of shares of common stock granted to Mr. Foley on May 10, 2016 under our 2016 Omnibus Plan was determined by multiplying the number of shares times $17.58, the closing price of our common stock on the date of the grant. We inform grant recipients of their awards after we determine the number of RSUs and/or NQSOs to be granted. For awards made in February 2016, we determined the number of RSUs and NQSOs to be granted on the first business day after we announced our results of operations for the 2015 fiscal year. |
(2) | Represents the range of possible cash awards under (a) our 2016 SMIP and (b) the performance cash component of our 2016 LTIP. |
(a) | Under our SMIP, each named executive is eligible for an annual incentive award in an amount up to 225% of the executive officer’s target award, which in turn is a percentage of the executive’s anticipated full-year base salary, as set forth in the following table: |
Named Executive | Target Award as a Percentage of Anticipated Full-Year Base Salary (%) | |
W. Foley | 100 | |
S. Streeter | 100 | |
S. Buck | 70 | |
A. Cerioli | 60 | |
S. Kovach | 50 | |
S. Miñarro | 60 | |
J. White | 75 |
Revenue Growth (Net Sales) | Adjusted Cash Earnings | |||||||
Full Year Net Sales | Percent of Targeted Net Sales | Performance Level | Payout Percentage | Full Year Cash Earnings | Percent of Targeted Cash Earnings | Performance Level | Payout Percentage | |
$880,000 | 104.9% | Maximum | 200% | $131,076 | 110.0% | Maximum | 200% | |
$839,138 | 100.0% | Target | 100% | $119,160 | 100.0% | Target | 100% | |
$800,000 | 95.3% | Threshold | 40% | $95,328 | 80.0% | Threshold | 50% | |
< $800,000 | < 95.3% | Below Threshold | 0% | < $95,328 | < 80.0% | Below Threshold | 0% |
COMPENSATION-RELATED MATTERS |
(b) | Under the performance cash component of our 2016 LTIP, each named executive is eligible for a cash award in an amount up to 200% of the named executive’s target award. Each named executive’s target award under the performance cash component is 40% of the named executive’s target award under all components of the relevant LTIP. The target awards are based on the named executives' respective annualized base salaries as of January 1, 2016 (in the case of Mr. Foley, January 12, 2016). Each named executive’s target award under all components of the 2016 LTIP is set forth in the following table: |
Named Executive | 2016 Target Long-Term Award as a Percentage of Annualized Base Salary (%) | 2016 LTIP Performance Cash Target as Percentage of Annualized Base Salary (%) | ||
W. Foley | 300 | 120 | ||
S. Streeter | 300 | 120 | ||
S. Buck | 140 | 56 | ||
A. Cerioli | 120 | 48 | ||
S. Kovach | 95 | 38 | ||
S. Miñarro | 120 | 48 | ||
J. White | 150 | 60 |
Basis Points Above or Below 2016 Targeted ROIC | Payout Score (%) | |||
+100 | 200 | |||
0 | 100 | |||
-150 | 25 | |||
Less than -150 | 0 |
(3) | Represents grants of RSUs made under our 2016 LTIP and, as to Mr. Foley, an outright grant of common stock attributable to his service as a non-management director during 2015. |
(4) | Represents grants of NQSOs made under our 2016 LTIP. The grants vest 25% per year beginning on February 17, 2016. |
(5) | Represents the respective grant date fair values, determined in accordance with FASB ASC Topic 718, of the RSUs and NQSOs. |
• | NQSOs granted under our 2006 Omnibus Plan and predecessor plans; |
• | RSUs granted under our 2006 Omnibus Plan; and |
• | Cash-settled SARs granted under our 2006 Omnibus Plan. |
COMPENSATION-RELATED MATTERS |
Option Awards | Stock Awards | ||||||||||||||||||||
Named Executive | Award Date(1) | Grant Date(1)(2) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(3) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | |||||||||||||
W. Foley | 1/11/2016 | 2/25/2016 | 0 | 126,598 | 17.13 | 2/25/2026 | 59,855 | 1,164,778 | |||||||||||||
S. Streeter(6) | 12/9/2013 | 12/16/2013 | 240,829 | 0 | 21.29 | 1/11/2017 | |||||||||||||||
S. Buck(7) | 7/6/2012 | 8/1/2012 | 33,389 | 0 | 13.96 | 3/31/2017 | 0 | 0 | |||||||||||||
2/11/2013 | 2/22/2013 | 8,953 | 0 | 19.02 | 2/22/2023 | 0 | 0 | ||||||||||||||
2/17/2014 | 2/24/2014 | 5,370 | 0 | 23.02 | 2/24/2024 | 0 | 0 | ||||||||||||||
2/16/2015 | 3/2/2015 | 2,246 | 0 | 38.06 | 3/31/2017 | 0 | 0 | ||||||||||||||
A. Cerioli | 10/27/2014 | 12/1/2014 | 2,746 | 2,745 | 29.50 | 12/1/2024 | 4,178 | 81,304 | |||||||||||||
2/16/2015 | 3/2/2015 | 1,321 | 3,963 | 38.06 | 3/2/2025 | 2,934 | 57,096 | ||||||||||||||
6/11/2015 | 6/12/2015 | 1,875 | 36,488 | ||||||||||||||||||
2/8/2016 | 2/25/2016 | 0 | 24,553 | 17.13 | 2/25/2026 | 11,608 | 225,892 | ||||||||||||||
S. Kovach | 2/4/2008 | 2/15/2008 | 3,621 | 0 | 15.35 | 2/15/2018 | |||||||||||||||
2/7/2011 | 2/10/2011 | 3,625 | 0 | 17.00 | 2/10/2021 | ||||||||||||||||
2/6/2012 | 2/17/2012 | 4,624 | 0 | 13.95 | 2/17/2022 | ||||||||||||||||
2/11/2013 | 2/22/2013 | 5,177 | 1,725 | 19.02 | 2/22/2023 | 1,513 | 29,443 | ||||||||||||||
2/17/2014 | 2/24/2014 | 3,207 | 3,206 | 23.02 | 2/24/2024 | 2,817 | 54,819 | ||||||||||||||
2/16/2015 | 3/2/2015 | 1,172 | 3,513 | 38.06 | 3/2/2025 | 2,601 | 50,615 | ||||||||||||||
2/8/2016 | 2/25/2016 | 0 | 16,353 | 17.13 | 2/25/2026 | 7,731 | 150,445 | ||||||||||||||
S. Miñarro | 2/4/2008 | 2/15/2008 | 3,200 | 0 | 15.35 | 2/15/2018 | |||||||||||||||
2/9/2009 | 2/27/2009 | 3,500 | 0 | 1.01 | 2/27/2019 | ||||||||||||||||
2/8/2010 | 2/11/2010 | 6,000 | 0 | 10.13 | 2/11/2020 | ||||||||||||||||
12/6/2010 | 12/31/2010 | 20,000 | 0 | 15.47 | 12/31/2020 | ||||||||||||||||
2/7/2011 | 2/10/2011 | 7,000 | 0 | 17.00 | 2/10/2021 | ||||||||||||||||
2/6/2012 | 2/17/2012 | 7,500 | 0 | 13.95 | 2/17/2022 | ||||||||||||||||
7/5/2012 | 8/1/2012 | 3,597 | 0 | 13.96 | 8/1/2022 | ||||||||||||||||
2/11/2013 | 2/22/2013 | 5,939 | 1,979 | 19.02 | 2/22/2023 | 1,734 | 33,744 | ||||||||||||||
2/17/2014 | 2/24/2014 | 3,291 | 3,291 | 23.02 | 2/24/2024 | 2,891 | 56,259 | ||||||||||||||
2/16/2015 | 3/2/2015 | 1,585 | 4,755 | 38.06 | 3/2/2025 | 12,521 | 243,659 | ||||||||||||||
2/8/2016 | 2/25/2016 | 0 | 21,486 | 17.13 | 2/25/2026 | 10,158 | 197,675 | ||||||||||||||
J. White(8) |
(1) | The Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of NQSOs or RSUs, as the case may be, awarded. |
(2) | See ‘‘Compensation Discussion and Analysis — How does Libbey determine the forms and amounts of executive pay? — Our Equity Grant Practices’’ for information as to how we determine the number of NQSOs and RSUs awarded to our named executives. We inform grant recipients of their awards after we determine the number of NQSOs and/or RSUs to be granted. For awards made in February 2016, the grant date was the first business day after we announced our results of operations for the 2015 fiscal year. |
(3) | Represents NQSOs awarded under our 2006 Omnibus Plan. NQSOs granted before 2015 vest 25% on each of the first four anniversaries of the grant date. NQSOs granted in 2015 and 2016 vest 25% per year for four years beginning on February 17th of the year after the grant. |
(4) | Represents RSUs awarded under our 2006 Omnibus Plan. One share of our common stock underlies each RSU. RSUs granted in 2013, 2014 and on June 12, 2015 vest 25% on each of the first four anniversaries of the grant date. All other RSUs vest 25% per year for four years beginning on February 17th of the year after the grant. |
(5) | Represents the market value, as of December 31, 2016, of unvested RSUs. We have estimated the market value by multiplying the number of shares of common stock underlying the RSUs by $19.46, the closing price of our common stock on December 30, 2016, the last trading day of 2016. |
COMPENSATION-RELATED MATTERS |
(6) | The special retention award of cash-settled SARs made to Ms. Streeter in December 2013 was scheduled to cliff vest on December 31, 2018; however, all 240,829 cash-settled SARs vested automatically upon Ms. Streeter's termination of employment on January 11, 2016. For additional information, see footnote (8) to the Potential Payments Upon Termination of Employment table below. |
(7) | Pursuant to the terms of the applicable NQSO and RSU award agreements, upon Ms. Buck's resignation on December 31, 2016, all unvested NQSOs and RSUs were forfeited. |
(8) | Mr. White had no outstanding equity awards as of December 31, 2016. When Mr. White's employment ended on March 31, 2016, vesting was accelerated as to all NQSOs and RSUs that otherwise would have vested within one year of his termination date. All other unvested NQSOs and RSUs were forfeited. Vested NQSOs expired on June 29, 2016. |
Option Awards | Stock Awards | |||||||||||
Named Executive | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting ($)(2) | Value Realized on Vesting ($)(3) | ||||||||
W. Foley | 0 | 0 | 4,551 | 80,007 | ||||||||
S. Streeter | 54,801 | 129,731 | 150,029 | 2,937,568 | ||||||||
S. Buck | 0 | 0 | 11,747 | 212,777 | ||||||||
A. Cerioli | 0 | 0 | 3,693 | 66,863 | ||||||||
S. Kovach | 0 | 0 | 5,586 | 96,832 | ||||||||
S. Miñarro | 2,882 | 21,846 | 8,584 | 149,804 | ||||||||
J. White | 10,071 | 9,265 | 15,564 | 289,490 |
(1) | Represents the sum of the differences between the market prices and the exercise prices for the respective awards of NQSOs exercised by the named executive officers during 2016. |
(2) | As to Mr. Foley, represents grant of unrestricted common stock in 2016. As to Ms. Streeter, represents 34,342 RSUs and 115,687 cash-settled RSUs that vested during 2016. As to all other named executives, represents the number of RSUs that vested during 2016. |
(3) | As to Mr. Foley, represents the value of unrestricted common stock granted in 2016, the value of which was determined by multiplying the number of shares by the closing price of our common stock on the grant date: $17.58. As to all other named executives, represents the value of RSUs, including cash-settled RSUs, that vested during 2016. The value was determined by multiplying the number of shares by the closing price of our common stock on the applicable vesting dates: |
Vesting Date | Closing Price ($) | |
January 11, 2016 | 19.58 | |
February 17, 2016 | 16.75 | |
February 22, 2016 | 17.56 | |
February 24, 2016 | 18.20 | |
March 31, 2016 | 18.60 | |
June 12, 2016 | 16.80 | |
August 1, 2016 | 18.80 | |
December 1, 2016 | 19.13 |
COMPENSATION-RELATED MATTERS |
Named Executive | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | |||||||
W. Foley | N/A | N/A | N/A | N/A | |||||||
S. Streeter | N/A | N/A | N/A | N/A | |||||||
S. Buck | N/A | N/A | N/A | N/A | |||||||
A. Cerioli | N/A | N/A | N/A | N/A | |||||||
S. Kovach | Salary Plan | 13.08 | 164,229 | 0 | |||||||
SERP | 13.08 | 125,254 | 0 | ||||||||
S. Miñarro | N/A | N/A | N/A | N/A | |||||||
J. White | N/A | N/A | N/A | N/A |
(1) | Represents actual years of service to Libbey. The plans were frozen at the end of 2012, after which additional pension service is not credited. |
(2) | Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31, 2016, except that all named executives who are eligible for pension benefits under the Salary Plan are assumed to receive benefits under the cash balance design at their normal retirement age of 65. |
COMPENSATION-RELATED MATTERS |
Executive Contributions in Last FY | Registrant Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate Withdrawals / Distributions in Last FY | Aggregate Balance at Last FYE(3) | ||||||||||||||||||||||
Named Executive | ($) | RSUs | ($)(1) | RSUs | ($)(2) | RSUs | ($) | RSUs | ($) | RSUs | ||||||||||||||||
W. Foley | 30,938 | 0 | 30,938 | 0 | 6 | 0 | 0 | 0 | 61,881 | 0 | ||||||||||||||||
S. Streeter | 2,117 | 0 | 0 | 0 | (24,001 | ) | 0 | (388,925 | ) | 0 | 0 | 0 | ||||||||||||||
S. Buck | 12,113 | 0 | 12,113 | 0 | 2,055 | 131 | 0 | 0 | 83,480 | 5,310 | ||||||||||||||||
A. Cerioli | 68,800 | 0 | 8,800 | 0 | 1,830 | 0 | 0 | 0 | 79,430 | 0 | ||||||||||||||||
S. Kovach | 4,291 | 0 | 4,291 | 0 | 1,011 | 407 | 0 | 0 | 69,922 | 16,530 | ||||||||||||||||
S. Miñarro | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
J. White | 6,563 | 0 | 0 | 0 | 839 | 0 | (40,696 | ) | 0 | 0 | 0 |
(1) | The following amounts are included in the column headed ‘‘All Other Compensation’’ in the Summary Compensation Table above: Mr. Foley — $30,938; Ms. Buck — $12,113; Ms. Cerioli — $8,800; Ms. Kovach— $4,291. |
(2) | Not included in the Summary Compensation Table because earnings are not at an above-market rate. |
(3) | Of the total amounts in this column, the following amounts are reported as ‘‘Salary’’ or ‘‘Stock Awards’’ in the Summary Compensation Table in this proxy statement for the 2016, 2015 and/or 2014 fiscal years: |
Named Executive | Salary ($) | Stock Awards ($) | ||||
W. Foley | 30,938 | 0 | ||||
S. Streeter | 381,251 | 0 | ||||
S. Buck | 35,288 | 0 | ||||
A. Cerioli | 68,800 | 0 | ||||
S. Kovach | 10,923 | 0 | ||||
S. Miñarro | 0 | 0 | ||||
J. White | 28,875 | 0 |
COMPENSATION-RELATED MATTERS |
• | We have assumed that the executive's employment terminated on December 31, 2016 under the various scenarios described in the table. |
• | For purposes of illustrating the amounts payable on or in connection with a change in control, we have assumed that a change in control occurred on December 31, 2016, and that the named executive's employment terminated concurrently with the change in control. |
COMPENSATION-RELATED MATTERS |
Named Executive | Cash Severance ($) | Annual Incentive for Year of Termination ($) | LTIP Cash ($)(2) | Acceleration of Unvested Equity Awards ($)(3) | Misc. Benefits ($) | Total ($) | ||||||||||||
William A. Foley | ||||||||||||||||||
Death or permanent disability(4) | 0 | 556,000 | 980,100 | 1,459,752 | 0 | 2,995,852 | ||||||||||||
Voluntary termination(5) | 0 | 556,000 | 759,550 | 0 | 0 | 1,315,550 | ||||||||||||
Involuntary termination without Cause - no change in control(6) | 0 | 556,000 | 759,550 | 364,944 | 0 | 1,680,494 | ||||||||||||
Involuntary termination without Cause in connection with a change in control(7) | 0 | 556,000 | 1,459,854 | 1,459,752 | 0 | 3,475,606 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Stephanie A. Streeter | ||||||||||||||||||
Involuntary termination without Cause - no change in control(8) | 3,193,000 | 24,057 | 629,609 | 2,978,115 | 106,618 | 6,931,399 | ||||||||||||
Sherry Buck | ||||||||||||||||||
Voluntary termination without Good Reason - no change in control(9) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Annunciata Cerioli | ||||||||||||||||||
Death or permanent disability(10) | 0 | 141,670 | 254,404 | 457,987 | 0 | 854,061 | ||||||||||||
Voluntary termination for Good Reason - no change in control(11) | 0 | 0 | 176,576 | 0 | 0 | 176,576 | ||||||||||||
Involuntary termination without Cause - no change in control(12) | 704,006 | 141,670 | 176,576 | 142,623 | 93,393 | 1,258,268 | ||||||||||||
Voluntary termination for Good Reason or involuntary termination without Cause - change in control(13) | 1,408,012 | 141,670 | 314,631 | 457,987 | 106,507 | 2,428,807 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Susan A. Kovach | ||||||||||||||||||
Death or permanent disability(10) | 0 | 118,695 | 247,101 | 324,184 | 0 | 689,980 | ||||||||||||
Retirement(14) | 0 | 118,695 | 0 | 0 | 289,483 | 408,178 | ||||||||||||
Voluntary termination for Good Reason - no change in control(11) | 0 | 0 | 170,540 | 0 | 0 | 170,540 | ||||||||||||
Involuntary termination without Cause - no change in control(12) | 514,875 | 118,695 | 170,540 | 121,617 | 88,454 | 1,014,181 | ||||||||||||
Voluntary termination for Good Reason or involuntary termination without Cause - change in control(13) | 1,029,750 | 118,695 | 267,688 | 324,184 | 84,585 | 1,824,902 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Salvador Miñarro Villalobos | ||||||||||||||||||
Death or permanent disability(10) | 0 | 148,156 | 292,952 | 582,269 | 0 | 1,023,377 | ||||||||||||
Voluntary termination for Good Reason – no change in control(11) | 0 | 0 | 199,709 | 0 | 0 | 199,709 | ||||||||||||
Involuntary termination without Cause -- no change in control(12) | 571,266 | 148,156 | 199,709 | 205,905 | 93,393 | 1,218,429 | ||||||||||||
Voluntary termination for Good Reason or involuntary termination without Cause - change in control(13) | 1,142,532 | 148,156 | 328,177 | 582,269 | 94,062 | 2,295,196 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
James H. White | ||||||||||||||||||
Involuntary termination without Cause -- no change in control(11) | 918,750 | 68,414 | 93,209 | 324,295 | 93,808 | 1,498,476 |
COMPENSATION-RELATED MATTERS |
(1) | Represents potential payments pursuant to equity award agreements (including award agreements for cash-settled retention RSUs and cash-settled retention SARs), performance cash award agreements and (a) in the case of the named executives other than Ms. Streeter or Mr. Foley, our Executive Severance Compensation Policy or their respective change in control agreements, as applicable, (b) in the case of Mr. Foley, his Letter Agreement, and (c)in the case of Ms. Streeter, her Mutual Separation and Release Agreement. Only Ms. Kovach was retirement eligible as of December 31, 2016. |
(2) | As to those triggering events for which we estimated future payouts under the performance cash component of our 2015 LTIP and 2016 LTIP, we estimated the payout under the performance cash component of our 2015 LTIP assuming achievement at 51% of target performance and we estimated the payout under the performance cash component of our 2016 LTIP assuming achievement of 89% of target performance. |
(3) | For those triggering events that result in acceleration of unvested equity awards: (a) except as to RSUs (including cash-settled RSUs) granted to Ms. Streeter and Mr. White, we have estimated the value of common stock underlying RSUs by multiplying the applicable number of RSUs by $19.46, the closing price of our common stock on December 31, 2016; and (b) except as to RSUs (including cash-settled RSUs) granted to Ms. Streeter and Mr. White, we have determined the in-the-money / intrinsic value of the applicable NQSOs by deducting the respective exercise prices for the NQSOs from $19.46 and multiplying the result (if greater than zero) by the applicable number of NQSOs. As to Ms. Streeter, the values for the RSUs (including cash-settled RSUs), NQSOs and cash-settled SARs were calculated based on the closing price of our common stock on January 11, 2016, which was $19.58. As to Mr. White, the values of the RSUs and NQSOs were calculated based on the closing price of our common stock on March 31, 2016, which was $18.60. |
(4) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(b) | under "LTIP Cash," a target award (unprorated because the performance cycle was complete as of December 31, 2016) under the performance cash component of our 2014 LTIP and prorated target awards under the performance cash component of our 2015 LTIP and our 2016 LTIP; and |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying all RSUs that were not vested as of December 31, 2016, and (ii) the in-the-money/ intrinsic value, as of December 31, 2016, of all NQSOs that were not vested as of December 31, 2016. |
(5) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; and |
(b) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate of the prorated amount that actually would be earned under the performance cash component of each of our 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle. |
(6) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(b) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate of the prorated amount that actually would be earned under the performance cash component of each of our 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; and |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying RSUs that were not vested as of December 31, 2016 but were scheduled to vest by December 31, 2017, and (ii) the in-the-money/ intrinsic value, as of December 31, 2016, of NQSOs that were not vested as of December 31, 2016 but were scheduled to vest by December 31, 2017. |
(7) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; and |
(b) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate of the unprorated amount that actually would be earned under the performance cash component of each of our 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). The unprorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; and |
COMPENSATION-RELATED MATTERS |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying all RSUs that were not vested as of December 31, 2016, and (ii) the in-the-money/ intrinsic value, as of December 31, 2016, of all NQSOs that were not vested as of December 31, 2016. |
(8) | Represents the sum of: |
(a) | under "Cash Severance," two times the sum of (a) her annual base salary in effect on the date of termination; and (b) her target 2016 SMIP opportunity, with such amount being payable in equal monthly installments over a period of 24 months; |
(b) | under "Annual Incentive for Year of Termination," the amount earned under our 2016 SMIP based on Ms. Streeter's base salary earnings for 2016 and forecasted Company performance as of the end of January 2016. This amount was paid to Ms. Streeter in March 2016; |
(c) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP, 2015 LTIP and 2016 LTIP, based on forecasted Company performance as of the end of January 2016, and prorated to Ms. Streeter's termination date. This amount was paid to Ms. Streeter in March 2016; |
(d) | under "Acceleration of Unvested Equity Awards," the sum of (i) the value, as of January 11, 2016, of common stock underlying all cash-settled retention RSUs; (ii) the value, as of January 11, 2016, of common stock underlying stock-settled RSUs scheduled to vest on or before June 30, 2016; and (iii) the in-the-money / intrinsic value, as of January 11, 2016, of all NQSOs scheduled to vest on or before June 30, 2016. Ms. Streeter's cash-settled retention SARs were underwater as of January 11, 2016; and |
(e) | under "Misc. Benefits," the sum of the maximum cost ($75,000) to be incurred by Libbey to provide executive level outplacement services for two years following termination and the estimated cost (net of contributions by Ms. Streeter at the active employee rate) to provide medical, dental, prescription drug and life insurance coverage for 18 months following termination. |
(9) | Ms. Buck did not receive any severance payments or benefits in connection with her resignation. |
(10) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(b) | under "LTIP Cash," a target award (unprorated because the performance cycle was complete as of December 31, 2016) under the performance cash component of our 2014 LTIP and prorated target awards under the performance cash component of our 2015 LTIP and our 2016 LTIP; and |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying all RSUs that were not vested as of December 31, 2016, (iii) the in-the-money/ intrinsic value, as of December 31, 2016, of all NQSOs that were not vested as of December 31, 2016. |
(11) | Under "LTIP Cash," represents prorated actual awards under the performance cash component of our 2014 LTIP, 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). We have prorated the amounts through the assumed date of termination. The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle. |
(12) | Represents the sum of: |
(a) | under "Cash Severance," salary continuation for 12 months and a lump sum payment in an amount equal to the named executive's target annual incentive compensation, based on the annual base salary and target opportunity percentage in effect on the date of termination; |
(b) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(c) | under "LTIP Cash," prorated actual awards under the performance cash component of our 2014 LTIP, 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). We have prorated the amounts through the assumed date of termination. The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; |
(d) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying RSUs that were not yet vested as of December 31, 2016, and were scheduled to vest by December 31, 2017; (ii) the in-the-money / intrinsic value, as of December 31, 2016, of NQSOs that were not yet vested as of December 31, 2016, and were scheduled to vest by December 31, 2017; and |
(e) | under "Misc. Benefits," the sum of (i) the estimated cost (net of contributions by the named executive, at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for a period of 12 months following termination, and (ii) executive outplacement services for a period of one year from termination at the rate of $75,000 per year. |
COMPENSATION-RELATED MATTERS |
(13) | Represents the sum of: |
(a) | under "Cash Severance," the sum of two times the named executive's annual base salary and two times the named executive’s target award under our 2016 SMIP, at the annual base salary and target incentive opportunity in effect on the date of termination; |
(b) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(c) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate (without proration) of the amount the named executive would earn under the performance cash component of each of our 2015 LTIP and our 2016 LTIP (estimated as described in footnote (2) above). The unprorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; |
(d) | under "Acceleration of Unvested Equity Awards," the estimated value, as of December 31, 2016, of common stock underlying RSUs not yet vested as of that date and the in-the-money / intrinsic value, as of December 31, 2016, of NQSOs not yet vested as of that date; and |
(e) | under "Misc. Benefits," the sum of (i) the maximum cost (15% of base salary) to be incurred by Libbey to provide executive level outplacement services for two years after termination; (ii) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for 18 months following termination; and (iii) and the maximum cost ($10,000) to provide financial planning services to the named executive. |
(14) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; and |
(b) | under "Misc. Benefits," the present value of Ms. Kovach's accumulated benefit under our Salary Plan and SERP at December 31, 2016. |
COMPENSATION-RELATED MATTERS |
Element of Compensation | Annual Compensation Amount | |
Annual Cash Retainer | $47,500 | |
Lead Independent Director Cash Retainer | $20,000 | |
Equity Award | On the date of each annual meeting of shareholders, outright grant of shares of common stock valued at $80,000 on the date of grant | |
Committee Chair Cash Retainers (in addition to Committee Member Cash Retainers) | $12,500 (Audit Committee and Compensation Committee) | |
$6,500 (Nominating and Governance Committee) | ||
Committee Member Cash Retainers | $7,500 (Audit Committee and Compensation Committee) | |
$5,000 (Nominating and Governance Committee) | ||
Other Fees | $500 per one-half day of service |
COMPENSATION-RELATED MATTERS |
Director | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($) | Total ($) | ||||||||
Carlos V. Duno | 72,500 | 80,007 | 0 | 0 | 152,507 | ||||||||
Peter C. McC. Howell | 16,630 | 80,007 | 0 | 0 | 96,637 | ||||||||
Ginger M. Jones | 75,000 | 80,007 | 0 | 0 | 155,007 | ||||||||
Theo Killion | 60,421 | 80,007 | 0 | 0 | 140,428 | ||||||||
Eileen A. Mallesch | 42,079 | 0 | 0 | 0 | 42,079 | ||||||||
Deborah G. Miller | 60,693 | 80,007 | 0 | 0 | 140,700 | ||||||||
Carol B. Moerdyk | 60,000 | 80,007 | 0 | 0 | 140,007 | ||||||||
John C. Orr | 87,587 | 80,007 | 0 | 0 | 167,594 |
(1) | Includes pay deferred into the Libbey common stock measurement fund pursuant to the Director DCP. |
(2) | Represents the grant date fair value, determined in accordance with FASB ASC Topic 718, of awards of stock made to non-management directors on May 10, 2016. On that date, we awarded certain non-management directors stock having a grant date fair value of $17.58 per share. |
(3) | We do not maintain a pension plan for our non-management directors. We do not guarantee any particular rate of return on any pay deferred pursuant to our deferred compensation plans. Dividends on pay deferred into the Libbey Inc. phantom stock or measurement fund under our deferred compensation plans for non-management directors accrue only if and to the extent payable to holders of our common stock. Pay deferred into interest-bearing accounts under our deferred compensation plans for non-management directors does not earn an above-market return, as the applicable interest rate is the yield on ten-year treasuries. Pay deferred into other measurement funds under our deferred compensation plans for non-management directors does not earn an above-market return as that pay earns a return only if and to the extent that the net asset value of the measurement fund into which the pay is deemed invested actually increases. |
AUDIT- RELATED MATTERS |
PROPOSAL 4 — RATIFICATION OF AUDITORS |
Nature of Fees | 2016 Fees | 2015 Fees | ||||||
Audit Fees(1) | $ | 1,116,444 | $ | 1,112,248 | ||||
Audit-Related Fees(2) | 112,840 | 115,200 | ||||||
Tax Fees(3) | 0 | 33,900 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 1,229,284 | $ | 1,261,348 |
(1) | Audit Fees include fees associated with the annual audit of our internal controls, the annual audit of financial statements, the reviews of our quarterly reports on Form 10-Q and annual report on Form 10-K and statutory audit procedures. |
(2) | Audit-related fees include fees for audits of our employee benefit plans. The 2015 fees represent payments for the audits of our employee benefit plans for the year ended December 31, 2014, which were performed by Ernst & Young LLP. The 2016 fees represent payments for the audits of our employee benefit plans for the year ended December 31, 2015, which were performed by Deloitte & Touche LLP. |
(3) | Tax fees are for analysis that was performed in 2015 on new U.S. tangible property regulations and was contracted and started in 2014, prior to the appointment of Deloitte & Touche LLP as our independent registered accounting firm. |
AUDIT- RELATED MATTERS |
• | confirming the independence of our independent auditors; |
• | appointing, compensating and retaining our independent auditors; |
• | reviewing the scope of the audit services to be provided by our independent auditors, including the adequacy of staffing and compensation; |
• | approving non-audit services; |
• | overseeing management’s relationship with our independent auditors; |
• | overseeing management’s implementation and maintenance of effective systems of internal and disclosure controls; |
• | reviewing our internal audit program; and |
• | together with the Board and its other standing committees, overseeing our enterprise risk management program. |
Ginger M. Jones, Chair | ||
Theo Killion | ||
Eileen A. Mallesch | ||
Deborah G. Miller | ||
John C. Orr |
STOCK OWNERSHIP |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||||
Frontier Capital Management Co., LLC.(1) | ||||||||||
99 Summer Street | ||||||||||
Boston, MA 02110 | 2,164,994 | 9.9% | ||||||||
RBC Global Asset Management (U.S.) Inc.(2) | ||||||||||
50 South Sixth Street, Suite 2350 | ||||||||||
Minneapolis, MN 55402 | 1,889,001 | 8.6% | ||||||||
BlackRock, Inc.(3) | ||||||||||
55 East 52nd Street | ||||||||||
New York, NY 10055 | 1,292,374 | 5.9% | ||||||||
Dimensional Fund Advisors LP(4) | ||||||||||
Building One | ||||||||||
6300 Bee Cave Road | ||||||||||
Austin, TX 78746 | 1,228,844 | 5.6% | ||||||||
Boston Partners(5) | ||||||||||
One Beacon Street | ||||||||||
Boston, MA 02108 | 1,195,143 | 5.5% | ||||||||
The Vanguard Group(6) | ||||||||||
100 Vanguard Boulevard | ||||||||||
Malvern, PA 19355 | 1,103,770 | 5.1% |
(1) | Schedule 13G filed with the SEC on behalf of Frontier Capital Management Co., LLC. ("Frontier"), an investment adviser, indicates that, as of December 31, 2016, Frontier was the beneficial owner of 2,164,994 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power as to 758,964 common shares, and shared voting power with respect to no common shares. |
(2) | Amendment No. 4 to Schedule 13G filed with the SEC on behalf of RBC Global Asset Management (U.S.) Inc. (‘‘RBC’’), an investment adviser, indicates that, as of December 31, 2016, RBC was the beneficial owner of 1,889,001 common shares, with sole dispositive power as to none of such shares, shared dispositive power as to all of such shares, sole voting power with respect to no common shares, and shared voting power with respect to 1,650,102 common shares. |
(3) | Schedule 13G filed with the SEC on behalf of BlackRock, Inc. ("BlackRock"), a parent holding company, indicates that, as of December 31, 2016, BlackRock was the beneficial owner of 1,292,374 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power with respect to 1,241,664 common shares, and shared voting power with respect to no common shares. |
(4) | Amendment No. 1 to Schedule 13G filed with the SEC on behalf of Dimensional Fund Advisors LP ("Dimensional"), an investment adviser, indicates that, as of December 31, 2016, Dimensional was the beneficial owner of 1,228,884 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power with respect to 1,170,018 common shares, and shared voting power with respect to no common shares. |
(5) | Schedule 13G filed with the SEC on behalf of Boston Partners ("Boston"), an investment adviser, indicates that, as of December 31, 2016, Boston was the beneficial owner of 1,195,143 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power with respect to 704,280 common shares, and shared voting power with respect to no common shares. |
(6) | Schedule 13G filed with the SEC on behalf of The Vanguard Group ("Vanguard"), an investment adviser, indicates that, as of December 31, 2016, Vanguard was the beneficial owner of 1,103,770 common shares, with sole dispositive power as to 1,075,574 of such shares, shared dispositive power as to 28,196 of such shares, sole voting power with respect to 27,994 common shares and shared voting power with respect to 1,700 common shares. |
STOCK OWNERSHIP |
• | Pursuant to the applicable deferral election in effect immediately before November 1, 2015, the deferred compensation is to be distributed on a date that may precede the first to occur of the non-management director's death or retirement from the Board; and |
• | In the case of deferred cash compensation, the cash was deemed invested in "phantom stock" or the Libbey common stock fund pursuant to the applicable deferred compensation plan. |
• | 50% of the net after-tax shares underlying each grant of RSUs made after January 1, 2013 that subsequently vests; and |
• | 50% of the net after-tax shares underlying NQSOs granted after January 1, 2013 that the executive subsequently exercises. |
STOCK OWNERSHIP |
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||
Sherry Buck(1)(2)(4) | 69,538 | * | ||||
Anunciata (Nucci) Cerioli(1)(2) | 18,116 | * | ||||
Carlos V. Duno(3) | 37,648 | * | ||||
William A. Foley(1)(2)(3) | 89,376 | * | ||||
Ginger M. Jones(3) | 10,599 | * | ||||
Theo Killion(3) | 6,381 | * | ||||
Susan A. Kovach(1)(2) | 50,788 | * | ||||
Eileen A. Mallesch(3) | 0 | * | ||||
Deborah G. Miller(3) | 25,492 | * | ||||
Salvador Miñarro Villalobos(1)(2) | 86,596 | * | ||||
Carol B. Moerdyk(3) | 38,095 | * | ||||
John C. Orr(3) | 29,423 | * | ||||
Stephanie A. Streeter(1)(2)(4) | 109,350 | * | ||||
James H. White(1)(2)(4) | 10,413 | * | ||||
Directors and Executive Officers as a Group(1)(2)(3)(4) | 600,344 | 2.74% |
(1) | Does not include shares of our common stock that have vested but are deferred under our Executive Deferred Compensation Plan, which we refer to as our EDCP. As of March 20, 2017, each of our named executives, and all executive officers as a group, had the following number of shares of our common stock that are vested but deferred under our EDCP: |
Named Executive | Number of Deferred Shares | ||
S. Buck | 5,355 | ||
A. Cerioli | 0 | ||
W. Foley | 0 | ||
S. Kovach | 16,670 | ||
S. Miñarro | 0 | ||
S. Streeter | 0 | ||
J. White | 0 | ||
All executive officers as a group | 22,025 |
(2) | Includes the following number of NQSOs that have been granted to our named executives and all executive officers as a group and that currently are exercisable or will be exercisable on or before May 19, 2017: |
Named Executive | Number of Outstanding Stock Options Exercisable Within 60 Days | ||
S. Buck | 49,958 | ||
A. Cerioli | 11,527 | ||
W. Foley | 31,650 | ||
S. Kovach | 30,014 | ||
S. Miñarro | 72,194 | ||
S. Streeter | 0 | ||
J. White | 0 | ||
All executive officers as a group | 210,693 |
STOCK OWNERSHIP |
(3) | Includes the following number of shares of our common stock that are deferred by non-management directors under our 2009 Director Deferred Compensation Plan, which we refer to as our Director DCP, and that are payable as shares of our common stock: |
Name of Director | Number of Deferred Shares | ||
C. Duno | 24,522 | ||
W. Foley(a) | 0 | ||
G. Jones | 0 | ||
T. Killion | 0 | ||
E. Mallesch | 0 | ||
D. Miller | 0 | ||
C. Moerdyk | 0 | ||
J. Orr | 0 | ||
All non-management directors as a group | 24,522 |
Name of Director | Number of Phantom Shares | ||
C. Duno | 0 | ||
W. Foley(a) | 12,348 | ||
G. Jones | 0 | ||
T. Killion | 0 | ||
E. Mallesch | 0 | ||
D. Miller | 2,298 | ||
C. Moerdyk | 19,347 | ||
J. Orr | 0 | ||
All non-management directors as a group | 33,993 |
(4) | Based on last known information as of date of separation from service. For Ms. Buck, that date was December 31, 2016. For Ms. Streeter, that date was January 11, 2016. For Mr. White, that date was March 31, 2016. |
Named Executive | Number of Unvested RSUs(1) | ||
S. Buck | 0 | ||
A. Cerioli | 16,715 | ||
W. Foley | 88,670 | ||
S. Kovach | 14,709 | ||
S. Miñarro | 24,990 | ||
S. Streeter | 0 | ||
J. White | 0 | ||
All executive officers as a group | 166,338 |
(1) | Of these amounts, a total of 2,855 RSUs with four-year vesting were awarded on February 24, 2014; a total of 4,178 RSUs with four-year vesting were awarded on December 1, 2014; a total of 12,956 RSUs with four-year vesting were awarded on February 16, 2015; a total of 1,674 RSUs with four-year vesting were awarded on May 18, 2015; a total of 1,875 RSUs with four-year vesting were awarded on June 11, 2015; a total of 4,125 RSUs with four-year vesting were awarded on December 11, 2015; a total of 72,457 RSUs with four-year vesting were awarded on February 8, |
STOCK OWNERSHIP |
GENERAL INFORMATION |
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APPENDIX A |
Year ended December 31, 2016 | ||||||||
As Reported | For LTIP Incentive Calculations | |||||||
Revenue | ||||||||
Reported net sales | $ | 793,420 | $ | 793,420 | ||||
Adjusted EBITDA | ||||||||
Reported net income | $ | 10,073 | $ | 10,073 | ||||
Add: Interest expense | 20,888 | 20,888 | ||||||
Add: Provision for income taxes | 17,711 | 17,711 | ||||||
Earnings before interest and income taxes (EBIT) | 48,672 | 48,672 | ||||||
Add: Depreciation and amortization | 48,486 | 48,486 | ||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | 97,158 | 97,158 | ||||||
Add: Special items before interest and taxes | ||||||||
Pension settlement | 168 | 168 | ||||||
Product portfolio optimization | 5,693 | 5,693 | ||||||
Work Stoppage | 4,162 | 4,162 | ||||||
Executive terminations | 4,460 | 4,460 | ||||||
Derivatives | (1,860 | ) | (1,860 | ) | ||||
Adjusted EBITDA | $ | 109,781 | $ | 109,781 | ||||
Adjusted EBITDA margin | ||||||||
Adjusted EBITDA | $ | 109,781 | $ | 109,781 | ||||
Net sales | $ | 793,420 | $ | 793,420 | ||||
Adjusted EBITDA margin | 13.8 | % | 13.8 | % | ||||
Debt net of cash to Adjusted EBITDA ratio | ||||||||
Debt | $ | 407,840 | $ | 407,840 | ||||
Plus: Unamortized discount and finance fees | 4,480 | 4,480 | ||||||
Gross debt | 412,320 | 412,320 | ||||||
Cash | 61,011 | 61,011 | ||||||
Less: Share repurchases below budgeted amount | — | 8,000 | ||||||
Debt net of Cash | $ | 351,309 | $ | 359,309 | ||||
Adjusted EBITDA | $ | 109,781 | $ | 109,781 | ||||
Debt net of cash to adjusted EBITDA ratio | 3.2 | 3.3 | ||||||
APPENDIX A |
Year ended December 31, 2016 | ||||||||
As Reported | For LTIP Incentive Calculations | |||||||
Return on Invested Capital (ROIC) | ||||||||
Defined as: After tax adjusted income from operations (using a 30% tax rate) over ending working capital (accounts receivable-net plus inventory-net, less accounts payable) plus net book value of property, plant and equipment | ||||||||
Income from operations | $ | 45,310 | $ | 45,310 | ||||
Add: Adjustments | ||||||||
Product portfolio optimization charge | 5,693 | 5,693 | ||||||
Work stoppage | 4,162 | 4,162 | ||||||
Executive terminations | 4,460 | 3,554 | ||||||
Pension settlement charges | 168 | — | ||||||
Mexico tax assessment | — | 1,085 | ||||||
Adjusted income from operations | 59,793 | 59,804 | ||||||
Add: Impact of currency to reflect results at budgeted exchange rates | — | 4,574 | ||||||
Adjusted income from operations at budgeted exchange rates | 59,793 | 64,378 | ||||||
Factor to apply for taxes | 70 | % | 70 | % | ||||
After tax adjusted income from operations at budgeted exchange rates | $ | 41,855 | $ | 45,065 | ||||
Invested capital | ||||||||
Property, plant and equipment, net | $ | 256,392 | $ | 256,392 | ||||
Add: Impact of currency to reflect results at budgeted exchange rates | — | 4,174 | ||||||
Property, plant and equipment, net at budgeted exchange rates | 256,392 | 260,566 | ||||||
Accounts receivable - net | 85,113 | 85,113 | ||||||
Inventories - net | 170,009 | 170,009 | ||||||
Less: Accounts payable | 71,582 | 71,582 | ||||||
Trade Working Capital | 183,540 | 183,540 | ||||||
Add: Adjustments | ||||||||
Inventory impact of work stoppage at Toledo, Ohio plant | — | 2,694 | ||||||
Inventory impact of product portfolio optimization | — | 5,693 | ||||||
Adjusted trade working capital | 183,540 | 191,927 | ||||||
Add: Impact of currency | — | 4,616 | ||||||
Adjusted trade working capital at budgeted exchange rates | 183,540 | 196,543 | ||||||
Total adjusted invested capital at budgeted exchange rates | $ | 439,932 | $ | 457,109 | ||||
ROIC | 9.5 | % | 9.9 | % | ||||
APPENDIX B |
Year ended December 31, 2016 | ||||||||
As Reported | For SMIP Incentive Calculations | |||||||
Revenue | ||||||||
Reported net sales | $ | 793,420 | $ | 793,420 | ||||
Add: Sales impact of work stoppage at Toledo, Ohio plant | — | 7,245 | ||||||
Adjusted net sales | 793,420 | 800,665 | ||||||
Add: Impact of currency to reflect results at budgeted exchange rates | — | 6,263 | ||||||
Adjusted net sales at budgeted exchange rates | $ | 793,420 | $ | 806,928 | ||||
Adjusted EBITDA | ||||||||
Reported net income | $ | 10,073 | $ | 10,073 | ||||
Add: Interest expense | 20,888 | 20,888 | ||||||
Add: Provision for income taxes | 17,711 | 17,711 | ||||||
Earnings before interest and income taxes (EBIT) | 48,672 | 48,672 | ||||||
Add: Depreciation and amortization | 48,486 | 48,486 | ||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | 97,158 | 97,158 | ||||||
Add: Special items before interest and taxes | ||||||||
Pension settlement | 168 | — | ||||||
Product portfolio optimization | 5,693 | 5,693 | ||||||
Work Stoppage | 4,162 | 4,162 | ||||||
Executive terminations | 4,460 | 3,554 | ||||||
Derivatives | (1,860 | ) | (1,860 | ) | ||||
2010 Mexican tax assessment | — | 1,085 | ||||||
Adjusted EBITDA | 109,781 | 109,792 | ||||||
Add: Impact of currency to reflect results at budgeted exchange rates | — | 4,609 | ||||||
Adjusted EBITDA at budgeted exchange rates | 109,781 | 114,401 | ||||||
Change in Trade Working Capital | ||||||||
Change in accounts receivable - net | $ | 9,266 | $ | 9,266 | ||||
Change in inventories - net | 8,018 | 8,018 | ||||||
Change in accounts payable | 22 | 22 | ||||||
Change in trade working capital | 17,306 | 17,306 | ||||||
Add: Adjustments | ||||||||
Inventory impact of work stoppage at Toledo, Ohio plant | — | (2,694 | ) | |||||
Inventory impact of product portfolio optimization | — | (5,693 | ) | |||||
Adjusted change in trade working capital | 17,306 | 8,919 | ||||||
Add: Impact of currency | — | 4,616 | ||||||
Adjusted change in trade working capital at budgeted exchange rates | $ | 17,306 | $ | 4,303 | ||||
Adjusted Cash Earnings | ||||||||
Adjusted EBITDA at budgeted exchange rates | $ | 109,781 | $ | 114,401 | ||||
Adjusted change in trade working capital at budgeted exchange rates | 17,306 | 4,303 | ||||||
Adjusted cash earnings at budgeted exchange rates | $ | 127,087 | $ | 118,704 | ||||
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LIBBEY INC. P.O. BOX 10060 TOLEDO, OH 43699-0060 |
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For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||
The Board of Directors recommends you vote FOR the following Class III Directors: | ||||||||||||||||
1. | Election of Directors | o | o | o | ||||||||||||
Nominees | ||||||||||||||||
01 | William A. Foley 02 Deborah G. Miller 03 Steve Nave | |||||||||||||||
NOTE: The Directors up for election are Class III directors. At the meeting shareholders will transact such other business as properly may come before the meeting. | ||||||||||||||||
The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |||||||||||||
2. | Approve, on an advisory and non-binding basis, the 2016 compensation of the Company’s named executives. | o | o | o | ||||||||||||
The Board of Directors recommends you vote 1 YEAR on the following proposal: | 1 year | 2 years | 3 years | Abstain | ||||||||||||
3. | Recommend, on an advisory and non-binding basis, the frequency of future advisory votes on executive compensation. | o | o | o | o | |||||||||||
The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |||||||||||||
4. | Ratification of the appointment of Deloitte & Touche LLP as Libbey’s independent auditors for the 2017 fiscal year. | o | o | o | ||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | ||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com. | |||
LIBBEY INC. Annual Meeting of Shareholders May 17, 2017 2:00 PM This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Veronica (Ronni) L. Smith and Susan A. Kovach, or either of them, as proxies, each with the power to appoint her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of LIBBEY INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of shareholders to be held at 02:00 PM, EDT on May 17, 2017, at the Libbey Corporate Showroom, 335 N. St. Clair Street, Toledo, Ohio, 43604, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. | |||
Continued and to be signed on reverse side |