(1) |
Title of each class of securities to which transaction
applies: |
(2) |
Aggregate number of securities to which transaction applies: |
(3) |
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined): |
(4) |
Proposed maximum aggregate value of transaction: |
(5) |
Total fee paid: |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) |
Amount previously paid: |
(2) |
Form, Schedule or Registration Statement No.: |
(3) |
Filing Party: |
(4) |
Date Filed: |
| elect three directors, each for a term of three years; | |
| vote to ratify the appointment of Ernst & Young LLP as Libbeys independent auditors for our fiscal year ending December 31, 2009; and | |
| transact such other business as properly may come before the meeting. |
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| Proposal 1: Election of three nominees Jean-René Gougelet, John F. Meier and Carol B. Moerdyk to serve as Class I directors; and | |
| Proposal 2: Ratification of the appointment of Ernst & Young LLP as Libbeys independent auditors for the 2009 fiscal year. |
| Proposal 1: FOR each of Jean-René Gougelet, John F. Meier and Carol B. Moerdyk to serve as Class I directors; and | |
| Proposal 2: FOR ratification of the appointment of Ernst & Young LLP as Libbeys independent auditors for the 2009 fiscal year. |
1
| sending us a proxy card dated later than your last vote; | |
| notifying the Secretary of Libbey in writing; or | |
| voting at the meeting. |
2
Amount and Nature |
||||||||
Name and Address |
of Beneficial |
Percent |
||||||
of Beneficial Owner
|
Ownership | of Class | ||||||
Zesiger Capital Group LLC(1)
|
2,190,880 | 14.87 | % | |||||
320 Park Avenue, 30th Floor New York, NY 10022 |
||||||||
Dimensional Fund Advisors LP(2)
|
802,287 | 5.45 | % | |||||
Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 |
||||||||
Barclays Global Investors, NA(3)
|
789,523 | 5.36 | % | |||||
400 Howard Street San Francisco, CA 94105 |
(1) | Amendment No. 5 to Schedule 13G filed with the Securities and Exchange Commission on behalf of Zesiger Capital Group LLC, an investment advisor, indicates that, as of December 31, 2008, Zesiger Capital Group LLC is the beneficial owner of 2,190,880 common shares, with sole dispositive power as to 2,190,880 common shares and sole voting power as to 1,560,700 common shares. The schedule further states that all securities reported in the schedule are held in discretionary accounts that Zesiger Capital Group LLC manages, and that no single client of Zesiger Capital Group LLC owns more than 5% of the class. | |
(2) | Amendment No. 2 to Schedule 13G filed with the Securities and Exchange Commission on behalf of Dimensional Fund Advisors LP, an investment advisor, states that Dimensional Fund Advisors LP (Dimensional) furnishes investment advice and serves as investment manager to certain commingled group trusts and separate accounts (the Funds). The schedule further indicates that, as of December 31, 2008, Dimensional is the beneficial owner of 802,287 common shares, with sole dispositive power as to 802,287 common shares and sole voting power as to 785,582 common shares; that the Funds own all such securities; and that Dimensional disclaims beneficial ownership of all such securities. |
3
(3) | Schedule 13G filed with the Securities and Exchange Commission by Barclays Global Investors, NA, a bank (Barclays NA), Barclays Global Fund Advisors (GBFA), an investment advisor, and Barclays Global Investors, Ltd. (Barclays Ltd.), a non-U.S. institution, indicates that, as of December 31, 2008, they collectively are the beneficial owners of 789,523 shares, with sole voting power with respect to 733,632 shares and sole dispositive power with respect to 789,523 shares. The schedule further states that the shares are held in trust accounts for the economic benefit of the beneficiaries of those accounts. |
Multiple of |
||||
Executive Officer Title
|
Base Salary | |||
Chief Executive Officer
|
5X | |||
President, Executive Vice President, group or divisional
president(1)
|
3X | |||
Other Vice Presidents
|
2X |
(1) | No individuals currently occupy the positions of President or group or divisional president. Mr. Reynolds currently is Libbeys only Executive Vice President. |
| Shares of Libbey common stock held by the officer, his or her spouse and/or his or her minor children (as long as they are minors), if: |
| The shares are not subject to forfeiture under the terms of any award of those shares or the terms of any plan pursuant to which those shares are purchased and/or held; and | |
| The shares are not pledged to secure any indebtedness; |
4
| Awards, pursuant to any plan approved by the Compensation Committee of the Board of Directors, of restricted shares, restricted stock units (which we refer to as RSUs) or shares issued in settlement of performance shares, but only if and to the extent the vesting requirements (whether continued service to Libbey or achievement of performance targets) associated with the shares already have been satisfied; | |
| Shares of Libbey common stock that are held for the benefit of the executive officer or his or her spouse or minor children in a 401k savings account, in Libbeys Employee Stock Purchase Plan, in any individual retirement account or in any trust or other estate planning vehicle; | |
| Phantom stock into which any restricted shares, RSUs or shares issued in settlement of performance shares are deferred pursuant to any plan approved by the Compensation Committee of the Board of Directors; and | |
| Vested, in-the-money stock options, but only to the extent they do not exceed 50% of the shares required by the guideline applicable to the particular executive officer. |
Applicable Guideline |
Number of |
|||||||
Named Executive
|
(Number of Shares) | Qualifying Shares Held | ||||||
J. Meier
|
204,869 | 175,058 | ||||||
G. Geswein(1)
|
40,099 | 5,852 | ||||||
R. Reynolds
|
79,504 | 70,094 | ||||||
S. Sellick
|
32,193 | 19,907 | ||||||
K. Wilkes
|
39,302 | 57,706 |
(1) | As to Mr. Geswein, the number of qualifying shares held does not include 1,642 RSUs that are scheduled to vest on May 23, 2009. These RSUs are included under the Beneficial Ownership Table below. |
5
Amount and Nature |
||||||||
of Beneficial |
Percent |
|||||||
Name of Beneficial Owner
|
Ownership(1) | of Class | ||||||
Carlos V. Duno
|
10,697 | * | ||||||
William A. Foley(2)
|
9,317 | * | ||||||
Gregory T. Geswein(3)
|
8,961 | * | ||||||
Jean-René Gougelet(2)
|
2,694 | * | ||||||
Peter C. McC. Howell(2)(4)
|
10,967 | * | ||||||
John F. Meier(3)(5)
|
393,975 | 2.66 | % | |||||
Deborah G. Miller(2)
|
7,572 | * | ||||||
Carol B. Moerdyk(2)
|
10,177 | * | ||||||
John C. Orr
|
0 | * | ||||||
Richard I. Reynolds(3)
|
227,041 | 1.53 | % | |||||
Scott M. Sellick(3)
|
67,383 | * | ||||||
Terence P. Stewart(2)
|
15,145 | * | ||||||
Kenneth G. Wilkes(3)
|
158,159 | 1.07 | % | |||||
Directors & Executive Officers as a Group(3)(2)
|
922,088 | 6.24 | % |
(1) | Includes the following number of non-qualified stock options (which we refer to as NQSOs) that have been granted to Messrs. Meier, Geswein, Reynolds, Sellick and Wilkes and that currently are exercisable or will be exercisable on or before June 8, 2009: |
Number of |
||||
Outstanding Stock |
||||
Options Exercisable |
||||
Named Executive
|
Within 60 Days | |||
J. Meier
|
218,917 | |||
G. Geswein
|
4,378 | |||
R. Reynolds
|
156,948 | |||
S. Sellick
|
47,476 | |||
K. Wilkes
|
100,453 |
(2) | Does not include the following number of shares of phantom stock held by non-management directors, as of March 13, 2009, pursuant to certain deferred compensation plans for outside directors: |
Number of |
||||
Name of Director
|
Phantom Shares | |||
Carlos V. Duno
|
||||
William A. Foley
|
11,778 | |||
Jean-René Gougelet
|
1,638 | |||
Peter C. McC. Howell
|
5,783 | |||
Deborah G. Miller
|
2,191 | |||
Carol B. Moerdyk
|
18,453 | |||
John C. Orr
|
||||
Terence P. Stewart
|
28,909 |
(3) | Includes the shares of common stock that Messrs. Meier, Geswein, Reynolds, Sellick and Wilkes, and all officers as a group, held in the Libbey Inc. Retirement Savings Plan as of March 13, 2009. | |
(4) | Includes 750 shares held by family members of Mr. Howell. Mr. Howell disclaims any beneficial interest in these shares. |
6
(5) | Includes 8,406 shares held by family members of Mr. Meier. Mr. Meier disclaims any beneficial interest in these shares. |
No. of Unvested |
||||
Named Executive
|
RSUs(1) | |||
J. Meier
|
104,296 | |||
G. Geswein
|
26,328 | |||
R. Reynolds
|
53,106 | |||
S. Sellick
|
20,479 | |||
K. Wilkes
|
28,488 |
(1) | Of this amount, 41,623 RSUs with three-year vesting were granted on February 16, 2007; 6,567 RSUs with four-year vesting were granted on May 23, 2007; 116,134 RSUs with four-year vesting were granted on February 16, 2007 and February 15, 2008; and 132,454 RSUs with four-year vesting were granted on February 12, 2009. One share of our common stock will be issued for each vested RSU. Dividends do not accrue on RSUs until they vest. For further information, see Compensation-Related Matters In what forms does Libbey deliver compensation to its executives, and what purposes do the various forms of compensation serve? and the Outstanding Equity Awards at Fiscal Year-End table below. |
Standing Committee |
Director |
|||||||||||
Director
|
Age |
Experience
|
Assignments
|
Since | ||||||||
Carlos V. Duno (Class II)
|
61 | Owner and Chief Executive Officer of Marcia Owen Associates/ Group Powell One, the leading executive recruiter in Santa Fe, New Mexico, from July 2006 to present; Chief Executive Officer and Owner, CDuno Consulting, from November 2004 to present; Chairman & CEO, Clean Fuels Technology, from June 2001 to October 2004; President, Business Development and Planning, Vitro S.A. from July 1995 to May 2001. | Chair, Audit Committee; Member, Nominating and Governance Committee | 2003 |
7
Standing Committee |
Director |
|||||||||||
Director
|
Age |
Experience
|
Assignments
|
Since | ||||||||
William A. Foley (Class III)
|
61 | Chairman and Chief Executive Officer of Blonder Home Accents from September 2008 to present; Chairman and Chief Executive Officer of Think Well Inc. from March 2005 to present; President and a Director of Arhaus, Incorporated, a retailer of home furnishings, from November 2006 to June 2007; Co-founder of Learning Dimensions LLC from November 2002 to July 2005; Chairman and Chief Executive Officer of LESCO Inc. from July 1993 to April 2002. | Chair, Nominating and Governance Committee; Member, Compensation Committee | 1994 | ||||||||
Jean-René Gougelet (Class I)
|
60 | From August 2007 to present, President of Burnes Home Accents, LLC; from 2005 to August 2007, strategy consultant with Vido Enterprises, providing strategic planning and growth management services to middle market companies; from 2001 to 2005, Chief Executive Officer of Arc Internationals Mikasa division; and from 1991 through 2001 and 2003 through 2005, Chief Executive Officer of Arc North America. | Member, Audit Committee | 2007 | ||||||||
Peter C. McC. Howell (Class II)
|
59 | From 1997 to present, advisor to various business enterprises in the areas of acquisitions, marketing and financial reporting; Chairman and Chief Executive Officer of Signature Brands USA Inc. (formerly Health o meter, Inc.) from August 1994 to August 1997; President, Chief Executive Officer and a director of Mr. Coffee, inc. from 1989 to 1994; Member of the board of directors of Pure Cycle Corporation (NASDAQ: PCYO) and Great Lakes Cheese Company Limited. | Member, Audit Committee; Member, Nominating and Governance Committee | 1993 | ||||||||
John F. Meier (Class I)
|
61 | Chairman of the Board and Chief Executive Officer of Libbey since June 1993; Director, Cooper Tire and Rubber Company (NYSE: CTB), since 1997; Director, Applied Industrial Technologies (NYSE: AIT), since October 2005. | 1987 |
8
Standing Committee |
Director |
|||||||||||
Director
|
Age |
Experience
|
Assignments
|
Since | ||||||||
Deborah G. Miller (Class III)
|
59 | Chief Executive Officer of Enterprise Catalyst Group, a consulting firm specializing in high technology and biotechnology transformational applications, from 2003 to present, and in that role, President, Chief Executive Officer and Chairman of Ascendant Systems from February 2005 to present and Chief Executive Officer of Maranti Networks from September 2003 to November 2004; President and Chief Executive Officer of Egenera from April 2002 to 2003; from November 2001 to March 2002, Chief Executive Officer, On Demand Software. Ms. Miller also serves on the board of directors of Sentinel Group Funds, Inc. | Member, Compensation Committee; Member, Nominating and Governance Committee | 2003 | ||||||||
Carol B. Moerdyk (Class I)
|
58 | Retired. Formerly Senior Vice President, International, OfficeMax, Incorporated (formerly Boise Cascade Corporation), from August 2004 to September 2007; Senior Vice President, Administration, Boise Cascade Office Products Corporation, from January 2004 to August 2004; Senior Vice President, North American and Australasian Contract Operations, Boise Cascade Office Products Corporation, from 1998 through 2003. Director of American Woodmark Corporation (NASDAQ: AMWD) since May 2005. | Chair, Compensation Committee; Member, Audit Committee | 1998 | ||||||||
John C. Orr (Class II)
|
58 | President, Chief Executive Officer and a director of Myers Industries, Inc. (NYSE: MYE) from May 2005 to present; President and Chief Operating Officer of Myers Industries, Inc. from February 2003 to May 2005, and General Manager of its Buckhorn, Inc. division from July 2000 to February 2003. Various positions with The Goodyear Tire & Rubber Company for 28 years, most recently as Vice President, Manufacturing of the North American Tire division. | Member, Compensation Committee | 2008 |
9
Standing Committee |
Director |
|||||||||||
Director
|
Age |
Experience
|
Assignments
|
Since | ||||||||
Richard I. Reynolds (Class II)
|
62 | Executive Vice President and Chief Operating Officer of Libbey from November 1995 to present; Vice President and Chief Financial Officer of Libbey from 1993 to 1995. | 1993 | |||||||||
Terence P. Stewart (Class III)
|
60 | Managing partner of Stewart and Stewart, a Washington, D.C.-based law firm that specializes in trade and international law issues, where he has been employed since 1976. | 1997 |
| The Compensation Committee reviews executive compensation at comparable companies and recommends to the Board compensation levels and incentive compensation plans for our executives; | |
| The Compensation Committee reviews and approves the goals and objectives relevant to the targets of the executive incentive compensation plans; | |
| Following the Boards annual evaluation of the performance of the Chief Executive Officer (which is to be reviewed with the Chief Executive Officer by the chair of the Committee), the Compensation |
10
Committee establishes the compensation of the Chief Executive Officer based on the evaluation, and in determining the long-term incentive compensation component of the Chief Executive Officers compensation, the Compensation Committee considers the Companys performance, relative shareholder return, the value of similar awards to chief executive officers at comparable companies and the awards given to the Companys Chief Executive Officer in prior years. |
| The Compensation Committee performs an annual evaluation of the performance and effectiveness of the Compensation Committee. |
| the highest professional and personal ethics and values, consistent with longstanding Libbey values and standards | |
| broad experience at the policy-making level in business, government, education, technology or public interest |
11
| 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 and/or knowledge of business in foreign locations strategic to our then-current or potential future operations. For example, current or recent experience as a chief executive officer of a public company; expertise in logistics and advanced supply chain management; experience as an executive with a large multinational or as an expatriate executive in the Far East, Europe or Latin America; management experience in the foodservice industry; or management or board experience in a highly leveraged environment. |
12
13
Nature of Fees
|
2008 Fees | 2007 Fees | ||||||
Audit Fees(1)
|
$ | 1,329,777 | $ | 1,319,282 | ||||
Audit Related Fees(2)
|
$ | 80,000 | $ | 80,000 | ||||
Tax Fees(3)
|
$ | 2,334 | $ | 0 | ||||
All Other Fees
|
$ | 0 | $ | 0 | ||||
Total
|
$ | 1,412,111 | $ | 1,399,282 | ||||
(1) | Fees for audit services include fees associated with the annual audit of our internal controls, the annual audit of financial statements and the reviews of our quarterly reports on Form 10-Q and annual report on Form 10-K. | |
(2) | Audit-related fees include fees for audits of our employee benefit plans. | |
(3) | Compliance related to value-added tax (VAT) refunds in Mexico. |
14
| 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 managements relationship with our independent auditors; | |
| overseeing managements implementation and maintenance of effective systems of internal and disclosure controls; and | |
| reviewing our internal audit program. |
15
| As noted above, the quarter ended June 30, 2008, marked the tenth consecutive quarter during which Libbey met or exceeded the guidance that it provided to stockholders and analysts. | |
| According to NPD Groups Retail Tracking Service, we increased our share of the U.S. retail market for casual beverageware to 40.6% from 34.6% in 2007. And we increased sales to the U.S. retail market by 4% over 2007. At the same time, Crisa, our Mexican subsidiary, is the leader in the overall Mexican market, with a company-estimated market share of approximately 60% of the market for glass tableware. | |
| We solidified our leading position in the U.S. foodservice market by garnering seven vendor-of-the-year awards from the most prominent foodservice distributors in the industry. | |
| Our Chinese factory, which opened in 2007, serviced customers in 55 countries and all 31 Chinese provinces. | |
| Our glass factory in Shreveport, Louisiana made significant progress in its LEAN transformation, organizing into value streams and achieving a 3.3% increase in productivity. | |
| Our glass factory in Toledo, Ohio, which is our most complex factory, achieved notable results in 2008, including reducing machine changeover time by 45%. | |
| In response to deteriorating market conditions, we initiated a series of unbudgeted cost savings and cash flow enhancements, achieving $9.6 million of unbudgeted cost savings and cash flow enhancements during 2008. |
16
| Freezing the salaries for all U.S. management, professional, sales and administrative personnel until further notice; | |
| Reducing 2009 capital expenditures by approximately $12 million to $14 million, or approximately 26 to 31 percent of 2008 capital expenditures; and | |
| Rationalizing our manufacturing and distribution facilities by closing our Syracuse China ceramic dinnerware facility in early 2009 and our Mira Loma distribution center in May 2009, thereby reducing our U.S. headcount by approximately 300 full-time equivalents. |
17
| Talent Attraction and Retention Objective. Our business is experiencing significant challenges as a result of the current global economic recession. Accordingly, it is imperative that we are positioned to attract and retain highly qualified executives with the experience to enable us to achieve our business strategies in this challenging economic environment. | |
| Motivational Objective. We have a complex business, with operations in five countries on three continents and sales to more than 100 countries across the globe. We also are highly leveraged. In order to position Libbey to take advantage of the capital markets when they stabilize, we must achieve our business strategies and budgeted financial results. Accordingly, it is imperative that our executive compensation program provide adequate financial incentives to motivate our executives to achieve these strategies and results. | |
| Alignment Objective. Since our goal is to create long-term value for our stockholders, our executive compensation program should further that goal by aligning the interests of our executives with the long-term interests of our stockholders. | |
| Reasonableness Objective. We believe that our executive compensation program should balance the need to provide sufficient financial incentives to achieve the three objectives described above with the need to ensure that executive compensation is reasonable and appropriate. |
18
Form of Compensation | Characteristics | Purpose/ Objective | ||
Annual cash compensation
|
||||
Base Salary
|
Fixed component, reviewed annually
Differences among executives are a function of level of responsibility, experience, tenure, individual performance and comparison to market pay information For our Named Executives, represented between 29% and 43% of their 2008 total direct compensation opportunity(1) |
To compensate executives based upon
level of responsibility, experience, tenure, individual
performance and comparison to market pay information To provide for a stable and fixed level of compensation at competitive rates, thereby contributing to our talent attraction and retention objective |
||
Annual incentive award under our SMIP
|
At-risk variable pay opportunity for short-term performance
Target award equal to a percentage of base salary
Differences in target awards are a function of level of responsibility, anticipated ability to affect company performance and comparison to market pay information
For 2008, each executive officers target opportunity had two components a corporate component, representing 70% of his or her target opportunity for 2008, and an individual component, representing 30% of his or her target opportunity for 2008.
Amount actually payable varies based upon company performance and individual performance. In 2008, the amount actually payable under the corporate component was dependent upon the extent to which the Company achieved budgeted income from operations (which we refer to as IFO) and budgeted working capital productivity.
|
To motivate sustained performance
To motivate achievement of short-term company and individual goals To attract and retain talent by providing a market-competitive cash incentive opportunity |
||
19
Form of Compensation | Characteristics | Purpose/ Objective | ||
For the Named Executives, represented between 23%
and 27% of their 2008 total direct compensation opportunity
Compensation Committee may exercise negative discretion to reduce the payout under the SMIP |
||||
Discretionary cash awards
|
Payout based upon the Compensation
Committees qualitative assessment of each executive
officers individual performance, performance relative to
internal peers, the extent to which the leadership of the
executive officer contributed to our success during the year and
any outstanding achievements during the year that were not
contemplated when we set the individual goals under the SMIP.
|
To reward individual performance that demonstrates excellence in the execution and achievement of short-term goals without sacrificing focus on Libbeys long-term goals | ||
Long-term, equity-based Incentives(2)
|
||||
Performance shares
|
At-risk variable pay opportunity for sustained, long-term performance
Target opportunity equal to a percentage of base salary
Differences in target opportunities are a function of level of responsibility, anticipated ability to affect company performance over the long term and comparison to market pay information
Amount actually earned is formula-driven and varies based upon extent to which we achieve budgeted EBITDA over the applicable performance cycle
Payable in the form of one share of Libbey common stock for each earned performance share
Generally awarded each year for a three-year performance cycle that begins on January 1 of that year, with the determination of the number of performance shares earned occurring early in the year after the performance cycle ends
|
To motivate long-term performance
because the amount realized by executives varies based upon
actual financial and stock price performance
To align interests with stockholders To attract and retain high-caliber executive talent |
||
20
Form of Compensation | Characteristics | Purpose/ Objective | ||
Value of performance shares at target payout
represents 40% of each Named Executives long-term
incentive opportunity and between 13% and 18% of his or her
total direct compensation opportunity
No dividends are payable on the common stock underlying unearned performance shares, and the executive does not have voting rights with respect to unearned performance shares |
||||
NQSOs
|
Inherently performance-based award
Exercise price equal to closing price on grant date Differences in the value (and therefore number) of NQSOs awarded to various executives are a function of level of responsibility, anticipated ability to affect company performance over the long term, comparison of grant date value to be transferred to market pay information and differences in Black Scholes values of the NQSOs on their respective grant dates Generally awarded annually, with one-quarter vesting at the end of each of the first four years of a ten-year term Grant-date value of NQSOs represents 20% of each Named Executives long-term incentive opportunity and between 6% and 9% of his or her total direct compensation opportunity |
To motivate long-term performance
because amount realized by executives is based on the increase
in the stock price from the date of grant To align interests with stockholders To attract talent by providing market-competitive awards; time-based vesting also serves to retain talent |
||
RSUs
|
Differences in the value (and therefore
number) of RSUs awarded to various executives are a function of
level of responsibility, anticipated ability to affect company
performance over the long term, comparison to market pay
information and the average closing price of Libbey common stock
over a period of 60 consecutive trading days ending on the grant
date
|
To attract talent by providing market-competitive awards; time-based vesting also serves to retain talent
To motivate performance because amount realized by executives varies based upon stock price performance over an extended period of time
|
||
21
Form of Compensation | Characteristics | Purpose/ Objective | ||
Generally awarded annually, with one-quarter vesting
on each of the first through fourth anniversaries of the grant
date
Grant-date value of RSUs represents 40% of each Named Executives long-term incentive opportunity and between 13% and 18% of his or her total direct compensation opportunity No dividends are payable on the common stock underlying unvested RSUs, and the executive does not have voting rights with respect to unvested RSUs |
||||
Fringe benefits and perquisites designed to support a
market-competitive compensation package
|
||||
Medical, dental and life insurance benefits
|
Benefits provided on the same basis as
for all salaried U.S. employees
|
To provide market-competitive fringe benefits that further our talent attraction and retention objective | ||
Limited perquisites
|
||||
Tax return preparation and financial planning
|
Direct payment or reimbursement of fees incurred in
connection with personal financial planning and tax return
preparation, together with related gross-ups
|
To provide access to knowledgeable resources that can assist our executives in efficiently and effectively managing their personal financial and tax planning issues | ||
Executive health screening program
|
Annual executive physical examination and related
services
|
To provide executives with health screening and
related services to help them maintain their overall health
|
||
Limited ground transportation
|
Ground transportation for trips between Toledo, Ohio
and the Detroit/Wayne County Metropolitan airport for the
executive when traveling for business purposes and for the
executive and his or her spouse when traveling together
|
To provide fringe benefits that further our talent
attraction and retention objective and our reasonableness
objective
|
||
Relocation benefits
|
Typically provided to senior executives who are
required to relocate as a result of their employment with
Libbey
|
To attract and retain talent
To motivate performance by enabling a relocating executive to remain focused on business issues rather than relocation issues |
||
22
Form of Compensation | Characteristics | Purpose/ Objective | ||
Typically covers expenses associated with selling an existing home, house-hunting and moving to the new location. Also includes a tax gross-up
In extremely rare instances, includes loss-on-sale protection if necessary to lure an exceptional executive
|
||||
Income protection
|
||||
Retirement plans
|
||||
Cash balance pension plan (which we refer to as our
Salary Plan)
|
Qualified plan for all U.S. salaried
employees hired before January 1, 2006; certain long-term
employees, including our CEO and COO, are eligible for a benefit
at least equal to the benefit that would have been provided
under our previous defined benefit plan
|
To provide a reasonable level of
replacement income upon retirement, thereby serving as an
incentive for a long-term career with Libbey
|
||
Supplemental Retirement Benefit Plan
(which we refer to as our SERP)
|
An excess, nonqualified plan designed to provide substantially identical retirement benefits as the Salary Plan, to the extent the Salary Plan cannot provide those benefits due to limitations set forth in the Internal Revenue Code of 1986, as amended (which we refer to as the Code or the Internal Revenue Code)
We have provided no enhancement of service credit under the SERP
|
To provide a reasonable level of
replacement income upon retirement, thereby serving as an
incentive for a long-term career with Libbey
|
||
401(k) savings plan
|
Matching contributions to our 401(k)
savings plan provided on the same basis as for all salaried U.S.
employees
|
To provide an opportunity to save for
retirement on a tax-deferred basis up to limits established by
the Code
|
||
Executive Savings Plan (which we refer
to as our ESP), an unfunded mirror plan of our
qualified 401(k) savings plan
|
Base pay, including vacation pay and holiday pay, may be deferred up to a maximum of 50% of compensation
Deferred amounts deemed invested in one of two funds
Matching contributions equal to 100% of first 1% and 50% of next 2-6% of eligible compensation deferred
No guaranteed return on amounts deferred
|
To restore benefits that would have been
available to the executives under the 401(k) plan but for IRS
limitations on qualified plans, thereby contributing to our
talent attraction and retention objective
|
||
23
Form of Compensation | Characteristics | Purpose/ Objective | ||
Executive long-term disability coverage
|
Enhances the standard 60% long-term
disability benefit that we provide to all U.S. salaried
employees with an additional benefit of up to 15% of regular
earnings and incentive and bonus pay, or $7,500 per month, for a
total long-term disability benefit of up to 75% of pay
Coverage is portable |
To provide a higher level of replacement income upon disability than is provided under our disability coverage available to all U.S. salaried employees, thereby contributing to our talent attraction and retention objective and our objective of motivating our executives to focus on business issues | ||
Employment and change in control agreements
|
Contingent component; payouts only if
employment is terminated under certain circumstances, although
certain annual incentive and other performance-based
compensation may vest on an accelerated basis solely upon a
change in control (without the requirement that employment be
terminated)
|
To facilitate attraction and retention
of high caliber executives in a competitive labor market in
which formal severance plans are common To ensure executives focus on exploring opportunities that will result in maximum value for our stockholders, including actions that might result in a loss of employment with, or a change in position or standing within, Libbey |
||
(1) | Total direct compensation includes salary, annual cash incentives and bonus compensation, and long-term incentive compensation. The total direct compensation opportunity contemplates payment of incentive compensation (annual and long-term) at target, although the opportunity for payouts in excess of target exists under the relevant plans. | |
(2) | In 2008, each executive officers long-term incentive opportunity comprised an award of performance shares, NQSOs and RSUs having an aggregate economic value equal to a target percentage of the executives base salary. The following table sets forth the target percentage for each of the Named Executives in 2008: |
Target LTIP Award as a |
||||
Percentage of Base Salary |
||||
Named Executive
|
(%) | |||
J. Meier
|
150 | % | ||
G. Geswein
|
80 | % | ||
R. Reynolds
|
115 | % | ||
S. Sellick
|
80 | % | ||
K. Wilkes
|
80 | % |
Performance shares and RSUs each represent 40% of the target opportunity, while NQSOs represent the remaining 20% of the target opportunity. The Compensation Committee selected this mix for 2008 because it strikes an appropriate balance between our objective of motivating our executives to achieve our ambitious business strategies (primarily furthered by the performance share and NQSO components) and our objective of attracting and retaining talented and dedicated executives who are critical to Libbeys future (primarily furthered by the RSU component). |
24
| The performance award component of the 2009 LTIP will pay out in cash, rather than stock awards. The performance cycle associated with this component will be one year commencing January 1, 2009. However, payouts of any cash awards earned by an executive generally will be subject to the executives continued employment for two years after the end of the performance cycle. The Committee elected to use a one-year performance cycle, rather than a three-year performance cycle, because the turbulent economic environment makes predicting future performance over the long term extremely difficult. The Committee subjected the ultimate payout of the cash award to two-year cliff vesting to enable the awards to serve the Companys talent attraction and retention objective. | |
| The methodology used to determine the number of RSUs and NQSOs granted in connection with the 2009 LTIP changed. Rather than determining the number of RSUs to be granted in 2009 by dividing the value to be transferred by the average closing price of our common stock over a period of 60 consecutive trading days ending on the date of grant, the number of RSUs to be granted was determined by dividing the value to be transferred by the average closing price of our common stock on the last day of each month during the 12-month period beginning February 2008 and ending January 2009. Similarly, the number of NQSOs to be granted was determined by dividing the value to be transferred by the average Black Scholes value of the NQSOs on the last day of each month during the same 12-month period. |
25
26
Target LTIP Award as a |
||||
Percentage of Base Salary |
||||
Named Executive
|
(%) | |||
J. Meier
|
180 | % | ||
G. Geswein
|
100 | % | ||
R. Reynolds
|
140 | % | ||
S. Sellick
|
80 | % | ||
K. Wilkes
|
100 | % |
| We occasionally grant sign-on awards of NQSOs to individuals who have accepted offers of employment for executive positions with Libbey. With respect to each grant of NQSOs, the exercise price of the NQSOs is the closing price of Libbey common stock on the date on which the Compensation Committee authorizes the award or, if later, the date on which the individual reports to work at Libbey. | |
| In February of 2007 and 2008, the Compensation Committee granted RSUs, NQSOs and performance shares to our executive officers and other key executives under our long-term incentive compensation program. In February of 2009, the Compensation Committee granted RSUs and NQSOs to our executive officers and other key executives under our 2009 LTIP. In each year, the Compensation Committee also granted NQSOs to certain members of senior management who do not participate in our long-term incentive compensation program. Although the Compensation Committee authorized these awards at its meeting in early February of each year, before we announced financial results for the recently concluded fiscal year, the grants were not made until after we announced those financial |
27
results. The number of RSUs and performance shares awarded in 2007 and 2008 was a function of the closing price of our common stock over a period of 60 consecutive trading days ending on the first business day after we announced those results, and the number of NQSOs awarded in 2007 and 2008 was a function of the Black Scholes value of the NQSOs on the grant date, which, as indicated above, was the first business day after we announced those results. For the awards made in February 2009, the number of RSUs was a function of the average closing price of our common stock on the last day of each month from February 2008 through January 2009, and the number of NQSOs was a function of the average Black Scholes value of the NQSOs on the last day of each month during the same 12-month period. The exercise price of the NQSOs granted in each of 2007, 2008 and 2009 is the closing price of our common stock on the respective grant dates. |
| The Compensation Committee has delegated authority to the Chairman of the Board to make limited grants of NQSOs and restricted stock or RSUs to senior managers and other employees who are not executive officers. The Chairmans authority to make these grants is subject to the following limitations and conditions: |
| The Compensation Committee has limited the total number of NQSOs or RSUs, as the case may be, that may be granted; | |
| The exercise price of any NQSOs that the Chairman awards cannot be less than the closing price of our common stock on the date of grant; | |
| Grants may not be made during quiet periods; and | |
| The Chairman must report periodically to the Compensation Committee with respect to the awards that he has made pursuant to this delegation of authority. |
| 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 | |
| any of our executives knowingly engaged, or was grossly negligent in engaging, in the misconduct, or knowingly failed, or was grossly negligent in failing, to prevent the misconduct or is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, |
28
Salary |
Annualized |
|||||||
Named Executive
|
Effective 1/1/2008 | Percentage Increase | ||||||
J. Meier
|
$ | 690,000 | 12.20 | |||||
G. Geswein
|
$ | 337,632 | 9.94 | |||||
R. Reynolds
|
$ | 446,280 | 5.00 |
Salary |
Annualized |
|||||||
Named Executive
|
Effective 4/1/2008 | Percentage Increase | ||||||
S. Sellick
|
$ | 280,830 | 3.93 | |||||
K. Wilkes
|
$ | 345,816 | 4.91 |
Salary |
||||
Named Executive
|
Effective 2/16/2009 | |||
J. Meier
|
$ | 638,250 | ||
G. Geswein
|
$ | 312,310 | ||
R. Reynolds
|
$ | 412,809 | ||
S. Sellick
|
$ | 259,768 | ||
K. Wilkes
|
$ | 319,880 |
29
| Performance shares awarded under the long-term incentive plan that the Compensation Committee adopted in 2006 (which we refer to as the July 2006 LTIP) for the performance cycle beginning on July 1, 2006 and ending December 31, 2008. The performance measure under the July 2006 LTIP is the ratio of actual, cumulative EBITDA over the performance cycle (excluding special charges in accordance with generally accepted accounting principles and as adjusted for any acquisition or disposition with respect to which EBITDA for the business that is acquired or sold, as the case may be, exceeds $5.0 million) to the sum of EBITDA budgeted for each year (or partial year) during the performance cycle. Payouts with respect to the performance cycle that ended December 31, 2008, were made in February 2009 and are discussed further below. | |
| Performance shares awarded under the long-term incentive plan that the Compensation Committee adopted early in 2007 (which we refer to as the 2007 LTIP). The 2007 LTIP provides the opportunity to earn performance shares over a single, three-year performance cycle beginning on January 1, 2007 and ending December 31, 2009. Because the 2007 LTIP contemplates a single performance cycle, there will be no payouts under the 2007 LTIP until early 2010, after the performance cycle has ended and the Compensation Committee has determined the extent to which the performance measure has been achieved. The performance measure under the 2007 LTIP is the ratio of actual, cumulative EBITDA over the performance cycle (excluding special charges in accordance with generally accepted accounting principles and as adjusted for any acquisition or disposition with respect to which EBITDA for the business that is acquired or sold, as the case may be, exceeds $5.0 million) to the sum of EBITDA budgeted for each year during the performance cycle. | |
| Performance shares awarded under the long-term incentive plan that the Compensation Committee adopted early in 2008 (which we refer to as the 2008 LTIP). The 2008 LTIP provides the opportunity to earn performance shares over a single, three-year performance cycle beginning on January 1, 2008 and ending December 31, 2010. Because the 2008 LTIP contemplates a single performance cycle, there will be no payouts under the 2008 LTIP until early 2011, after the performance cycle has ended and the Compensation Committee has determined the extent to which the performance measure has been achieved. The performance measure under the 2008 LTIP is the ratio of actual, cumulative EBITDA over the performance cycle (excluding special charges in accordance with generally accepted accounting principles and as adjusted for any acquisition or disposition with respect to which EBITDA for the business that is acquired or sold, as the case may be, exceeds $5.0 million) to the sum of EBITDA budgeted for each year during the performance cycle. |
30
Named Executive
|
No. of Shares(1) | |||
J. Meier
|
4,943 | |||
G. Geswein
|
645 | |||
R. Reynolds
|
2,684 | |||
S. Sellick
|
1,063 | |||
K. Wilkes
|
1,369 |
(1) | Each of the Named Executives elected to have us withhold shares to cover taxes on these awards. Net of the withheld shares, we issued to the Named Executives the following number of shares: Mr. Meier 3,045 shares; Mr. Geswein 397 shares; Mr. Reynolds 1,653 shares; Mr. Sellick 655 shares; and Mr. Wilkes 843 shares. |
31
Annual Retainer:
|
$25,000 | |
Equity Awards:
|
On the date of each annual meeting of stockholders, outright grant of shares of common stock valued at $40,000 on the date of grant(1) | |
Audit Committee Chair Retainer:
|
$7,500 per year | |
Compensation Committee Chair and Nominating and Governance
Committee Chair Retainers:
|
$5,000 per year | |
Regular Board Meeting Fees:
|
$1,500 per meeting | |
Regular Committee Meeting Fees:
|
$750 per meeting | |
Telephonic Board or Committee Meeting Fees:
|
$500 per meeting | |
Other Fees:
|
$500 per half day for performance of special Board or committee business requested of the director |
(1) | In 2008, the number shares of common stock was determined by dividing $40,000 by the average closing price of our common stock over a period of 60 consecutive trading days ending on the date of grant. |
32
| To identify changes needed to ensure that the agreements comply with the requirements of Section 409A of the Internal Revenue Code; and | |
| To identify changes to the agreements that may be mutually acceptable to the Company and the executives and that may bring the agreements into greater conformity with contemporary governance and market practices. |
| If an executive is entitled, under his or her amended employment or change in control agreement, to payments upon termination of his or her employment, then payments of nonqualified deferred compensation (as defined in Section 409A of the Code) will be delayed for six months following the applicable executives termination of employment. Any portion of the payment that is based upon a multiple of the executives base salary, or any portion of the payment that is made pursuant to our SERP, ESP or Executive DCP, would be included in the Section 409A definition of nonqualified deferred compensation. | |
| Under the previous employment agreements, each executive officers agreement provided that, if the Company were to give the executive notice of non-renewal of the agreement, the executive would have good reason to terminate the agreement and obtain the severance and related benefits under |
33
the agreement, unless the Company were to concurrently give notice of non-renewal with respect to the employment agreements of all other executive officers. Under the amended employment agreements, each executive officer is assigned to one of two groups Group A or Group B. The executive officers assigned to Group A are our CEO, our chief operating officer and our chief financial officer. All of the remaining executive officers are assigned to Group B. If the Company were to give an executive notice of non-renewal under the executives amended employment agreement, the executive would not have good reason to terminate the agreement (and obtain the severance and related benefits under the amended agreement) if Libbey were to concurrently give notice of non-renewal with respect to the employment agreements of the other executive officers in his or her group. For example, if the Company were to give each of our CEO, COO and CFO notice of non-renewal, by September 30, 2009, that their amended employment agreements will not be renewed for the 2010 calendar year, none of the CEO, COO or CFO would be entitled to claim that the notice of non-renewal provides them with good reason to terminate their employment and receive the benefits provided under the amended employment agreements. Special provisions apply to the COO and CFO if, at the time the Company gives them notice of non-renewal of their amended employment agreements, John F. Meier has ceased to serve as CEO and there is no written agreement in effect between the Company and the individual selected to replace him as CEO on either an interim or permanent basis. |
| The amended change in control agreements eliminate the obligation of the Company to pay severance to an executive who unilaterally terminates his or her employment, without good reason, within 30 days after the first anniversary of a change in control. | |
| The amended employment agreements and amended change in control agreements limit the extent to which the Company may be obligated to gross up payments made to executives to cover the federal excise tax that could be imposed upon payments under the agreements. Under the amended agreements, if the present value of the executives parachute payments exceed 1.10 multiplied by three times the executives base amount, then the Company will not be obligated to gross up the executives payments to cover the excise tax. (The terms present value, parachute payments and base amount are defined in Section 280G of the Internal Revenue Code.) Instead, the executives payments will be reduced so that no excise tax is payable. | |
| The amended change in control agreements obligate the Company to pay severance if we terminate an executives employment without cause (a) after a potential change in control but before the change in control occurs, or (b) prior to a potential change in control, if the executive reasonably demonstrates that the termination was at the request of, or was induced by, a third party who has taken steps reasonably calculated to effect a change in control. Similarly, the amended change in control agreements obligate the Company to pay severance if the executive terminates his or her employment for good reason (a) after a potential change in control but before the change in control occurs, or (b) prior to a potential change in control, if the executive reasonably demonstrates that the events triggering the executives good reason were at the request of, or were induced by, a third party who has taken steps reasonably calculated to effect a change in control The Compensation Committee believes that providing for payments under these circumstances appropriately protects the executives against the possibility, however unlikely, that the Company, believing that a change in control is imminent, would, before consummating the change in control, attempt to rid itself of its obligation to pay severance under the amended change in control agreements by terminating an executive without cause, or taking other actions that would trigger good reason if they were to occur after consummation of the change in control. |
| Surveys demonstrate that a significant majority of companies of similar size (as determined by revenues) and in similar industries provide their executive officers with change in control and other severance |
34
benefits. Accordingly, we would be at a competitive disadvantage in attracting and retaining high-caliber senior executives if we were to eliminate the benefits provided by these agreements. The loss of a senior executive to another company that provides these benefits could adversely impact our ability to achieve our business strategies and our succession planning for Libbeys future. |
| In periods of uncertainty concerning the future control of Libbey or the future responsibilities or standing of our respective executive officers, it is imperative that each of our executive officers be focused on building value for our stockholders rather than pursuing career alternatives. |
Conditions to |
||||||
Triggers(1)
|
Benefits
|
Payment of Benefits
|
Rationale
|
|||
Death of the executive officer
|
Base salary through the date of death
Annual and long-term incentive compensation actually earned paid in a lump sum but prorated through the date of death In the case of Mr. Meier, two times his annual base salary, and in the case of the other Named Executives, one times his annual base salary, in each case at the rate in effect on the date of death; payable in a lump sum Continuation of medical, prescription drug, dental and vision benefits for covered dependents for a period of 12 months following the date of death Vesting, as of the date of death, of previously unvested equity compensation plan awards (RSUs and NQSOs). Those with option features will be exercisable for a period of three years following the date of death or for such longer period following the date of death as is specified by the award Benefits are payable within 60 days after receipt of the written notice and evidence referred to under the adjacent column entitled Conditions to Payment of Benefits |
Our receipt of written notice of appointment of a personal representative on behalf of the executives estate, together with evidence of the personal representatives authority to act
Our receipt from the personal representative of a release of claims against the Company |
Provide, on a cost-effective basis,
death benefits that exceed the available benefits (limited to
$250,000) under our group life insurance policy for all U.S.
salaried employees. Benefits are consistent with death benefits
provided under executive life insurance policies provided to
executives by similar companies
Support a market-competitive compensation package, thereby serving to attract and retain talent and to motivate focused and sustained performance |
35
Conditions to |
||||||
Triggers(1)
|
Benefits
|
Payment of Benefits
|
Rationale
|
|||
Permanent disability of the executive officer |
Any long-term disability coverage in
effect
Base salary accrued through the date of termination, payable within five business days after termination Annual incentive compensation for the year in which termination occurs; paid at target but prorated (subject to a 50% minimum) through the date of termination; payable between January 1 and March 15 of the year following the year in which termination occurs Performance-based equity compensation under all plans in effect at the date of termination, paid based upon the amount actually earned but prorated through the date of termination; payable between January 1 and March 15 of the year following the end of the applicable performance cycle Two times (or, in the case of Mr. Meier, three times) the sum of the executives (a) annual base salary at the then current rate and (b) target annual incentive opportunity at the time notice of termination is given; payable upon first to occur of (1) death or (2) the first day of the seventh month following the date of termination |
The Named Executives execution and
delivery to us of a release of all claims
The Named Executives obligations to us to: maintain the confidentiality of our proprietary information assign to us any inventions and copyrights obtained in connection with his employment assist us with any litigation with respect to which the Named Executive has, or may have reason to have, knowledge, information or expertise not interfere with customer accounts for 12 months not compete for 12 months for 12 months, not divert business opportunities of which the Named Executive became aware while an employee not solicit our employees for 12 months not disparage us for 12 months |
Provide, on a cost-effective basis, disability benefits under circumstances that may not be covered by our standard disability policy or our enhanced executive long-term disability coverage
Support a market-competitive compensation package, thereby serving to attract and retain talent and to motivate focused and sustained performance
|
|||
Continuation of medical, prescription
drug, dental and life insurance benefits for a period of
24 months (or, in Mr. Meiers case, 36 months)
following the date of termination
|
36
Conditions to |
||||||
Triggers(1)
|
Benefits
|
Payment of Benefits
|
Rationale
|
|||
Vesting, as of the date of termination,
of previously unvested equity compensation plan awards that are
not performance-based (for example, RSUs and NQSOs). Those
awards having an option feature will be exercisable for a period
of three years following the date of termination or for such
longer period following the date of termination as is specified
by the award granted to the Named Executive
|
||||||
We terminate the executive officers employment without cause(2) or the executive officer terminates his or her employment for good reason(3) |
Same as for termination upon permanent
disability
|
Same as for termination upon permanent disability | To promote sustained focus on building stockholder value during periods of uncertainty as to Libbeys future or the executives job standing or responsibilities |
(1) | We are obligated to provide the benefits described in the amended employment agreements if an executive officers employment is terminated upon or as a result of the occurrence of any of the events or circumstances described in this column. | |
(2) | Cause means any of: |
| the executive officers willful and continued failure (other than as a result of incapacity due to physical or mental illness or after the executive officer issues a notice of termination for good reason) to substantially perform his or her duties after our Board delivers to the executive officer a written demand for substantial performance that specifically identifies the manner in which the Board believes that the executive officer has not substantially performed his or her duties; | |
| the executive officers willful and continued failure (other than as a result of incapacity due to physical or mental illness or after the executive officer issues a notice of termination for good reason) to substantially follow and comply with the specific and lawful directives of our Board, as reasonably determined by our Board, after our Board delivers to the executive officer a written demand for substantial performance that specifically identifies the manner in which our Board believes that the executive officer has not substantially followed or complied with the directives of the Board; | |
| the executive officers willful commission of an act of fraud or dishonesty that results in material economic or financial injury to Libbey; or | |
| the executive officers willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to Libbey. |
(3) | Good reason means any of the following, unless we have corrected the circumstances fully (if they are capable of correction) prior to the date of termination: |
37
| With respect to Mr. Meier only: |
| He ceases to be our Chief Executive Officer reporting to the Board, or he fails to be elected as a member of the Board. | |
| There is a change in the reporting or responsibilities of any other executive officer that has not been approved by Mr. Meier. |
| With respect to each of our Named Executives other than Mr. Meier, the Named Executive ceases to be an executive officer reporting to another executive officer. | |
| With respect to each of our Named Executives, including Mr. Meier: |
| His base salary is reduced by a greater percentage than the reduction applicable to any other executive officer. | |
| There is a reduction in the annual incentive compensation opportunity or equity compensation opportunity established for the position held by the Named Executive, and the reduction is not applied in the same or similar manner to all other executive officers. | |
| An executive benefit provided to the Named Executive is reduced or eliminated and the reduction or elimination is not applicable to all other executive officers in the same or similar manner. | |
| We materially breach the amended employment agreement and do not remedy our breach within 30 days after we receive written notice of breach from the Named Executive. | |
| We exercise our right not to extend the term of the Named Executives amended employment agreement beyond the then current term, unless we exercise that right with respect to the amended employment agreements in effect with respect to the other executive officers in the same group. In that connection, the initial term of the amended employment agreements extends from January 1, 2009 through December 31, 2009, and the term extends automatically for additional one-year periods unless either we notify the Named Executive, or the Named Executive notifies us, on or before September 30 of the year in which the amended employment agreement is scheduled to expire, that the agreement will not be further extended. |
38
Conditions to |
||||||
Triggers
|
Benefits(1)
|
Payment of Benefits
|
Rationale
|
|||
A change in control(2) occurs
|
Cash value of performance-based equity compensation
(for example, performance shares) to be paid at target but
prorated through the date of change in control Annual incentive compensation for the year in which the change in control occurs; paid at target but prorated (subject to a 50% minimum) through the date of the change in control Accelerated vesting of NQSOs, but cancellation of NQSOs as to which the exercise price exceeds the closing stock price immediately prior to the change in control Value of unvested shares of restricted stock and unvested RSUs to be frozen upon change in control, but no payout unless and until vesting criteria of awards are met or employment is terminated by Company without cause or by the executive for good reason pursuant to the amended employment agreement or amended change in control agreement |
None | Since a change in control frequently is accompanied by a material shift in strategy, a significant increase in leverage or other events that may impact the likelihood that corporate performance metrics established early in the year prior to the change in control will be achieved, it is appropriate to pay, at the time of the change in control, a prorated amount of incentive compensation that relates to performance during a period that straddles the change in control. Similarly, it is appropriate to accelerate vesting of stock options so that they may be exercised, and the value realized by the executive at the time of, the change in control. |
39
Conditions to |
||||||
Triggers
|
Benefits(1)
|
Payment of Benefits
|
Rationale
|
|||
Without cause(3), we terminate the
executives employment (other than as a result of his or
her death or permanent disability) either (a) after a
potential change in control(4) occurs but before the
change in control occurs, or (b) prior to a potential
change in control, if the executive reasonably demonstrates that
the termination was at the request of, or was induced by, a
third party who has taken steps reasonably calculated to effect
a change in control, or (c) within two years following a
change in control
|
Base salary through the date of termination at the
rate then in effect A lump sum equal to three times the sum of (a) the executives annual base salary in effect as of the date of termination or immediately prior to the change in control, whichever is greater, and (b) the greater of (1) the executives target annual incentive compensation as in effect as of the date of termination or immediately prior to the change in control, whichever is greater, or (2) the executives actual annual bonus for the year immediately preceding the date of termination; payable on the first day of the seventh month after termination |
Our receipt of an agreement, signed by the
executive, obligating him or her to: maintain the confidentiality of our proprietary information for two years after the date of termination not compete with us for a period of 12 months after the date of termination not solicit our employees for a period of 24 months after the date of termination |
In periods of uncertainty concerning the future
control of Libbey or the future responsibilities or standing of
the executive, permits the executive to focus on performance
that increases stockholder value rather than pursuing career
alternatives Supports a market-competitive compensation package, thereby serving to attract and retain talent |
|||
Continuation of medical and dental benefits for a
period of 36 months following the date of termination,
subject to reduction or elimination to the extent the executive
receives comparable benefits under any other employment that the
executive obtains during the 36-month period.
|
||||||
For one year following the date of termination,
financial planning services
|
||||||
For two years following the date of termination,
outplacement services, subject to a maximum out-of-pocket cost
to Libbey of $15,000
|
||||||
Payment in cash of the value, frozen at the time of
the change in control, of restricted stock or restricted stock
units that were outstanding and unvested at the time of the
change in control; payable on the first day of the seventh month
after termination
|
40
Conditions to |
||||||
Triggers
|
Benefits(1)
|
Payment of Benefits
|
Rationale
|
|||
Full and immediate vesting of accrued benefits under
any qualified and unqualified pension, profit-sharing, deferred
compensation or supplemental plans that we maintain for the
executives benefit, plus a lump sum, payable on the first
day of the seventh month after termination, equal to the greater
of $250,000 or the present value of the additional benefit that
would have accrued had the executive continued his or her
employment for three additional years following the date of
termination.
|
||||||
A tax gross-up(6)
|
||||||
The executive terminates his or her employment for
good reason(5) either (a) after a potential
change in control but before the change in control occurs, or
(b) prior to a potential change in control, if the
executive reasonably demonstrates that the events triggering the
executives good reason were at the request of, or was
induced by, a third party who has taken steps reasonably
calculated to effect a change in control, or (c) within two
years following a change in control
|
Same as for termination by the Company without cause, as described above | Same as for termination by the Company without cause, as described above | Same as for termination by the Company without cause, as described above |
(1) | The benefits set forth in this column are payable upon the occurrence of the corresponding triggers identified in the Triggers column. | |
(2) | Change in control generally means any of the following events: |
| A person (other than Libbey, any trustee or other fiduciary holding securities under one of Libbeys employee benefit plans, or any corporation owned, directly or indirectly, by Libbeys stockholders in substantially the same proportions as their ownership of Libbeys common stock) becomes the beneficial owner, directly or indirectly, of Libbey securities representing 30% or more of the combined voting power of our then-outstanding securities; | |
| The consummation of a merger or consolidation pursuant to which Libbey is merged or consolidated with any other corporation (or other entity), unless the voting securities of Libbey outstanding immediately prior to the merger or consolidation continue to represent (either by remaining |
41
outstanding or by being converted into voting securities of the surviving entity) more than 662/3% of the combined voting power of securities of the surviving entity outstanding immediately after the merger or consolidation; |
| The consummation of a plan of complete liquidation or an agreement for the sale or disposition of all or substantially all of our assets; or | |
| During any period of two consecutive years (not including any period prior to the execution of the amended change in control agreement), Continuing Directors (as defined below) cease for any reason to constitute at least a majority of the Board. The term 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 two-thirds (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 the Company to effect a transaction that otherwise meets the definition of a change in control. |
(3) | Cause has the same meaning as it has under the amended employment agreements. We cannot terminate an executive officer for cause unless and until we deliver to the executive officer a copy of a resolution, duly adopted by the affirmative vote of not less than 3/4 of the entire membership of our Board at a meeting of our Board, finding that, in the Boards good faith opinion, the executive committed any of the conduct described in the definition of cause and specifying, in reasonable detail, the particulars of that conduct. We must provide the executive officer with reasonable notice of the meeting of the Board and the opportunity, together with the executives legal counsel, to be heard before the Board. We also must provide the executive with reasonable opportunity to correct the conduct that he or she is alleged to have committed. | |
(4) | Potential change in control means: |
| The Company enters into an agreement, the consummation of which would result in a change in control; | |
| A person (which may include the Company) publicly announces an intention to take or consider taking actions that, if consummated, would result in a change in control; | |
| Our Board adopts a resolution to the effect that, for purposes of the amended change in control agreements, a potential change in control has occurred; or | |
| A person (other than Zesiger Capital Group, which currently holds almost 15% of our common stock) who is or becomes the beneficial owner of 10% or more of the voting power of our common stock increases its beneficial ownership by 5% or more, or Zesiger Capital increases its beneficial ownership to 25% or more of our common stock. |
(5) | Good reason means any of the following, unless we have corrected the circumstances fully (if they are capable of correction) prior to the date of termination: |
| We assign to the executive duties that are inconsistent with the executives position immediately prior to the change in control, or we significantly and adversely alter the nature or status of the executives responsibilities or the conditions of the executives employment from those in effect immediately prior to the change in control (including if we cease to be a publicly-held corporation), or we take any other action that results in the material diminution of the executives position, authority, duties or responsibilities; | |
| We reduce the executives annual base salary as in effect on the date of the executives change in control agreement and as increased from time to time thereafter; |
42
| We relocate the offices at which the executive principally is employed immediately prior to the date of the change in control (which we refer to as the executives Principal Location) to a location more than 30 miles from that location, or we require the executive, without his or her written consent, to be based anywhere other than his or her Principal Location, except for required travel on business to an extent substantially consistent with the executives present business travel obligations; | |
| We fail to pay to the executive any portion of his or her current compensation or to pay to him or her any portion of an installment of deferred compensation under any deferred compensation program within seven business days of the date on which the compensation is due; | |
| We fail to continue in effect any material compensation or benefit plan or practice in which the executive participates immediately prior to the change in control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to the plan, or we fail to continue the executives participation in the plan (or in the substitute or alternative plan) on a basis that is not materially less favorable, both in terms of the amount of benefits provided and the level of the executives participation relative to other participants, as existed at the time of the change in control; | |
| We fail to continue to provide the executive with benefits substantially similar in the aggregate to those enjoyed by the executive under any of our life insurance, medical, health and accident, disability, pension, retirement or other benefit plans or practices in which the executive and his or her eligible family members were participating at the time of the change in control, or we take any action that would directly or indirectly materially reduce any of those benefits, or we fail to provide the executive with the number of paid vacation days to which the executive is entitled on the basis of years of service with us in accordance with our normal vacation policy in effect at the time of the change in control or, if more favorable to the executive, on the basis of the executives initial employment with the Company; | |
| We fail to obtain a satisfactory agreement from any successor to assume and agree to perform our obligations under the executives change in control agreement; or | |
| We purport to terminate the executives employment without complying with our obligations with respect to providing notice of termination. |
(6) | No gross-up is required if the present value of the parachute payments payable to the executive or his estate does not exceed 1.10 multiplied by three times the executives base amount. The terms present value, parachute payments and base amount are defined in Section 280G of the Code. |
43
44
Change in |
||||||||||||||||||||||||||||||||||||
Pension |
||||||||||||||||||||||||||||||||||||
Value and |
||||||||||||||||||||||||||||||||||||
Nonqualified |
||||||||||||||||||||||||||||||||||||
Non-Equity |
Deferred |
|||||||||||||||||||||||||||||||||||
Incentive |
Compensation |
All Other |
||||||||||||||||||||||||||||||||||
Name and Principal |
Salary |
Bonus |
Stock Awards |
Option Awards |
Compensation |
Earnings |
Compensation |
Total |
||||||||||||||||||||||||||||
Position
|
Year | ($) | ($) | ($)(1)(a) | ($)(1)(b) | ($) | ($) | ($)(2) | ($) | |||||||||||||||||||||||||||
John F. Meier
|
2008 | 690,000 | 0 | 521,902 | 211,757 | 0 | 147,871 | 30,127 | 1,601,657 | |||||||||||||||||||||||||||
Chairman and Chief
|
2007 | 615,000 | 0 | 577,099 | 189,982 | 496,490 | 5,469 | 27,670 | 1,911,710 | |||||||||||||||||||||||||||
Executive Officer
|
2006 | 558,000 | 0 | 82,500 | 0 | 631,767 | 0 | 17,689 | 1,289,956 | |||||||||||||||||||||||||||
Gregory T. Geswein
|
2008 | 337,632 | 0 | 122,856 | 210,743 | 0 | 0 | 26,885 | 698,116 | |||||||||||||||||||||||||||
Vice President, Chief
Financial Officer |
2007 | 193,535 | 20,321 | 73,090 | 117,839 | 84,020 | 0 | 47,917 | 536,722 | |||||||||||||||||||||||||||
Richard I. Reynolds
|
2008 | 446,280 | 0 | 269,508 | 111,578 | 0 | 91,990 | 20,366 | 939,722 | |||||||||||||||||||||||||||
Executive Vice President
|
2007 | 425,016 | 28,848 | 299,016 | 105,970 | 251,821 | 84,424 | 20,116 | 1,215,211 | |||||||||||||||||||||||||||
and Chief Operating Officer
|
2006 | 395,184 | 0 | 44,794 | 0 | 366,928 | 0 | 11,563 | 818,469 | |||||||||||||||||||||||||||
Scott M. Sellick
|
2008 | 278,390 | 0 | 112,666 | 48,471 | 0 | 19,997 | 11,203 | 470,727 | |||||||||||||||||||||||||||
Vice President, Chief
|
2007 | 268,012 | 18,593 | 122,983 | 47,979 | 114,011 | 22,111 | 11,442 | 605,131 | |||||||||||||||||||||||||||
Accounting Officer
|
2006 | 252,675 | 0 | 17,744 | 0 | 189,506 | 12,579 | 6,965 | 479,469 | |||||||||||||||||||||||||||
Kenneth G. Wilkes
|
2008 | 342,093 | 0 | 138,649 | 59,634 | 0 | 37,306 | 23,282 | 600,964 | |||||||||||||||||||||||||||
Vice President, General
|
2007 | 325,670 | 26,113 | 153,315 | 59,321 | 151,892 | 36,030 | 21,580 | 773,921 | |||||||||||||||||||||||||||
Manager, International Operations
|
2006 | 300,315 | 0 | 22,848 | 0 | 213,734 | 22,022 | 11,896 | 570,815 |
(1) | Represents the 2008, 2007 and 2006 compensation expense that we recorded, for financial reporting purposes in accordance with FAS 123R, with respect to (a) common stock that we issued in settlement of performance shares earned for performance cycles ending December 31, 2008, 2007 and 2006, respectively, and RSUs that we granted in 2008 and 2007, and (b) NQSOs that we granted in 2008 and 2007. For more information, see Footnote 14, Employee Stock Benefit Plans, to the financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2009. | |
(2) | The following table provides additional detail with respect to the perquisites that we provided to our Named Executives in 2008: |
Tax Return |
Tax |
||||||||||||||||||||||||||
Preparation |
Gross-Up on Tax |
Executive |
Annual |
||||||||||||||||||||||||
ESP |
and Financial |
Return/ |
Long-Term |
Executive |
|||||||||||||||||||||||
Matching |
Planning |
Financial |
Ground |
Disability |
Physical |
||||||||||||||||||||||
Contributions |
Fees |
Planning Fees |
Transportation |
Coverage |
Examination |
Total |
|||||||||||||||||||||
Name
|
($) | ($) | ($) | ($)(a) | ($) | ($) | ($) | ||||||||||||||||||||
J. Meier
|
16,100 | 670 | 318 | 735 | 4,254 | 0 | 22,077 | ||||||||||||||||||||
G. Geswein
|
0 | 8,500 | 4,037 | 282 | 3,868 | 2,148 | 18,835 | ||||||||||||||||||||
R. Reynolds
|
7,159 | 605 | 287 | 0 | 4,265 | 0 | 12,316 | ||||||||||||||||||||
S. Sellick
|
0 | 0 | 0 | 634 | 2,519 | 4,560 | 3,153 | ||||||||||||||||||||
K. Wilkes
|
3,530 | 2,577 | 1,224 | 17 | 3,325 | 0 | 15,232 |
(a) | For personal trips, includes the entire cost that we incurred for such transportation; for business trips, includes only the amount in excess of the amount to which the respective Named Executives would have been entitled to reimbursement for mileage and parking under our travel policy applicable to all employees. |
45
| Performance share awards under our 2007 LTIP; and | |
| NQSOs and RSUs. |
All |
All |
|||||||||||||||||||||||||||||||||||||||||||||||
Other |
Other |
|||||||||||||||||||||||||||||||||||||||||||||||
Stock |
Option |
Grant |
||||||||||||||||||||||||||||||||||||||||||||||
Awards: |
Awards: |
Exercise or |
Date Fair |
|||||||||||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts |
Estimated Future Payouts |
Number of |
Number of |
Base |
Value of |
|||||||||||||||||||||||||||||||||||||||||||
Under Non-Equity |
Under Equity Incentive |
Shares of |
Securities |
Price of |
Stock and |
|||||||||||||||||||||||||||||||||||||||||||
Award |
Grant |
Incentive Plan Awards(2) | Plan Awards(3) |
Stock or |
Underlying |
Option |
Option |
|||||||||||||||||||||||||||||||||||||||||
Date |
Date |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
Units |
Options |
Awards |
Awards |
|||||||||||||||||||||||||||||||||||||
Name
|
(1) | (1) | ($) | ($) | ($) | (#) | (#) | (#) | (#)(4) | (#)(5) | ($/Sh) | ($)(6) | ||||||||||||||||||||||||||||||||||||
J. Meier
|
2/4/2008 | 242,190 | 621,000 | 1,242,000 | ||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 13,503 | 27,006 | 54,012 | (a) 207,271 | |||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 27,006 | (b) 414,537 | |||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 28,202 | 15.35 | (c) 207,003 | ||||||||||||||||||||||||||||||||||||||||||||
G. Geswein
|
2/4/2008 | 79,006 | 202,579 | 405,158 | ||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 3,524 | 7,048 | 14,096 | (a) 54,093 | |||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 7,048 | (b) 108,185 | |||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 7,360 | 15.35 | (c) 54,002 | ||||||||||||||||||||||||||||||||||||||||||||
R. Reynolds
|
2/4/2008 | 130,537 | 334,710 | 669,420 | ||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 6,696 | 13,391 | 26,782 | (a) 102,776 | |||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 13,391 | (b) 205,549 | |||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 13,984 | 15.35 | (c) 102,643 | ||||||||||||||||||||||||||||||||||||||||||||
S. Sellick
|
2/4/2008 | 65,143 | 167,034 | 334,068 | ||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 2,829 | 5,658 | 11,316 | (a) 43,425 | |||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 5,658 | (b) 86,849 | |||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 5,909 | 15.35 | (c) 43,372 | ||||||||||||||||||||||||||||||||||||||||||||
K. Wilkes
|
2/4/2008 | 73,379 | 188,151 | 376,302 | ||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 3,454 | 6,908 | 13,816 | (a) 53,019 | |||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 6,908 | (b) 106,036 | |||||||||||||||||||||||||||||||||||||||||||||
2/4/2008 | 2/15/2008 | 7,214 | 15.35 | (c) 52,951 |
(1) | For Non-Equity Incentive Plan Awards, the Award Date and the Grant Date are the same namely, the date on which the Compensation Committee approved the 2008 SMIP. For Equity Incentive Plan Awards, All Other Stock Awards and All Other Option Awards, the Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determine the number of NQSOs, RSUs or performance shares, as the case may be, awarded. The number of NQSOs, RSUs and performance shares awarded to the executive officers in February 2008 under our Omnibus Incentive Plan was determined by dividing the target dollar value of the applicable component of equity to be awarded by (a) in the case of NQSOs, the Black Scholes value of the options as of grant date or (b) in the |
46
case of RSUs and performance shares, the average closing price of Libbey common stock on the New York Stock Exchange over a period of 60 consecutive trading days ending on the grant date. We inform grant recipients of their awards after we determine the number of stock options, RSUs and/or performance shares to be granted. For awards made in February 2008, the grant date was the first business day after we announced our results of operations for the 2007 fiscal year. | ||
(2) | Represents the range of possible cash awards under our SMIP for performance during 2008. Under our SMIP, each executive officer is eligible for an annual incentive award in an amount up to 200% of the executive officers target award, which in turn is a percentage of the executives anticipated full-year base salary, as set forth in the following table: |
Target Award as a |
||||
Percentage of Anticipated |
||||
Full-Year Base Salary |
||||
Named Executive
|
(%) | |||
J. Meier
|
90 | % | ||
G. Geswein
|
60 | % | ||
R. Reynolds
|
75 | % | ||
S. Sellick
|
60 | % | ||
K. Wilkes
|
55 | % |
Percentage of |
Payout as |
|||||||
Budgeted IFO |
Percentage of Target |
|||||||
Payout Level
|
(%) | (%) | ||||||
Threshold
|
85 | % | 50 | % | ||||
Target
|
100 | % | 100 | % | ||||
Maximum
|
115 | % | 200 | % |
Payout as |
||||||||
Working |
a Percentage of Target |
|||||||
Payout Level
|
Capital Ratio | (%) | ||||||
Threshold
|
3.45 | 50 | % | |||||
Target
|
3.94 | 100 | % | |||||
Maximum
|
4.58 | 200 | % |
47
(3) | Represents performance shares awarded under our Omnibus Incentive Plan with respect to our 2008 LTIP for the three-year performance cycle beginning on January 1, 2008 and ending on December 31, 2010. The performance measure to be used to determine the extent to which performance shares are earned is the ratio of our actual, cumulative EBITDA over the applicable performance cycle (excluding special charges in accordance with generally accepted accounting principles and as adjusted for any acquisition or disposition with respect to which EBITDA for the business that is acquired or sold, as the case may be, exceeds $5 million) to the sum of budgeted EBITDA for each year during the performance cycle. The scale with respect to our 2008 LTIP is: |
Percentage of |
Payout as |
|||||||
Budgeted EBITDA |
Percentage of Target |
|||||||
Payout Level
|
(%) | (%) | ||||||
Threshold
|
85 | % | 50 | % | ||||
Target
|
100 | % | 100 | % | ||||
Maximum
|
115 | % | 200 | % |
(4) | Represents a grant of RSUs made under our Omnibus Incentive Plan. The grant vests 25% per year beginning on February 15, 2009. | |
(5) | Represents a grant of NQSOs made under our Omnibus Incentive Plan. The grant vests 25% per year beginning on February 15, 2009. | |
(6) | Represents the grant-date fair values, determined in accordance with FAS 123R, of (a) the performance shares at a maximum payout, (b) the RSUs and (c) the NQSOs. |
| NQSOs granted under our Omnibus Plan and predecessor plans; | |
| RSUs granted under our Omnibus Plan; and | |
| Performance share awards made under our Omnibus Plan. |
48
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity |
Equity |
|||||||||||||||||||||||||||||||||||
Incentive |
Incentive |
|||||||||||||||||||||||||||||||||||
Plan |
Plan |
|||||||||||||||||||||||||||||||||||
Awards: |
Awards: |
|||||||||||||||||||||||||||||||||||
Number |
Market |
|||||||||||||||||||||||||||||||||||
of Unearned |
or Payout |
|||||||||||||||||||||||||||||||||||
Shares, |
Value of |
|||||||||||||||||||||||||||||||||||
Market |
Units or |
Unearned |
||||||||||||||||||||||||||||||||||
Number of |
Number of |
Number of |
Value of |
Other |
Shares, |
|||||||||||||||||||||||||||||||
Securities |
Securities |
Shares or |
Shares or |
Rights |
Units or Other |
|||||||||||||||||||||||||||||||
Underlying |
Underlying |
Units of |
Units of |
That |
Rights |
|||||||||||||||||||||||||||||||
Unexercised |
Unexercised |
Option |
Stock That |
Stock That |
Have |
That Have |
||||||||||||||||||||||||||||||
Award |
Grant |
Options |
Options |
Exercise |
Option |
Have Not |
Have Not |
Not |
Not |
|||||||||||||||||||||||||||
Date |
Date |
(#) |
(#) |
Price |
Expiration |
Vested |
Vested |
Vested |
Vested |
|||||||||||||||||||||||||||
Name
|
(1) | (2) | Exercisable | Unexercisable | ($) | Date | (#)(3) | ($)(4) | (#)(5) | ($)(6) | ||||||||||||||||||||||||||
J. Meier
|
8/24/1999 | 30,000 | 0 | 31.3750 | 8/25/2009 | |||||||||||||||||||||||||||||||
9/08/2000 | 30,000 | 0 | 32.3125 | 9/09/2010 | ||||||||||||||||||||||||||||||||
11/13/2001 | 35,000 | 0 | 30.5500 | 11/14/2011 | ||||||||||||||||||||||||||||||||
11/20/2002 | 35,000 | 0 | 23.9300 | 11/21/2012 | ||||||||||||||||||||||||||||||||
12/15/2003 | 17,500 | 0 | 28.5300 | 12/16/2013 | ||||||||||||||||||||||||||||||||
12/10/2004 | 17,500 | 0 | 20.3900 | 12/11/2014 | ||||||||||||||||||||||||||||||||
12/08/2005 | 14,000 | 3,500 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 7,404 | (a) 22,211 | 12.8000 | 2/17/2017 | (a) 23,140 | 28,925 | 23,140 | 28,925 | |||||||||||||||||||||||||||
9,029 | (b) 18,058 | 12.8000 | 2/17/2017 | (b) 18,662 | 23,328 | |||||||||||||||||||||||||||||||
2/04/2008 | 2/15/2008 | 0 | 28,202 | 15.3500 | 2/15/2018 | 27,006 | 33,758 | 13,503 | 16,879 | |||||||||||||||||||||||||||
G. Geswein
|
5/02/2007 | 5/23/2007 | 0 | (c) 50,000 | 19.8500 | 5/23/2017 | 4,925 | 6,156 | 4,285 | 5,356 | ||||||||||||||||||||||||||
1,269 | (d) 3,807 | 19.8500 | 5/23/2017 | |||||||||||||||||||||||||||||||||
2/04/2008 | 2/15/2008 | 0 | 7,360 | 15.3500 | 2/15/2018 | 7,048 | 8,810 | 3,524 | 4,405 | |||||||||||||||||||||||||||
R. Reynolds
|
8/24/1999 | 22,000 | 0 | 31.3750 | 8/25/2009 | |||||||||||||||||||||||||||||||
9/08/2000 | 22,000 | 0 | 32.3125 | 9/09/2010 | ||||||||||||||||||||||||||||||||
11/13/2001 | 27,000 | 0 | 30.5500 | 11/14/2011 | ||||||||||||||||||||||||||||||||
11/20/2002 | 27,000 | 0 | 23.9300 | 11/21/2012 | ||||||||||||||||||||||||||||||||
12/15/2003 | 13,500 | 0 | 28.5300 | 12/16/2013 | ||||||||||||||||||||||||||||||||
12/10/2004 | 13,500 | 0 | 20.3900 | 12/11/2014 | ||||||||||||||||||||||||||||||||
12/08/2005 | 10,800 | 2,700 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 3,923 | (a) 11,767 | 12.8000 | 2/17/2017 | (a) 12,260 | 15,325 | 12,260 | 15,325 | |||||||||||||||||||||||||||
4,903 | (b) 9,804 | 12.8000 | 2/17/2017 | (b) 10,133 | 12,666 | |||||||||||||||||||||||||||||||
2/04/2008 | 2/15/2008 | 0 | 13,984 | 15.3500 | 2/15/2018 | 13,391 | 16,739 | 6,696 | 8,370 | |||||||||||||||||||||||||||
S. Sellick
|
8/24/1999 | 1,250 | 0 | 31.3750 | 8/25/2009 | |||||||||||||||||||||||||||||||
9/08/2000 | 1,500 | 0 | 32.3125 | 9/09/2010 | ||||||||||||||||||||||||||||||||
2/22/2001 | 3,000 | 0 | 31.1500 | 2/23/2011 | ||||||||||||||||||||||||||||||||
11/13/2001 | 3,000 | 0 | 30.5500 | 11/14/2011 | ||||||||||||||||||||||||||||||||
11/20/2002 | 7,000 | 0 | 23.9300 | 11/21/2012 | ||||||||||||||||||||||||||||||||
12/15/2003 | 7,000 | 0 | 28.5300 | 12/16/2013 | ||||||||||||||||||||||||||||||||
12/10/2004 | 8,000 | 0 | 20.3900 | 12/11/2014 | ||||||||||||||||||||||||||||||||
12/08/2005 | 8,000 | 2,000 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 1,682 | (a) 5,044 | 12.8000 | 2/17/2017 | (a) 5,255 | 6,569 | 5,256 | 6,570 | |||||||||||||||||||||||||||
1,942 | (b) 3,883 | 12.8000 | 2/17/2017 | (b) 4,013 | 5,016 | |||||||||||||||||||||||||||||||
2/04/2008 | 2/15/2008 | 0 | 5,909 | 15.3500 | 2/15/2018 | 5,658 | 7,073 | 2,829 | 3,536 | |||||||||||||||||||||||||||
K. Wilkes
|
8/24/1999 | 11,500 | 0 | 31.3750 | 8/25/2009 | |||||||||||||||||||||||||||||||
9/08/2000 | 11,500 | 0 | 32.3125 | 9/09/2010 | ||||||||||||||||||||||||||||||||
11/13/2001 | 17,000 | 0 | 30.5500 | 11/14/2011 | ||||||||||||||||||||||||||||||||
11/20/2002 | 17,000 | 0 | 23.9300 | 11/21/2012 | ||||||||||||||||||||||||||||||||
12/15/2003 | 11,000 | 0 | 28.5300 | 12/16/2013 | ||||||||||||||||||||||||||||||||
12/10/2004 | 12,000 | 0 | 20.3900 | 12/11/2014 | ||||||||||||||||||||||||||||||||
12/08/2005 | 9,600 | 2,400 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 2,024 | (a) 6,070 | 12.8000 | 2/17/2017 | (a) 6,324 | 7,905 | 6,324 | 7,905 | |||||||||||||||||||||||||||
2,500 | (b) 5,001 | 12.8000 | 2/17/2017 | (b) 5,168 | 6,460 | |||||||||||||||||||||||||||||||
2/04/2008 | 2/15/2008 | 0 | 7,214 | 15.3500 | 2/15/2018 | 6,908 | 8,635 | 3,454 | 4,318 |
(1) | The Award Date is the date on which the Compensation Committee took action. Until 2006, the award date and the grant date typically were the same. | |
(2) | Under our executive compensation program adopted by the Compensation Committee in 2006, the number of NQSOs, RSUs and performance shares awarded to the executive officers is determined by |
49
dividing the target dollar value of the applicable component of equity by (a) in the case of NQSOs, the Black Scholes value of the options as of the grant date or (b) in the case of RSUs and performance shares, the average closing price of Libbey common stock on the New York Stock Exchange over a period of 60 consecutive trading days ending on the grant date. We inform grant recipients of their awards after we have determined the number of NQSOs, RSUs and/or performance shares to be granted to them. For awards made in February 2008, the grant date was the first business day after we announced our results of operations for the 2007 fiscal year. | ||
(3) | Represents RSUs awarded pursuant to our Omnibus Plan. One share of our common stock underlies each RSU. | |
(4) | Represents the market value, as of December 31, 2008, of unvested RSUs or unearned performance shares, as applicable. We have estimated the market value by multiplying the number of shares of common stock underlying the RSUs and performance shares by $1.25, the closing price of our common stock on the New York Stock Exchange on December 31, 2008. | |
(5) | Represents the number of shares of our common stock underlying performance shares that were awarded under our 2008 LTIP and 2007 LTIP for the 36-month performance cycles ending December 31, 2010 and December 31, 2009, respectively. With respect to the award of performance shares made on February 5, 2007, the number of shares is based upon achievement of the performance measure described below at the targeted level of performance, since the combined performance for the first two years of the three-year performance cycle would result in a payout in excess of threshold if the performance cycle had ended on December 31, 2008. With respect to the award of performance shares made on February 4, 2008, the number of shares is based upon achievement of the performance measure described below at the threshold level of performance, since the performance during the first year of the three-year performance cycle would result in a payout at less than threshold if the performance cycle had ended on December 31, 2008. Performance shares awarded with respect to each of these performance cycles may be earned if and to the extent that we achieve actual, cumulative EBITDA for the applicable performance cycles (excluding special charges in accordance with generally accepted accounting principles and as adjusted for any acquisition or disposition with respect to which EBITDA for the business that is acquired or sold, as the case may be, exceeds $5.0 million) equal to at least 85% of the sum of EBITDA budgeted for each year (or partial year) during the applicable performance cycle. For further information, see footnote 3 to the Grants of Plan-Based Awards Table above. | |
(6) | Represents the payout value, as of December 31, 2008, of unearned performance shares that were awarded under our 2008 LTIP and 2007 LTIP for the 36-month performance cycles ending December 31, 2010 and December 31, 2009, respectively. We have estimated the payout value by multiplying the number of shares of common stock underlying the unearned performance shares by $1.25, the closing price of our common stock on the New York Stock Exchange on December 31, 2008. With respect to the award of performance shares made on February 5, 2007, the number of shares is based upon achievement of the performance measure at the targeted level of performance, since the combined performance for the first two years of the three-year performance cycle would result in a payout in excess of threshold if the performance cycle had ended on December 31, 2008. With respect to the award of performance shares made on February 4, 2008, the number of shares is based upon achievement of the performance measure described below at the threshold level of performance, since the performance during the first year of the three-year performance cycle would result in a payout at less than threshold if the performance cycle had ended on December 31, 2008. |
50
Option Awards (NQSOs) Vesting Schedule | Stock Awards (RSUs) Vesting Schedule | |||||
Grant Date
|
Vesting Schedule
|
Grant Date
|
Vesting Schedule
|
|||
12/08/2005
|
80% were vested as of 12/31/2007; the balance are scheduled to vest 12/08/2009 | |||||
2/16/2007
|
(a) 25% were vested on February 16, 2008; an additional 25% is scheduled to vest on each of February 16, 2009, February 16, 2010 and February 16, 2011 | 2/16/2007 | (a) 25% were vested on February 16, 2008; an additional 25% is scheduled to vest on each of February 16, 2009, February 16, 2010 and February 16, 2011 | |||
(b) 33% were vested on February 16, 2008; an additional 33% is scheduled to vest on each of February 16, 2009 and February 16, 2010 | (b) 33% were vested on February 16, 2008; an additional 33% is scheduled to vest on each of February 16, 2009 and February 16, 2010 | |||||
5/23/2007
|
(c) 100% are scheduled to vest on May 23, 2010 (d) 25% were vested on May 23, 2008; an additional 25% are scheduled to vest on each of May 23, 2009, May 23, 2010 and May 23, 2011 |
5/23/2007 | 25% were vested on May 23, 2008; an additional 25% are scheduled to vest on each of May 23, 2009, May 23, 2010 and May 23, 2011 | |||
2/15/2008
|
25% are scheduled to vest on each of February 15, 2009, February 15, 2010, February 15, 2011 and February 15, 2012 | 2/15/2008 | 25% are scheduled to vest on each of February 15, 2009, February 15, 2010, February 15, 2011 and February 15, 2012 | |||
Option Awards | Stock Awards | |||||||||||||||
Number of |
Number of |
|||||||||||||||
Shares |
Value Realized |
Shares |
Value Realized |
|||||||||||||
Acquired on |
on |
Acquired on |
on |
|||||||||||||
Exercise |
Exercise |
Vesting |
Vesting |
|||||||||||||
Name
|
(#) | ($) | (#) | ($)(1) | ||||||||||||
J. Meier
|
0 | 0 | 21,987 | 29,243 | ||||||||||||
G. Geswein
|
0 | 0 | 645 | 858 | ||||||||||||
R. Reynolds
|
0 | 0 | 11,837 | 15,743 | ||||||||||||
S. Sellick
|
0 | 0 | 4,822 | 6,431 | ||||||||||||
K. Wilkes
|
0 | 0 | 1,369 | 8,061 |
(1) | Represents the value of the sum of (a) the number of performance shares earned under the July 2006 LTIP for the performance cycle beginning on July 1, 2006 and ending on December 31, 2008, and (b) RSUs that vested during 2008. The value was determined by multiplying the number of shares by $1.33, the |
51
closing price of our common stock on February 9, 2009, the date on which the Compensation Committee determined that the shares had been earned. |
52
Number of Years |
Present Value of |
Payments During |
||||||||||||
Credited Service |
Accumulated Benefit |
Last Fiscal Year |
||||||||||||
Name
|
Plan Name | (#)(1) | ($)(2) | ($) | ||||||||||
J. Meier
|
Salary Plan | 38.25 | 1,315,518 | 0 | ||||||||||
SERP | 38.25 | 3,843,517 | 0 | |||||||||||
G. Geswein
|
N/A | N/A | N/A | N/A | ||||||||||
R. Reynolds
|
Salary Plan | 38.83 | 1,296,866 | 0 | ||||||||||
SERP | 38.83 | 2,066,654 | 0 | |||||||||||
S. Sellick
|
Salary Plan | 11.33 | 81,330 | 0 | ||||||||||
SERP | 11.33 | 26,567 | 0 | |||||||||||
K. Wilkes
|
Salary Plan | 15.42 | 153,044 | 0 | ||||||||||
SERP | 15.42 | 121,553 | 0 |
(1) | Represents actual years of service to Libbey and Owens-Illinois Inc., our former parent company. We have not granted additional years of service to any of our executives. | |
(2) | Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31, 2008, except that assumptions relating to expected retirement age are as follows. Participants who are eligible for pension benefits under the Salary Plans final average pay formula (namely, Messrs. Meier and Reynolds) are assumed to retire at the earliest age at which they can receive an unreduced benefit under the Salary Plan. Messrs. Sellick and Wilkes are assumed to receive benefits under the cash balance design at their normal retirement age of 65. |
Executive |
Registrant |
Aggregate |
||||||||||||||||||
Contributions in |
Contributions in |
Aggregate Earnings |
Withdrawals/ |
Aggregate Balance |
||||||||||||||||
Last FY |
Last FY |
in Last FY |
Distributions |
at Last FYE |
||||||||||||||||
Name
|
($) | ($)(1) | ($)(2) | ($) | ($)(3) | |||||||||||||||
J. Meier
|
46,000 | 16,100 | (215,242 | ) | 0 | 495,950 | ||||||||||||||
G. Geswein
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
R. Reynolds
|
12,273 | 7,159 | (136,179 | ) | 0 | 245,046 | ||||||||||||||
S. Sellick
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
K. Wilkes
|
10,086 | 3,530 | (5,320 | ) | 0 | 128,409 |
(1) | Included in column headed All Other Compensation in the Summary Compensation Table above. | |
(2) | Not included in column headed Change in Pension Value and Nonqualified Deferred Compensation Earnings in the Summary Compensation Table because earnings are not at an above-market rate. | |
(3) | Included in the column All Other Compensation in the Summary Compensation Table to the extent of the contributions that are reflected in the Registrant Contributions in Last FY column of this table. |
53
| Although the amended employment and change in control agreements did not become effective until January 1, 2009, the following tables assume that the amended employment and change in control agreements were in effect on December 31, 2008. | |
| For purposes of the Potential Payments Upon Termination Under Employment Agreements table, we have assumed that the employment of the respective Named Executives was terminated on December 31, 2008 under the various scenarios described in that table. | |
| For purposes of the Potential Payments Upon Change in Control table, we have assumed that a change in control occurred on December 31, 2008, but that none of the Named Executives was terminated in connection with that change in control. | |
| For purposes of the Potential Payments Upon Termination in Connection with Change in Control table, we have assumed that a change in control occurred on December 31, 2008 and that the employment of the respective Named Executives was terminated on December 31, 2008 under the various scenarios described in that table. |
54
Annual |
Long-Term |
Acceleration of |
||||||||||||||||||||||
Base |
Incentive |
Incentive |
Unvested Equity |
Misc. |
||||||||||||||||||||
Salary |
Compensation |
Compensation |
Awards |
Benefits |
Total |
|||||||||||||||||||
Named Executive
|
($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ||||||||||||||||||
John F. Meier
|
||||||||||||||||||||||||
Death
|
1,380,000 | 0 | 30,536 | 86,010 | 12,000 | 1,508,546 | ||||||||||||||||||
Permanent disability
|
2,070,000 | 1,863,000 | 6,179 | 86,010 | 36,803 | 4,061,992 | ||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
2,070,000 | 1,863,000 | 6,179 | 86,010 | 36,803 | 4,061,992 | ||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Gregory T. Geswein
|
||||||||||||||||||||||||
Death
|
337,632 | 0 | 6,508 | 14,968 | 12,000 | 371,108 | ||||||||||||||||||
Permanent disability
|
675,264 | 405,158 | 806 | 14,968 | 26,676 | 1,122,873 | ||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
675,264 | 405,158 | 806 | 14,968 | 26,676 | 1,122,873 | ||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Richard I. Reynolds
|
||||||||||||||||||||||||
Death
|
446,280 | 0 | 15,796 | 44,731 | 12,000 | 518,807 | ||||||||||||||||||
Permanent disability
|
892,560 | 669,420 | 3,355 | 44,731 | 24,535 | 1,634,601 | ||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
892,560 | 669,420 | 3,355 | 44,731 | 24,535 | 1,634,601 | ||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Scott M. Sellick
|
||||||||||||||||||||||||
Death
|
280,830 | 0 | 6,738 | 18,660 | 16,500 | 322,728 | ||||||||||||||||||
Permanent disability
|
561,660 | 336,996 | 1,329 | 32,055 | 35,676 | 954,321 | ||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
561,660 | 336,996 | 1,329 | 32,055 | 35,676 | 954,321 | ||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Kenneth G. Wilkes
|
||||||||||||||||||||||||
Death
|
345,816 | 0 | 8,149 | 23,001 | 16,500 | 393,466 | ||||||||||||||||||
Permanent disability
|
691,632 | 380,398 | 1,711 | 23,001 | 33,535 | 1,130,277 | ||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
691,632 | 380,398 | 1,711 | 23,001 | 33,535 | 1,130,277 | ||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 0 |
(1) | Represents (a) in the event of termination due to death, two times base salary in the case of Mr. Meier and one times base salary in the case of the other Named Executives (in each case at the rate in effect on December 31, 2008, the date of termination), and (b) in the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, three times 2008 base salary in the case of Mr. Meier and two times 2008 base salary in the case of the other Named Executives (in each case at the rate in effect on the date of termination). Since termination is assumed to have occurred on December 31, 2008, we have assumed that all 2008 base salary has been paid when due. The base salary and annual incentive compensation components are payable in a lump sum, with the payment being made on the first day of the seventh month following termination, except if termination is a result of the Named Executives death, in which case the payment would be made within 60 days after Libbey receives written notice of the appointment of a personal representative for the Named Executives estate. | |
(2) | In the case of termination due to death, represents the actual bonus earned for 2008 performance under our SMIP. In the case of termination due to permanent disability, by the Company without cause or by the executive for good reason, represents a multiple of the executives target award for 2008 under our SMIP. The multiple is three for Mr. Meier and two for each of the other Named Executives. Because termination is assumed to occur on December 31, 2008, the amount is not prorated. If termination were to occur during a year, the amount would be prorated, but would not be less than 50% of the target award unless termination is a result of death. |
55
(3) | Represents, in the event of termination due to death, the sum of (a) the estimated value of shares of common stock issued on February 17, 2008, as payment for performance shares earned under the July 2006 LTIP for the performance cycle beginning July 1, 2006 and ending December 31, 2008, and (b) the estimated value of a prorated award of performance shares for the performance cycles beginning January 1, 2007 and January 1, 2008. In the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, represents the estimated value of shares of common stock issued on February 17, 2008, as payment for performance shares earned under the July 2006 LTIP for the performance cycle beginning July 1, 2006 and ending December 31, 2008. In the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, performance shares for incomplete performance cycles are paid out only if and when earned. We have estimated the values of the performance shares on December 31, 2008 by multiplying the number of shares by $1.25, the closing price of our common stock on the New York Stock Exchange on December 31, 2008. | |
(4) | Represents the estimated value of common stock underlying RSUs that were granted in February 2007 and February 2008 and that had not vested as of December 31, 2008. We have estimated the value by multiplying the number of shares by $1.25, the closing price of our common stock on the New York Stock Exchange on December 31, 2008. The exercise price of all unvested non-qualified stock options exceeded $1.25 per share. As a result, the in-the-money/intrinsic value of the unvested non-qualified stock options at December 31, 2008 was $0. | |
(5) | Represents the sum of (a) the estimated cost of medical, prescription drug, dental and vision benefits for the Named Executive and/or his covered dependents for (i) 12 months following the date of termination if termination is a result of death or (ii) 24 months (or, in Mr. Meiers case, 36 months) following the date of termination if termination is a result of permanent disability, voluntary termination for good reason or involuntary termination without cause; and (b) in the event of termination as a result of permanent disability, voluntary termination for good reason or involuntary termination without cause, the estimated cost of continued life insurance coverage, for a period of 24 months (or, in Mr. Meiers case, 36 months) following the date of termination, under our group life insurance policy applicable to all salaried employees. | |
(6) | Does not include any tax gross-up because the excise tax contemplated by Section 4999 of the Internal Revenue Code does not apply in the absence of a change in control. Does not include any qualified or nonqualified pension benefit or other deferred compensation to which any of the Named Executives otherwise may be entitled upon their retirement or other termination of employment. For further information regarding those benefits, see Retirement Plans and Nonqualified Deferred Compensation above. |
Annual Incentive |
Equity Incentive |
Unvested Stock |
||||||||||||||
Compensation |
Plan Awards |
Options |
Total |
|||||||||||||
Named Executive
|
($)(1) | ($)(2) | ($)(3) | ($) | ||||||||||||
John F. Meier
|
621,000 | 36,713 | 0 | 657,713 | ||||||||||||
Gregory T. Geswein
|
202,579 | 7,314 | 0 | 209,893 | ||||||||||||
Richard I. Reynolds
|
334,710 | 19,151 | 0 | 353,861 | ||||||||||||
Scott M. Sellick
|
167,034 | 8,066 | 0 | 175,100 | ||||||||||||
Kenneth G. Wilkes
|
188,151 | 9,860 | 0 | 199,392 |
(1) | Represents the executives target award for 2008 under our SMIP, based upon actual base salary earned during 2008. Because a change in control is assumed to occur on December 31, 2008, the amount is not prorated. If termination were to occur during a year, the amount would be prorated, but in no event would less than 50% of the target award be used for purposes of determining this amount. | |
(2) | Represents the sum of (a) the value of performance shares earned as of December 31, 2008 under our July 2006 LTIP for the performance cycle beginning July 1, 2006 and ending December 31, 2008; and (b) the |
56
value of performance shares deemed earned (on a prorated basis) as of December 31, 2008 under our 2007 LTIP for the performance cycle ending December 31, 2009, and under our 2008 LTIP for the performance cycle ending December 31, 2010. We have estimated the value of the performance shares deemed earned by multiplying the number of shares by $1.25, the closing price of our common stock on the New York Stock Exchange on December 31, 2008. | ||
(3) | Represents the in-the-money/intrinsic value of unvested NQSOs based upon the closing price of our stock on the New York Stock Exchange on December 31, 2008 ($1.25 per share). |
Annual |
Unvested |
Pension |
||||||||||||||||||||||||||
Incentive |
Restricted |
Misc. |
Plan |
Tax |
||||||||||||||||||||||||
Base Salary |
Compensation |
Stock Awards |
Benefits |
Benefits |
Gross-Up |
Total |
||||||||||||||||||||||
Named Executive
|
($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ($)(7) | ($) | |||||||||||||||||||||
John F. Meier
|
2,070,000 | 1,863,000 | 86,110 | 52,473 | 250,000 | 1,769,256 | 6,090,739 | |||||||||||||||||||||
Gregory T. Geswein
|
1,012,896 | 607,738 | 14,966 | 63,514 | 250,000 | 844,330 | 2,793,444 | |||||||||||||||||||||
Richard I. Reynolds
|
1,338,840 | 1,004,130 | 44,730 | 52,408 | 250,000 | 1,058,315 | 3,748,423 | |||||||||||||||||||||
Scott M. Sellick
|
842,490 | 501,102 | 18,660 | 68,514 | 250,000 | 745,741 | 2,426,497 | |||||||||||||||||||||
Kenneth G. Wilkes
|
1,037,448 | 564,453 | 23,001 | 67,880 | 250,000 | 783,733 | 2,726,514 |
(1) | Represents amounts payable if, within two (2) years after the change in control, Libbey terminates the employment of the Named Executive without Cause or the Named Executive terminates his employment for Good Reason. In certain circumstances these amounts may be payable to the Named Executive if his employment is terminated prior to the change in control based upon an event that would meet the definition of Cause or Good Reason if the event were to occur within two (2) years after the change in control. | |
(2) | Represents three times base salary in effect on December 31, 2008 and is payable in a lump sum on the first day of the seventh month following termination of employment. We have assumed that all 2008 base salary has been paid when due. | |
(3) | Represents three times the respective Named Executives target annual incentive awards for 2008 performance, since the actual annual incentive awards earned by them for 2007 performance were less than their target annual incentive awards for 2008 performance. Target annual incentive compensation is a percentage of base salary actually earned during the year, as reflected by W-2 wages. For information with respect to the target percentages of the respective Named Executives, see Compensation Discussion and Analysis What compensation did Libbeys executives receive for 2008? Annual Incentive Compensation under SMIP. | |
(4) | The change in control is assumed to have occurred concurrently with termination of employment on December 31, 2008. Pursuant to the change in control agreements, the cash value of unvested RSUs outstanding on the date of the change in control is determined based upon the closing price of Libbeys common stock on the last trading day immediately preceding the change in control. That value is frozen. Upon termination by Libbey without cause or by the Named Executive for good reason within two (2) years after the change in control (and in certain circumstances prior to the change in control), that value is paid to the Named Executive in cash. The estimated value for purposes of this table is based upon the closing price of Libbeys common stock on December 30, 2008, or $1.25 per share. | |
(5) | Represents the sum of (a) the estimated cost of medical, prescription drug, dental and vision benefits for the Named Executive and his covered dependents for 36 months following the date of termination, at an assumed annual cost of $12,000 for Messrs. Meier, Reynolds and Geswein and $16,500 for Messrs. Sellick and Wilkes; (b) the estimated cost of continued life insurance coverage, for a period of 36 months following the date of termination, under our group life insurance policy applicable to all salaried employees; (c) the estimated cost to provide outplacement services for two years following the date of termination, at a maximum cost to the Company of $15,000 per Named Executive; and (d) the estimated |
57
cost to provide one year of financial planning services of the nature and scope provided to the respective Named Executive Officers during 2008. | ||
(6) | Represents a lump sum equal to the greater of (i) $250,000 or (ii) the additional benefits to which each Named Executive would have been entitled under the Companys qualified pension plan if he had remained employed by the Company for an additional three (3) years. Does not include any other qualified or nonqualified pension benefit or other deferred compensation to which any of the Named Executives otherwise may be entitled upon their retirement or other termination of employment. For further information regarding those benefits, see Retirement Plans and Nonqualified Deferred Compensation above. | |
(7) | The present value of the parachute payments payable to each of the Named Executives exceeded 1.10 multiplied by three times the base amount of the respective Named Executives (with the terms present value, parachute payments and base amount being defined in Section 280G of the Internal Revenue Code). Accordingly, the Company would be obligated to fully gross up the amounts payable to the respective Named Executives to cover the excise taxes assessed against them. |
Change in Pension |
||||||||||||||||||||
Value and |
||||||||||||||||||||
Nonqualified |
||||||||||||||||||||
Fees Earned or |
Deferred |
All Other |
||||||||||||||||||
Paid in Cash |
Stock Awards |
Compensation |
Compensation |
Total |
||||||||||||||||
Name
|
($)(1) | ($)(1)(2) | Earnings(3) | ($) | ($) | |||||||||||||||
Carlos V. Duno
|
$ | 53,500 | $ | 32,086 | $ | 0 | $ | 0 | $ | 85,586 | ||||||||||
William A. Foley
|
53,250 | 32,086 | 0 | 0 | 85,336 | |||||||||||||||
Jean-René Gougelet
|
47,645 | 32,086 | 0 | 0 | 79,731 | |||||||||||||||
Peter C. McC. Howell
|
46,625 | 32,086 | 0 | 0 | 78,711 | |||||||||||||||
Deborah G. Miller
|
48,250 | 32,086 | 0 | 0 | 80,336 | |||||||||||||||
Carol B. Moerdyk
|
59,636 | 32,086 | 0 | 0 | 91,722 | |||||||||||||||
John C. Orr(4)
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20,083 | 0 | 0 | 0 | 20,083 | |||||||||||||||
Terence P. Stewart(6)
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35,300 | 32,086 | 0 | 0 | 67,386 |
(1) | Includes compensation deferred into the phantom stock subaccount or the interest-bearing subaccount pursuant to the 2006 Deferred Compensation Plan for Outside Directors adopted effective January 1, 2006, and the Amended and Restated 2006 Deferred Compensation Plan for Outside Directors adopted effective October 17, 2006. | |
(2) | Represents the grant-date fair value, determined in accordance with FAS 123R, of awards of stock made to each non-management director on May 16, 2008. On that date, we awarded each non-management director stock having a value of $40,000. The number of shares of common stock issued to each non-management director was determined by dividing $40,000 by $14.85, the average closing price of our common stock on the New York Stock Exchange over a period of 60 consecutive trading days ending on May 16, 2008. The closing price of our common stock on the New York Stock Exchange on May 16, 2008 was $11.91. | |
(3) | We do not maintain a pension plan for our non-management directors. Compensation deferred into the phantom stock subaccount does not earn an above-market return, as dividends accrue only if and to the extent payable to holders of our common stock. Compensation deferred into the interest-bearing subaccount does not earn an above-market return, as the applicable interest rate is the yield on 10-year treasuries. |
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(4) | Mr. Orr was elected as a member of the Board of Directors on July 7, 2008, and attended his first meeting of the Board on July 22, 2008. | |
(5) | For additional information with respect to compensation payable to Mr. Stewarts law firm for services provided to Libbey, see Corporate Governance Certain Relationships and Related Transactions What transactions involved directors or other related parties? |
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Please mark your votes as indicated in this example |
x | |||
WITHHOLD | |||||||||||||||||
AUTHORITY to vote for | |||||||||||||||||
FOR all nominees | all nominees listed | ||||||||||||||||
listed below | below | *EXCEPTIONS | FOR | AGAINST | ABSTAIN | ||||||||||||
1. | Election of Directors Nominees: 01 Jean-René Gougelet |
o | o | o | 2. Proposal to ratify the appointment of
Ernst & Young LLP as the Companys
independent auditors for the fiscal year
ending December 31, 2009
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o | o | o | |||||||||
02 John F. Meier 03 Carol B. Moerdyk (INSTRUCTIONS: To withhold authority to vote for any
individual nominee, mark the Exceptions box and write
that nominees name in the space provided below.)
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3. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting or any adjournment thereof. |
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*Exceptions |
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o |
Signature
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