þ | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(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 | Fee paid previously with preliminary materials. |
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, 2008; and | |
| transact such other business as properly may come before the meeting. |
| Proposal 1: Election of three nominees William A. Foley, Deborah G. Miller and Terence P. Stewart to serve as Class III directors; and | |
| Proposal 2: Ratification of the appointment of Ernst & Young LLP as Libbeys independent auditors for the 2008 fiscal year. |
| Proposal 1: FOR each of William A. Foley, Deborah G. Miller and Terence P. Stewart to serve as Class III directors; and | |
| Proposal 2: FOR ratification of the appointment of Ernst & Young LLP as Libbeys independent auditors for the 2008 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)
|
2,101,050 | 14.40% | ||||||
320 Park Avenue,
30th Floor New York, NY 10022 |
||||||||
Dimensional Fund Advisors LP(2)
|
985,270 | 6.77% | ||||||
1299 Ocean Avenue Santa Monica, CA 90401 |
||||||||
Skylands Capital, LLC(3)
|
908,800 | 6.20% | ||||||
1200 North Mayfair Road, Suite 250 Milwaukee, WI 53226 |
||||||||
Barclays Global Investors, NA(4)
|
806,402 | 5.54% | ||||||
45 Fremont Street San Francisco, CA 94105 |
||||||||
Credit Suisse(5)
|
730,781 | 5.00% | ||||||
11 Madison Ave New York, NY 10010 |
(1) | Amendment No. 4 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, 2007, Zesiger Capital Group LLC is the beneficial owner of 2,101,050 common shares, with sole dispositive power as to 2,101,050 common shares and sole voting power as to 1,393,000 common shares. The schedule further states that all securities reported in the schedule are held in discretionary accounts that Zesiger Capital Group LLC manages, and that no single client of Zesiger Capital Group LLC owns more than 5% of the class. | |
(2) | 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 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, 2007, Dimensional Fund Advisors LP is the beneficial owner of 985,270 common shares, with sole voting and dispositive power with respect to all of those shares; that the Funds own all such securities; and that no one such Fund owns more than 5% of the shares. | |
(3) | Schedule 13G filed with the Securities and Exchange Commission on behalf of Skylands Capital, LLC indicates that, as of December 31, 2007, Skylands Capital, LLC, an investment advisor, is the beneficial owner of 908,800 shares, with sole voting and dispositive power with respect to all of those shares, which |
3
are held in four private investment funds and ten separate accounts managed by Skylands Capital, LLC, and that no fund or person beneficially owns more than 5% of the outstanding shares. |
(4) | Schedule 13G filed with the Securities and Exchange Commission by Barclays Global Investors, NA on behalf of a group including Barclays Global Investors, NA, a bank (Barclays NA), Barclays Global Fund Advisors (GBFA), an investment advisor, and Barclays Global Investors, Ltd. (Barclays Ltd.), a bank, indicates that, as of December 31, 2007, each member of the group is the beneficial owner of 806,402 shares, with sole voting power with respect to 647,221 shares and sole dispositive power with respect to 806,402 shares. The schedule further states that the shares are held by the company in trust accounts for the economic benefit of the beneficiaries of those accounts. | |
(5) | Schedule 13G filed with the Securities and Exchange Commission by Credit Suisse, a bank (the Bank), indicates that it is filed on behalf of the subsidiaries of Credit Suisse to the extent that they constitute the Investment Banking division (the Investment Banking division), the Alternative Investments business (the AI Business) within the Asset Management division (the Asset Management division) and the U.S. private client services business (the U.S. PCS Business) within the Private Banking division (the Private Banking division) (the Reporting Person). The address of the principal business and office of the Bank is Uetlibergstrasse 231, P.O. Box 900, CH 8070 Zurich , Switzerland. The address of the principal business and office of the Reporting Person in the United States is Eleven Madison Avenue, New York, New York 10010. Schedule 13G states that, as of December 31, 2007, the Reporting Person is the beneficial owner of 730,781 shares, with shared voting and dispositive power with respect to all those shares. Schedule 13G further indicates that the ultimate parent company of the Bank is Credit Suisse Group (CSG), a corporation formed under the laws of Switzerland, and that CSG, for purposes of the federal securities laws, may be deemed ultimately to control the Bank and the Reporting Person. The Schedule 13G also states that CSG, its executive officers and directors, and its direct and indirect subsidiaries (including those subsidiaries that constitute the Asset Management division (other than the AI Business) (the Traditional AM Business) and the Private Banking division (other than the U.S. PCS Business (the Non-U.S. PB Business)) may beneficially own Shares to which the Schedule 13G relates (the Shares) and such Shares are not reported in the Schedule 13G. CSG disclaims beneficial ownership of Shares beneficially owned by its direct and indirect subsidiaries, including the Reporting Person. Each of the Traditional AM Business and the Non-U.S. PB Business disclaims beneficial ownership of Shares beneficially owned by the Reporting Person. The Reporting Person disclaims beneficial ownership of Shares beneficially owned by CSG, the Traditional AM Business and the Non-U.S. PB Business. |
4
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; |
| 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. |
5
Applicable Guideline |
Number of |
|||||||
Named Executive
|
(Number of Shares)_ | Qualifying Shares Held | ||||||
John F. Meier
|
204,869 | 120,062 | ||||||
Gregory T. Geswein(1)
|
40,099 | 1,257 | ||||||
Scott M. Sellick
|
32,193 | 22,707 | ||||||
Richard I. Reynolds
|
79,504 | 74,879 | ||||||
Kenneth G. Wilkes
|
39,302 | 39,869 | ||||||
Daniel P. Ibele
|
31,061 | 24,203 |
(1) | Does not include 1,642 restricted stock units (which we refer to as RSUs) that are scheduled to vest on May 23, 2008 and therefore are included under Beneficial Ownership Table below. |
Amount and Nature |
||||||||
of Beneficial |
Percent |
|||||||
Name of Beneficial Owner
|
Ownership(1) | of Class | ||||||
Carlos V. Duno
|
7,523 | * | ||||||
William A. Foley(2)
|
6,623 | * | ||||||
Gregory T. Geswein(3)
|
2,526 | * | ||||||
Jean-René Gougelet(2)
|
0 | * | ||||||
Daniel P. Ibele(3)
|
92,703 | * | ||||||
Peter C. McC. Howell(2)(4)
|
8,273 | * | ||||||
John F. Meier(3)(5)
|
314,006 | 2.15 | % | |||||
Deborah G. Miller(2)
|
4,878 | * | ||||||
Carol B. Moerdyk(2)
|
7,423 | * | ||||||
Richard I. Reynolds(3)
|
221,880 | 1.52 | % | |||||
Scott M. Sellick(3)
|
54,707 | * | ||||||
Terence P. Stewart(2)
|
10,451 | * | ||||||
Kenneth G. Wilkes(3)
|
131,370 | * | ||||||
Directors & Executive Officers as a Group(3)(2)
|
1,033,807 | 7.08 | % |
(1) | Includes the following number of stock options that have been granted to Messrs. Meier, Geswein, Sellick, Reynolds, Wilkes and Ibele and that currently are exercisable or will be exercisable on or before June 3, 2008: |
6
Number of |
||||
Outstanding Stock |
||||
Options Exercisable |
||||
Named Executive
|
Within 60 Days | |||
John F. Meier
|
221,933 | |||
Gregory T. Geswein
|
1,269 | |||
Scott M. Sellick
|
41,623 | |||
Richard I. Reynolds
|
163,925 | |||
Kenneth G. Wilkes
|
103,225 | |||
Daniel P. Ibele
|
78,264 |
(2) | Does not include the following number of shares of phantom stock held by non-management directors, as of March 31, 2008, pursuant to certain deferred compensation plans for outside directors: |
Number of |
||||
Name of Director
|
Phantom Shares | |||
William A. Foley
|
11,633 | |||
Jean-René Gougelet
|
152 | |||
Peter C. McC. Howell
|
5,703 | |||
Deborah G. Miller
|
2,164 | |||
Carol B. Moerdyk
|
22,378 | |||
Terence P. Stewart
|
17,066 |
(3) | Includes the shares of common stock that Messrs. Meier, Geswein, Sellick, Reynolds, Wilkes and Ibele, and all officers as a group, held in the Libbey Inc. Retirement Savings Plan as of March 31, 2008. | |
(4) | Includes 750 shares held by family members of Mr. Howell. Mr. Howell disclaims any beneficial interest in these shares. | |
(5) | Includes 8,406 shares held by family members of Mr. Meier. Mr. Meier disclaims any beneficial interest in these shares. |
No. of Unvested |
||||
Named Executive
|
RSUs(1) | |||
John F. Meier
|
68,808 | |||
Gregory T. Geswein
|
13,615 | |||
Scott M. Sellick
|
14,920 | |||
Richard I. Reynolds
|
35,784 | |||
Kenneth G. Wilkes
|
18,400 | |||
Daniel P. Ibele
|
12,797 |
(1) | Of this amount, 41,623 RSUs with three-year vesting were granted on February 16, 2007, a total of 6,567 RSUs with four-year vesting were granted on May 23, 2007, and a total of 116,134 RSUs with four-year vesting were granted on February 16, 2007 and February 15, 2008. 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. |
7
Board Committee |
Director |
|||||||||||
Director
|
Age
|
Experience
|
Assignments
|
Since
|
||||||||
Carlos V. Duno (Class II)
|
60 | Owner and Chief Executive Officer of Marcia Owen Associates, a recruiting and staffing agency, 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 | ||||||||
William A. Foley (Class III)
|
60 | 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; Co-founder of Entrenu Holdings LLC; Chairman and Chief Executive Officer of LESCO Inc. from July 1993 to April 2002. | Chair, Nominating and Governance Committee; Member, Compensation Committee | 1994 |
8
Board Committee |
Director |
|||||||||||
Director
|
Age
|
Experience
|
Assignments
|
Since
|
||||||||
Jean-René Gougelet (Class I)
|
59 | 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 International North America. | Member, Audit Committee | 2007 | ||||||||
Peter C. McC. Howell (Class II)
|
58 | 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). | Member, Audit Committee; Member, Nominating and Governance Committee | 1993 | ||||||||
John F. Meier (Class I)
|
60 | 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 |
9
Board Committee |
Director |
|||||||||||
Director
|
Age
|
Experience
|
Assignments
|
Since
|
||||||||
Deborah G. Miller (Class III)
|
58 | 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)
|
57 | 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 | ||||||||
Richard I. Reynolds (Class II)
|
61 | 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)
|
59 | 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 |
10
| 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 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. |
11
| 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 | |
| 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
14
Nature of Fees
|
2007 Fees | 2006 Fees | ||||||
Audit Fees(1)
|
$ | 1,200,082 | $ | 2,103,622 | ||||
Audit Related Fees(2)
|
$ | 80,000 | $ | 76,000 | ||||
Tax Fees
|
$ | 0 | $ | 0 | ||||
All Other Fees
|
$ | 0 | $ | 0 | ||||
Total
|
$ | 1,280,082 | $ | 2,179,622 | ||||
(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 principally include fees for audits of our benefit plans. |
| confirming the independence of our independent auditors; | |
| appointing, compensating and retaining our independent auditors; |
15
| 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. |
16
o | The one-year total return to our stockholders was 29.1%, the second consecutive year in which our one-year total shareholder return exceeded 20%. In contrast, the annual return for the Russell 2000 Index, of which we are a component company, was −1.6%; the annual return for the S&P SmallCap 600 Index was -0.3%; the annual return for the S&P 600 Housewares & Specialties Index was 8.6%; and the annual total shareholder return for our peer group, as defined under How does Libbey determine the forms and amounts of executive compensation? below, on a composite basis, was 17.1%.2 In fact, our one-year total shareholder return was among the top one-third in our peer group. | ||
o | Our income from operations (which we refer to as IFO) was $66.1 million, an increase of $46.8 million, or 243.1%, over our reported IFO for our fiscal year ended December 31, 2006, and an increase of $28.3 million, or 74.9%, over 2006 adjusted IFO, excluding special charges, of $37.8 million. | ||
o | Our earnings before interest, taxes, depreciation and amortization, after minority interest (which we refer to as EBITDA) was $116.5 million, an increase of $62.9 million, or 117.6%, over our reported EBITDA for our fiscal year ended December 31, 2006, and an increase of $44.5 million, or 61.8%, over our 2006 adjusted EBITDA, excluding special charges, of $72 million. | ||
o | We increased free cash flow by $113.7 million, from $(97.2) million in 2006 to $16.5 million in 2007. | ||
o | We achieved record-setting sales in our North American Glass segment by taking significant additional market share in the retail channel of distribution, and achieved record-setting sales in our International segment. | ||
o | We improved our operating margin in 2007 to 8.1% from 2.8% in 2006. | ||
o | We began operations at our new, state-of-the-art glass tableware manufacturing facility in Langfang, China, near Beijing, in early 2007; we shipped our first customer order from that facility in March; and we achieved our first profitable month in December. | ||
o | We substantially completed Project Tiger, our project to rationalize capacity at our Crisa facility in Mexico and achieve annualized savings of $13-15 million. |
17
| Talent Attraction and Retention Objective. As our business has become more global and complex, it has become increasingly important that we are positioned to attract and retain highly qualified executives with the experience to enable us to achieve our business strategies. As indicated above, in |
18
| Motivational Objective. Between 2005 and 2007, we expanded our business operations into Portugal, Mexico and China, adding significant complexity to our business. And in 2006, we incurred a significant amount of very expensive debt in order to complete the transaction pursuant to which we acquired the remaining 51% interest in our Crisa subsidiary that we did not already own. We can create significant shareholder value by refinancing that debt and reducing our cost of capital substantially. 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 ample financial incentives to motivate our executives to achieve these strategies and results. | |
| Alignment Objective. Since ultimately 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 motivational objective described above with the need to ensure that executive compensation is reasonable. |
Form of Compensation | Characteristics | Purpose/ Objective | ||
Annual cash compensation
|
||||
Base Salary
|
Fixed component, adjusted 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 45% of their 2007 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
To motivate sustained performance
|
||
19
Form of Compensation | Characteristics | Purpose/ 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 2007, each executive officers target award had two components a corporate component, representing 67% of his or her annual incentive opportunity for 2007, and an individual component, representing 33% of his or her annual incentive opportunity for 2007. There will be no payout under the individual component unless Libbey achieves at least 60% of budgeted IFO.
Amount actually payable varies based upon company performance, as measured by the extent to which Libbey achieves budgeted IFO, and individual performance
For the Named Executives, represented between 23% and 27% of their 2007 total direct compensation opportunity
Compensation Committee may exercise negative discretion to reduce the payout under the SMIP
|
To motivate achievement of short-term company and individual goals
To attract and retain talent by providing a market-competitive cash incentive opportunity
|
||
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
|
||
20
Form of Compensation | Characteristics | Purpose/ Objective | ||
Long-term, equity-based Incentives(2)
|
||||
Performance shares
|
At-risk variable pay opportunity for sustained, long-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 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
Grant date fair value of performance shares at target payout represents 30-40% 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
|
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
|
||
21
Form of Compensation | Characteristics | Purpose/ Objective | ||
NQSOs
|
Inherently performance-based award
Exercise price equal to closing price on grant date
Differences in the grant-date fair 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 fair 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 fair 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 grant-date fair 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
Generally awarded annually, with one-quarter vesting on each of the first through fourth anniversaries of the grant date
Grant-date fair 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
|
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
|
||
22
Form of Compensation | Characteristics | Purpose/ Objective | ||
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
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
|
To attract and retain talent
To motivate performance by enabling a relocating executive to remain focused on business issues rather than relocation issues
|
||
23
Form of Compensation | Characteristics | Purpose/ Objective | ||
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
|
To provide a reasonable level of replacement income
upon retirement, thereby serving as an incentive for a long-term
career with Libbey
|
||
We have provided no enhancement of service credit
under the SERP
|
||||
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 Internal
Revenue 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
|
||
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
|
||
24
Form of Compensation | Characteristics | Purpose/ Objective | ||
Employment and change in control agreements
|
Contingent component; payouts only if employment is
terminated under certain circumstances, although certain
equity-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. | |
(2) | Each executive officers long-term incentive opportunity comprises an award of performance shares, NQSOs and RSUs having an aggregate 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: |
Target LTIP Award as a |
||||
Percentage of Base Salary |
||||
Named Executive
|
(%) | |||
John F. Meier
|
150 | % | ||
Gregory T. Geswein
|
80 | % | ||
Scott M. Sellick
|
80 | % | ||
Richard I Reynolds
|
115 | % | ||
Kenneth G. Wilkes
|
80 | % | ||
Daniel P. Ibele
|
70 | % |
Performance shares and RSUs each represent 40% of the target award, while NQSOs represent the remaining 20% of the target award. The Compensation Committee selected this mix 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). |
25
Ameron International Corporation
|
Graco Inc. | Sypris Solutions, Inc. | ||
Ametek, Inc.
|
Jarden Corp. | Teradyne, Inc. | ||
Blyth Inc.
|
Johnson Outdoors Inc. | Thermadyne Holdings | ||
Brady Corporation
|
Lancaster Colony Corp. | Tupperware Corporation | ||
Church & Dwight Company, Inc.
|
Milacron Inc. | Waters Corporation | ||
EnPro Industries Inc.
|
Polaris Industries Inc. | Woodward Governor Company | ||
ESCO Technologies Inc.
|
| modified the mix of compensation by (a) increasing the portion of total direct compensation that is dependent upon Company performance and (b) implementing new forms of equity-based compensation, specifically RSUs and performance shares, to augment the NQSOs historically granted to executives; and | |
| increased the target payouts for executives under our SMIP and long-term incentive plans, so that target incentive opportunities more closely resembled the median incentive opportunities provided by the companies in our peer group. |
26
| 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 each year, the Compensation Committee grants RSUs, NQSOs and performance shares to our executive officers and other key executives under our long-term incentive compensation |
27
| 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
Annual Base Salary |
||||
Named Executive
|
Effective May 1, 2007 | |||
Scott M. Sellick
|
$ | 271,068 | ||
Kenneth G. Wilkes
|
$ | 330,924 | ||
Daniel P. Ibele
|
$ | 261,534 |
Annual Base Salary |
||||
Named Executive
|
Effective January 1, 2008 | |||
John F. Meier
|
$ | 690,000 | ||
Gregory T. Geswein
|
$ | 337,632 | ||
Richard I. Reynolds
|
$ | 446,280 |
Annual Base Salary |
||||
Named Executive
|
Effective April 1, 2008 | |||
Scott M. Sellick
|
$ | 280,830 | ||
Kenneth G. Wilkes
|
$ | 345,816 | ||
Daniel P. Ibele
|
$ | 272,652 |
29
Named Executive
|
Individual Goals | |
John F. Meier
|
Advance total shareholder return beyond
that of comparable peer groups and indices
|
|
Ensure that Libbey maintains its
liquidity cushion throughout 2007, as contemplated by our
operating plan
|
||
Gregory T. Geswein
|
Develop and implement a more focused
approach to managing working capital
|
|
Refine and ready our best strategy for
refinancing our debt
|
||
Scott M. Sellick
|
Implement electronic financial
consolidation system
|
|
Review and modify, as appropriate,
worldwide transfer pricing policy
|
||
Richard I. Reynolds
|
Achieve targeted cost savings of $33.5
million
|
|
Integrate Crisa into a stronger
logistics partner with U.S. glass operations; accelerate
conclusion of transition services provided by former joint
venture partner; and determine strategy for certain production
capacity
|
||
Kenneth G. Wilkes
|
Achieve net sales for our International
segment of at least $163.8 million
|
|
Achieve International segment EBITDA of
at least $16.5 million
|
||
Achieve specified business unit cost
reduction targets
|
||
Daniel P. Ibele
|
Achieve net sales, on a combined basis,
for our North American Glass and North American Other segments
of at least $655.1 million
|
|
Achieve certain profitability targets
for our combined North American Glass and North American Other
segments
|
30
Amount of |
||||||
Named Executive
|
Discretionary Bonus |
Achievements Recognized
|
||||
Gregory T. Geswein
|
$ | 20,321 | Having joined Libbey only in May 2007, Greg quickly gained the confidence of the investment community, financial institutions and internal constituencies, providing us with a fresh set of eyes and deep experience with respect to capital markets issues as we seek to improve our financial results. | |||
Scott M. Sellick
|
$ | 18,593 | In 2007 Scott did an excellent job addressing the myriad accounting and tax issues stemming from, and setting our tax strategy with respect to, our global operations. In addition, he oversaw implementation of the appropriate internal controls to ensure that our Crisa operation and our new factory in China met the requirements of Section 404 of the Sarbanes-Oxley Act. | |||
Richard I. Reynolds
|
$ | 28,848 | Aside from Dicks success in overseeing the integration of Crisa into our North American supply chain, Dick continued to spearhead the implementation of LEAN principles throughout our global enterprise, freeing up additional manufacturing capacity that otherwise could be obtained only by incurring significant capital expenditures. | |||
Kenneth G. Wilkes
|
$ | 26,113 | Ken continued to drive the expansion of our global business, ensuring successful completion and start-up of our new factory in China, significant growth in the sales and profitability of our European operations and significant growth in sales to export markets. |
31
Amount of |
||||||
Named Executive
|
Discretionary Bonus |
Achievements Recognized
|
||||
Daniel P. Ibele
|
$ | 19,523 | In spite of a lackluster economy in late 2007, Dan led Libbey to solid, single-digit sales growth in U.S. foodservice sales for the year. Under his leadership, we also achieved record-setting sales in the retail channel in the U.S., increasing our market share in that channel by 6%, and increasing sales at our Crisa subsidiary by 6.6% over Crisas pro forma 2006 sales (giving effect to our acquisition of the remaining 51% of Crisa as of January 1, 2006). |
| 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). The July 2006 LTIP provides the opportunity to earn performance shares over three performance cycles beginning on July 1, 2006 and ending December 31, 2006, December 31, 2007, and December 31, 2008, respectively. In early 2007, payouts were made with respect to the performance cycle that ended December 31, 2006. The performance measure under the July 2006 LTIP is the ratio of actual, cumulative EBITDA over the relevant 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, 2007, were made in February 2008 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. |
32
Named Executive
|
No. of Shares(1) | |||
John F. Meier
|
5,163 | |||
Gregory T. Geswein
|
418 | |||
Scott M. Sellick
|
1,110 | |||
Richard I. Reynolds
|
2,803 | |||
Kenneth G. Wilkes
|
1,430 | |||
Daniel P. Ibele
|
1,009 |
(1) | Each of our executive officers 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 3,501 shares; Mr. Geswein 257 shares; Mr. Sellick 752 shares; Mr. Reynolds 1,787 shares; Mr. Wilkes 970 shares; and Mr. Ibele 936 shares. |
| A grant of NQSOs and RSUs (representing the grant that was delayed from 2006), that vests ratably over three years, with the NQSOs having an exercise price equal to the closing price of our common stock on February 16, 2007, the first business day after we released our financial results for our 2006 fiscal year; and | |
| A grant of NQSOs and RSUs (representing the grant that ordinarily would be made in 2007) that vests ratably over four years, with the NQSOs having an exercise price equal to the closing price of our common stock on February 16, 2007, the first business day after we released our financial results for our 2006 fiscal year. |
33
Annual Retainer:
|
$25,000 | |
Equity Awards:
|
On the date of each annual meeting of stockholders, outright grant of shares of common stock having a grant date fair equal to $40,000(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) | The number shares of common stock is 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. |
34
| Surveys conducted by Hewitt Associates and our Vice President, General Counsel for the Compensation Committee in late 2007 demonstrated that a significant majority of the companies who are in our peer group provide their executive officers with change in control and other severance benefits. Accordingly, we would be at a competitive disadvantage in attracting and retaining high-caliber senior executives if we were to eliminate the benefits provided by these agreements. The loss of a senior executive to another company that provides these benefits could adversely impact our ability to achieve our business strategies and our succession planning for Libbeys future. | |
| In periods of uncertainty concerning the future control of Libbey or the future responsibilities or standing of our respective executive officers, it is imperative that each of our executive officers be focused on building value for our stockholders rather than pursuing career alternatives. | |
| An executive whose employment is not terminated immediately in connection with a change in control should focus on our business, rather than his or her career prospects, during the critical transition period following the change in control. In order to ensure that continued focus, our change in control agreements provide our executives with the unilateral right to terminate their respective employment relationships with Libbey, and receive a payment of benefits under the change in control agreements, for a short period of time (30 days) after the first anniversary of a change in control. | |
| Based upon our review of tally sheets for the Named Executives, and assuming a third party were to purchase Libbey, effective December 31, 2007, for a price equal to seven to nine times Libbeys 2007 EBITDA, we believe that the benefits payable to the Named Executives upon termination of their employment in connection the acquisition would represent a small fraction (less than 3.5%) of the purchase price. With respect to the amounts payable to Messrs. Meier (our CEO) and Reynolds (our COO), each of whom has served Libbey and its former parent for more than 37 years, a significant part of the benefits payable in connection with a change in control consist of benefits to which they currently are entitled upon retirement in the ordinary course. Accordingly, we believe that the amounts payable under the our change in control agreements are reasonable in light of the benefits that these agreements provide to Libbey and its shareholders. |
35
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 paid at target but prorated over the period of each applicable plan through the date of death In the case of Mr. Meier, two times his annual base salary, and in the case of all other Named Executives, one times his annual base salary, in each case at the rate in effect on the date of death and 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 without any contribution by the dependents Vesting, as of the date of death, of previously unvested equity participation awards (which we construe to mean RSUs and NQSOs), which 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 If and to the extent that the Named Executive is determined to be subject to excise tax under Section 4999 of the Internal Revenue Code (which applies to amounts paid in connection with a change in control), a tax gross-up 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 Named Executives
estate, together with evidence of the personal
representatives authority to act
Obligations of the personal representative to: maintain the confidentiality of our proprietary information assign to us any inventions and copyrights obtained in connection with the Named Executives employment assist us with any litigation with respect to which the Named Executive had, or may have had reason to have, knowledge, information or expertise not interfere with customer accounts for 24 months (or, in Mr. Meiers case, for 36 months) not compete for 24 months (or, in Mr. Meiers case, 36 months) for 24 months or, in Mr. Meiers case, 36 months after termination, not divert business opportunities of which the Named Executive became aware while an employee not solicit our employees for 24 months or, in Mr. Meiers case, 36 months not disparage us for 24 months or, in Mr. Meiers case, 36 months |
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
and are consistent with death benefits provided under executive
life insurance policies provided by companies in our peer group
to their executives
Support a market-competitive compensation package, thereby serving to attract and retain talent and to motivate focused and sustained performance |
36
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 Annual incentive compensation paid at the lesser of the annual target or the average percentage of the target paid to all other executive officers, but prorated over the period of each applicable plan through the date of termination Long-term incentive compensation (which we construe to mean performance shares) under all plans in effect at the date of termination, paid at target but prorated over the period of each applicable plan through the date of termination Two times (or, in the case of Mr. Meier, three times) the sum of annual base salary at the then current rate, payable in equal installments over a period of 24 months (or, in Mr. Meiers case, 36 months) following the date of termination, although we may elect to pay this amount in a lump sum; Annual incentive compensation paid at the lesser of annual target or the average percentage of the target paid to all other executive officers, for all annual compensation periods ending 24 months (or, in Mr. Meiers case, 36 months) after the date of termination, with the final payment prorated to the end of the 24 month (or, in Mr. Meiers case, 36 month) period |
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 24 months (or, in Mr. Meiers case, for 36 months); not compete for 24 months (or, in Mr. Meiers case, 36 months) for 24 months or, in Mr. Meiers case, 36 months after termination, not divert business opportunities of which the Named Executive became aware while an employee not solicit our employees for 24 months or, in Mr. Meiers case, 36 months not disparage us for 24 months or, in Mr. Meiers case, 36 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 |
37
Conditions to |
||||||
Triggers(1)
|
Benefits
|
Payment of Benefits
|
Rationale
|
|||
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, without any contribution by the Named Executive or
his dependents
Vesting, as of the date of termination, of previously unvested equity participation awards (which we construe to mean RSUs and NQSOs), which 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 If and to the extent the Named Executive is determined to be subject to excise tax pursuant to Section 4999 of the Internal Revenue Code, a tax gross-up Base salary component is payable as salary continuation in accordance with our normal pay practices, which currently contemplate semi-monthly payments |
||||||
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 |
Same as for termination upon permanent disability
Also promotes 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 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 |
38
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 resulting 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: |
| 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 incentive compensation target established for the position held by the Named Executive that 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, unless the reduction or elimination is with respect to the number of equity awards granted to the respective executive officers. | |
| We materially breach the employment agreement and do not remedy our breach within 30 days after we receive written notice of breach from the Named Executive. | |
| We exercise our right not to extend the term of the Named Executives employment agreement beyond the then current term, unless we exercise that right with respect to all employment agreements (excluding change in control agreements) in effect with respect to our other executive officers. In that connection, the initial term of each employment agreement began on March 22, 2004 and expired on December 31, 2006, except that the initial term of Mr. Gesweins employment agreement began May 23, 2007 and expired on December 31, 2007. However, each employment |
39
agreement was automatically extended for an additional one-year period. Upon expiration of the current term of each employment agreement, it will continue to be extended automatically for additional one-year periods unless either we notify the Named Executive, or the Named Executive notifies us, on or before September 30 of the year in which the employment agreement is scheduled to expire, that the agreement will not be further extended. |
40
Conditions to |
||||||
Triggers(1)
|
Benefits(2)
|
Payment of Benefits
|
Rationale
|
|||
Without cause(3), we terminate the executives employment within two years following a change in control(4)
The executive terminates his or her employment for good reason(5) within two years following a change in control
The executive voluntarily terminates his employment within 30 days after the first anniversary of the change in control
|
Base salary (at the greater of the rate in effect as of the date of termination or the rate in effect immediately prior to the change in control) through the date of termination
Within five days after termination, a lump sum equal to the sum of three times the executives annual base salary in effect as of the date of termination or immediately prior to the change in control, whichever is greater
Within five days after termination, a lump sum equal to three times the greater of (a) the executives target annual bonus in effect as of the date of termination or immediately prior to the change in control, whichever is greater, or (b) the executives actual bonus for the year immediately preceding the date of termination
Continuation of medical and dental benefits for a period of 36 months following the date of termination, with costs to be shared on the same basis as in effect on the date of the change in control. These benefits are reduced or eliminated to the extent the executive receives comparable benefits under any other employment that the executive obtains during the three-year
period.
|
Our receipt of an agreement, signed by the executive, obligating him or her to:
maintain the confidentiality of our proprietary information for three years after the date of termination
not compete with us for a period of 24 months after the date of termination
not solicit our employees for a period of 36 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
Enables an executive whose employment is not terminated immediately in connection with a change in control to focus on transition issues during the one-year period immediately after the change in control, thereby providing stability of management to an acquirer of our business.
Assuming a purchase price for Libbey of between seven and nine times Libbeys 2007 EBITDA, benefits payable to the Named Executives if they were terminated in connection with an acquisition of Libbey effective December 31, 2007, would represent a small fraction (less than 3.5%) of the purchase price
Supports a market-competitive compensation package, thereby serving to attract and retain talent
|
41
Conditions to |
||||||
Triggers(1)
|
Benefits(2)
|
Payment of Benefits
|
Rationale
|
|||
Immediate vesting of unvested restricted stock grants (which we construe to apply to grants of RSUs), with the underlying shares of stock to be distributed within five days after the date of termination
Immediate vesting of unvested NQSOs
Accelerated vesting of performance shares is within the discretion of the Compensation Committee
For one year following the date of termination, financial planning services of substantially the same type and scope as we provided to the executive immediately prior to the date of termination or, if more favorable to the executive, immediately prior to the change in control
|
||||||
For two years following the date of
termination, outplacement services
|
||||||
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 additional fully vested
benefits in an amount equal to the benefit that would have
accrued had the executive continued his or her employment for
three additional years following the date of termination. If
the present value, as of the date of termination, of the
enhanced benefit is less than $250,000, we are obligated to pay,
in a lump sum, the amount, if any, by which $250,000 exceeds the
then present value of the enhanced benefit.
|
42
Conditions to |
||||||
Triggers(1)
|
Benefits(2)
|
Payment of Benefits
|
Rationale
|
|||
A tax gross-up
Continued coverage, for six years after the date of termination, under our policy of liability insurance covering our directors and officers
|
(1) | We are obligated to provide the benefits described in the change in control 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. We also are obligated to accelerate the vesting of certain equity awards in connection with a change in control, even if an executive officers employment is not terminated. See Other obligations below. | |
(2) | The benefits set forth in this column are payable upon any of the triggers identified in the Triggers column. | |
(3) | Cause has substantially the same meaning under the change in control agreements as it has under the employment agreements. We cannot terminate an executive officer for cause unless and until we deliver to the executive officer a copy of a resolution, duly adopted by the affirmative vote of not less than 3/4 of the entire membership of our Board at a meeting of our Board, finding that, in the Boards good faith opinion, the executive 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) | 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 20% or more of the combined voting power of our then-outstanding securities; | |
| Our stockholders approve a merger or consolidation pursuant to which Libbey is merged or consolidated with any other corporation (or other entity), unless the voting securities of Libbey outstanding immediately prior to the merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 662/3% of the combined voting power of securities of the surviving entity outstanding immediately after the merger or consolidation; | |
| Our stockholders approve a plan of complete liquidation or an agreement for the sale or disposition of all or substantially all of our assets; or | |
| A person becomes the beneficial owner, directly or indirectly, of securities of Libbey that represent ten percent or more of the combined voting power of our then outstanding securities (we refer to a person who achieves that level of ownership of voting securities as a 10% Owner) and (a) our CEO is terminated and/or replaced during the period beginning 60 days before, and ending two years after, the person becomes a 10% Owner, or (b) individuals constituting at least one-third of the members of the Board on the date 61 days before the person becomes a 10% Owner cease for any reason to serve on the Board during the period beginning 60 days before, and ending two years after, the person becomes a 10% Owner; however, this provision does not apply to any person who is a 10% Owner as of the date of the applicable change in control agreement so long as that person does not increase his, |
43
her or its beneficial ownership by five percent or more over the percentage owned by that person as of the date of the change in control agreement. |
(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; | |
| 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 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; | |
| 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; | |
| We purport to terminate the executives employment without complying with our obligations with respect to providing notice of termination; or | |
| The executive continues, after giving us written notice of his or her objection, to be subjected to harassing or denigrating treatment in the workplace that is inconsistent with his or her position with us. |
44
45
46
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
|
2007 | 615,000 | 0 | 577,099 | 189,982 | 496,490 | 5,469 | 27,670 | 1,911,710 | |||||||||||||||||||||||||||
Chairman and Chief
|
2006 | 558,000 | 0 | 82,500 | 0 | 631,767 | 0 | 17,689 | 1,289,956 | |||||||||||||||||||||||||||
Executive Officer
|
||||||||||||||||||||||||||||||||||||
Gregory T. Geswein(3)
|
2007 | 193,535 | 20,321 | 73,090 | 117,839 | 84,020 | 0 | 47,917 | 536,722 | |||||||||||||||||||||||||||
Vice President, Chief Financial Officer
|
||||||||||||||||||||||||||||||||||||
Scott M. Sellick(3)
|
2007 | 268,012 | 18,593 | 122,983 | 47,979 | 114,011 | 22,111 | 11,442 | 605,131 | |||||||||||||||||||||||||||
Vice President, Chief
|
2006 | 252,675 | 0 | 17,744 | 0 | 189,506 | 12,579 | 6,965 | 479,469 | |||||||||||||||||||||||||||
Accounting Officer
|
||||||||||||||||||||||||||||||||||||
Richard I. Reynolds
|
2007 | 425,016 | 28,848 | 299,016 | 105,970 | 251,821 | 84,424 | 20,116 | 1,215,211 | |||||||||||||||||||||||||||
Executive Vice President
|
2006 | 395,184 | 0 | 44,794 | 0 | 366,928 | 0 | 11,563 | 818,469 | |||||||||||||||||||||||||||
and Chief Operating Officer
|
||||||||||||||||||||||||||||||||||||
Kenneth G. Wilkes
|
2007 | 325,670 | 26,113 | 153,315 | 59,321 | 151,892 | 36,030 | 21,580 | 773,921 | |||||||||||||||||||||||||||
Vice President, General
|
2006 | 300,315 | 0 | 22,848 | 0 | 213,734 | 22,022 | 11,896 | 570,815 | |||||||||||||||||||||||||||
Manager, International Operations
|
||||||||||||||||||||||||||||||||||||
Daniel P. Ibele
|
2007 | 257,382 | 19,523 | 107,184 | 44,021 | 93,870 | 34,220 | 14,784 | 570,984 | |||||||||||||||||||||||||||
Vice President, General
|
2006 | 240,097 | 0 | 16,118 | 0 | 158,224 | 16,124 | 10,403 | 440,966 | |||||||||||||||||||||||||||
Sales Manager, North America
|
(1) | Represents the 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 2007 and 2006, respectively, and RSUs that we granted in 2007, and (b) NQSOs that we granted in 2007. For more information, see Footnote 15, 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 17, 2008. | |
(2) | The following table provides additional detail with respect to the perquisites that we provided to our Named Executives in 2007: |
Tax Return |
Tax |
|||||||||||||||||||||||||||||||||||
Preparation |
Gross-Up on Tax |
Executive |
Annual |
Tax |
||||||||||||||||||||||||||||||||
ESP |
and Financial |
Return/ |
Long-Term |
Executive |
Gross-Up on |
|||||||||||||||||||||||||||||||
Matching |
Planning |
Financial |
Ground |
Disability |
Physical |
Relocation |
Relocation |
|||||||||||||||||||||||||||||
Contributions |
Fees |
Planning Fees |
Transportation |
Coverage |
Examination |
Expenses |
Expenses |
Total |
||||||||||||||||||||||||||||
Name
|
($) | ($) | ($) | ($)(a) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
J. Meier
|
13,650 | 645 | 306 | 940 | 4,254 | 0 | 0 | 0 | 19,795 | |||||||||||||||||||||||||||
G. Geswein
|
0 | 4,250 | 2,018 | 375 | 1,934 | 0 | 24,643 | 9,123 | 42,343 | |||||||||||||||||||||||||||
S. Sellick
|
0 | 0 | 0 | 1,048 | 2,519 | 0 | 0 | 0 | 3,567 | |||||||||||||||||||||||||||
R. Reynolds
|
7,000 | 605 | 287 | 84 | 4,265 | 0 | 0 | 0 | 12,241 | |||||||||||||||||||||||||||
K. Wilkes
|
3,524 | 2,991 | 1,421 | 53 | 3,325 | 2,391 | 0 | 0 | 13,705 | |||||||||||||||||||||||||||
D. Ibele
|
0 | 2,217 | 1,053 | 779 | 2,860 | 0 | 0 | 0 | 6,909 |
(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. | |
(3) | On May 23, 2007, Mr. Sellick became Vice President, Chief Accounting Officer, and Mr. Geswein joined Libbey as Vice President, Chief Financial Officer. |
| Annual cash incentive awards under our SMIP; |
47
| Performance share awards under our 2007 LTIP; and | |
| NQSOs and RSUs under our 2006 Omnibus Incentive Plan. |
All |
All |
|||||||||||||||||||||||||||||||||||||||||||||||
Other |
Other |
|||||||||||||||||||||||||||||||||||||||||||||||
Stock |
Option |
Grant |
||||||||||||||||||||||||||||||||||||||||||||||
Awards: |
Awards: |
Exercise or |
Date Fair |
|||||||||||||||||||||||||||||||||||||||||||||
Estimated Future 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
|
2/5/2007 | 2/16/2007 | 185,423 | 553,500 | 1,107,000 | 11,570 | 23,140 | 46,280 | 58,846 | 56,702 | 12.80 | $ | 1,343,750 | |||||||||||||||||||||||||||||||||||
G. Geswein
|
5/2/2007 | 5/23/2007 | 38,901 | 116,121 | 232,242 | (a)797 | 1,594 | 3,188 | 21,548 | |||||||||||||||||||||||||||||||||||||||
(b)2,143 | 4,285 | 8,570 | 85,057 | |||||||||||||||||||||||||||||||||||||||||||||
6,567 | 130,355 | |||||||||||||||||||||||||||||||||||||||||||||||
(c)5,076 | 19.85 | 44,904 | ||||||||||||||||||||||||||||||||||||||||||||||
(d)50,000 | 19.85 | 430,415 | ||||||||||||||||||||||||||||||||||||||||||||||
S. Sellick
|
2/5/2007 | 2/16/2007 | 53,870 | 160,807 | 321,614 | 2,628 | 5,256 | 10,512 | 13,027 | 12,551 | 12.80 | 299,044 | ||||||||||||||||||||||||||||||||||||
R. Reynolds
|
2/5/2007 | 2/16/2007 | 106,785 | 318,762 | 637,524 | 6,130 | 12,260 | 24,520 | 31,545 | 30,397 | 12.80 | 718,628 | ||||||||||||||||||||||||||||||||||||
K. Wilkes
|
2/5/2007 | 2/16/2007 | 60,005 | 179,119 | 358,238 | 3,162 | 6,324 | 12,648 | 16,183 | 15,595 | 12.80 | 369,079 | ||||||||||||||||||||||||||||||||||||
D. Ibele
|
2/5/2007 | 2/16/2007 | 43,111 | 128,691 | 257,318 | 2,187 | 4,373 | 8,746 | 11,302 | 10,891 | 12.80 | 257,242 |
(1) | The Award Date is the date on which the Compensation Committee took action. Until 2006, the award date and the grant date were the same date. Under the executive compensation program approved by the Compensation Committee in 2006, the number of NQSOs, RSUs and performance shares awarded to the executive officers is 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 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. Accordingly, the grant date is the date as of which we determine the number of NQSOs, RSUs or performance shares, as the case may be, awarded. 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 2007, the grant date was the first business day after we announced our results of operations for the 2006 fiscal year. For awards made to Mr. Geswein, the grant date was his first day of employment. | |
(2) | Represents the range of possible awards under our SMIP for performance during 2007. 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 W-2 earnings, as set forth in the following table: |
Target Award |
||||
as a Percentage |
||||
of W-2 Earnings |
||||
Named Executive
|
(%) | |||
John F. Meier
|
90 | % | ||
Gregory T. Geswein
|
60 | % | ||
Scott M. Sellick
|
60 | % | ||
Richard I. Reynolds
|
75 | % | ||
Kenneth G. Wilkes
|
55 | % | ||
Daniel P. Ibele
|
50 | % |
48
Percentage of |
Payout as |
|||||||
Budgeted IFO |
Percentage of Target |
|||||||
Payout Level
|
(%) | (%) | ||||||
Threshold
|
95 | % | 50 | % | ||||
Target
|
100 | % | 100 | % | ||||
Maximum
|
115 | % | 200 | % |
(3) | For Mr. Geswein, represents prorated awards of performance shares under (a) our July 2006 LTIP for the performance cycles beginning July 1, 2006 and ending on each of December 31, 2007 and December 31, 2008, respectively, and (b) our 2007 LTIP for the three-year performance cycle beginning on January 1, 2007 and ending on December 31, 2009. For each of the other Named Executives, represents performance shares awarded under our 2007 LTIP for the three-year performance cycle beginning on January 1, 2007 and ending on December 31, 2009. 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 each of the performance cycles under our July 2006 LTIP and our 2007 LTIP is: |
Percentage of |
Payout as |
|||||||
Budgeted EBITDA |
Percentage of Target |
|||||||
Payout Level
|
(%) | (%) | ||||||
Threshold
|
85 | % | 50 | % | ||||
Target
|
100 | % | 100 | % | ||||
Maximum
|
115 | % | 200 | % |
(4) | For Mr. Geswein, represents a single grant of RSUs that vest ratably over a four-year period beginning on May 23, 2008. For all Named Executives other than Mr. Geswein, represents two grants of RSUs. The first grant of RSUs vests ratably over a three-year period beginning on February 16, 2008. As disclosed under Compensation Discussion and Analysis What compensation did Libbeys executives receive for 2007? Stock Options and RSUs, the Compensation Committee delayed the first grant from 2006 to 2007, after we completed the acquisition of the remaining 51% interest in our Mexican joint venture and, in connection with that acquisition, refinanced our indebtedness, and after we announced our results of operations for 2006. The second grant of RSUs vests ratably over a four-year period beginning February 16, 2008. | |
(5) | For Mr. Geswein, represents two grants of NQSOs: (c) a grant of 5,076 NQSOs that vest ratably over a four-year period beginning May 23, 2008; and (d) a grant of 50,000 NQSOs that vest 100% on May 23, 2010. For each Named Executive other than Mr. Geswein, represents two grants of NQSOs, the first of which vests ratably over a three-year period beginning on February 16, 2008. As disclosed under Compensation Discussion and Analysis What compensation did Libbeys executives receive for 2007? Stock Options and RSUs, the Compensation Committee delayed the first grant from 2006 to 2007, after we completed the acquisition of the remaining 51% interest in our Mexican joint venture and, in connection with that acquisition, refinanced our indebtedness, and after we announced our results of operations for 2006. The second grant of NQSOs vests ratably over a four-year period beginning February 16, 2008. |
49
(6) | Represents the sum of the grant-date fair values, determined in accordance with FAS 123R, of (a) the performance shares at a target 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. |
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) | ($)(4) | (#)(5) | ($)(4) | ||||||||||||||||||||||||||
J. Meier
|
6/05/1998 | 30,000 | 0 | 38.4375 | 6/06/2008 | |||||||||||||||||||||||||||||||
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 | 10,500 | 7,000 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
9/27/2006 | 0 | 0 | N/A | N/A | 0 | 0 | 8,939 | 141,594 | ||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 0 | (a) 29,615 | 12.8000 | 2/17/2017 | (a) 30,853 | 488,712 | 23,140 | 366,538 | |||||||||||||||||||||||||||
(b) 27,087 | 12.8000 | 2/17/2017 | (b) 27,993 | 443,409 | ||||||||||||||||||||||||||||||||
G. Geswein
|
5/02/2007 | 5/23/2007 | 0 | (c) 50,000 | 19.8500 | 5/23/2017 | 6,567 | 104,022 | 5,452 | 86,360 | ||||||||||||||||||||||||||
0 | (d) 5,076 | 19.8500 | 5/23/2017 | |||||||||||||||||||||||||||||||||
S. Sellick
|
6/05/1998 | 500 | 0 | 38.4375 | 6/06/2008 | |||||||||||||||||||||||||||||||
11/25/1998 | 750 | 0 | 31.0000 | 11/26/2008 | ||||||||||||||||||||||||||||||||
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 | 6,000 | 4,000 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
9/27/2006 | 0 | 0 | N/A | N/A | 0 | 0 | 1,922 | 30,444 | ||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 0 | (a) 6,726 | 12.8000 | 2/17/2017 | (a) 7,007 | 110,991 | 5,256 | 83,255 | |||||||||||||||||||||||||||
(b) 5,825 | 12.8000 | 2/17/2017 | (b) 6,020 | 95,357 | ||||||||||||||||||||||||||||||||
R. Reynolds
|
6/05/1998 | 22,000 | 0 | 38.4375 | 6/06/2008 | |||||||||||||||||||||||||||||||
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 |
50
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) | ($)(4) | ||||||||||||||||||||||||||
12/08/2005 | 8,100 | 5,400 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
9/27/2006 | 0 | 0 | N/A | N/A | 0 | 0 | 4,854 | 76,887 | ||||||||||||||||||||||||||||
2/05/2007 | 2/16/2007 | 0 | (a) 15,690 | 12.8000 | 2/17/2017 | (a) 16,346 | 258,921 | 12,260 | 194,198 | |||||||||||||||||||||||||||
(b | ) | 14,707 | 12.8000 | 2/17/2017 | (b)15,199 | 240,752 | ||||||||||||||||||||||||||||||
K. Wilkes
|
6/05/1998 | 11,500 | 0 | 38.4375 | 6/06/2008 | |||||||||||||||||||||||||||||||
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 | 7,200 | 4,800 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
9/27/2006 | 0 | 0 | N/A | N/A | 0 | 0 | 2,476 | 39,220 | ||||||||||||||||||||||||||||
2/5/2007 | 2/16/2007 | 0 | (a) 8,094 | 12.8000 | 2/17/2017 | (a) 8,432 | 133,563 | 6,324 | 100,172 | |||||||||||||||||||||||||||
(b) 7,501 | 12.8000 | 2/17/2017 | (b) 7,751 | 122,776 | ||||||||||||||||||||||||||||||||
D. Ibele
|
6/05/1998 | 5,500 | 0 | 38.4375 | 6/06/2008 | |||||||||||||||||||||||||||||||
8/24/1999 | 5,500 | 0 | 31.3750 | 8/25/2009 | ||||||||||||||||||||||||||||||||
12/16/1999 | 2,000 | 0 | 27.1250 | 12/16/2009 | ||||||||||||||||||||||||||||||||
9/08/2000 | 8,000 | 0 | 32.3125 | 9/09/2010 | ||||||||||||||||||||||||||||||||
11/13/2001 | 13,500 | 0 | 30.5500 | 11/14/2011 | ||||||||||||||||||||||||||||||||
11/20/2002 | 13,500 | 0 | 23.9300 | 11/21/2012 | ||||||||||||||||||||||||||||||||
12/15/2003 | 9,500 | 0 | 28.5300 | 12/16/2013 | ||||||||||||||||||||||||||||||||
12/10/2004 | 11,000 | 0 | 20.3900 | 12/11/2014 | ||||||||||||||||||||||||||||||||
12/08/2005 | 6,600 | 4,400 | 11.7900 | 12/09/2015 | ||||||||||||||||||||||||||||||||
9/27/2006 | 0 | 0 | N/A | N/A | 0 | 0 | 1,747 | 27,672 | ||||||||||||||||||||||||||||
2/5/2007 | 2/16/2007 | 0 | (a) 5,597 | 12.8000 | 2/17/2017 | (a) 5,831 | 92,363 | 4,373 | 69,268 | |||||||||||||||||||||||||||
(b | ) | 5,294 | 12.8000 | 2/17/2017 | (b) 5,471 | 86,661 |
(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 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 2007, the grant date was the first business day after we announced our results of operations for the 2006 fiscal year. For awards made to Mr. Geswein in 2007, the grant date was his first day of employment. | |
(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, 2007, 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 $15.84, the closing price of our common stock on the New York Stock Exchange on December 31, 2007. | |
(5) | Represents the number of shares of our common stock underlying performance shares that were awarded under our July 2006 LTIP for the 30-month performance cycle ending December 31, 2008 and under our |
51
2007 LTIP for the 36-month performance cycle ending December 31, 2009. 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 $5.0 million) equal to at least 85% of the sum of EBITDA budgeted for each year (or partial year) during the applicable performance cycle. For further information, see footnote 3 to the Grants of Plan-Based Awards Table above. |
Option Awards (NQSOs) Vesting Schedule | Stock Awards (RSUs) Vesting Schedule | |||||
Grant Date
|
Vesting Schedule
|
Grant Date
|
Vesting Schedule
|
|||
12/08/2005
|
60% were vested as of 12/31/2007; 20% are scheduled to vest on 12/08/2008; and the balance are scheduled to vest 12/08/2009 | 2/16/2007 | (a) 25% were vested on February 16, 2008; an additional 25% is scheduled to vest on each of February 16, 2009, February 16, 2010 and February 16, 2011 | |||
2/16/2007
|
(a) 25% were vested on February 16, 2008; an additional 25% is scheduled to vest on each of February 16, 2009, February 16, 2010 and February 16, 2011 | (b) 33% were vested on February 16, 2008; an additional 33% is scheduled to vest on each of February 16, 2009 and February 16, 2010 | ||||
(b) 33% were vested on February 16, 2008; an additional 33% is scheduled to vest on each of February 16, 2009 and February 16, 2010 | 5/23/2007 | 25% are scheduled to vest on each of May 23, 2008, May 23, 2009, May 23, 2010 and May 23, 2011 | ||||
5/23/2007
|
(c) 100% are scheduled to vest on May 23, 2010 | |||||
(d) 25% are scheduled to vest on each of May 23, 2008, May 23, 2009, May 23, 2010 and May 23, 2011 | ||||||
|
||||||
Option Awards | Stock Awards | |||||||||||||||
Number of |
Number of |
|||||||||||||||
Shares |
Value Realized |
Shares |
Value Realized |
|||||||||||||
Acquired on |
on |
Acquired on |
on |
|||||||||||||
Exercise |
Exercise |
Vesting |
Vesting |
|||||||||||||
Name
|
(#) | ($) | (#) | ($)(1) | ||||||||||||
J. Meier
|
0 | 0 | 5,163 | 74,657 | ||||||||||||
G. Geswein
|
0 | 0 | 418 | 6,044 | ||||||||||||
S. Sellick
|
0 | 0 | 1,110 | 16,051 | ||||||||||||
R. Reynolds
|
0 | 0 | 2,803 | 40,531 | ||||||||||||
K. Wilkes
|
0 | 0 | 1,430 | 20,678 | ||||||||||||
D. Ibele
|
0 | 0 | 1,009 | 14,590 |
52
(1) | Represents 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, 2007, multiplied by $14.46, the closing price of our common stock on February 5, 2008, the date on which the Compensation Committee determined that the shares had been earned. |
53
Number of Years |
Present Value of |
Payments During |
||||||||||||
Credited Service |
Accumulated Benefit |
Last Fiscal Year |
||||||||||||
Name
|
Plan Name | (#)(1) | ($)(2) | ($) | ||||||||||
J. Meier
|
Salary Plan | 37.25 | 1,277,813 | 0 | ||||||||||
SERP | 37.25 | 3,733,351 | 0 | |||||||||||
G. Geswein
|
N/A | N/A | N/A | N/A | ||||||||||
S. Sellick
|
Salary Plan | 10.33 | 71,192 | 0 | ||||||||||
SERP | 10.33 | 16,708 | 0 | |||||||||||
R. Reynolds
|
Salary Plan | 37.83 | 1,261,406 | 0 | ||||||||||
SERP | 37.83 | 2,010,114 | 0 | |||||||||||
K. Wilkes
|
Salary Plan | 14.42 | 137,930 | 0 | ||||||||||
SERP | 14.42 | 99,361 | 0 | |||||||||||
D. Ibele
|
Salary Plan | 24.58 | 180,174 | 0 | ||||||||||
SERP | 24.58 | 53,386 | 0 |
(1) | Represents actual years of service to Libbey and Owens-Illinois Inc., our former parent company. We have not granted additional years of service to any of our executives. | |
(2) | Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31, 2007, except that assumptions relating to expected retirement age are as follows. Participants who are eligible for pension benefits under the Salary Plans final average pay formula (namely, Messrs. Meier and Reynolds) are assumed to retire at the earliest age at which they can receive an unreduced benefit under the Salary Plan. Messrs. Sellick, Wilkes and Ibele are assumed to receive benefits under the cash balance design at their normal retirement age of 65. |
Executive |
Registrant |
Aggregate |
||||||||||||||||||
Contributions in |
Contributions in |
Aggregate Earnings |
Withdrawals/ |
Aggregate Balance |
||||||||||||||||
Last FY |
Last FY |
in Last FY |
Distributions |
at Last FYE |
||||||||||||||||
Name
|
($) | ($)(1) | ($)(2) | ($) | ($)(3) | |||||||||||||||
J. Meier
|
38,886 | 13,650 | 32,708 | 0 | 649,092 | |||||||||||||||
G. Geswein
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
S. Sellick
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
R. Reynolds
|
12,485 | 7,000 | 17,428 | 0 | 361,793 | |||||||||||||||
K. Wilkes
|
9,943 | 3,524 | 13,587 | 0 | 120,112 | |||||||||||||||
D. Ibele
|
0 | 0 | 450 | 0 | 8,761 |
(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. |
54
(3) | Included in the column All Other Compensation in the Summary Compensation Table above to the extent of the contributions that are reflected in the Registrant Contributions in Last FY column of this table. |
55
Annual |
Long-Term |
Acceleration of |
||||||||||||||||||||||||||
Base |
Incentive |
Incentive |
Unvested Equity |
Misc. |
Pension Plan |
|||||||||||||||||||||||
Salary |
Compensation |
Compensation |
Awards |
Benefits |
Benefits |
Total |
||||||||||||||||||||||
Named Executive
|
($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ($)(7) | |||||||||||||||||||||
John F. Meier
|
||||||||||||||||||||||||||||
Death
|
1,230,000 | 1,107,000 | 0 | 1,132,845 | 12,000 | 4,531,029 | 8,012,874 | |||||||||||||||||||||
Permanent disability
|
1,845,000 | 1,391,315 | 288,795 | 1,132,845 | 36,868 | 4,531,029 | 9,225,852 | |||||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
1,845,000 | 1,391,315 | 288,795 | 1,132,845 | 36,868 | 4,531,029 | 9,225,852 | |||||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 4,531,029 | 4,531,029 | |||||||||||||||||||||
Gregory T. Geswein
|
||||||||||||||||||||||||||||
Death
|
318,504 | 191,102 | 0 | 104,021 | 12,000 | 0 | 625,627 | |||||||||||||||||||||
Permanent disability
|
637,008 | 382,205 | 40,314 | 104,021 | 26,892 | 0 | 1,190,440 | |||||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
637,008 | 382,205 | 40,314 | 104,021 | 26,892 | 0 | 1,190,440 | |||||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Scott M. Sellick
|
||||||||||||||||||||||||||||
Death
|
271,068 | 162,641 | 0 | 260,703 | 17,000 | 36,792 | 748,204 | |||||||||||||||||||||
Permanent disability
|
542,136 | 325,282 | 63,573 | 260,703 | 36,892 | 36,792 | 1,265,378 | |||||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
542,136 | 325,282 | 63,573 | 260,703 | 36,892 | 36,792 | 1,265,378 | |||||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 36,792 | 36,792 | |||||||||||||||||||||
Richard I. Reynolds
|
||||||||||||||||||||||||||||
Death
|
425,016 | 318,762 | 0 | 613,950 | 12,000 | 2,515,901 | 3,885,629 | |||||||||||||||||||||
Permanent disability
|
850,032 | 637,524 | 155,200 | 613,950 | 24,578 | 2,515,901 | 4,797,185 | |||||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
850,032 | 637,524 | 155,200 | 613,950 | 24,578 | 2,515,901 | 4,797,185 | |||||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 2,515,901 | 2,515,901 | |||||||||||||||||||||
Kenneth G. Wilkes
|
||||||||||||||||||||||||||||
Death
|
330,924 | 182,008 | 0 | 323,188 | 17,000 | 200,922 | 1,054,042 | |||||||||||||||||||||
Permanent disability
|
661,848 | 364,016 | 79,540 | 323,188 | 34,578 | 200,922 | 1,664,092 | |||||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
661,848 | 364,016 | 79,540 | 323,188 | 34,578 | 200,922 | 1,664,092 | |||||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 200,922 | 200,922 | |||||||||||||||||||||
Daniel P. Ibele
|
||||||||||||||||||||||||||||
Death
|
261,534 | 130,767 | 0 | 229,996 | 17,000 | 107,520 | 746,817 | |||||||||||||||||||||
Permanent disability
|
523,068 | 261,534 | 55,652 | 229,996 | 36,892 | 107,520 | 1,214,662 | |||||||||||||||||||||
Voluntary termination for Good Reason or Involuntary termination
without Cause
|
523,068 | 261,534 | 55,652 | 229,996 | 36,892 | 107,520 | 1,214,662 | |||||||||||||||||||||
Involuntary termination for Cause
|
0 | 0 | 0 | 0 | 0 | 107,520 | 107,520 |
56
(1) | Represents (a) in the event of termination due to death, two times 2007 base salary in the case of Mr. Meier and one times 2007 base salary in the case of the other Named Executives (in each case at the rate in effect on 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 2007 base salary in the case of Mr. Meier and two times 2007 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, 2007, we have assumed that all 2007 base salary has been paid when due. In the case of termination due to death, the base salary component is payable in a lump sum. In the case of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, the base salary component is payable as salary continuation in accordance with our normal pay practices, unless we elect to pay it in a lump sum. | |
(2) | Represents (a) in the event of termination due to death, the product of 2007 actual base salary and the applicable Named Executives target percentage under our SMIP program (90% in the case of Mr. Meier, 75% in the case of Mr. Reynolds, 60% in the case of Messrs. Geswein and Sellick, 55% in the case of Mr. Wilkes and 50% in the case of Mr. Ibele), and (b) in the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, the product of 2007 actual base salary and the lesser of (i) the applicable Named Executives target percentage under our SMIP program (see above) or (ii) the average percentage of target annual incentive compensation paid to all other executive officers. The average percentage of target annual incentive compensation (excluding discretionary awards) paid to all executive officers for 2007 was 76.84%. | |
(3) | Represents, in the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, the estimated value of shares of common stock issued on February 19, 2008, as payment for performance shares earned under the July 2006 LTIP for the performance cycle beginning July 1, 2006 and ending December 31, 2007; and the estimated value of shares of common stock underlying a prorated award of performance shares under the July 2006 LTIP for the performance cycle beginning July 1, 2006 and ending December 31, 2008 and under the 2007 LTIP for the performance cycle beginning January 1, 2007 and ending December 31, 2009. We have estimated the value by multiplying the number of shares by $15.84, the closing price of our common stock on the New York Stock Exchange on December 31, 2007. | |
(4) | Represents the sum of (a) the estimated value of common stock underlying RSUs that were granted in February 2007 and had not vested as of December 31, 2007, and (b) the in-the-money/ intrinsic value of unvested non-qualified stock options, in each case based upon the closing price of our common stock on the New York Stock Exchange on December 31, 2007 ($15.84 per share). | |
(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) | Represents the cash value of the sum of (a) the annuities payable to the respective Named Executives under our Salary Plan and the lump sums payable to them under our SERP, assuming that they were retirement eligible at December 31, 2007, and (b) the balances (excluding employee contributions) in their respective ESP accounts. Mr. Geswein is not eligible for a pension benefit under the Salary Plan or SERP, since those plans were terminated as to new employees after January 1, 2006, and Mr. Gesweins employment did not begin until May 2007. Only Messrs. Meier and Reynolds were retirement eligible at December 31, 2007. Each of them would have been entitled to elect either a lump sum benefit or an annuity under our Salary Plan. However, as of December 31, 2007, our ability to pay lump sum benefits under the Salary Plan was restricted as a result of limitations imposed by Internal Revenue Code |
57
Section 401 upon lump-sum distributions to highly compensated employees. Absent that restriction, the lump sum amounts that would have been payable to Messrs. Meier and Reynolds under the Salary Plan would have been $1,378,691 and $1,359,255, respectively. Does not include the respective Named Executives account balances under our 401(k) savings plan. | ||
(7) | Does not include any tax gross-up because the excise tax contemplated by Section 4999 of the Internal Revenue Code does not apply in the absence of a change in control. |
Acceleration of |
Acceleration of |
|||||||||||||||||||||||||||||||
Annual |
Unvested |
Unvested |
Pension |
|||||||||||||||||||||||||||||
Incentive |
Stock |
Restricted |
Misc. |
Plan |
Tax |
|||||||||||||||||||||||||||
Base Salary |
Compensation |
Options |
Stock Awards |
Benefits |
Benefits |
Gross-Up |
Total |
|||||||||||||||||||||||||
Named Executive
|
($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ($) | ($) | ||||||||||||||||||||||||
John F. Meier
|
1,845,000 | 1,895,301 | 200,724 | 932,121 | 48,868 | 4,531,029 | 1,671,710 | 11,124,753 | ||||||||||||||||||||||||
Gregory T. Geswein
|
955,512 | 348,363 | 0 | 104,021 | 61,838 | 250,000 | 690,657 | 2,410,391 | ||||||||||||||||||||||||
Scott M. Sellick
|
813,204 | 568,518 | 54,355 | 206,348 | 64,338 | 100,204 | 775,061 | 2,582,028 | ||||||||||||||||||||||||
Richard I. Reynolds
|
1,275,048 | 1,100,784 | 114,277 | 499,673 | 48,868 | 2,515,901 | 994,642 | 6,549,193 | ||||||||||||||||||||||||
Kenneth G. Wilkes
|
992,772 | 641,202 | 66,849 | 256,339 | 62,368 | 200,922 | 798,629 | 3,019,081 | ||||||||||||||||||||||||
Daniel P. Ibele
|
784,602 | 474,672 | 50,973 | 179,024 | 64,838 | 63,049 | 686,453 | 2,303,611 |
(1) | Represents three times base salary in effect on December 31, 2007 and is payable in a lump sum. We have assumed that all 2007 base salary has been paid when due. | |
(2) | For the Named Executives other than Mr. Geswein, represents three times the respective Named Executives actual annual incentive compensation earned for 2006, since actual annual incentive compensation earned for 2006 exceeded their target annual incentive awards for 2007. For Mr. Geswein, represents three times his target annual incentive compensation for 2007, since he joined Libbey on May 23, 2007. 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 2006? Annual Incentive Compensation under SMIP. | |
(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, 2007 ($15.84 per share). | |
(4) | Represents the estimated value of common stock underlying RSUs that were granted in February 2007 and had not vested as of December 31, 2007. We have estimated the value by multiplying the number of shares of common stock underlying unvested RSUs by $15.84, the closing price of our stock on the New York Stock Exchange on December 31, 2007. We have assumed that unearned performance shares will be forfeited, but the Compensation Committee, in its sole discretion, may elect to accelerate vesting of all or any portion of unearned performance shares in connection with a change in control. | |
(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, net of employee contributions, of $10,000 for Messrs. Meier, Reynolds and Geswein and $14,000 for Messrs. Sellick, Wilkes and Ibele; (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 an assumed annual cost of $7,500; and (d) the estimated cost to provide one year of financial planning services of the nature and scope provided to the respective Named Executive Officers during the year preceding termination. For those Named Executives who availed themselves of this perquisite during 2007, we have estimated the cost using the greater of $3,000 or the amount we paid for financial planning services for those Named Executives in 2007. For those Named Executives who did not avail themselves of this perquisite during 2007, we have used an assumed annual cost of $3,000. We have assumed that there is no incremental cost to us to continue the |
58
Named Executive as an insured on our directors and officers liability insurance policy for six years following the date of termination. |
(6) | As to each of Messrs. Meier and Reynolds, who were eligible for retirement at December 31, 2007, represents the sum of (a) the annuity payable to them under our Salary Plan, (b) the lump sum payable to them under our SERP and (c) the balances (excluding employee contributions) in their respective ESP accounts. None of the other Named Executives was retirement eligible at December 31, 2007. As to Messrs. Sellick, Wilkes and Ibele, whose benefits under the Salary Plan and SERP were vested as of December 31, 2007, represents the sum of (a) the annuity payable to them under our Salary Plan as if they were retirement-eligible, (b) the lump sum payable to them under our SERP as if they were retirement-eligible, (c) the amount, if any, by which the $250,000 minimum pension benefit contemplated by their change in control agreements exceeds the present value of their benefits (enhanced by an additional three years of service, as required under their change in control agreements) under our Salary Plan and SERP, and (d) the balances (excluding employee contributions) in their respective ESP accounts. As to Mr. Geswein, who is not eligible to receive a pension benefit under either the Salary Plan or the SERP, represents the $250,000 minimum pension benefit that we are obligated to pay him under his change in control agreement. Each of the Named Executives (other than Mr. Geswein, who is not a participant in the Salary Plan) is entitled, under our Salary Plan, to elect either a lump sum benefit or an annuity. However, as of December 31, 2006, our ability to pay lump sum benefits under the Salary Plan was restricted as a result of limitations imposed by Internal Revenue Code Section 401 upon lump-sum distributions to highly compensated employees. Absent that restriction, the lump sum amounts that would have been payable to the Named Executives are as follows: Mr. Meier $1,378,691; Mr. Reynolds $1,359,255; Mr. Geswein $0; Mr. Sellick $81,157; Mr. Wilkes $152,570; and Mr. Ibele $203,376. |
Change in Pension |
||||||||||||||||||||
Value and |
||||||||||||||||||||
Nonqualified |
||||||||||||||||||||
Fees Earned or |
Deferred |
All Other |
||||||||||||||||||
Paid in Cash |
Stock Awards |
Compensation |
Compensation |
Total |
||||||||||||||||
Name
|
($)(1) | ($)(1)(2) | Earnings(3) | ($) | ($) | |||||||||||||||
Carlos V. Duno
|
$ | 50,875 | $ | 55,315 | $ | 0 | $ | 0 | $ | 106,190 | ||||||||||
William A. Foley
|
48,750 | 55,315 | 0 | 0 | 104,065 | |||||||||||||||
Jean-René Gougelet(4)
|
18,021 | 0 | 0 | 0 | 18,021 | |||||||||||||||
Peter C. McC. Howell
|
46,500 | 55,315 | 0 | 0 | 101,815 | |||||||||||||||
Deborah G. Miller
|
42,250 | 55,315 | 0 | 0 | 97,565 | |||||||||||||||
Carol B. Moerdyk
|
50,750 | 55,315 | 0 | 0 | 106,065 | |||||||||||||||
Gary L. Moreau(5)
|
24,375 | 55,315 | 0 | 0 | 79,690 | |||||||||||||||
Terence P. Stewart(6)
|
34,625 | 55,315 | 0 | 0 | 89,940 |
(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 3, 2007. 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 $13.90, the average closing price of our |
59
common stock over a period of 60 consecutive trading days ending on May 3, 2007. The closing price of our common stock on the New York Stock Exchange on May 3, 2007 was $19.22. | ||
(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. | |
(4) | Mr. Gougelet was elected as a member of the Board of Directors on June 22, 2007, and attended his first meeting of the Board on July 24, 2007. | |
(5) | Mr. Moreau resigned from, and his resignation was accepted by, the Board on May 17, 2007. | |
(6) | 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? |
60
61
o
|
6 DETACH PROXY CARD HERE 6 | |
Sign, Date and Return
the Proxy Card in the Enclosed Envelope. |
x | ||||
Votes MUST be indicated (x) in Black or Blue ink. |
1. |
Election of Directors | |
FOR
all nominees listed below |
o | WITHHOLD
AUTHORITY to vote for all nominees listed below |
o | *EXCEPTIONS | o |
The nominees for the board of directors are: |
William A. Foley, Deborah G. Miller and Terence P. Stewart |
*Exceptions
|
FOR | AGAINST | ABSTAIN | ||||||
2. |
Proposal to ratify the appointment of Ernst & Young LLP as the Companys independent auditors for the fiscal year ending December 31, 2008 | o | o | o | ||||
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. |
To change your address, please mark this box. |
o | |
To include any comments, please mark this box. |
o |
S C A N L I N E | |
Date |
Share Owner sign here | Co-Owner
sign here |
0503
LIBBEY INC. |
|
|||||||
To: JPMorgan Chase Bank, Trustee of: - Libbey Inc. Retirement Savings Plan |
||||||||
- Libbey Inc. Supplemental Retirement Plan |
||||||||
As a participant in one or more of the above plans, I hereby direct the Trustee to vote all
common shares of Libbey Inc. allocated to my account as of March 31, 2008 as indicated on the
reverse side, at the annual meeting of shareholders to be held on May 16, 2008, or any
adjournment thereof. If no directions are given and the signed card is returned, the Trustee
will vote my allocated shares FOR the election of all listed director nominees and FOR the
ratification of Ernst & Young LLP as the independent auditors of Libbey Inc. for its fiscal year
ending December 31, 2008.
|
||||||||
The board of directors of Libbey Inc. recommends a vote FOR election of all listed director nominees
and FOR the ratification of Ernst & Young LLP as the independent auditors of Libbey Inc. for
its fiscal year ending December 31, 2008.
|
||||||||
Please sign on the reverse side of this card and return it promptly in the enclosed postage-paid
envelope. If you do not return this card by May 12, 2008, the shares allocated to your account will
be voted in the manner that the majority of the shares for which instruction cards received by
the Trustee are voted.
|
LIBBEY INC. PROXY PROCESSING P.O. BOX 3548 S HACKENSACK NJ 07606-9248 |
o
|
6 DETACH PROXY CARD HERE 6 | |
Sign, Date and Return
the Proxy Card in the Enclosed Envelope. |
x | ||||
Votes MUST be indicated (x) in Black or Blue ink. |
1. |
Election of Directors | |
FOR
all nominees listed below |
o | WITHHOLD
AUTHORITY to vote for all nominees listed below |
o | *EXCEPTIONS | o |
The nominees for the board of directors are: |
William A. Foley, Deborah G. Miller and Terence P. Stewart |
*Exceptions
|
FOR | AGAINST | ABSTAIN | ||||||
2. |
Proposal to ratify the appointment of Ernst & Young LLP as the Companys independent auditors for the fiscal year ending December 31, 2008 | o | o | o | ||||
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. |
To change your address, please mark this box. |
o | |
To include any comments, please mark this box. |
o |
S C A N L I N E | |
Date |
Share Owner sign here | Co-Owner
sign here |
0502
LIBBEY INC. |
|
|||||||
PROXY |
||||||||
This Proxy is Solicited on Behalf of the Board of Directors |
||||||||
The undersigned hereby appoints each of John F. Meier, Richard I. Reynolds and Susan Allene
Kovach, as proxy, with full power of substitution, to vote all shares of Common Stock of Libbey Inc. held
of record by the undersigned on March 31, 2008, at the Annual Meeting of Stockholders to be held on
May 16, 2008 and at any adjournment thereof, upon the matters referred to on the reverse side
and described in the proxy statement furnished herewith, and in their discretion, upon any other
matters which may properly come before the meeting.
If no directions are given, the proxies will vote FOR the election of all listed director nominees
and FOR the ratification to Ernst & Young LLP as the Independent auditors to Libbey Inc. for its fiscal
year ending December 31, 2008 and in the proxies discretion on any other matters
that may properly come before the meeting.
|
||||||||
The board of directors of Libbey Inc. recommends a Vote FOR election of all listed director nominees and FOR
the ratification of Ernst & Young LLP as the Independent
auditors to Libbey Inc. for its fiscal year ending December 31,
2008.
|
||||||||
Please sign on the reverse side of this card and return it promptly in the enclosed postage-paid envelope. |
LIBBEY INC. PROXY PROCESSING P.O. BOX 3548 S HACKENSACK NJ 07606-9248 |