|
|
Non-Management Directors' Compensation
|
Although the Nominating and Governance Committee periodically reviews director compensation market data to ensure that the compensation of Libbey's non-management directors remains competitive, Libbey's directors repeatedly have declined to increase the annual cash retainer payable to non-management directors since 2013 and have declined to increase the value of the equity award made to non-management directors since 2015. As a result, a market study of Libbey's non-management director compensation performed in late 2018 found that the compensation paid to Libbey's non-management directors was substantially below the median for the peer group used in developing our 2019 CEO and CFO pay program and below public companies of similar size, as set forth in the most recent National Association of Corporate Directors (NACD) 2017-2018 director compensation report. In order to ensure that Libbey's compensation for non-management directors remains sufficiently competitive to attract and retain directors with the skills and expertise needed to support Libbey's strategy, the Nominating and Governance Committee recommended to the Board, and the Board approved, an increase in the annual cash retainer payable for Board service and an increase in the value of the annual equity award, as noted in the table below.
|
|
|
|
ELEMENT OF COMPENSATION
|
|
ANNUAL COMPENSATION AMOUNT
|
Annual Cash Retainer
|
|
$47,500 (increased to $62,000 effective January 1, 2019)
|
Lead Independent Director Cash Retainer
|
|
$20,000
|
Equity Award
|
|
On the date of each annual meeting of shareholders, outright grant of shares of common stock valued at $80,000 on the date of grant, attributable to service during the preceding year (increased to $90,000 beginning with the grant on the date of the 2019 Annual Meeting)
Our stock retention guidelines require that the director hold the net after-tax shares issued for at least one year from the date of grant
|
Committee Chair Cash Retainers
(in addition to Committee Member Cash Retainers)
|
|
$12,500 (Audit Committee and Compensation Committee)
$6,500 (Nominating and Governance Committee)
|
Committee Member Cash Retainers
|
|
$7,500 (Audit Committee and Compensation Committee)
$5,000 (Nominating and Governance Committee)
|
Other Fees
|
|
$500 per one-half day of service
|
For service periods of less than one year, amounts are prorated. Our management directors do not receive additional pay for service on the Board of Directors.
We also maintain stock ownership and retention guidelines for non-management directors. The guidelines include, but are not limited to, a requirement that the director hold the net after-tax shares issued to him or her on the date of each annual shareholders meeting for at least one year from the date of grant and, until the director acquires the guideline number of shares, he or she must hold 100% of the net after-tax shares of Libbey common stock issued to him or her on the date of each annual shareholders meeting and all other Libbey shares that he or she owns or otherwise acquires. For more information regarding our stock ownership and retention guidelines for non-management directors, see
“
Stock Ownership/Retention Guidelines
”
on page 57.
Pursuant to the Director Deferred Compensation Plan (DCP), directors may elect to defer cash and/or equity compensation into any of 13 measurement funds. The Director DCP and the predecessor deferred compensation plans for which non-management directors were eligible are unfunded plans, and the Company does not guarantee an above-market return on amounts deferred under these plans. Amounts deferred under the Director DCP or a predecessor plan are, at the director's election, payable either in a lump sum or in installments over a period of time selected by the director. Amounts deferred under our first deferred compensation plan for outside directors are payable in a lump sum upon the earlier of the director's death or retirement from our Board.
We reimburse our non-management directors for their travel expenses incurred in attending Board or Board committee meetings and for fees and expenses incurred in attending director education seminars and conferences. The directors do not receive any other personal benefits.
The following table shows the pay received by our non-management directors in
2018
.
|
|
|
|
|
|
|
|
|
|
|
|
|
Director Compensation for Year Ended December 31, 2018
|
Director
|
|
Fees Earned or
Paid in Cash
($)
(1)
|
|
Stock Awards
($)
(2)
|
|
Change in Pension
Value and
Nonqualified Deferred
Compensation Earnings
($)
(3)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
Carlos V. Duno
|
|
73,708
|
|
79,998
|
|
0
|
|
0
|
|
153,706
|
|
Ginger M. Jones
|
|
76,208
|
|
79,998
|
|
0
|
|
0
|
|
156,206
|
|
Eileen A. Mallesch
|
|
63,708
|
|
79,998
|
|
0
|
|
0
|
|
143,706
|
|
Deborah G. Miller
|
|
61,208
|
|
79,998
|
|
0
|
|
0
|
|
141,206
|
|
Carol B. Moerdyk
|
|
61,208
|
|
79,998
|
|
0
|
|
0
|
|
141,206
|
|
Steve Nave
|
|
56,208
|
|
79,998
|
|
0
|
|
0
|
|
136,206
|
|
John C. Orr
|
|
97,208
|
|
79,998
|
|
0
|
|
0
|
|
177,206
|
|
|
|
(1)
|
Includes pay deferred into the Libbey common stock measurement fund pursuant to the Director DCP.
|
|
|
(2)
|
Represents the grant date fair value, determined in accordance with FASB ASC Topic 718, of awards of stock made to non-management directors on May 16, 2018. On that date, we awarded certain non-management directors stock having a grant date fair value of $6.70 per share. The awards were attributable to service during the preceding year. Pursuant to our stock ownership and retention guidelines for non-management directors, directors are required to hold the net after-tax shares issued for at least one year from the grant date.
|
|
|
(3)
|
We do not maintain a pension plan for our non-management directors. We do not guarantee any particular rate of return on any pay deferred pursuant to our deferred compensation plans. Dividends on pay deferred into the Libbey Inc. phantom stock or measurement fund under our deferred compensation plans for non-management directors accrue only if and to the extent payable to holders of our common stock. Pay deferred into interest-bearing accounts under our deferred compensation plans for non-management directors does not earn an above-market return, as the applicable interest rate is the yield on ten-year treasuries. Pay deferred into other measurement funds under our deferred compensation plans for non-management directors does not earn an above-market return, as that pay earns a return only if and to the extent that the net asset value of the measurement fund into which the pay is deemed invested actually increases.
|
LIBBEY EXECUTIVE OFFICERS
As of
March 28, 2019
, our executive officers are:
|
|
|
MICHAEL P. BAUER -
CHIEF EXECUTIVE OFFICER
|
|
Biographical information for Mr. Bauer appears on page 13.
|
|
|
|
JAMES C. BURMEISTER -
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER
|
Mr. Burmeister, 51, has been Senior Vice President, Chief Financial Officer since June 2018. Mr. Burmeister joined Libbey as Vice President, Chief Financial Officer on March 30, 2017. Mr. Burmeister came to Libbey from The Andersons, Inc. (NASDAQ: ANDE), where he served since 2014 as Vice President, Finance and Treasurer, managing the treasury, tax, investor relations, sourcing, business development and continuous improvement functions. Before joining The Andersons, Inc., Mr. Burmeister held roles of increasing responsibility in operations finance with Owens Corning (NYSE: OC), beginning in 2005 as Director of Finance of the cultured stone business and culminating in his role from 2013-2014 as Vice President, Finance of the roofing and asphalt division. Earlier in his career, Mr. Burmeister served in a variety of roles with General Electric (NYSE: GE), including an assignment with GE's highly regarded Corporate Audit Staff, and with Rubbermaid in its supply chain function. Mr. Burmeister is a graduate of the U.S. Naval Academy and served as a commissioned officer in the U.S. Marine Corps from 1990 to 1995.
|
|
|
JAMES (KLAY) K. HUDDLESTON -
SENIOR VICE PRESIDENT, CHIEF DIGITAL OFFICER
|
Mr. Huddleston, 48, has been Senior Vice President, Chief Digital Officer since June 2018, having joined Libbey as Vice President, Chief Digital Officer on November 13, 2017. From 2008 until joining Libbey, Mr. Huddleston served as Senior Vice President, Omni-Commerce for Resource/Ammirati, an IBM (NYSE: IBM) consulting agency specializing in brand, commerce, and technology solutions to drive sales and increase customer engagement. Mr. Huddleston previously served as Vice President & General Manager, Direct for Tween Brands from 2006 to 2008 and Director, E-Commerce for Lane Bryant from 2005 to 2006. Mr. Huddleston's earlier career included various marketing and product management positions for Amazon.com, Inc. (NASDAQ: AMZN) from 1998 to 2004.
|
|
|
SUSAN A. KOVACH -
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
|
Ms. Kovach, 59, has been Senior Vice President, General Counsel and Secretary of Libbey Inc. since June 2018. Ms. Kovach was Vice President, General Counsel and Secretary of Libbey Inc. from July 2004 until June 2018, having joined Libbey in December 2003 as Vice President, Associate General Counsel and Assistant Secretary. Ms. Kovach was Of Counsel to Dykema Gossett PLLC from 2001 through November 2003. She served from 1997 to 2001 as Vice President, General Counsel and Corporate Secretary of Omega Healthcare Investors, Inc. (NYSE: OHI) and from 1998 to 2000 as Vice President, General Counsel and Corporate Secretary of Omega Worldwide, Inc., a NASDAQ-listed firm. Prior to joining Omega Healthcare Investors, Inc., Ms. Kovach was a partner in Dykema Gossett PLLC from 1995 through November 1997 and an associate in Dykema Gossett PLLC from 1985 to 1995.
|
|
|
WILLIAM C. MOSSING -
SENIOR VICE PRESIDENT, CHIEF SUPPLY CHAIN OFFICER
|
Mr. Mossing, 52, has been Senior Vice President, Chief Supply Chain Officer since June 2018, having joined Libbey as Vice President, Chief Supply Chain Officer on December 1, 2017. Mr. Mossing came to Libbey from Bendix Commercial Vehicle Systems LLC, where he served as Vice President, Supply Chain since 2011 and Vice President and General Manager - Modules from 2008 to 2011. Mr. Mossing previously served as Product Line Director from 2006 to 2008 and Assistant General Manager from 2004 to 2008 of Bendix Spicer Foundation Brake LLC, a joint venture of Bendix Commercial Vehicle Systems LLC and Dana Corporation. Mr. Mossing's previous experience includes various positions of increasing responsibility in the manufacturing, supply chain, and engineering functions at Dana Corporation, a predecessor to Dana Incorporated (NYSE: DAN).
|
|
|
SARAH J. ZIBBEL -
SENIOR VICE PRESIDENT, CHIEF HUMAN RESOURCES OFFICER
|
Ms. Zibbel, 39, has been Senior Vice President, Chief Human Resources Officer since June 2018, having joined Libbey in April 2018 as Vice President, Chief Human Resources Officer. Ms. Zibbel came to Libbey from Owens-Illinois, Inc. (NYSE: OI), where she most recently served as Vice President, Global Talent, Culture & Organizational Effectiveness since December 2017. Ms. Zibbel's previous positions at Owens-Illinois include Vice President, HR Strategy & Enterprise Transformation from 2016 to December 2017, Vice President, Human Resources, Global Technology and Operations from 2015 to 2016, Director, Corporate Human Resources from 2011 to 2015, and Manager, Corporate Human Resources from 2010 to 2011. Before joining Owens-Illinois, Ms. Zibbel was HR Operations Manager for Rexam PLC from 2009 to 2010, Human Resources Leader at Owens Corning (NYSE: OC) from 2005 to 2009, and Human Resource Director at MedCorp Inc. from 2002 to 2005.
|
EXECUTIVE COMPENSATION
|
|
|
PROPOSAL NO. 2
|
|
ADVISORY SAY-ON-PAY
|
|
We are providing shareholders the opportunity to cast an advisory vote with respect to the following resolution:
RESOLVED
, that the shareholders of the Company approve, on an advisory and non-binding basis, the compensation of the Company’s named executives, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, pursuant to Item 402 of Regulation S-K.
|
þ
|
The Board recommends a vote
FOR
this Proposal
|
|
|
|
|
PAY OBJECTIVE
|
|
SUPPORTIVE COMPONENTS OF 2018 PAY PROGRAM
|
Support our business strategy; drive long-term performance and shareholder value
|
|
• Annual and long-term incentive plan performance measures focused on growing our business profitably, improving our ability to generate cash, and improving our adjusted EBITDA
• Strategic objectives that are closely tied to developing and executing our strategy
|
Align interests of executives and shareholders
|
|
• Performance-based annual and long-term incentive plans
• 80% of our CEO’s target pay opportunity is “at-risk”
• RSUs directly align interests of executives and shareholders
• Stock retention guidelines designed to require our executives to achieve ownership of meaningful amounts of our stock
|
Attract and retain highly talented and experienced senior executives who are key to implementing our strategy and achieving future success
|
|
• RSU grants that vest ratably over 4 years
|
Align executive pay program with corporate governance best practices
|
|
• Limited perquisites (tax return preparation and financial planning, executive health screening program, limited ground transportation and airline club membership)
• Limited severance pay arrangements
• Stock retention guidelines designed to require executives to achieve ownership of meaningful amounts of our stock
• Annual and long-term incentive awards and RSU awards are subject to clawback
|
We believe that our
2018
executive pay program linked directly to our corporate strategy. The quantitative performance metrics under both our
2018
SMIP and the performance cash component of our
2018
LTIP were tied directly to improving our ability to generate cash and improving our adjusted EBITDA, both of which are critical to achieving our strategic objectives.
Additionally, the below-target payouts under our
2018
SMIP (ranging from 90.3% to 99.4% of target for each of the named executives, excluding Mr. Miñarro) and the performance cash component of our 2016 LTIP (at only 19.7% of target) reflect our financial performance.
Because your vote is advisory, it will not be binding on Libbey, our Compensation Committee or our Board of Directors. However, we value the opinions of our shareholders, and our Compensation Committee and Board will carefully consider the outcome of this vote.
|
|
Compensation Discussion and Analysis
|
This Compensation Discussion and Analysis provides information regarding our
2018
executive pay program, particularly as it relates to the following individuals, who are our named executives for
2018
:
|
|
|
|
Named Executive
|
|
Title
|
William A. Foley
|
|
Executive Chairman and former Chief Executive Officer
|
James C. Burmeister
|
|
Senior Vice President, Chief Financial Officer
|
Susan A. Kovach
|
|
Senior Vice President, General Counsel and Secretary
|
Salvador Miñarro Villalobos
|
|
Vice President, General Manager, U.S. and Canada until his employment ended on January 15, 2018
|
William C. Mossing
|
|
Senior Vice President, Chief Supply Chain Officer
|
Sarah J. Zibbel
|
|
Senior Vice President, Chief Human Resources Officer
|
EXECUTIVE SUMMARY
During
2018
, we remained committed to our Creating Momentum strategic priorities:
|
|
|
|
|
|
PROFITABLE
GROWTH
|
|
OPERATIONAL EXCELLENCE
|
|
ORGANIZATIONAL EXCELLENCE
|
Improving marketing capabilities in new product development and innovation to drive profitable growth
|
|
Improving operating processes, systems and technology
|
|
Building winning teams that foster high performance and live our core values
|
As discussed in the
Proxy Statement Summary
at page 3, we made significant progress with respect to our strategic priorities, but while we grew top-line revenues, our adjusted EBITDA and cash earnings fell far short of our expectations.
Executive Pay Highlights
Our executive compensation programs are designed to attract, develop and retain global business leaders who can drive financial and strategic objectives and are intended to foster a pay-for-performance culture and maximize long-term shareholder value.
KEY COMPENSATION PRACTICES
For a summary of our key executive compensation practices, including practices we use to drive performance and practices we do not use because we do not believe they would serve our shareholders’ long-term interests, see page 8 of the
Proxy Statement Summary
.
CORE COMPENSATION ELEMENTS
The Compensation Committee strives to provide an executive compensation program that aligns the interests of our executives with those of our shareholders. In furtherance of that aim, 50% of our CEO's target pay opportunity is performance-based and 80% of our CEO's target pay opportunity is “at-risk.”
The percentages above represent pay opportunity at target and do not include sign-on awards. "Incentive-Based Pay" includes an annual cash incentive award under our SMIP and long-term performance cash awards under our LTIP. "Time-Based Pay" includes RSUs granted under our LTIP. “NEOs” exclude Mr. Miñarro, whose employment ended January 15, 2018.
Pay for Performance Alignment
We strive to structure our executive compensation program to align pay with performance. The
2018
compensation of our named executives reflects the Company's performance in multiple respects:
|
|
|
|
|
|
|
|
NO CEO SALARY INCREASE
|
|
INCENTIVE PAYMENTS BELOW TARGET
|
|
REDUCED LONG-TERM INCENTIVE VALUE
|
|
DECLINE IN RSU VALUE
|
Mr. Foley's annualized salary has never been above $825,000, the initial rate established at his time of hire in January 2016
|
|
LTIP payouts were only 19.7% of target; SMIP payouts were 90.3% to 99.4% of target
(1)
|
|
To conserve shares, the Committee changed the method used to calculate the number of RSUs awarded in 2018, thereby reducing the economic value of RSUs awarded in 2018 by 21% to 26% compared to the previous method
|
|
RSUs granted in 2018 have declined in value since grant date
|
(1) Does not include Mr. Miñarro, whose employment ended January 15, 2018.
BASE SALARY
After Mr. Foley, Mr. Burmeister, Ms. Kovach and Mr. Miñarro voluntarily decreased their base salaries in May of 2017 (a decrease of 10% for Mr. Foley and 5% for each of the other named executives), their base salaries returned to their pre-decrease rates as of January 1, 2018. Mr. Foley's annualized base salary in 2018 was
$825,000
, the same initial rate established at his time of hire in January 2016. Effective April 1, 2018, Mr. Burmeister and Ms. Kovach received modest base salary increases of 4.0% and 3.0%, respectively. Mr. Mossing did not receive a salary increase in 2018, as he was hired in December 2017. When we hired Ms. Zibbel in April 2018, the Compensation Committee approved an initial base salary of $
310,002
. Mr. Miñarro did not receive a salary increase, as his employment ended January 15, 2018.
ANNUAL CASH INCENTIVE
The annual cash incentive plan adopted by the Committee in February
2018
provided the named executives with the opportunity to earn an award based 65% on financial metrics (40% adjusted cash earnings, 15% e-commerce revenue, 10% new product revenue) and 35% on achievement with respect to certain shared non-financial strategic objectives directly tied to our Creating Momentum strategic priorities. Adjusted cash earnings is calculated as shown in
Appendix A
. Strong performance with respect to the e-commerce revenue, new product revenue, and strategic objectives components, combined with poor performance with respect to the adjusted cash earnings metric, resulted in payouts of 90.3% to 99.4% to each of the named executives, excluding Mr. Miñarro. Our SMIP has paid out below target each of the last six years, evidencing the rigor of the targets set by the Committee.
LONG-TERM INCENTIVE PROGRAM
Under the long-term incentive plan approved by the Committee in February
2018
for the
2018
-
2020
performance cycle, 50% of each executive's overall LTIP target opportunity consists of a performance-based cash incentive. The performance cash opportunity under the
2018
LTIP (
2018
-
2020
performance cycle) is based on the Company's adjusted EBITDA, calculated as shown in
Appendix A
.
The performance cash opportunity under the
2016
LTIP (
2016
-2018 performance cycle) was based on the Company's ROIC in 2016 and 2017 and the Company's adjusted EBITDA in 2018. The Company's failure to achieve target with respect to these performance measures resulted in payouts under the performance cash component of our
2016
LTIP of only 19.7% of target. This equals the lowest LTIP performance cash score ever under the performance cash component of the Company's long-term incentive plans.
EQUITY AWARDS
Under our
2018
LTIP, named executives were awarded RSUs with ratable, four-year vesting. The RSUs were intended to have an economic value at the time of the award equal to 50% of the applicable executive's overall
2018
LTIP target opportunity. To responsibly manage the limited number of shares remaining available for issuance under our Omnibus Incentive Plans, the Committee elected to modify the method used to determine the number of RSUs to be granted to each executive. This change in methodology resulted in each executive receiving RSUs with an economic value on the grant date 21% to 26% lower than the economic value on the grant date would have been had the Committee used the method employed in prior years. For more information regarding the method used to calculate the number of RSUs to be granted, see "
What pay did Libbey's executives receive in 2018? - Equity Compensation
."
Demonstrating that our executive's pay is aligned with other shareholders, the value of this equity compensation has been further impacted by our negative total shareholder return. The chart on the following page shows, with respect to the RSUs granted to our CEO and other named executives in 2018, the market value on the grant date and the market value on December 31, 2018. The market value was determined by multiplying the number of RSUs by the closing price of our common stock on the applicable date.
LOOKING AHEAD: 2019 AND BEYOND
Leadership Transition
Michael Bauer
In connection with Mr. Foley's retirement, Michael Bauer succeeded Mr. Foley as our CEO effective March 25, 2019. The Compensation Committee approved a compensation package for Mr. Bauer that includes:
|
|
•
|
Initial base salary of $
675,000
;
|
|
|
•
|
2019 SMIP target opportunity equal to 100% of actual base earnings;
|
|
|
•
|
2019 LTIP target opportunity equal to
225%
of annual base salary, consisting of a prorated performance cash target of $
696,094
and a grant of
116,827
RSUs with three-year ratable vesting;
|
|
|
•
|
Prorated target opportunities under the performance cash components of the 2017 LTIP and 2018 LTIP equal to $
189,844
and $
442,969
, respectively;
|
|
|
•
|
To induce Mr. Bauer to join the Company and to establish an immediate and meaningful link to Libbey's long-term stock performance, the Compensation Committee also made Mr. Bauer a new-hire grant of 150,000 non-qualified stock options on March 25, 2019. The options are divided into four groups of 37,500 options each, with one group having an exercise price of $7.00, one group having an exercise price of $8.50, one group having an exercise price of $10.00, and one group having an exercise price of $11.50. This new-hire grant cliff vests on the third anniversary of Mr. Bauer's first day of employment.
|
|
|
•
|
In recognition of the fact that Mr. Bauer is relocating from Wisconsin to the Toledo, Ohio, area, he is eligible for relocation assistance under the Company's Senior Executive Relocation Policy.
|
|
|
•
|
Mr. Bauer does not have an employment agreement. Mr. Bauer is a party to a change in control agreement with the Company and is eligible to participate in the Company's Executive Severance Compensation Policy. Additional information regarding Mr. Bauer's change in control and severance benefits can be found under
"Potential Payments upon Termination or Change in Control"
on page 40.
|
William A. Foley
Mr. Foley will continue to be paid his current salary through March 31, 2019. For his service as Executive Chairman, Mr. Foley will be paid an annual salary of $232,000. Mr. Foley's participation in the 2019 SMIP and the performance cash components of the 2017 LTIP (2017-2019 performance cycle), 2018 LTIP (2018-2020 performance cycle) and 2019 LTIP (2019-2021 performance cycle) will be prorated to March 31, 2019.
Compensation Programs
2019 SMIP
In order to further simplify the plan design and focus the executives on key financial measures and Company-wide strategic objectives, each executive's annual incentive award opportunity under the 2019 SMIP will be based 85% on financial metrics (50% adjusted cash earnings, 20% OTIF and inventory reduction, and 15% new product revenue) and 15% on the shared non-financial strategic objective of ERP implementation.
2019 LTIP
The Committee elected to maintain the same plan design for the 2019 LTIP as for the 2018 LTIP, including using adjusted EBITDA as the financial metric for the performance cash component and awarding the equity component of the 2019 LTIP entirely in RSUs to conserve shares under its omnibus incentive plans and manage its burn rate in light of the decline in the Company's stock price. In order to responsibly manage the limited number of shares available under the existing Omnibus Incentive Plans, the Committee elected to use the average closing price over the fourth quarter of 2018 to calculate the number of RSUs.
2020 LTIP
If the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan is approved by our shareholders, the Compensation Committee intends, beginning in 2020, to modify the mix of vehicles in our long-term incentive program to include performance shares. While this is the Compensation Committee's current intention, the Committee's ultimate decision as to the plan designs for future long-term incentive programs will depend on a variety of factors and circumstances as existing at the time each applicable program is adopted.
EXECUTIVE COMPENSATION PHILOSOPHY
Our executive compensation programs are designed to attract, develop and retain global business leaders who can drive financial and strategic objectives and are intended to foster a pay-for-performance culture and maximize long-term shareholder value.
Our Compensation Committee follows these guiding principles when designing our compensation programs:
|
|
•
|
Competitiveness
- Overall, the mix and levels of compensation should be reasonably comparable to appropriate peer companies so that the Company can continue to attract, retain and motivate high performing executives in an environment where companies are increasingly competing for high-caliber talent. Recognizing that Libbey’s size, manufacturing asset intensity and multi-channel characteristics make identifying appropriate peer companies especially challenging, the general guideline is to target compensation at the median; however, individual positions may have target compensation mix and/or levels above or below the median depending on an evaluation of relevant factors, including experience, performance, time in position, and what is needed to attract the best talent for key positions, particularly when the Company recruits from much larger companies.
|
|
|
•
|
Pay for Performance
- Major components of compensation should be tied to the Company’s overall performance. Base salary and annual incentive compensation also should be tied to the performance of the individual executive and his or her specific business unit or function.
|
|
|
•
|
Values
- While the Company’s pay for performance philosophy should reward the achievement of financial and strategic objectives, the manner in which results are achieved is also important in assessing base salary adjustments and annual performance bonus payments. Therefore, while not always directly quantifiable, the manner in which the executive achieves results through collaboration and leadership - in keeping with the Company’s set of core values, notably teamwork, performance, continuous improvement, respect, development, and customer focus - are key considerations in the individual performance review process.
|
|
|
•
|
Judgment
- In assessing the executive’s contributions to the Company’s performance, the Committee looks to results-oriented performance measures, but also considers the long-term impact of an executive’s decisions. The CEO and Committee use their judgment and experience to evaluate whether an executive’s actions were aligned with the Company’s values and cultural elements.
|
|
|
•
|
Accountability for Short- and Long-Term Performance
- Annual and long-term incentives should reward an appropriate balance of short- and long-term financial and strategic business results, with an emphasis on managing the business for the long term. Such incentives should have a clear, direct and balanced link to the Company’s financial and strategic objectives.
|
|
|
•
|
Alignment to Shareholders’ Interests
- Long-term incentives should align the interests of individual executives with the long-term interests of the Company’s shareholders.
|
|
|
•
|
Simplicity
- The Company strives to the extent practicable to make its compensation programs straightforward, simple to understand, and easy to administer and evaluate for competitiveness and appropriateness.
|
|
|
•
|
Reasonableness
- Indirect executive compensation programs are designed to be reasonable and appropriate, with executive perquisites applied conservatively but judiciously.
|
In applying these guiding principles, the Committee seeks to ensure that the Company’s executive compensation programs attract, retain and motivate highly talented executives, support achieving the Company’s financial and strategic objectives, and align with shareholder interests generally.
WHAT ARE THE ELEMENTS OF LIBBEY’S EXECUTIVE COMPENSATION PROGRAM?
Balanced Program with Significant Pay at Risk
The core elements of compensation for which our executives were eligible in
2018
were base salary, an annual cash incentive award under our SMIP, and long-term cash incentive and equity awards under our LTIP. For
2018
, the pay opportunities of our named executives were designed to provide a balance of stable and competitive pay in the form of base salary, welfare and retirement benefits and perquisites; equity-based compensation (RSUs) that aligns our executives’ interests with those of shareholders generally and also serves as a retention tool; and annual and long-term incentive awards that are designed to motivate our executives to execute our strategy, thereby driving our financial and operational performance. In devising and administering the executive compensation program, the Committee weighs objectives, including talent attraction and retention, alignment with shareholder interests, and closely tying pay with performance, recognizing that these objectives often compete with one another.
CORE COMPENSATION ELEMENTS
|
|
|
|
|
|
|
|
Type of Pay
|
|
Element
|
|
Key Characteristics
|
|
Objectives
|
Base salary
|
|
Base salary
|
|
Fixed component; reviewed annually
|
|
Attract and retain talent
|
|
|
|
|
|
|
|
Incentive-Based Pay
|
|
Annual cash incentive award under our 2018 SMIP
|
|
At-risk variable pay opportunity for short-term performance; no guaranteed minimum payout; maximum payout equal to 200% of target; payout is based 40% on adjusted cash earnings, 15% on e-commerce revenue, 10% on new product revenue, and 35% on strategic objectives
|
|
Attract and retain talent; motivate; align with key business and financial objectives and strategies; align with shareholder interests
|
|
|
|
|
|
|
|
|
|
Long-term performance cash incentive awards under our 2018 LTIP
|
|
Formula-driven, at-risk cash award that comprises 50% of LTIP opportunity; no guaranteed minimum payout; maximum payout equal to 200% of target; payout based on adjusted EBITDA
|
|
Attract and retain talent; motivate; align with key business and financial objectives and strategies; align with shareholder interests
|
|
|
|
|
|
|
|
Time-Based Pay
|
|
RSUs granted under our 2018 LTIP
|
|
Intended to comprise 50% of LTIP opportunity; at risk; vest ratably over four years beginning on a date not earlier than the first anniversary of the date the award is approved; no dividends or voting rights with respect to unvested RSUs
|
|
Attract and retain talent; motivate; align with shareholder interests
|
OTHER COMPENSATION ELEMENTS
|
|
|
|
|
|
Element
|
|
Key Characteristics
|
|
Objectives
|
Perquisites
|
|
Direct payment or reimbursement of personal financial planning and tax return preparation fees; annual executive health screening and related services; ground transportation for trips between Toledo, Ohio, and the Detroit/Wayne County Metropolitan airport for the executive when traveling for business purposes and the executive's spouse when traveling together; membership in one airline club of the executive's choice; for executives relocating at Libbey's request, moving and related expenses associated with the move (may also include loss-on-sale protection when necessary to attract talent); and, for Mr. Foley until April 24, 2019, a housing allowance for housing in the Toledo, Ohio, area since his primary residence is in the Cleveland, Ohio, area
|
|
Attract and retain talent
|
|
|
|
|
|
Welfare and
retirement benefits
|
|
Medical, dental and life insurance benefits for U.S. executives on the same basis as for all U.S. salaried employees; matching contributions to our 401(k) savings plan on the same basis as for all U.S. salaried employees; for Ms. Kovach only, retirement benefits under our Salary Plan (a qualified retirement plan for all U.S. salaried employees hired before January 1, 2006) and our Supplemental Retirement Benefit Plan ("SERP") (an excess, non-qualified plan designed to provide substantially identical retirement benefits as the Salary Plan to the extent the Salary Plan cannot provide those benefits due to IRS limitations; no enhanced credit has ever been provided). Company contribution credits under the Salary Plan and the SERP were discontinued at the end of 2012
|
|
Attract and retain talent
|
|
|
|
|
|
Limited Income Protection
|
|
Separation benefits under change in control agreements or our executive severance policy; contingent component payable only if employment is terminated under specified circumstances
|
|
Attract and retain talent
|
WHAT PAY DID LIBBEY’S EXECUTIVES RECEIVE FOR
2018
?
Base Salary
|
|
|
SALARY HIGHLIGHTS
|
• No salary increase for CEO
• No salary increases for recently hired executives
• 3% - 4% salary increases for certain other named executives
|
The named executives' annualized base salary rates are:
|
|
|
|
|
Named Executive
|
|
Annualized Base Salary
($)
|
W. Foley
|
|
825,000
|
|
J. Burmeister
|
|
390,000
|
|
S. Kovach
|
|
364,154
|
|
S. Miñarro
|
|
362,397
|
|
W. Mossing
|
|
300,000
|
|
S. Zibbel
|
|
310,002
|
|
After Mr. Foley, Mr. Burmeister, Ms. Kovach and Mr. Miñarro voluntarily decreased their base salaries in May of 2017 (a decrease of 10% for Mr. Foley and 5% for each of the other executives), their base salaries returned to their pre-decrease rates as of January 1, 2018. Mr. Foley's annualized base salary in 2018 was
$825,000
, the same initial rate established at his time of hire in January 2016. In February
2018
, the Compensation Committee approved modest base salary increases of 4.0% for Mr. Burmeister and 3.0% for Ms. Kovach. In authorizing these increases, the Committee considered the need to retain these high-performing leaders and the significant contributions that Mr. Burmeister and Ms. Kovach have made and are expected to continue to make toward achieving the Company's strategic initiatives. These increases were effective April 1,
2018
, and are included in the rates above. Mr. Miñarro did not receive a salary increase because his employment ended January 15, 2018. Mr. Mossing did not receive a salary increase in 2018, as he was hired in December 2017. When we hired Ms. Zibbel in April 2018, the Committee approved the initial base salary shown above.
Annual Cash Incentive Award under our SMIP
|
|
|
SMIP HIGHLIGHTS
|
• Annual Cash Incentive Award
• Based 40% on Company's adjusted cash earnings, 15% on e-commerce revenue, 10% on new product revenue, and 35% on performance against strategic objectives
• Named executives (excluding Mr. Miñarro) received below-target payouts ranging from 90.3% to 99.4%
|
The Compensation Committee approved our
2018
SMIP design and approved the SMIP target opportunity for each named executive, other than Ms. Zibbel, in February
2018
. Ms. Zibbel's SMIP target opportunity was approved at the time of her hire.
TARGET OPPORTUNITIES
Each of our named executives had a target opportunity under the
2018
SMIP equal to a percentage of his or her actual base salary earned in
2018
.
In setting the named executives’ target opportunities under the
2018
SMIP, the Compensation Committee elected not to increase the target opportunities from the prior-year plan for any of the named executives.
|
|
|
|
|
|
|
Named Executive
|
|
Target Award as a Percent of Full-Year Base Salary
|
|
Target Award based on Actual Full-Year Base Salary
($)
|
W. Foley
|
|
100%
|
|
825,000
|
|
J. Burmeister
|
|
60%
|
|
231,750
|
|
S. Kovach
|
|
50%
|
|
180,752
|
|
W. Mossing
|
|
50%
|
|
150,000
|
|
S. Zibbel
|
|
50%
|
|
114,313
|
|
PLAN DESIGN
In designing our
2018
SMIP, the Committee sought a design that, compared to our 2017 SMIP, was less complex and more keenly focused on metrics essential to executing our Creating Momentum strategy, and that more closely aligned the efforts of the individual executives. The Committee felt it was important, however, to continue to directly incent the executives to focus their efforts on critical objectives supporting our Creating Momentum strategy, recognizing that the benefits of those objectives may not be reflected in improvements to the Company's financial performance until future years. The Committee also considered the need to maintain motivation among the management team and retain high-performing leaders after a period of significant turnover among the senior leadership team and several years of below-target payouts. For these reasons, the Committee maintained certain metrics and objectives but abandoned the individual strategic objectives and variable weighting aspects of the previous year's SMIP in favor of the following:
Financial Metrics (65% of Target Opportunity)
Adjusted Cash Earnings (40% of Target Opportunity)
The target and payout scale for the Company adjusted cash earnings performance metric was:
|
|
|
|
|
|
|
|
|
|
Adjusted Cash Earnings
|
|
|
|
|
|
|
Full-Year
Adjusted Cash Earnings
(dollars in thousands)
|
|
Percent of Targeted
Cash Earnings
|
|
Performance
Level
|
|
Payout
Percentage
|
|
$103,557
|
|
|
110.0%
|
|
Maximum
|
|
200%
|
|
$94,143
|
|
|
100.0%
|
|
Target
|
|
100%
|
|
$75,314
|
|
|
80.0%
|
|
Threshold
|
|
50%
|
< $75,314
|
|
|
< 80.0%
|
|
Below Threshold
|
|
0%
|
The
2018
adjusted cash earnings target of $94.1 million was lower than the adjusted cash earnings target under our 2017 SMIP, but 58% higher than the Company's 2017 actual adjusted cash earnings of $59.4 million. The Committee believed that the
2018
adjusted cash earnings target was a sufficiently challenging goal because it reflected a significant increase over the Company's actual adjusted cash earnings for 2017 and, when this target was established in early
2018
, the Company expected adjusted cash earnings to be affected by costs associated with implementation of a new global ERP system, investments in e-commerce and new product development, planned furnace rebuilds, and a continued challenging competitive environment. The degree of difficulty required for the Company to achieve target performance with respect to the adjusted cash earnings metric in its annual incentive plan is evidenced by historical results: the Company has failed to achieve target with respect to the adjusted cash earnings performance metric of its annual incentive plans for the past three years.
Under the
2018
SMIP, the Committee may adjust actual results to exclude the impact of special items. Examples of special items for which adjustments may be made include restructuring charges, asset impairment charges, and other similar items that are either not foreseen or are foreseen but are not included in the Company's annual operating plan because the occurrence of the event is substantially uncertain at the time the annual operating plan is submitted to the Board. The Committee believes such adjustments are appropriate so that our executives' pay will not be impacted, positively or negatively, by special items that are not a reflection of our core operating performance. As explained in further detail below, and as shown in the calculations set forth on attached
Appendix A
, the Committee adjusted cash
earnings to reflect certain reorganization charges. The adjustment to cash earnings had no effect on the payout percentage for the metric, as adjusted cash earnings remained below the threshold level required for any payout.
The Committee believed that it was appropriate to adjust cash earnings (calculated as set forth on attached
Appendix A
) by the following item that did not reflect our core operating performance and were not anticipated or budgeted. As a result, the Committee adjusted cash earnings (calculated as set forth on attached
Appendix A
) by the following item:
|
|
|
|
|
Item
|
|
Amount of Adjustment to Company-Wide Cash Earnings
($)
|
Costs Related to Strategic Initiative
|
|
2,341,000
|
|
Total
|
|
2,341,000
|
|
After accounting for this adjustment, adjusted cash earnings was $68.6 million, or 72.8% of targeted adjusted cash earnings for the year. Based on the payout scale above, adjusted cash earnings was below threshold, resulting in no payout for the named executives with respect to the adjusted cash earnings component of the SMIP.
E-Commerce Revenue (15% of Target Opportunity)
Success under the e-commerce revenue component of the
2018
SMIP is based on the total gross revenue from products sold through all e-commerce accounts. The target and payout scale for the e-commerce revenue performance metric was:
|
|
|
|
|
|
|
|
E-Commerce Revenue
|
|
|
|
|
|
|
Full-Year E-Commerce Revenue
(represented as % increase vs. prior year)
|
|
Percent of Targeted
E-Commerce Revenue
|
|
Performance
Level
|
|
Payout
Percentage
|
67%
|
|
125%
|
|
Maximum
|
|
200%
|
33%
|
|
100%
|
|
Target
|
|
100%
|
20%
|
|
90%
|
|
Threshold
|
|
50%
|
< 20%
|
|
< 90%
|
|
Below Threshold
|
|
0%
|
The Committee felt the e-commerce revenue target was sufficiently challenging because it represented a significant increase over the prior year's e-commerce revenue target and the e-commerce revenue actually achieved in the prior year.
The Company achieved a
34%
increase in gross e-commerce revenue as compared to the prior year, resulting in a payout score of 100% based on the scale above.
New Product Revenue (10% of Target Opportunity)
The new product revenue performance measure under the
2018
SMIP consists of gross revenue from new products launched in the previous 36 months on a rolling basis. The Committee chose new product revenue as a performance measure to encourage progress toward the Company's long-term goal to have new products make up 8% to 9% of the Company's sales. The new product revenue metric in the 2018 SMIP is not comparable to the innovation and new product development metric included in the 2017 SMIP. When designing the 2018 SMIP, the Committee redefined the metric to encompass new products launched in the previous 36 months on a rolling basis. This form of measure acknowledges that, due to the length of the new product development cycle from initial innovation to market penetration, revenue benefits from new products take time to achieve.
The target and payout scale for the new product revenue performance metric was:
|
|
|
|
|
|
|
|
|
|
New Product Gross Revenue
|
|
|
|
|
|
|
Full-Year New Product
Gross Revenue
(dollars in thousands)
|
|
Percent of Targeted
New Product
Gross Revenue
|
|
Performance
Level
|
|
Payout
Percentage
|
|
$59,840
|
|
|
110.0%
|
|
Maximum
|
|
200%
|
|
$54,000
|
|
|
100.0%
|
|
Target
|
|
100%
|
|
$48,960
|
|
|
90.0%
|
|
Threshold
|
|
50%
|
< $48,960
|
|
|
< 90.0%
|
|
Below Threshold
|
|
0%
|
The Company achieved $58.5 million in gross revenue from new products, resulting in a payout score of 170% based on the scale above.
Strategic Objectives (35% of Target Opportunity)
The strategic objectives component of the
2018
SMIP consisted of three equally weighted strategic objectives that were shared by all executives. For each objective, the named executives were evaluated and scored as a group, such that all applicable named executives received the same rating for the objective. The targets were established by the Committee early in
2018
and the Company's performance with respect to the objectives was evaluated and scored by the Committee in February
2019
.
The tables below describe each of the strategic objectives, their link to our Creating Momentum strategy, the types of measures, targets, and the Company's performance with respect to the objective as determined by the Committee at its February
2019
meeting.
|
|
|
|
|
|
|
|
|
ERP Planning and Implementation
|
|
|
|
|
|
|
|
|
Strategy Link:
|
Supports operational excellence and profitable growth
|
|
Threshold
|
Target
|
Maximum
|
Actual Performance
|
|
ERP investment is critical to driving future top-line growth and margin improvement. We anticipate that, once fully implemented, our ERP will help us achieve annual run-rate benefits of $15 - $20 million.
|
|
Execute one milestone, within budget
|
Execute two milestones, within budget
|
Execute three milestones, within budget
|
Executed one milestone, within budget
|
|
Measure:
|
Qualitative
|
|
(3 rating)
|
(4 rating)
|
(5 rating)
|
3 rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Levels
|
|
|
|
|
|
|
|
|
Strategy Link:
|
Supports profitable growth
|
|
Threshold
|
Target
|
Maximum
|
Actual Performance
|
|
Providing exceptional service differentiates us from our competitors. We believe superior service will help us accelerate our growth, gain stronger product placement, and enhance margins in the long term.
|
|
83%
|
86%
|
90%
|
90%
|
|
Measure:
|
Percent of customer orders filled on time and in full
|
|
(2 rating)
|
(3 rating)
|
(5 rating)
|
5 rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual and Leader Development
|
|
|
|
|
|
|
|
|
|
Strategy Link:
|
Supports organizational excellence
|
|
Threshold
|
Target
|
Maximum
|
Actual Performance
|
|
To ensure our success, our people must be strong and effective leaders who embody the right skill sets and capabilities to execute our strategy. By developing our leaders, we are preparing for continued growth as an organization, building our succession plans, and embracing a new and ever-changing workforce.
|
|
Assess 50% of leaders; train supervisors at manufacturing sites; complete development plans for 75% of salaried employees
|
Assess 75% of leaders; train supervisors at manufacturing sites + a non-manufacturing site; development plans for > 75% of salaried employees
|
Assess all leaders; train supervisors at all locations; complete development plans for all salaried employees
|
Assessed all leaders; trained all supervisors; completed development plans for all salaried employees
|
|
|
|
|
|
Measure:
|
Qualitative
|
|
(3 rating)
|
(4 rating)
|
(5 rating)
|
5 rating
|
|
|
|
|
|
|
|
|
|
At its meeting in February
2019
, the Committee reviewed the Company's performance with respect to the strategic objectives. After meeting in executive session, the Committee determined the Company's scores with respect to each shared objective. The weighted rating of the overall strategic objectives was converted to a payout score of 166.7% based on the following scale:
|
|
|
|
Strategic Objectives
|
|
|
Overall Rating
|
|
Payout Percentage
|
above 4.5
|
|
176% - 200%
|
4.1 - 4.5
|
|
151% - 175%
|
3.6 - 4.0
|
|
126% - 150%
|
3.1 - 3.5
|
|
101% - 125%
|
2.6 - 3.0
|
|
76% - 100%
|
2.0 - 2.5
|
|
51% - 75%
|
below 2.0
|
|
0% - 50%
|
SMIP PAYOUTS
Based on the payout scores for each of the plan components and the weight assigned to each component, the total payout score under the 2018 SMIP, unadjusted for any individual performance, was 90.3% of target.
|
|
|
|
|
|
|
|
|
|
Component
|
|
Payout Score
|
|
Weight
|
|
Weighted Payout Score
|
|
Total Unadjusted Payout Score
|
Adjusted Cash Earnings
|
|
0%
|
|
40%
|
|
0.0%
|
|
90.3%
|
E-Commerce Revenue
|
|
100%
|
|
15%
|
|
15.0%
|
|
New Product Revenue
|
|
170%
|
|
10%
|
|
17.0%
|
|
Strategic Objectives
|
|
166.7%
|
|
35%
|
|
58.3%
|
|
Under the 2017 SMIP, the Committee did not retain discretion to modify a participant's payout based on individual performance, as the 2017 SMIP design included an individual objectives component. Because the 2018 SMIP design did not include an individual objectives component, the Committee retained discretion to adjust a participant's individual payout (up or down) based on individual performance. As a result, an executive who demonstrated exceptional performance may be awarded a payout greater than the payout based strictly on the shared financial and strategic objectives. Alternatively, an executive whose individual performance did not meet expectations may be awarded a payout less than the payout that is based strictly on Company-wide performance measures. Applying the individual performance modifier also ensures that the executive's compensation is based not only on the goals achieved, but also on the extent to which the executive demonstrates effective organizational leadership skills in the execution of our strategy.
The Committee received input from Mr. Foley regarding the other named executives' individual performance review scores, including an evaluation of the extent to which they achieved their individual objectives. After meeting in executive session with Exequity, the Committee’s independent compensation consultant, the Committee determined that, based on their extraordinary efforts and leadership in connection with a strategic initiative that we terminated in the third quarter of 2018, the payouts for each of Mr. Foley, Mr. Burmeister and Ms. Kovach should be increased 10%.
Accordingly, the named executives received the following payouts under the SMIP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Award
|
|
Actual Payout
|
Named Executive
|
|
As Percent of
Full-Year Base Salary
|
|
Based on Actual
Full-Year Base Salary
($)
|
|
As Percent of Target
|
|
Actual Award
($)
|
W. Foley
|
|
100%
|
|
825,000
|
|
|
99.4%
|
|
819,775
|
J. Burmeister
|
|
60%
|
|
231,750
|
|
|
99.4%
|
|
230,282
|
S. Kovach
|
|
50%
|
|
180,752
|
|
|
99.4%
|
|
179,607
|
W. Mossing
|
|
50%
|
|
150,000
|
|
|
90.3%
|
|
135,500
|
S. Zibbel
|
|
50%
|
|
114,313
|
|
|
90.3%
|
|
103,263
|
Long-Term Performance-Based Compensation
|
|
|
LTIP HIGHLIGHTS
|
• Long-term performance cash incentive award
• Based on Company's adjusted ROIC for 2016 and 2017 and adjusted EBITDA for 2018
• Below target payout of 19.7% for 2016 LTIP (for the 2016-2018 performance cycle)
• 2017 LTIP (for 2017-2019 performance cycle) and 2018 LTIP (for 2018-2020 performance cycle) both tracking below target
|
In
2018
, each named executive’s long-term incentive opportunity included a cash-based performance component and an award of RSUs. The long-term incentive opportunity is intended to have an aggregate economic value equal to a target percentage of the executive’s base salary. The Committee did not increase the target opportunities from the 2017 LTIP for any of the named executives. The table below sets forth the target percentage for each of the named executives in
2018
. Mr. Miñarro was not a participant in the 2018 LTIP because his employment ended January 15, 2018.
|
|
|
|
Named Executive
|
|
2018 Target Long-Term Award
as a Percentage of Annualized Base Salary
|
W. Foley
|
|
300%
|
J. Burmeister
|
|
100%
|
S. Kovach
|
|
95%
|
W. Mossing
|
|
70%
|
S. Zibbel
|
|
70%
|
The Committee believes cash is the appropriate vehicle for the performance component of the long-term incentive plans. While the Committee has considered the use of performance-based equity awards, the Committee continues to use performance-based cash because of the need to conserve shares under its Omnibus Incentive Plans and manage the Company's burn rate in light of the decline in the Company's stock price. If the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan is approved by our shareholders, the Compensation Committee intends, beginning in 2020, to modify the mix of vehicles in our long-term incentive program to include performance shares. While this is the Compensation Committee's current intention, the Committee's ultimate decision as to the plan designs for future long-term incentive programs will depend on a variety of factors and circumstances as existing at the time each applicable program is adopted.
The cash-based performance opportunity provided to our named executives for performance during
2018
consisted of the following components:
|
|
•
|
A performance component under our 2016 LTIP (for the 2016-2018 performance cycle) that provides for cash awards if and to the extent we achieve our targeted adjusted return on invested capital (ROIC) for each of 2016 and 2017 and our targeted adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for 2018; a performance component under our 2017 LTIP (for the 2017-2019 performance cycle) that provides for cash awards if and to the extent we achieve our targeted adjusted ROIC for 2017 and our targeted adjusted EBITDA for each of 2017 and 2018; a performance component under our 2018 LTIP (for the 2018-2020 performance cycle) that provides for cash awards if and to the extent we achieve our targeted adjusted EBITDA for each of the three 1-year performance periods included in the three-year performance cycle. The scale used to determine the payout score for each of the three 1-year performance periods is reset for each performance period to correlate with targeted adjusted ROIC or targeted adjusted EBITDA, as applicable, for that year. The amount of the final payout, if any, will be determined based on the average of the three discrete, single-year payout scores. In deciding to set annual goals instead of three-year goals, the Committee considered the extreme difficulty in forecasting three years ahead in the volatile economic environment (as evidenced by our inability to achieve target performance under our annual incentive plans over the past five years) and the need to keep management engaged as the Company faces that challenging environment.
|
|
|
◦
|
For any performance cycle of which 2016 is a part, our 2016 adjusted ROIC target was 10.8%. We achieved adjusted ROIC of 9.9% in 2016, resulting in a payout score for the 2016 calendar year of 59%, as determined according to the following scale:
|
|
|
|
|
Basis Points Above or Below 2016 Targeted Adjusted ROIC
|
|
Payout Score
|
+100
|
|
200%
|
0
|
|
100%
|
-150
|
|
25%
|
Less than -150
|
|
0%
|
|
|
◦
|
For any performance cycle of which 2017 is a part, our 2017 adjusted ROIC target was 9.2%. We achieved 2017 adjusted ROIC of 3.1%, resulting in a payout score for the 2017 calendar year of 0%, as determined according to the following scale:
|
|
|
|
|
Basis Points Above or Below 2017 Targeted Adjusted ROIC
|
|
Payout Score
|
+50
|
|
200%
|
0
|
|
100%
|
-100
|
|
50%
|
Less than -100
|
|
0%
|
|
|
◦
|
For any performance cycle of which 2018 is a part, our 2018 adjusted EBITDA target was $89.8 million. In setting the target, the Committee considered the Company's prior year performance and alignment with the Company's annual operating plan and long-term strategic initiatives. The volatile global economy, decline in restaurant traffic, shift in retail sales toward e-commerce, and competitive pricing environment of 2017 were expected to continue in 2018. The realities of the business environment led the Company to shift its priorities from aggressive growth toward improving marketing and new product development capabilities and innovation, improving customer relationships, and simplifying the business - all of which would support future, sustainable, profitable growth. The Committee believed that an adjusted EBITDA target of $89.8 million would prove sufficiently challenging to achieve. In February 2019, the Committee determined that we had achieved 2018 adjusted EBITDA of $72.5 million, resulting in a payout score for the 2018 calendar year of 0%, as determined according to the following scale:
|
|
|
|
|
Percent of 2018 Targeted Adjusted EBITDA
|
|
Payout Score
|
112.5%
|
|
200%
|
0
|
|
100%
|
87.5%
|
|
50%
|
Less than 87.5%
|
|
0%
|
Adjusted ROIC and adjusted EBITDA are calculated as set forth on
Appendix A
.
When the Committee initially adopted the 2016 LTIP and 2017 LTIP, the Committee believed that using adjusted ROIC as a performance measure would align with the long-term interests of our shareholders because of adjusted ROIC's relationship to total shareholder return. In February 2018, the Committee elected to use adjusted EBITDA as the financial metric for the performance cash component of the 2018 LTIP and modified the performance cash components of the 2016 LTIP and 2017 LTIP to provide that the performance metric for the 2018 and 2019 plan years would be based on adjusted EBITDA as opposed to ROIC. The Committee transitioned from adjusted ROIC to adjusted EBITDA for the following reasons:
|
|
•
|
The Committee recognized that the large investments needed in connection with our ERP implementation, our e-commerce platform and new product development, all of which are essential to our Creating Momentum strategic priorities, were unlikely to generate significant returns until future years;
|
|
|
•
|
Given the asset intensity of our business, as well as our relatively high degree of financial leverage, the Committee believes that adjusted EBITDA is an appropriate measure of core operating performance;
|
|
|
•
|
The Committee felt it was imperative to re-focus management on the primary drivers of cash earnings;
|
|
|
•
|
Adjusted EBITDA is regularly used by the Company internally to measure profitability; and
|
|
|
•
|
We believe adjusted EBITDA is used by investors, analysts and other interested parties in comparing our performance across reporting periods and in comparing Libbey to other companies with different capital and legal structures.
|
Despite transitioning from adjusted ROIC to adjusted EBITDA, the Company still failed to achieve threshold performance for the 2018 calendar year.
In February
2019
, the Compensation Committee reviewed our performance for the three-year performance cycle ended December 31,
2018
, and, based on the average of the three discrete payout scores for each of
2016
,
2017
and
2018
, determined that we had achieved an overall payout score of
19.7%
of target under the
2016
LTIP.
|
|
|
|
|
|
Payout Score
|
2016 calendar year
|
|
59%
|
2017 calendar year
|
|
0%
|
2018 calendar year
|
|
0%
|
Overall Payout Score
|
|
19.7%
|
Performance cash payouts under our LTIP are not subject to modifications based on individual performance. Payouts were prorated, however, for those executives who were not employed for the entire
2016
-
2018
performance period.
The final payout amounts received by the named executives under the performance cash component of the
2016
LTIP were:
|
|
|
|
|
|
|
|
Named Executive
|
|
2016 LTIP Cash Target
($)
|
|
2016 LTIP Cash Payout
($)
|
|
2016 LTIP Cash Payout as a Percentage of Target
|
W. Foley
|
|
990,000
|
|
195,030
|
|
19.7%
|
J. Burmeister
(1)
|
|
87,900
|
|
17,316
|
|
19.7%
|
S. Kovach
|
|
127,878
|
|
25,192
|
|
19.7%
|
S. Miñarro
(1)
|
|
114,421
|
|
22,541
|
|
19.7%
|
W. Mossing
(1)
|
|
30,324
|
|
5,974
|
|
19.7%
|
S. Zibbel
(1)
|
|
21,700
|
|
4,275
|
|
19.7%
|
|
|
(1)
|
Prorated to reflect the portion of the performance cycle during which the named executive was employed.
|
Equity Compensation
|
|
|
EQUITY HIGHLIGHTS
|
• Annual awards under LTIP
• Economic value of RSUs at time of award intended to equal 50% of LTIP target opportunity
• 4-year ratable vesting
|
In February 2018, the Compensation Committee awarded to participants in our
2018
LTIP RSUs having an intended economic value at the time of award equal to 50% of their target long-term incentive opportunities. The RSUs vest ratably over four years beginning on February 17,
2019
, except for awards to Ms. Zibbel, which vest ratably over four years beginning on April 5, 2019.
The Committee elected to award the equity component of the 2018 LTIP entirely in RSUs to conserve shares under the Company's Omnibus Incentive Plans and manage its burn rate in light of the decline in the Company's stock price. If the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan is approved, the Compensation Committee intends, beginning in 2020, to modify the mix of vehicles in our long-term incentive program to include performance shares. While this is the Compensation Committee's current intention, the Committee's ultimate decision as to the plan designs for future long-term incentive programs will depend on a variety of factors and circumstances as existing at the time each applicable program is adopted. For more information regarding the proposed
Historically, the Committee determined the number of RSUs actually awarded by dividing the intended economic value (50% of the executive's target long-term incentive opportunity) by the "trailing 20-day average," the average closing price of our common stock over a period of 20 consecutive trading days ending on the grant date. However, to further conserve shares available for issuance under our Omnibus Incentive Plans, the Committee elected to calculate the number of RSUs to be granted under the 2018 LTIP by dividing the intended economic value by the greater of: (a) the trailing 20-day average; or (b) the average closing price of our common stock over the fourth quarter of 2017 (the "Q4 2017 average"). Ultimately, the Q4 2017 average of $7.75 was used because it was higher than the trailing 20-day average ($5.74 for the grant to Ms. Zibbel and $6.15 for the grants to the other named executives). This change in methodology resulted in each executive receiving RSUs with an economic value on the grant date 21% to 26% lower than the economic value on the grant date would have been if the Committee had used the trailing 20-day average method as in prior years.
In choosing to modify the method used to calculate the number of RSUs to be issued, the Committee weighed the need to responsibly manage the shares available under the Company's Omnibus Incentive Plans against the potential retention challenges that may be created by reducing the total compensation opportunities provided to executives as a result of the reduction in the economic value of the RSUs delivered.
Sign-on Awards
In connection with her hire, Ms. Zibbel was awarded a $
100,000
cash sign-on bonus and an award of 10,000 RSUs to induce her to join the Company and to replace the value of compensation being forfeited at her previous employer. If Ms. Zibbel resigns without Good Reason before April 5, 2019 (when she has been employed by Libbey for one year), she must repay the entire cash sign-on bonus within 30 days of her date of termination. “Good Reason” is defined on page 42. The sign-on RSUs awarded to Ms. Zibbel cliff vest on April 5, 2021, the third anniversary of Ms. Zibbel's date of hire.
HOW DOES LIBBEY DETERMINE THE FORMS AND AMOUNTS OF EXECUTIVE PAY?
Participants and Tools
The Compensation Committee, consisting entirely of independent directors, is responsible for overseeing the design, development and implementation of our executive pay program. Each year, the Compensation Committee evaluates Libbey's executive compensation program to determine what, if any, changes are appropriate. In making these determinations, the Committee may consult with its independent compensation consultant, management and the Board, as described below; however, the Compensation Committee uses its own judgment in making final decisions regarding the compensation paid to our executives.
The Compensation Committee consults with its independent executive compensation consultant when determined to be appropriate by the Compensation Committee. In
2018
, the Compensation Committee retained Exequity, LLP to serve as the Committee’s independent compensation consultant. A representative of Exequity attended the majority of the meetings of the Compensation Committee in
2018
, including the February
2018
and February
2019
meetings at which the Compensation Committee made decisions regarding our executive pay program for
2018
and also advised the Committee in connection with other pay decisions made during the year. All expenses that we incurred in
2018
for services provided by Exequity were attributable to services provided by Exequity to the Compensation Committee in connection with its executive pay decisions.
In compliance with the NYSE American Company Guide's disclosure requirements regarding compensation consultant independence, Exequity provided the Compensation Committee with a letter addressing each of six independence factors. Their responses affirm the independence of Exequity and the partners, consultants, and employees who service the Compensation Committee on executive compensation matters.
Our CEO, our Senior Vice President, Chief Human Resources Officer and our Senior Vice President, General Counsel and Secretary attend meetings of, and provide information to, the Compensation Committee and its consultant to assist them in their pay determinations. In addition, management may request that the Compensation Committee convene a meeting, and management may communicate with the Compensation Committee’s consultant to provide the consultant with information or understand the views of, or request input from, the consultant as to pay proposals being submitted by management to the Committee. However, the Compensation Committee meets in executive session, without any member of management present, to discuss and make its final executive pay determinations.
Our non-CEO executives play no direct role in determining their own pay, except to the extent they assess their own performance against their individual performance objectives as part of our performance appraisal process and to the extent that the Senior Vice President, Chief Human Resources Officer, the Senior Vice President, Chief Financial Officer and the Senior Vice President, General Counsel and Secretary provide information to the Compensation Committee with respect to pay programs affecting the entire executive leadership team.
The Compensation Committee sets the performance goals for our SMIP and LTIP based upon input from our CEO, including suggested individual performance objectives and metrics under the SMIP and the performance cash component of the LTIP. In setting our corporate performance objectives and measures, the Committee seeks input from its independent consultant. The Committee also seeks input from our Board in setting our CEO’s individual performance objectives and metrics.
INTERNAL PAY EQUITY AND WEALTH ACCUMULATION
In determining awards for current and future performance periods, the Compensation Committee considers internal pay equity within the senior leadership team, but does not consider the impact of, or wealth accumulated as a result of, equity awards made during prior years, since those awards represent pay for services rendered during prior-year periods.
TALLY SHEETS
In connection with the preparation of our proxy statement each year, the Committee reviews “tally sheets” that summarize, for each executive officer, the compensation paid and equity grants awarded during the prior year, as well as the amounts that would have been payable to each executive officer if his or her employment had been terminated under a variety of scenarios as of December 31 of the prior year. The Committee uses these “tally sheets,” which are prepared by management and provide substantially the same information as is provided in the tables in this proxy statement, primarily to ensure that our executives’ estimated pay is consistent with the Committee’s intent in adopting the program and for reviewing internal pay equity within the senior leadership team.
BENCHMARKING AND PEER GROUPS
The Compensation Committee engages its independent consultant to conduct a full benchmarking study of the Company’s executive compensation and that of its peers approximately every other year. Because the Committee uses benchmarking studies as a reference point, and not the sole determinative factor, in setting executive compensation, the Committee does not conduct benchmarking on an annual basis. As disclosed in the proxy statement filed in connection with our 2018 Annual Meeting, Exequity conducted a full benchmarking study in the fall of 2016, and the Compensation Committee considered the results of the study, in combination with many other factors, in setting our executives' pay opportunities for 2017. Consistent with its biennial benchmarking practice, the Compensation Committee did not conduct a compensation benchmarking study in 2017 and did not rely on peer group benchmarking in setting 2018 compensation. The Committee conducted a full benchmarking study in the fall of 2018 for use as a point of reference when setting executive pay opportunities for 2019.
SAY-ON-PAY RESULTS AND SHAREHOLDER ENGAGEMENT
Our annual say-on-pay vote is one of our opportunities to receive feedback from shareholders regarding our executive compensation program. Following the 2018 Annual Meeting, at which our advisory say-on-pay proposal garnered the support of approximately 82% of the shares voted, we reached out to our top 25 shareholders (collectively representing over 61% of our then outstanding common stock) to solicit feedback regarding executive compensation and corporate governance. Our Chief Financial Officer, General Counsel and Chief Human Resources Officer spoke with six shareholders (collectively representing over 21% of our then outstanding common stock) who accepted our invitation to provide feedback.
In our conversations with shareholders, we generally heard support for the strategic initiatives on which we are focused and for the compensation measures tied to those initiatives and recognition of the need to retain key executives in order to execute the Company's strategy and improve the Company's performance. We also heard suggestions for changes to our executive compensation program, many of which varied significantly from shareholder to shareholder. Suggestions we heard included, but were not limited to, preference for use of performance shares instead of performance cash in the Company's long-term incentive program, suggestions regarding performance metrics, and consideration of stock option awards as powerful incentive tools to drive performance and increase the Company's stock price.
Our Compensation Committee considered the vote result and the feedback we received as it evaluated the compensation opportunities to be provided to our executive officers in 2019 and beyond. The Compensation Committee's ability to implement several of the suggestions proposed by shareholders is largely dependent upon an increase in the number of shares available for issuance under our equity incentive plans. As such, we are requesting shareholder approval of an amendment to our Libbey Inc. 2016 Omnibus Incentive Plan. Information regarding the proposed amendment can be found under the heading
"Equity Compensation Plan Information - Proposal No. 3"
starting on page 60.
Overview of Process for Setting
2018
Executive Pay
INITIAL COMPENSATION PACKAGE FOR MS. ZIBBEL
Ms. Zibbel joined Libbey effective April 5, 2018. In connection with her hire, the Compensation Committee approved an initial base salary of $
310,002
, a target SMIP opportunity of
50%
, and a target LTIP opportunity of
70%
. In setting Ms. Zibbel's initial base salary and target short-term and long-term incentive opportunities, we considered Ms. Zibbel's highly sought after skill-set and experience, her compensation package at her previous employer, the significant responsibilities of the Senior Vice President, Chief Human Resources Officer position and its importance to achieving our Creating Momentum strategy, the relationship of her compensation to that of our other executive officers, the fact that Ms. Zibbel had never before been chief human resources officer of a public company, and the results of the benchmarking study completed in October 2016. The Committee also granted Ms. Zibbel a sign-on cash bonus of $
100,000
and a grant of 10,000 RSUs to induce her to join the Company and to replace the value of compensation she was forfeiting at her previous employer. If Ms. Zibbel resigns without Good Reason before April 5, 2019 (the first anniversary of her date of hire), she must repay the entire cash sign-on bonus within 30 days of her date of termination. The sign-on RSUs cliff-vest on April 5, 2021.
BASE SALARY ADJUSTMENTS
The Compensation Committee reviews base salaries at least annually. With respect to base salary increases that were implemented in April
2018
, the Compensation Committee made its decisions after receiving input from Mr. Foley and Exequity.
APPROVAL OF 2018 SMIP AND 2018 LTIP DESIGNS
The Compensation Committee approved the Company's
2018
SMIP and
2018
LTIP in the first quarter of
2018
.
EQUITY GRANTS UNDER OUR LTIP
The Compensation Committee typically makes awards of equity to our senior leadership team under our long-term incentive compensation program each February. The Compensation Committee authorized these awards at its February
2018
meeting, which occurred before we announced financial results for the 2017 fiscal year. The number of RSUs actually awarded was a function of the average closing price of our common stock over the fourth quarter of 2017. In each case, except for awards made to Ms. Zibbel, the grant date was the first business day after we released our fiscal 2017 financial results. For awards of RSUs made to Ms. Zibbel, the Committee authorized these awards in March 2018 and the grant date was the first business day after we released our financial results for the first quarter of 2018.
AWARDS UNDER OUR 2018 SMIP AND 2016 LTIP
In February
2019
, the Compensation Committee reviewed and certified our
2018
performance and made the awards under our
2018
SMIP and the performance cash component of our
2016
LTIP (for the
2016
-
2018
performance cycle). Details regarding the decisions made and payouts awarded are described above under
"What pay did Libbey's executives receive for 2018?"
WHAT ARE LIBBEY'S EQUITY GRANT PRACTICES?
As explained above, the Compensation Committee typically makes awards of RSUs in February to our executive leadership team under our LTIP. The Compensation Committee also occasionally makes "sign-on" awards of RSUs or NQSOs to newly hired executives and other key employees. Typically, the number of RSUs or NQSOs awarded is determined as described above under “
What pay did Libbey's executives receive for 2018 - Equity Compensation
”. Occasionally, the sign-on awards include the award of a fixed number of RSUs or NQSOs intended to make the executive whole for equity awards that the executive forfeits when leaving his or her prior employment, or to induce the executive to join the Company.
The Compensation Committee has delegated authority to the CEO to make limited grants of RSUs to senior managers and other employees who are not executive officers or direct reports to the CEO. The CEO’s authority to make these grants in
2018
was subject to the following limitations and conditions:
|
|
•
|
The maximum number of shares underlying RSUs that the CEO was authorized to award to all eligible individuals was 230,000;
|
|
|
•
|
The RSUs awarded could vest no more rapidly than ratably on the first, second and third anniversaries of the grant date;
|
|
|
•
|
The CEO was authorized to make awards only outside "quiet periods";
|
|
|
•
|
RSUs awarded to individuals whose home country is China were to be cash-settled RSUs;
|
|
|
•
|
The CEO was required to report at least quarterly to the Compensation Committee regarding the nature and scope of awards made pursuant to this authority; and
|
|
|
•
|
The agreements pursuant to which RSUs were granted must be substantially in the form approved by the Committee from time to time.
|
POLICIES AND PRACTICES RELATED TO LIBBEY’S EXECUTIVE COMPENSATION PROGRAM
Potential Impact of Misconduct on Compensation
Our SMIP and long-term incentive plans are authorized under our Amended and Restated Libbey Inc. 2006 Omnibus Incentive Plan or our Libbey Inc. 2016 Omnibus Incentive Plan, each of which contains a “clawback” provision. The clawback provision of the Amended and Restated Libbey Inc. 2006 Omnibus Incentive Plan obligates the recipient of a cash or equity award to reimburse us if:
|
|
•
|
we are required, as a result of misconduct, to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the securities laws; and
|
|
|
•
|
the award recipient knowingly engaged, or was grossly negligent in engaging, in the misconduct, or knowingly failed, or was grossly negligent in failing, to prevent the misconduct or is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002.
|
The amount to be reimbursed is the amount of any payment in settlement of an award made under the Amended and Restated Libbey Inc. 2006 Omnibus Plan and earned or accrued during the 12-month period following the first public issuance or filing with the SEC of the financial document embodying the financial reporting requirement in question.
Awards under the Libbey Inc. 2016 Omnibus Incentive Plan are subject to forfeiture and clawback under the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and under any clawback policy that we may have in place at any time.
Share Ownership / Retention Guidelines
We obligate our non-management directors and our executive officers to achieve or retain ownership of meaningful amounts of equity in Libbey. For more information, see
“Stock Ownership/Retention Guidelines”
on page 57.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code precludes the Company from taking a federal income tax deduction for compensation paid in excess of $1 million to our covered employees (which includes the CEO and our three other most highly compensated executive officers, other than the Chief Financial Officer, for years prior to 2018). Prior to 2018 (and including tax years that began prior to January 1, 2018), this limitation did not apply to performance-based compensation. While the Compensation Committee has generally attempted to maximize the tax deductibility of executive compensation, the Compensation Committee believes that the primary purpose of our compensation program is to support the Company’s business strategy and the long-term interests of our shareholders. Therefore, the Compensation Committee has maintained the flexibility to award compensation that may not be tax-deductible if doing so furthers the objectives of our executive compensation program.
Under the recent U.S. tax reform, the exception to Section 162(m) for performance-based compensation has been repealed for tax years beginning after December 31, 2017, subject to certain transition and grandfathering rules. In addition, the Chief Financial Officer is now included as a covered employee. Despite these new limits on the deductibility of performance-based compensation, the Compensation Committee continues to believe that a significant portion of our named executive officers’ compensation should be tied to the Company’s performance. Therefore, it is not currently anticipated that the changes to Section 162(m) will significantly impact the design of our compensation program going forward.
Compensation Risk Assessment
On an annual basis, management conducts a risk assessment of our compensation policies, practices and plans to determine whether they encourage excessive risk-taking. In addition to reviewing this annual risk-assessment, the Compensation Committee also reviews and discusses, at least annually, the relationship between risk management policies and practices and compensation and evaluates compensation policies and practices that could mitigate any such risk. Examples of features of our compensation program that guard against excessive risk-taking include:
|
|
•
|
An appropriate mix of fixed and variable, short-term and long-term, and cash and equity compensation;
|
|
|
•
|
Compensation Committee discretion regarding individual executive awards;
|
|
|
•
|
Oversight by non-participants in the plans;
|
|
|
•
|
Long-term compensation awards and vesting periods that encourage a focus on sustained, long-term results;
|
|
|
•
|
Executive incentive awards are subject to forfeiture and clawback;
|
|
|
•
|
Prohibition against hedging, pledging and engaging in transactions involving derivatives of our stock;
|
|
|
•
|
Stock ownership/retention requirements for our executives; and
|
|
|
•
|
"Double-trigger" vesting of equity awards and non-equity incentives after a change in control.
|
The Compensation Committee has determined that our compensation policies, practices and plans do not encourage excessive and unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on the Company.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Mr. Foley
Mr. Foley is employed at will. He is not covered by an employment agreement or change in control agreement, nor is he eligible to participate in our Executive Severance Compensation Policy, our Salary Plan, or our SERP.
In early 2016, the Company entered into a letter agreement with Mr. Foley that provides for, among other things, limited separation benefits under certain circumstances. As with all other named executives, the award agreements relating to grants of RSUs, NQSOs and performance cash opportunities also provide for separation benefits in certain circumstances. There are no conditions to Libbey’s obligations to provide separation benefits to Mr. Foley.
Because Mr. Foley was retired at the time of his hire and intends to retire once again when his employment with Libbey ends (regardless of when or how it ends), the Compensation Committee chose to provide Mr. Foley with more modest separation benefits compared to those of our other named executives.
With respect to Mr. Foley, the following table summarizes the trigger events under which payments may be made and/or other benefits provided, and the material payments or benefits to be provided, assuming Mr. Foley's employment ended December 31, 2018. Effective March 24, 2019, Mr. Foley retired from his role as CEO but continues to be employed by the Company as Executive Chairman. If Mr. Foley's employment ends in the future, he will be eligible for the same benefits and payments as described below, except that his participation in the 2019 SMIP and the performance cash components of the 2017 LTIP (2017-2019 performance cycle), 2018 LTIP (2018-2020 performance cycle) and 2019 LTIP (2019-2021 performance cycle) will be prorated to March 31, 2019.
|
|
|
|
|
|
|
|
|
|
|
|
Death or Disability
|
|
Resignation or Retirement
|
|
Termination without Cause
|
|
Termination without Cause
in connection with
Change in Control
|
Cash Severance
|
|
None
|
|
None
|
|
None
|
|
None
|
Annual Cash Incentive
(SMIP)
(1)
|
|
Prorated and subject to actual performance
|
|
Prorated and subject to actual performance
|
|
Prorated and subject to actual performance
|
|
Prorated and subject to actual performance
|
Long-Term Performance Cash Incentive
(1)
|
|
Prorated target award for any current performance cycle, paid as soon as administratively feasible
|
|
Prorated and subject to actual performance
|
|
Prorated and subject to actual performance
|
|
Not prorated but subject to actual performance
|
Equity Awards Granted in 2016
|
|
All awards immediately vest
|
|
All awards immediately vest
|
|
All awards immediately vest
|
|
All awards immediately vest
|
Equity Awards Granted in 2017 and 2018
|
|
All awards immediately vest
|
|
Forfeit all unvested awards
|
|
Awards scheduled to vest within one year of termination date will immediately vest
|
|
All awards immediately vest
|
Health, Welfare and Other Benefits
|
|
Accrued Benefits only
|
|
Accrued Benefits only
|
|
Accrued Benefits only
|
|
Accrued Benefits only
|
|
|
(1)
|
Except in the case of death or permanent disability, amounts paid under our SMIP and the performance cash component of our LTIP will be paid between January 1 and March 15 of the year following the end of the relevant performance cycle.
|
Mr. Bauer
Mr. Bauer is not a party to an employment agreement, but is a party to a change in control agreement and is covered by our Executive Severance Compensation Policy. The terms of award agreements under which awards of RSUs and NQSOs were made to Mr. Bauer provide for acceleration of unvested awards in the event of termination of employment under certain circumstances. Additionally, the terms of award agreements relating to the performance cash components of our long-term incentive plans provide for payouts in the event of termination of employment under certain circumstances.
With respect to Mr. Bauer, the trigger events under which payments may be made and/or other benefits provided, the material payments or benefits to be provided, and the conditions to our obligations to make the payments and/or provide the benefits are consistent with those summarized in the table below regarding our non-CEO named executives, with the following exceptions:
|
|
•
|
If Mr. Bauer's employment is terminated without Cause, Mr. Bauer's cash severance would consist of 24 months' salary continuation plus a lump sum equal to two times his target annual incentive;
|
|
|
•
|
If Mr. Bauer's employment is terminated by the Company without Cause or by him with Good Reason in connection with a Change in Control, Mr. Bauer's lump sum cash severance payment would be in an amount equal to three times the sum of his annual base salary in effect at the time of termination and his target annual incentive under the SMIP, and the continuation of his medical, prescription drug, dental and life insurance benefits would be for a period of 24 months.
|
All Other Named Executives
We do not have employment agreements with our non-CEO named executives. Our non-CEO named executives are, however:
|
|
•
|
parties to change in control agreements that provide for payments under the circumstances described below in the event of a termination of employment in connection with a Change in Control; and
|
|
|
•
|
covered by our Executive Severance Compensation Policy, which provides for certain separation benefits in the event of termination of employment without Cause absent a Change in Control.
|
From the time of their hire through the end of 2018, Mr. Mossing and Ms. Zibbel were eligible for more limited severance benefits than those provided under our Executive Severance Compensation Policy. However, Mr. Mossing and Ms. Zibbel have since become eligible for full benefits under the Executive Severance Compensation Policy. In addition, the sign-on bonus provided to Ms. Zibbel is subject to full repayment if she resigns without Good Reason before April 5, 2019, and the sign-on bonus provided to Mr. Mossing in 2017 is subject to full repayment if he voluntarily resigns before December 4, 2019.
The terms of award agreements under which awards of RSUs and NQSOs were made provide for acceleration of unvested awards in the event of termination of employment under certain circumstances. Additionally, the terms of award agreements relating to the performance cash components of our
2016
LTIP (for the
2016
-
2018
performance cycle),
2017
LTIP (for the
2017
-
2019
performance cycle) and
2018
LTIP (for the
2018
-
2020
performance cycle) provide for payouts in the event of termination of employment under certain circumstances.
Mr. Miñarro’s employment ended January 15, 2018. His termination was without Cause under the Executive Severance Compensation Policy, and he received severance benefits and payments pursuant to the terms of the Executive Severance Compensation Policy and equity and performance cash agreements. Such severance benefits and payments are consistent with those described below under “Termination without Cause,” with the following exception: The Committee elected to accelerate the vesting of 3,000 unvested RSUs that were awarded to Mr. Miñarro in 2015 to replace the value of certain pension and social security benefits that Mr. Miñarro forfeited when he was promoted to Vice President, General Manager, U.S. and Canada, from his previous position with Libbey's Mexican subsidiary. Had the Committee not exercised its discretion to accelerate vesting, the 3,000 RSUs would have been forfeited upon Mr. Miñarro's termination.
Because individuals hired after January 1, 2006, are ineligible for participation in the Salary Plan and SERP, Ms. Kovach is our only named executive who is eligible for benefits under the Salary Plan and SERP. As of December 31,
2018
, Ms. Kovach was at least age 55 and had at least five years of service with Libbey. As a result, Ms. Kovach would have been eligible to receive a retirement benefit under our Salary Plan and SERP if she had retired on or before December 31,
2018
. If Ms. Kovach or any of our other non-CEO named executives had retired on or before December 31,
2018
, all unvested equity awards would have been forfeited.
With respect to all non-CEO named executives, the following table assumes a termination date of December 31, 2018, and summarizes the trigger events under which payments may be made and/or other benefits provided, the material payments or benefits to be provided, and the conditions to our obligations to make the payments and/or provide the benefits.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death or
Disability
|
|
Termination
for Cause or
Quit without
Good Reason
|
|
Quit for
Good Reason
|
|
Termination
without Cause
|
|
Termination without Cause
or Quit for Good Reason
in connection with
Change in Control
|
|
|
All
Non-CEO NEOs
|
|
All
Non-CEO NEOs
|
|
All
Non-CEO NEOs
|
|
Mr. Mossing and Ms. Zibbel
(1)
|
All other
Non-CEO NEOs
|
|
All
Non-CEO NEOs
|
Cash
Severance
|
|
None
|
|
None
|
|
None
|
|
6 months' salary continuation + (for Mr. Mossing only) lump sum of 50% target annual incentive
|
12 months’ salary continuation + lump sum target annual incentive
|
|
Lump sum 2x annual salary + 2x target annual incentive
(3)
|
Annual
Cash Incentive
(SMIP)
|
|
None
|
|
None
|
|
None
|
|
Prorated and subject to actual performance
(2)
|
|
Prorated and subject to actual performance
(2)
|
Long-Term
Performance
Cash Incentive
|
|
Prorated target award for any current performance cycle
|
|
None
|
|
Prorated and subject to actual performance
(2)
|
|
Prorated and subject to actual performance
(2)
|
|
Not prorated but subject to actual performance
(2)
|
Equity Awards
|
|
All awards immediately vest
|
|
Forfeit all unvested
awards
|
|
Forfeit all
unvested
awards
|
|
Awards scheduled to vest within 1 year immediately vest
|
|
All awards immediately vest
|
Health,
Welfare and
Other Benefits
|
|
Accrued
Benefits
only
|
|
Accrued
Benefits
only
|
|
Accrued
Benefits
only
|
|
Accrued Benefits; continued dental/health benefits during period of salary continuation; outplacement services during period of salary continuation
|
|
Accrued Benefits; 18 months continued dental/health/life insurance benefits; outplacement services with cost to Libbey ≤15% base salary; financial planning services with cost to Libbey ≤$10,000
|
Conditions
to Payment
of Benefits
|
|
None
|
|
None
|
|
None
|
|
Release of claims against Libbey; Confidentiality obligations; Obligation to assign intellectual property rights; Obligation to assist with litigation; 1 year obligation not to interfere with customer accounts, compete, divert business opportunities, solicit our employees, or disparage us
|
|
Release of claims against Libbey; Confidentiality obligations; Obligation to assign intellectual property rights; Obligation to assist with litigation; 1 year obligation not to interfere with customer accounts, compete, divert business opportunities, solicit our employees, or disparage us
|
|
|
(1)
|
The above table assumes a termination date of December 31, 2018. Mr. Mossing and Ms. Zibbel have since become eligible for the same termination benefits as the other non-CEO named executives.
|
|
|
(2)
|
Amounts paid under our SMIP and the performance cash component of our LTIP will be paid between January 1 and March 15 of the year following the end of the relevant performance cycle.
|
|
|
(3)
|
Lump-sum cash payments will be paid no later than five days after termination except to the extent the payments are subject to a six-month delay under Internal Revenue Code Section 409A, in which case payment will be on the first day of the seventh month after the executive’s termination.
|
DEFINITIONS
Unless otherwise specified above, the following definitions apply:
“
Accrued Benefits
” includes base salary through date of termination, any amounts to which the executive is entitled under any retirement savings plan, equity participation plan, medical benefit plan or employment policy and any incentive compensation earned but not yet paid for a performance period ended before the date of termination.
“
Cause
” means (a) willful and continuous failure to substantially perform duties; (b) willful and continuous failure to substantially follow and comply with directives of the Board; (c) commission of an act of fraud or dishonesty that results in harm to us or failure to comply with a material policy, including our Code of Business Ethics and Conduct; (d) material breach of a material obligation to us; or (e) commission of illegal conduct or gross misconduct that causes harm to us. When used in reference to a termination that is not in connection with a change in control, “Cause” can have any of the previously listed meanings or: conviction of a misdemeanor or felony that is directly related to, or indicates the executive is not suited for, the position the executive occupies with us.
“
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 our employee benefit plans, or any corporation owned, directly or indirectly, by our shareholders in substantially the same proportions as their ownership of our common stock) becomes the “beneficial owner,” directly or indirectly, of our securities representing 30% or more of the combined voting power of our then-outstanding securities;
|
|
|
•
|
The consummation of a merger or consolidation pursuant to which we are merged or consolidated with any other corporation (or other entity), unless our voting securities outstanding immediately prior to the merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3% of the combined voting power of securities of the surviving entity outstanding immediately after the merger or consolidation;
|
|
|
•
|
A plan of complete liquidation or an agreement for the sale or disposition of all or substantially all of our assets is consummated; or
|
|
|
•
|
During any period of two consecutive years (not including any period prior to the execution of the agreement), Continuing Directors (as defined below) cease for any reason to constitute at least a majority of our Board. Continuing Directors means (i) individuals who were members of the Board at the beginning of the two-year period referred to above and (ii) any individuals elected to the Board, after the beginning of the two-year period referred to above, by a vote of at least 2/3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously approved in accordance with this provision. However, an individual who is elected to the Board after the beginning of the two-year period referred to above will not be considered to be a Continuing Director if the individual was designated by a person who has entered into an agreement with us to effect a transaction that otherwise meets the definition of a change in control.
|
A person typically is considered to be the “beneficial owner” of securities if the person has or shares the voting power associated with those securities.
“
Good Reason
” means (a) the executive ceases to be an officer of the Company; (b) we reduce the executive’s base salary and we do not apply the reduction in the same or similar manner to similarly situated employees; (c) we materially reduce the executive’s annual incentive compensation opportunity and the reduction is not applied in the same or similar manner to similarly situated employees; (d) we materially reduce or eliminate an executive benefit or an employee benefit, and we do not apply the reduction to similarly situated employees in the same or similar manner; (e) we materially breach any written agreement between the executive and the Company and we fail to remedy the breach within 60 days after our receipt from the executive of written notice of breach; or (f) we exercise our right not to renew the agreement unless we concurrently exercise our right not to renew the agreements of similarly situated employees.
|
|
Compensation Committee Report
|
The Compensation Committee has reviewed and discussed with Libbey’s management the Compensation Discussion and Analysis in this proxy statement. Taking all of these reviews and discussions into account, the Compensation Committee has approved the inclusion of the Compensation Discussion and Analysis in this proxy statement and has approved the incorporation by reference of the Compensation Discussion and Analysis in our Annual Report on Form 10-K for the fiscal year ended December 31,
2018
.
|
|
Carlos V. Duno,
Chair
Ginger M. Jones
Eileen A. Mallesch
Carol B. Moerdyk
Steve Nave
|
|
|
Executive Compensation Tables
|
SUMMARY COMPENSATION TABLE
The following narrative and tables describe the “total compensation” our named executives earned during
2018
,
2017
and
2016
. The total compensation presented below does not reflect the actual pay received by, or the target pay of, the named executives in
2018
,
2017
or
2016
. The actual value realized by our named executives in
2018
from NQSOs and RSUs is presented in the
Option Exercises and Stock Vested Table
on page 48. Target annual and long-term incentive awards for
2018
are presented in the
Grants of Plan-Based Awards Table
on page 45.
The core components of our named executives’ compensation are base salary, an annual cash incentive opportunity under our SMIP, and a long-term incentive opportunity under our LTIP, which includes performance-based cash compensation and equity awards. In addition to these core components, our executives occasionally receive compensation through sign-on awards, discretionary awards in recognition of outstanding individual contributions, retention awards, or in connection with termination of employment.
Mr. Miñarro
In
2018
, Mr. Miñarro received compensation in connection with his termination of employment. These payments and benefits were determined in accordance with the Executive Severance Compensation Policy and the award agreements governing awards of RSUs, NQSOs and LTIP performance cash opportunities. The values of those RSUs and NQSOs for which vesting accelerated in connection with Mr. Miñarro's termination are not included in the "All Other Compensation" column in this Summary Compensation Table because the cumulative grant date fair values were included in the "Stock Awards" and "Option Awards" columns of the Summary Compensation Tables in the years in which they were granted and the incremental fair value of the 3,000 RSUs for which the Compensation Committee exercised discretion to accelerate vesting is included in the "Stock Awards" column in 2018. For additional information regarding the payments and benefits provided to Mr. Miñarro in connection with his termination of employment, see "Potential Payments upon Termination of Employment or Change in Control" above and the Potential Payments upon Termination of Employment Table on page 51.
Ms. Zibbel
In connection with her hire, Ms. Zibbel received a $
100,000
cash sign-on bonus and 10,000 RSUs to induce her to join the Company and to replace the value of compensation being forfeited at her previous employer. If Ms. Zibbel resigns without Good Reason before April 5, 2019, she must repay the entire sign-on bonus within 30 days of her date of termination. "Good Reason" is defined on page 42. The sign-on RSUs cliff-vest on April 5, 2021, the third anniversary of Ms. Zibbel's start date.
|
|
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Compensation
|
|
|
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Stock Awards
|
|
Option Awards
|
|
|
|
All Other Compensation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
(1)
|
|
($)
(2)
|
|
($)
(3)
|
|
($)
(4)
|
|
($)
(5)
|
|
($)
(6)
|
|
($)
|
William A. Foley
|
|
2018
|
|
825,000
|
|
|
0
|
|
|
814,353
|
|
|
0
|
|
|
1,014,805
|
|
|
0
|
|
|
123,984
|
|
|
2,778,142
|
|
Chairman and Chief Executive Officer
(7)
|
|
2017
|
|
770,000
|
|
|
0
|
|
|
544,611
|
|
|
322,592
|
|
|
707,520
|
|
|
0
|
|
|
120,649
|
|
|
2,465,372
|
|
|
2016
|
|
804,185
|
|
|
0
|
|
|
1,037,687
|
|
|
532,688
|
|
|
801,520
|
|
|
0
|
|
|
110,050
|
|
|
3,286,130
|
|
James C. Burmeister
|
|
2018
|
|
386,250
|
|
|
0
|
|
|
123,389
|
|
|
0
|
|
|
247,598
|
|
|
0
|
|
|
28,362
|
|
|
785,599
|
|
Senior Vice President, Chief Financial Officer
(8)
|
|
2017
|
|
271,354
|
|
|
100,000
|
|
|
76,808
|
|
|
47,057
|
|
|
145,859
|
|
|
0
|
|
|
25,752
|
|
|
666,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan A. Kovach
|
|
2018
|
|
361,503
|
|
|
0
|
|
|
110,512
|
|
|
0
|
|
|
204,799
|
|
|
0
|
|
|
35,959
|
|
|
712,773
|
|
Senior Vice President, General Counsel & Secretary
|
|
2017
|
|
339,189
|
|
|
0
|
|
|
71,754
|
|
|
42,500
|
|
|
143,174
|
|
|
22,060
|
|
|
33,959
|
|
|
652,636
|
|
|
2016
|
|
341,568
|
|
|
0
|
|
|
123,696
|
|
|
68,809
|
|
|
209,254
|
|
|
21,812
|
|
|
34,191
|
|
|
799,330
|
|
Salvador Miñarro Villalobos
|
|
2018
|
|
15,100
|
|
|
0
|
|
|
21,450
|
|
|
0
|
|
|
22,541
|
|
|
0
|
|
|
641,233
|
|
|
700,324
|
|
Vice President, General Manager, US & Canada
(9)
|
|
2017
|
|
348,978
|
|
|
0
|
|
|
94,283
|
|
|
55,844
|
|
|
165,014
|
|
|
0
|
|
|
77,171
|
|
|
741,290
|
|
|
2016
|
|
355,291
|
|
|
0
|
|
|
162,528
|
|
|
90,407
|
|
|
241,106
|
|
|
0
|
|
|
98,845
|
|
|
948,177
|
|
William C. Mossing
|
|
2018
|
|
300,000
|
|
|
0
|
|
|
69,095
|
|
|
0
|
|
|
141,474
|
|
|
0
|
|
|
103,391
|
|
|
613,960
|
|
Senior Vice President, Chief Supply Chain Officer
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sarah J. Zibbel
|
|
2018
|
|
228,626
|
|
|
100,000
|
|
|
120,170
|
|
|
0
|
|
|
107,538
|
|
|
0
|
|
|
22,304
|
|
|
578,638
|
|
Senior Vice President, Chief Human Resources Officer
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As to Mr. Burmeister for 2017 and Ms. Zibbel for 2018, represents a signing bonus.
|
|
|
(2)
|
Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to RSUs granted in
2018
,
2017
and
2016
, respectively. As to Mr. Foley in 2016, also represents the grant date fair value, determined in accordance with FASB ASC Topic 718, of awards of stock made to non-management directors on May 10, 2016. On that date, we awarded certain non-management directors stock having a grant date fair value of $80,007, or $17.58 per share. Although Mr. Foley ceased to be a non-management director when he was appointed CEO on January 12, 2016, this stock award was attributable to service as a non-management director during the 2015 fiscal year. As to RSU awards in
2018
,
2017
and
2016
, the awards vest ratably over a four-year period from the date of grant, with the following exceptions: RSUs granted to Mr. Burmeister in 2017 vest ratably over four years from the first day of employment; 14,000 RSUs granted to Ms. Zibbel vest ratably over four years from the first day of employment; and 10,000 RSUs granted to Ms. Zibbel cliff-vest on the third anniversary of her first day of employment. For Mr. Miñarro in 2018, also includes the incremental fair value of 3,000 RSUs for which the Compensation Committee exercised discretion to accelerate vesting in connection with his termination of employment. For more information, see Footnote 11, “Employee Stock Benefit Plans,” to the consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on
February 27, 2019
. The actual values realized by the respective named executives depend on the number of RSUs that actually vest and the price of our common stock when the RSUs vest.
|
|
|
(3)
|
Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to NQSOs granted in
2017
and
2016
, respectively. The awards vest ratably over a four-year period from the date of grant or, in Mr. Burmeister's case, from the first day of employment. When Mr. Miñarro’s employment ended on January 15, 2018, vesting was accelerated with respect to all NQSOs that otherwise would have vested by January 15, 2019, and all other unvested NQSOs were forfeited. For more information, see Footnote 11, “Employee Stock Benefit Plans,” to the consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on
February 27, 2019
. The actual values received by the respective named executives depend on the number of NQSOs that actually vest, the number of shares with respect to which NQSOs are exercised and the price of our common stock on the date on which the NQSOs are exercised.
|
|
|
(4)
|
Represents amounts earned by the named executives in
2018
,
2017
and
2016
under our SMIP and under the performance cash component of our
2016
LTIP,
2015
LTIP and
2014
LTIP, respectively. The awards under our SMIP were paid in March of
2019
,
2018
and
2017
, respectively, and the awards under the performance cash component of our
2016
LTIP,
2015
LTIP and
2014
LTIP were paid in March of
2019
,
2018
and
2017
, respectively.
|
|
|
(5)
|
Represents the actuarial increase in pension value under our Salary Plan and our SERP. In 2018, the net pension value under our Salary Plan and our SERP declined for all named executives who were participants under those plans; as a result, for 2018 the amount of the actuarial increase is $0. We do not guarantee any particular rate of return on deferred compensation under our Executive Savings Plan (“ESP”) or our EDCP. The rate of return depends upon the performance of the fund in which the participant’s ESP or EDCP account is deemed invested. Accordingly, the amounts included in this column do not include above-market earnings on nonqualified deferred compensation. Ms. Kovach is the only named executive who is eligible to participate in the Salary Plan and SERP.
|
|
|
(6)
|
For
2018
, includes: (i) annual company matching contributions to our 401(k) savings plan (a broad-based plan open to all U.S. salaried employees); (ii) for Mr. Miñarro, our expense associated with the compensation payable to him in connection with his termination of employment; and (iii) the following perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EDCP Matching Contribution
|
|
Tax Prep / Financial Planning
|
|
Housing Allowance, Commuting or Relocation Assistance
|
|
Tax Gross-Up
|
|
Ground Transport
|
|
Airline Club Membership
|
|
Annual Executive Physical Exam
|
|
Total
|
Named Executive
|
|
($)
(a)
|
|
($)
(b)
|
|
($)
(c)
|
|
($)
(d)
|
|
($)
(e)
|
|
($)
|
|
($)
|
|
($)
|
W. Foley
|
|
33,000
|
|
14,760
|
|
51,568
|
|
2,996
|
|
2,332
|
|
495
|
|
2,933
|
|
108,084
|
J. Burmeister
|
|
0
|
|
8,761
|
|
0
|
|
0
|
|
163
|
|
495
|
|
2,443
|
|
11,862
|
S. Kovach
|
|
4,552
|
|
14,760
|
|
0
|
|
0
|
|
261
|
|
0
|
|
0
|
|
19,573
|
S. Miñarro
|
|
0
|
|
592
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
592
|
W. Mossing
|
|
0
|
|
12,658
|
|
59,463
|
|
13,980
|
|
424
|
|
495
|
|
2,121
|
|
89,141
|
S. Zibbel
|
|
0
|
|
9,948
|
|
0
|
|
0
|
|
1,506
|
|
0
|
|
0
|
|
11,454
|
|
|
(a)
|
Annual company matching contributions to our EDCP
|
|
|
(b)
|
The cost we paid for tax return preparation and financial planning for the respective named executives
|
|
|
(c)
|
As to Mr. Foley, represents a $
45,000
allowance for housing in the Toledo, Ohio, area since Mr. Foley’s primary home is in the Cleveland, Ohio metropolitan area and $
6,568
in expenses related to commuting between Cleveland and Toledo. Mr. Foley's housing allowance will end effective April 24, 2019. As to Mr. Mossing, represents relocation expense.
|
|
|
(d)
|
As to Mr. Foley, represents tax gross-up on commuting expense. As to Mr. Mossing, represents tax gross-up on relocation expense.
|
|
|
(e)
|
Includes our incremental cost for ground transportation for personal and business trips from the Toledo, Ohio, area to the Detroit / Wayne County Metropolitan Airport. For personal trips, includes the entire cost that we incurred for such transportation. For business trips, includes the amount in excess of the amount to which the respective named executives would have been entitled as reimbursement for mileage and parking under our travel policy applicable to all employees.
|
|
|
(7)
|
Mr. Foley assumed his role as CEO effective January 12, 2016. Effective March 24, 2019, he retired from his role as CEO but continues to be employed by the Company as Executive Chairman.
|
|
|
(8)
|
Mr. Burmeister was hired on March 30, 2017.
|
|
|
(9)
|
Mr. Miñarro's employment ended January 15, 2018.
|
|
|
(10)
|
Mr. Mossing was hired on December 1, 2017.
|
|
|
(11)
|
Ms. Zibbel was hired on April 5, 2018.
|
GRANTS OF PLAN-BASED AWARDS TABLE
During
2018
, the Compensation Committee granted to our named executives RSUs under our 2006 Omnibus Plan, 2016 Omnibus Plan and
2018
LTIP. RSU recipients are not entitled to dividends or voting rights with respect to the common shares underlying the RSUs unless and until they are earned or vested. Our executives were not granted any stock options in 2018. On February 4,
2019
, the Compensation Committee approved the payment of cash awards under our
2018
SMIP and our
2016
LTIP.
Mr. Miñarro did not receive any grants of plan-based awards due to his employment ending January 15, 2018. The Committee did, however, accelerate the vesting of 3,000 RSUs that were originally granted to Mr. Miñarro in 2015.
This table and accompanying footnotes contain information as to each of these awards, including information as to applicable performance measures for our cash awards and vesting schedules for RSUs.
|
|
Grants of Plan-Based Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts under Non-Equity Incentive Plan Awards
(2)
|
|
All Other Stock Awards: Number of Shares of Stock or Units
|
|
Grant Date Fair Value of Stock and Option Awards
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
|
Plan Name
|
|
Award Date
(1)
|
|
Grant Date
(1)
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
(3)
|
|
($)
(4)
|
W. Foley
|
|
2018 SMIP
|
|
2/15/18
|
|
|
|
41,250
|
|
|
825,000
|
|
|
1,650,000
|
|
|
|
|
|
|
|
2018 LTIP (cash)
|
|
2/15/18
|
|
|
|
618,750
|
|
|
1,237,500
|
|
|
2,475,000
|
|
|
|
|
|
|
|
2018 LTIP (RSU)
|
|
2/6/18
|
|
2/28/18
|
|
|
|
|
|
|
|
159,677
|
|
|
814,353
|
|
J. Burmeister
|
|
2018 SMIP
|
|
2/15/18
|
|
|
|
11,588
|
|
|
231,750
|
|
|
463,500
|
|
|
|
|
|
|
|
2018 LTIP (cash)
|
|
2/15/18
|
|
|
|
93,750
|
|
|
187,500
|
|
|
375,000
|
|
|
|
|
|
|
|
2018 LTIP (RSU)
|
|
2/6/18
|
|
2/28/18
|
|
|
|
|
|
|
|
24,194
|
|
|
123,389
|
|
S. Kovach
|
|
2018 SMIP
|
|
2/15/18
|
|
|
|
9,038
|
|
|
180,752
|
|
|
361,504
|
|
|
|
|
|
|
|
2018 LTIP (cash)
|
|
2/15/18
|
|
|
|
83,968
|
|
|
167,936
|
|
|
335,872
|
|
|
|
|
|
|
|
2018 LTIP (RSU)
|
|
2/6/18
|
|
2/28/18
|
|
|
|
|
|
|
|
21,669
|
|
|
110,512
|
|
S. Miñarro
|
|
Omnibus Plan (RSU)
|
|
1/9/18
|
|
1/15/18
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
21,450
|
|
W. Mossing
|
|
2018 SMIP
|
|
2/15/18
|
|
|
|
7,500
|
|
|
150,000
|
|
|
300,000
|
|
|
|
|
|
|
|
2018 LTIP (cash)
|
|
2/15/18
|
|
|
|
52,500
|
|
|
105,000
|
|
|
210,000
|
|
|
|
|
|
|
|
2018 LTIP (RSU)
|
|
2/6/18
|
|
2/28/18
|
|
|
|
|
|
|
|
13,548
|
|
|
69,095
|
|
S. Zibbel
|
|
2018 SMIP
|
|
3/7/18
|
|
|
|
5,716
|
|
|
114,313
|
|
|
228,626
|
|
|
|
|
|
|
|
2018 LTIP (cash)
|
|
3/7/18
|
|
|
|
49,729
|
|
|
99,458
|
|
|
198,916
|
|
|
|
|
|
|
|
2018 LTIP (RSU)
|
|
3/7/18
|
|
5/2/18
|
|
|
|
|
|
|
|
14,000
|
|
|
71,470
|
|
|
|
Omnibus Plan (RSU)
|
|
3/7/18
|
|
5/2/18
|
|
|
|
|
|
|
|
10,000
|
|
|
48,700
|
|
|
|
(1)
|
For non-equity incentive plan awards, the Award Date and the Grant Date are the date on which the Compensation Committee approved the applicable incentive plan or, if later, the date on which the Committee approved the executive’s participation in, and target opportunity under, the applicable incentive plan. For All Other Stock Awards, except with respect to Mr. Miñarro, the Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of RSUs awarded. With respect to Mr. Miñarro, the Award Date is the date on which the Compensation Committee approved the accelerated vesting of the RSUs and the Grant Date is the date on which the RSUs vested. The number of RSUs awarded to the named executives under our
2018
LTIP was determined by dividing the target dollar value of the applicable component of equity to be awarded by the average closing price of Libbey common stock over the fourth quarter of
2017
. We inform grant recipients of their awards after we determine the number of RSUs to be granted. For awards made in February
2018
, we determined the number of RSUs to be granted on the first business day after we announced our results of operations for the
2017
fiscal year. For Ms. Zibbel's awards of RSUs, we determined the number on the first business day after we announced our results of operations for the first quarter of 2018, since her first day of employment occurred during a quiet period.
|
|
|
(2)
|
Represents the range, as estimated on the award date, of possible cash awards under (a) our
2018
SMIP and (b) the performance cash component of our
2018
LTIP.
|
|
|
(a)
|
Under our SMIP, each named executive is eligible for an annual incentive award in an amount up to 200% of the executive officer’s target award, which in turn is a percentage of the executive’s anticipated full-year base salary, as set forth in the following table:
|
|
|
|
|
|
|
Target Award as a Percentage of Anticipated Full-Year Base Salary
|
Named Executive
|
|
W. Foley
|
|
100%
|
J. Burmeister
|
|
60%
|
S. Kovach
|
|
50%
|
W. Mossing
|
|
50%
|
S. Zibbel
|
|
50%
|
Under the
2018
SMIP, each named executive has an opportunity to earn a payout based 40% on company-wide adjusted cash earnings, 15% on e-commerce revenue, 10% on new product revenue and 35% on strategic objectives. The Compensation Committee has discretion to increase or decrease an executive's individual payout under the 2018 SMIP based on the executive's exceptional or unsatisfactory individual performance. The amount disclosed under the "Threshold" column represents 5% of target performance and assumes achievement of a 50% payout with respect to the new product revenue component (the least heavily weighted component of the 2018 SMIP) and 0% with respect to all other components. For additional information regarding the adjusted cash earnings, e-commerce revenue, new product revenue, and strategic objectives metrics, including the methods of measure, weighting of components, and payout scales, see
"
What pay did Libbey's executive's receive for 2018?
"
starting on page 29. Adjusted cash earnings is calculated as shown in
Appendix A
.
|
|
(b)
|
Under the performance cash component of our
2018
LTIP, each named executive is eligible for a cash award in an amount up to 200% of the named executive’s target award. Each named executive’s target award under the performance cash component is 50% of the named executive’s target award under all components of the relevant LTIP. The target awards are based on the named executives’ respective annualized base salaries as of January 1,
2018
(in the case of Ms. Zibbel, April 5, 2018). The target awards for executives whose participation begins mid-cycle are prorated accordingly. Each named executive’s target award under all components of the
2018
LTIP is set forth in the following table:
|
|
|
|
|
|
|
|
|
2018 Target Long-Term Award as a Percentage of Annualized Base Salary
|
|
2018 LTIP Performance Cash Target as a Percentage of Annualized Base Salary
|
Named Executive
|
|
|
W. Foley
|
|
300%
|
|
150%
|
J. Burmeister
|
|
100%
|
|
50%
|
S. Kovach
|
|
95%
|
|
48%
|
W. Mossing
|
|
70%
|
|
35%
|
S. Zibbel
|
|
70%
|
|
32%
|
The extent to which a payout is earned under the performance cash component of the
2018
LTIP is based on our adjusted EBITDA for each of
2018
,
2019
and
2020
. Adjusted EBITDA is calculated as shown in
Appendix A
. The scale used to determine the payout score for each of the three 1-year performance periods is reset for each performance period to correlate with targeted adjusted EBITDA for that year. The amount of the final payout, if any, will be determined based on the average of the three discrete, single-year payout scores. The scale used to determine the payout score for the
2018
calendar year is:
|
|
|
|
Percent of 2018 Targeted Adjusted EBITDA
|
|
Payout Score
|
112.5%
|
|
200%
|
0
|
|
100%
|
87.5%
|
|
50%
|
Less than 87.5%
|
|
0%
|
|
|
(3)
|
Represents grants of RSUs made under our
2018
LTIP and an award of sign-on RSUs to Ms. Zibbel. The grants under our 2018 LTIP vest 25% per year beginning April 5, 2019, for Ms. Zibbel, and beginning on February 17,
2019
, for all other executives. The 10,000 sign-on RSUs awarded to Ms. Zibbel cliff vest on April 5, 2021, the third anniversary of her date of hire. For Mr. Miñarro, represents 3,000 RSUs for which the Compensation Committee exercised discretion to accelerate vesting in connection with Mr. Miñarro's termination of employment. These RSUs were originally granted to Mr. Miñarro in 2015.
|
|
|
(4)
|
Except for Mr. Miñarro, represents the respective grant date fair values, determined in accordance with FASB ASC Topic 718, of the RSUs. For Mr. Miñarro, represents the incremental fair value of 3,000 RSUs for which the Compensation Committee exercised discretion to accelerate vesting in connection with Mr. Miñarro's termination of employment. These RSUs were originally granted to Mr. Miñarro in 2015.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
Our named executives had the following types of equity awards outstanding at the end of the
2018
fiscal year:
|
|
•
|
NQSOs granted under our 2016 Omnibus Plan and predecessor plans; and
|
|
|
•
|
RSUs granted under our 2016 Omnibus Plan and predecessor plans.
|
The following table shows, for each of the named executives, as of December 31,
2018
: (a) the number, exercise price and expiration date of NQSOs that were vested but not yet exercised and of NQSOs that were not vested; and (b) the number and market value of RSUs that were not vested.
|
|
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Named Executive
|
|
Award
Date
(1)
|
|
Grant
Date
(1)(2)
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(3)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
(4)
|
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)
(5)
|
W. Foley
|
|
1/11/16
|
|
2/25/16
|
|
63,299
|
|
|
63,299
|
|
|
17.13
|
|
|
2/25/26
|
|
29,927
|
|
|
116,117
|
|
|
|
2/13/17
|
|
3/1/17
|
|
22,138
|
|
|
66,412
|
|
|
13.60
|
|
|
3/1/27
|
|
32,834
|
|
|
127,396
|
|
|
|
2/5/18
|
|
2/28/18
|
|
|
|
|
|
|
|
|
|
159,677
|
|
|
619,547
|
|
J. Burmeister
|
|
3/16/17
|
|
5/3/17
|
|
5,297
|
|
|
15,889
|
|
|
9.38
|
|
|
5/3/27
|
|
7,008
|
|
|
27,191
|
|
|
|
2/5/18
|
|
2/28/18
|
|
|
|
|
|
|
|
|
|
24,194
|
|
|
93,873
|
|
S. Kovach
|
|
2/7/11
|
|
2/10/11
|
|
3,625
|
|
|
0
|
|
|
17.00
|
|
|
2/10/21
|
|
|
|
|
|
|
2/6/12
|
|
2/17/12
|
|
4,624
|
|
|
0
|
|
|
13.95
|
|
|
2/17/22
|
|
|
|
|
|
|
2/11/13
|
|
2/22/13
|
|
6,902
|
|
|
0
|
|
|
19.02
|
|
|
2/22/23
|
|
|
|
|
|
|
2/17/14
|
|
2/24/14
|
|
6,413
|
|
|
0
|
|
|
23.02
|
|
|
2/24/24
|
|
|
|
|
|
|
2/16/15
|
|
3/2/15
|
|
3,514
|
|
|
1,171
|
|
|
38.06
|
|
|
3/2/25
|
|
867
|
|
|
3,364
|
|
|
|
2/8/16
|
|
2/25/16
|
|
8,177
|
|
|
8,176
|
|
|
17.13
|
|
|
2/25/26
|
|
3,865
|
|
|
14,996
|
|
|
|
2/13/17
|
|
3/1/17
|
|
2,917
|
|
|
8,749
|
|
|
13.60
|
|
|
3/1/27
|
|
4,326
|
|
|
16,785
|
|
|
|
2/5/18
|
|
2/28/18
|
|
|
|
|
|
|
|
|
|
21,669
|
|
|
84,076
|
|
S. Miñarro
|
|
2/8/10
|
|
2/11/10
|
|
6,000
|
|
|
0
|
|
|
10.13
|
|
|
2/11/20
|
|
|
|
|
W. Mossing
|
|
11/5/17
|
|
12/1/17
|
|
7,531
|
|
|
22,592
|
|
|
6.75
|
|
|
12/1/27
|
|
6,682
|
|
|
25,926
|
|
|
|
11/5/17
|
|
12/1/17
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
54,320
|
|
|
|
2/5/18
|
|
2/28/18
|
|
|
|
|
|
|
|
|
|
13,548
|
|
|
52,566
|
|
S. Zibbel
|
|
3/7/18
|
|
5/2/18
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
54,320
|
|
|
|
3/7/18
|
|
5/2/18
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
38,800
|
|
|
|
(1)
|
The Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of NQSOs or RSUs, as the case may be, awarded.
|
|
|
(3)
|
Represents NQSOs awarded under our Omnibus Plans. NQSOs granted before 2015 vest 25% on each of the first four anniversaries of the grant date. NQSOs granted to Mr. Burmeister in May 2017 vest 25% on each of the first four anniversaries of March 30, 2017, his first day of employment. NQSOs granted to Ms. Mossing vest 25% on each of the first four anniversaries of December 1, 2017, his first day of employment. All other NQSOs vest 25% per year for four years beginning on February 17th of the year after the grant.
|
|
|
(4)
|
Represents RSUs awarded under our Omnibus Plans. One share of our common stock underlies each RSU. RSUs granted in February 2016, March 2017, and February
2018
vest 25% per year for four years beginning on February 17th of the year after the grant. The 14,000 sign-on RSUs granted to Mr. Mossing on December 1, 2017 cliff vest on December 1, 2020, the third anniversary of his start date. The 10,000 sign-on RSUs granted to Ms. Zibbel on May 2, 2018 cliff vest on April 5, 2021, the third anniversary of her start date, while the remaining 14,000 RSUs granted to Ms. Zibbel in 2018 vest ratably over four years starting on April 5, 2019. All other RSUs vest 25% on each of the first four anniversaries of the grant date.
|
|
|
(5)
|
Represents the market value, as of December 31,
2018
, of unvested RSUs. We have estimated the market value by multiplying the number of shares of common stock underlying the RSUs by $3.88, the closing price of our common stock on the last trading day of
2018
.
|
OPTION EXERCISES AND STOCK VESTED FOR FISCAL 2018 TABLE
The following table sets forth information concerning the exercise of stock options by the named executives in
2018
and the value of RSUs that vested in
2018
.
|
|
Option Exercises and Stock Vested in Fiscal 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Named Executive
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
Value Realized
on Exercise
($)
(1)
|
|
Number of Shares
Acquired on Vesting
($)
(2)
|
|
Value Realized
on Vesting
($)
(3)
|
W. Foley
|
|
0
|
|
|
0
|
|
|
25,909
|
|
|
157,268
|
|
J. Burmeister
|
|
0
|
|
|
0
|
|
|
2,336
|
|
|
11,423
|
|
S. Kovach
|
|
0
|
|
|
0
|
|
|
5,651
|
|
|
34,317
|
|
S. Miñarro
|
|
3,500
|
|
|
24,612
|
|
|
13,055
|
|
|
96,364
|
|
W. Mossing
|
|
0
|
|
|
0
|
|
|
2,228
|
|
|
13,390
|
|
S. Zibbel
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
(1)
|
Represents the sum of the differences between the market prices and the exercise prices for the respective awards of NQSOs exercised by the named executives during
2018
.
|
|
|
(2)
|
Represents the number of RSUs that vested during
2018
.
|
|
|
(3)
|
Represents the value of RSUs that vested during
2018
. The value was determined by multiplying the number of shares by the closing price of our common stock on the applicable vesting dates:
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting Date
|
|
Closing Price
($)
|
|
|
January 15, 2018
|
|
7.71
|
|
|
February 17, 2018
|
|
6.07
|
|
|
February 24, 2018
|
|
6.08
|
|
|
February 26, 2018
|
|
6.13
|
|
|
March 30, 2018
|
|
4.89
|
|
|
December 1, 2018
|
|
6.01
|
|
|
|
|
|
|
PENSION BENEFITS IN FISCAL 2018 TABLE
Executives hired before January 1, 2006, are eligible for benefits under our Salary Plan and our SERP. Of our named executives, only Ms. Kovach is eligible for benefits under the Salary Plan and SERP. None of our other named executives is eligible for a pension benefit under our Salary Plan or SERP because each joined Libbey after December 31, 2005.
The Salary Plan is a qualified plan, and the SERP is an excess, non-qualified plan designed to provide substantially identical retirement benefits as the Salary Plan to the extent that the Salary Plan cannot provide those benefits due to limitations in the Internal Revenue Code. Benefits under the Salary Plan and SERP are determined by annual contribution credits equal to a percentage of annual earnings plus interest. Ms. Kovach is eligible for a pension benefit under the Salary Plan and SERP under the cash balance formula, which is based upon the value of a notional account that had an opening balance determined in accordance with the final average pay formula described below as of January 1, 1998. Under the cash balance formula, the account balance is increased each year with a contribution amount based on the sum of age and years of service with Libbey and with interest based upon the 30-year Treasury rate.
The final average pay formula is:
|
|
[(A) × (B) × (C)] + [(D) × (E) × (C)] + [(F) + (A) + (G)]
|
Where:
|
|
(A)
|
Monthly final average earnings for the three highest consecutive calendar years before 2008
|
|
|
(C)
|
Years of credited service up to 35 years
|
|
|
(D)
|
Monthly final average earnings above Social Security Wage base at retirement
|
|
|
(G)
|
Years of credited service over 35 years
|
Only base salary and amounts earned under the SMIP are included in calculating final average earnings.
The retirement benefit may be adjusted if the employee has more or less than 35 years of credited service or retired before age 65. The Salary Plan and the SERP provide for additional benefit accruals beyond age 65 and for annual annuity benefits as well as an optional lump sum form of benefit.
The following table sets forth information concerning the benefits provided to Ms. Kovach under the Salary Plan and the SERP as of December 31,
2018
, the date that we use for pension plan measurement for financial statement reporting purposes.
|
|
Pension Benefits in Fiscal 2018 Table
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
|
Plan Name
|
|
Number of Years of
Credited Service
(#)
(1)
|
|
Present Value of
Accumulated Benefit
($)
(2)
|
|
Payments During
Last Fiscal Year
($)
|
S. Kovach
|
|
Salary Plan
|
|
15.08
|
|
172,141
|
|
0
|
|
|
SERP
|
|
15.08
|
|
136,694
|
|
0
|
|
|
(1)
|
Represents actual years of service to Libbey. The plans were frozen at the end of 2012, after which additional pension service is not credited.
|
|
|
(2)
|
Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31,
2018
, except that Ms. Kovach is assumed to receive benefits under the cash balance design at her normal retirement age of 65.
|
NONQUALIFIED DEFERRED COMPENSATION TABLE
The following table sets forth information with respect to our EDCP. The EDCP was the only nonqualified deferred compensation plan under which employees could defer pay earned in
2018
:
|
|
Nonqualified Deferred Compensation in Fiscal 2018 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Contributions
in Last FY
|
|
Registrant
Contributions
in Last FY
|
|
Aggregate
Earnings
in Last FY
|
|
Aggregate Withdrawals /Distributions
in Last FY
|
|
Aggregate
Balance
at Last FYE
(3)
|
Named Executive
|
|
($)
|
|
RSUs
|
|
($)
(1)
|
|
RSUs
|
|
($)
(2)
|
|
RSUs
|
|
($)
|
|
RSUs
|
|
($)
|
|
RSUs
|
W. Foley
|
|
33,000
|
|
0
|
|
33,000
|
|
0
|
|
2,051
|
|
|
0
|
|
0
|
|
0
|
|
189,686
|
|
0
|
J. Burmeister
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
S. Kovach
|
|
4,552
|
|
0
|
|
4,552
|
|
0
|
|
(5,402
|
)
|
|
286
|
|
0
|
|
0
|
|
77,624
|
|
17,720
|
S. Miñarro
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
W. Mossing
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
S. Zibbel
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
(1)
|
The following amounts are reported as “All Other Compensation” in the Summary Compensation Table: Mr. Foley - $33,000; Ms. Kovach - $4,552.
|
|
|
(2)
|
Not included in the Summary Compensation Table because earnings are not at an above-market rate.
|
|
|
(3)
|
Of the total amounts in this column, the following amounts are reported as “Salary” or “Stock Awards” in the Summary Compensation Table in this proxy statement for the
2018
,
2017
and/or
2016
fiscal years:
|
|
|
|
|
|
|
Named Executive
|
|
Salary
($)
|
|
Stock Awards
($)
|
W. Foley
|
|
93,638
|
|
0
|
S. Kovach
|
|
12,202
|
|
0
|
Under the EDCP, our named executives and other members of senior management may defer base pay, cash incentive and bonus compensation and RSUs into an account that is deemed invested in one of 13 measurement funds, including a Libbey common stock measurement fund. RSUs in all events are deemed invested in the Libbey common stock measurement fund. We selected these funds to provide measurement options similar to the investment options provided under our 401(k) plan. Participants make deferral elections with respect to cash pay and RSUs before the year in which they are earned or they vest.
Participants can defer (a) up to 60% of the amount by which base salary exceeds required payroll obligations and 401(k) plan contributions; (b) up to 60% of the amount by which cash incentive or bonus compensation exceeds required payroll obligations; and (c) up to 100% of RSUs that are earned or vest during the year to which the deferral relates. We provide matching contributions on excess contributions of base salary in the same manner as we provide matching contributions under our 401(k) plan. The matching contributions are deemed invested in accordance with the participant’s election as to his or her own contributions.
The balance credited to a participant’s account, including the matching contributions that we make, is 100% vested at all times. However, the EDCP is not funded and, as a result, EDCP account balances are subject to the claims of our creditors.
We must pay the account balance in a lump sum on, or in installments beginning on, the distribution date elected by the participant. However, if a participant dies before his or her account balance is distributed in full, we must distribute the account balance in a lump sum to the participant’s beneficiaries within 60 days after the participant’s death. If a participant ceases to be a Libbey employee before his or her 62
nd
birthday, we must pay the participant his or her account balance in a lump sum within 60 days after his or her separation from service, unless the participant is a “specified employee” for purposes of Internal Revenue Code Section 409A. In that event, we must pay the participant his or her account balance on the first day of the seventh month after his or her separation from service. If a participant ceases to be a Libbey employee on or after his or her 62nd birthday, we must distribute the account balance either in a lump sum or in installments, as elected by the participant, on or beginning on the distribution date elected by the participant. In that event, the distribution date cannot be later than the January 1st immediately following the participant’s 75th birthday. If, however, the executive is a “specified employee” for purposes of Internal Revenue Code Section 409A, we cannot distribute the account balance, or begin distributing the account balance, to the participant before the first day of the seventh month after the participant’s separation from service. Finally, if a change in control, as defined in the EDCP, occurs, a participant’s entire account balance will be distributed to him or her within 30 days after the change in control.
EDCP hardship distributions are permitted, but there are no loan provisions. All EDCP distributions are fully taxable. Rollovers to defer taxes are not permitted.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The terms of our RSU and NQSO award agreements provide for acceleration of unvested awards in the event of termination of employment under certain circumstances. Additionally, the terms of award agreements relating to the performance cash components of our
2016
LTIP (for the
2016
-
2018
performance cycle),
2017
LTIP (for the
2017
-
2019
performance cycle) and
2018
LTIP (for the
2018
-
2020
performance cycle) provide for payouts in the event of termination of employment under certain circumstances.
Mr. Miñarro’s employment ended effective January 15, 2018. His termination was without Cause under the Executive Severance Compensation Policy, and he received severance benefits and payments pursuant to the terms of the Executive Severance Compensation Policy and the agreements pursuant to which awards of RSUs, NQSOs and performance cash awards were made, with the following exception: The Committee elected to accelerate the vesting of 3,000 unvested RSUs that were awarded to Mr. Miñarro in 2015 to replace the value of certain pension and social security benefits that Mr. Miñarro forfeited when he was promoted to Vice President, General Manager, U.S. and Canada, from his previous position with Libbey's Mexican subsidiary. Had the Committee not exercised its discretion to accelerate vesting, the 3,000 RSUs would have been forfeited upon Mr. Miñarro's termination. The amounts reflected in the table on the following page are the amounts actually payable to Mr. Miñarro in connection with his termination of employment.
With respect to all other named executives, the table provides information with respect to the amounts payable to each of them based upon the following significant assumptions:
|
|
•
|
We have assumed that the executive’s employment terminated on December 31,
2018
, under the various scenarios described in the table.
|
|
|
•
|
For purposes of illustrating the amounts payable on or in connection with a change in control, we have assumed that a change in control occurred on December 31,
2018
, and that the named executive’s employment terminated concurrently with the change in control.
|
Ms. Kovach is the only named executive eligible for benefits under our Salary Plan and SERP. As of December 31,
2018
, Ms. Kovach was at least age 55 and had at least five years of service with Libbey. As a result, Ms. Kovach would have been eligible to receive a retirement benefit under our Salary Plan and SERP if she had retired on or before December 31,
2018
. If any of our non-CEO named executives had retired on or before December 31,
2018
, all unvested equity awards would have been forfeited.
|
|
Potential Payments Upon Termination of Employment
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
|
Event
|
|
Cash
Severance
($)
|
|
Annual
Incentive for
Year of
Termination
($)
|
|
LTIP Cash
($)
(2)
|
|
Acceleration of
Unvested
Equity Awards
($)
(3)
|
|
Misc.
Benefits ($)
|
|
Total
($)
|
W. Foley
|
|
Death or permanent disability
(4)
|
|
0
|
|
819,775
|
|
|
2,227,124
|
|
863,059
|
|
0
|
|
3,909,958
|
|
|
Voluntary resignation
(5)
|
|
0
|
|
819,775
|
|
|
744,779
|
|
116,117
|
|
0
|
|
1,680,671
|
|
|
Termination without Cause - no change in control
(6)
|
|
0
|
|
819,775
|
|
|
744,779
|
|
313,473
|
|
0
|
|
1,878,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause - change in control
(7)
|
|
0
|
|
819,775
|
|
|
1,432,530
|
|
863,059
|
|
0
|
|
3,115,364
|
|
|
Termination for Cause
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
J. Burmeister
|
|
Death or permanent disability
(4)
|
|
0
|
|
230,282
|
|
|
260,275
|
|
121,064
|
|
0
|
|
611,621
|
|
|
Quit for Good Reason - no change in control
(8)
|
|
0
|
|
0
|
|
|
95,589
|
|
0
|
|
0
|
|
95,589
|
|
|
Termination without Cause - no change in control
(9)
|
|
624,000
|
|
230,282
|
|
|
95,589
|
|
32,534
|
|
86,557
|
|
1,068,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quit for Good Reason or termination without Cause - change in control
(10)
|
|
1,248,000
|
|
230,282
|
|
|
199,793
|
|
121,064
|
|
88,751
|
|
1,887,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination for Cause
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
S. Kovach
|
|
Death or permanent disability
(4)
|
|
0
|
|
179,607
|
|
|
292,501
|
|
119,221
|
|
0
|
|
591,329
|
|
|
Retirement
(11)
|
|
0
|
|
179,607
|
|
|
0
|
|
0
|
|
308,835
|
|
488,442
|
|
|
Quit for Good Reason - no change in control
(8)
|
|
0
|
|
0
|
|
|
98,709
|
|
0
|
|
0
|
|
98,709
|
|
|
Termination without Cause - no change in control
(9)
|
|
546,231
|
|
179,607
|
|
|
98,709
|
|
37,481
|
|
88,220
|
|
950,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quit for Good Reason or Termination without Cause - change in control
(10)
|
|
1,092,462
|
|
179,607
|
|
|
191,497
|
|
119,221
|
|
87,370
|
|
1,670,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination for Cause
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
S. Miñarro
|
|
Termination without Cause — no change in control
(12)
|
|
579,835
|
|
0
|
|
|
22,541
|
|
190,342
|
|
93,219
|
|
885,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W. Mossing
|
|
Death or permanent disability
(4)
|
|
0
|
|
135,500
|
|
|
103,270
|
|
132,812
|
|
0
|
|
371,582
|
|
|
Quit for Good Reason – no change in control
(8)
|
|
0
|
|
0
|
|
|
41,956
|
|
0
|
|
0
|
|
41,956
|
|
|
Termination without Cause — no change in control
(13)
|
|
225,000
|
|
135,500
|
|
|
41,956
|
|
21,786
|
|
84,248
|
|
508,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quit for Good Reason or termination without Cause - change in control
(10)
|
|
900,000
|
|
135,500
|
|
|
100,298
|
|
132,812
|
|
85,659
|
|
1,354,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination for Cause
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
S. Zibbel
|
|
Death or permanent disability
(4)
|
|
0
|
|
103,263
|
|
|
75,950
|
|
93,120
|
|
0
|
|
272,333
|
|
|
Quit for Good Reason - no change in control
(8)
|
|
0
|
|
0
|
|
|
31,400
|
|
0
|
|
0
|
|
31,400
|
|
|
Termination without Cause - no change in control
(14)
|
|
155,001
|
|
103,263
|
|
|
31,400
|
|
13,580
|
|
46,148
|
|
349,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quit for Good Reason or termination without Cause - change in control
(10)
|
|
930,006
|
|
103,263
|
|
|
91,677
|
|
93,120
|
|
85,359
|
|
1,303,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination for Cause
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
(1)
|
Represents potential payments pursuant to equity award agreements, performance cash award agreements and (a) in the case of the executives other than Mr. Foley, Mr. Mossing and Ms. Zibbel, our Executive Severance Compensation Policy or their respective change in control agreements, as applicable, (b) in the case of Mr. Foley, his Letter Agreement, and (c) in the case of Mr. Mossing and Ms. Zibbel, their respective employment offer letters or change in control agreements, as applicable. Only Ms. Kovach was eligible for retirement benefits as of December 31,
2018
.
|
|
|
(2)
|
As to those triggering events for which we estimated future payouts under the performance cash component of our
2017
LTIP and
2018
LTIP, we estimated the payout under the performance cash component of our
2017
LTIP assuming achievement at 33% of target performance, and we estimated the payout under the performance cash component of our
2018
LTIP assuming achievement of 67% of target performance. The amounts actually earned under the performance cash component of our
2017
LTIP and
2018
LTIP would be paid between January 1 and March 15 of the calendar year following the conclusion of the applicable performance cycle.
|
|
|
(3)
|
For those triggering events that result in acceleration of unvested equity awards: (a) except as to RSUs granted to Mr. Miñarro, we have estimated the value of common stock underlying RSUs by multiplying the applicable number of RSUs by $3.88, the closing price of our common stock on December 31,
2018
; and (b) except as to RSUs granted to Mr. Miñarro, we have determined the in-the-money/intrinsic value of the applicable NQSOs by deducting the respective exercise prices for the NQSOs from $3.88 and multiplying the result (if greater than zero) by the applicable number of NQSOs. As to Mr. Miñarro, the values for the RSUs and NQSOs were calculated based on the closing price of our common stock on January 12, 2018, which was $7.71.
|
|
|
(4)
|
Represents the sum of:
|
|
|
(a)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our
2018
SMIP;
|
|
|
(b)
|
under “LTIP Cash,” a target award (unprorated because the performance cycle was complete as of December 31,
2018
) under the performance cash component of our
2016
LTIP and prorated target awards under the performance cash component of our
2017
LTIP and our
2018
LTIP; and
|
|
|
(c)
|
under “Acceleration of Unvested Equity Awards,” the sum of (i) the estimated value, as of December 31,
2018
, of common stock underlying all RSUs that were unvested as of December 31,
2018
, and (ii) the in-the-money/intrinsic value, as of December 31,
2018
, of all NQSOs that were unvested as of December 31,
2018
.
|
|
|
(5)
|
Represents the sum of:
|
|
|
(a)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our
2018
SMIP;
|
|
|
(b)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our
2016
LTIP and an estimate of the prorated amount that actually would be earned under the performance cash component of each of our
2017
LTIP and
2018
LTIP [estimated as described in footnote (2) above]; and
|
|
|
(c)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of December 31,
2018
, of common stock underlying RSUs granted in 2016 that were unvested as of December 31,
2018
; and (ii) the in-the-money/intrinsic value, as of December 31,
2018
, of NQSOs granted in 2016 that were unvested as of December 31,
2018
.
|
|
|
(6)
|
Represents the sum of:
|
|
|
(a)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our 2018 SMIP;
|
|
|
(b)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our
2016
LTIP and an estimate of the prorated amount that actually would be earned under the performance cash component of each of our
2017
LTIP and
2018
LTIP [estimated as described in footnote (2) above]; and
|
|
|
(c)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of December 31,
2018
, of common stock underlying RSUs granted in 2017 or
2018
that were unvested as of December 31,
2018
, but were scheduled to vest by December 31,
2019
; (ii) the in-the-money/ intrinsic value, as of December 31,
2018
, of NQSOs granted in 2017 that were unvested as of December 31,
2018
, but were scheduled to vest by December 31,
2019
; (iii) the estimated value, as of December 31,
2018
, of common stock underlying RSUs granted in 2016 that were unvested as of December 31,
2018
; and (iv) the in-the-money/intrinsic value, as of December 31,
2018
, of NQSOs granted in 2016 that were unvested as of December 31,
2018
.
|
|
|
(7)
|
Represents the sum of:
|
|
|
(1)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our
2018
SMIP; and
|
|
|
(2)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our
2016
LTIP and an estimate of the unprorated amount that actually would be earned under the performance cash component of each of our
2017
LTIP and
2018
LTIP [estimated as described in footnote (2) above]; and
|
|
|
(3)
|
under “Acceleration of Unvested Equity Awards,” the sum of (i) the estimated value, as of December 31,
2018
, of common stock underlying all RSUs that were unvested as of December 31,
2018
, and (ii) the in-the-money/intrinsic value, as of December 31,
2018
, of all NQSOs that were unvested as of December 31,
2018
.
|
|
|
(8)
|
Under “LTIP Cash,” represents prorated actual awards under the performance cash component of our
2016
LTIP,
2017
LTIP and
2018
LTIP [estimated as described in footnote (2) above]. We have prorated the amounts through the assumed date of termination.
|
(9) Represents the sum of:
|
|
(a)
|
under “Cash Severance,” the sum of 12 months' base salary and the named executive's target award under our
2018
SMIP, at the annual base salary and target incentive opportunity in effect on the date of termination;
|
|
|
(b)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our
2018
SMIP;
|
|
|
(c)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our
2016
LTIP and prorated actual awards under the performance cash component of each of our
2017
LTIP and our
2018
LTIP [estimated as described in footnote (2) above];
|
|
|
(d)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of December 31,
2018
, of common stock underlying RSUs that were unvested as of December 31,
2018
, but were scheduled to vest by December 31,
2019
,; (ii) the in-the-money/ intrinsic value, as of December 31,
2018
, of NQSOs that were unvested as of December 31,
2018
, but were scheduled to vest by December 31,
2019
; and
|
|
|
(e)
|
under “Misc. Benefits,” the sum of (i) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, and prescription drug coverage for 12 months following termination; and (iii) executive outplacement services for a period of one year from termination at the rate of $75,000 per year.
|
|
|
(9)
|
Represents the sum of:
|
|
|
(a)
|
under “Cash Severance,” the sum of 6 months' base salary and 50% of Mr. Burmeister's target award under our 2017 SMIP, at the annual base salary and target incentive opportunity in effect on the date of termination;
|
|
|
(b)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our 2017 SMIP;
|
|
|
(c)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our 2015 LTIP and prorated actual awards under the performance cash component of each of our 2016 LTIP and our 2017 LTIP [estimated as described in footnote (2) above];
|
|
|
(d)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of December 31, 2017, of common stock underlying RSUs that were unvested as of December 31, 2017, but were scheduled to vest by December 31, 2018,; (ii) the in-the-money/intrinsic value, as of December 31, 2017, of NQSOs that were unvested as of December 31, 2017, but were scheduled to vest by December 31, 2018; and
|
|
|
(e)
|
under “Misc. Benefits,” the sum of (i) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, and prescription drug coverage for six months following termination; and (iii) executive outplacement services for a period of one year from termination at the rate of $75,000 per year.
|
|
|
(10)
|
Represents the sum of:
|
|
|
(a)
|
under “Cash Severance,” the sum of two times the named executive’s annual base salary and two times the named executive’s target award under our
2018
SMIP, at the annual base salary and target incentive opportunity in effect on the date of termination;
|
|
|
(b)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our
2018
SMIP;
|
|
|
(c)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our
2016
LTIP and an estimate (without proration) of the amount the named executive would earn under the performance cash component of each of our
2017
LTIP and our
2018
LTIP [estimated as described in footnote (2) above];
|
|
|
(d)
|
under “Acceleration of Unvested Equity Awards,” the estimated value, as of December 31,
2018
, of common stock underlying RSUs not yet vested as of that date and the in-the-money/intrinsic value, as of December 31,
2018
, of NQSOs not yet vested as of that date; and
|
|
|
(e)
|
under “Misc. Benefits,” the sum of (i) the maximum cost (15% of base salary) to be incurred by Libbey to provide executive level outplacement services for two years after termination; (ii) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for 18 months following termination; and (iii) the maximum cost ($10,000) to provide financial planning services to the named executive.
|
|
|
(11)
|
Represents the sum of:
|
|
|
(a)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our
2018
SMIP; and
|
|
|
(b)
|
under “Misc. Benefits,” the present value of Ms. Kovach’s accumulated benefit under our Salary Plan and SERP at December 31,
2018
.
|
In addition, if the Compensation Committee were to exercise discretion to accelerate unvested RSUs and NQSOs that were scheduled to vest by December 31,
2019
, we estimate that the value, as of December 31,
2018
, of the accelerated RSUs would be $111,331, and that the in-the-money/intrinsic value, as of December 31,
2018
, of the accelerated NQSOs would be $10,286. We estimated these values in the manner described in footnote (3) above.
|
|
(12)
|
Represents the sum of:
|
|
|
(a)
|
under “Cash Severance,” salary continuation for 12 months and a lump sum payment;
|
|
|
(b)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our 2016 LTIP and prorated actual awards under the performance cash component of our 2017 LTIP [estimated as described in footnote (2) above];
|
|
|
(c)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of January 15, 2018, of common stock underlying RSUs that were unvested as of January 15, 2018, but were scheduled to vest by January 15, 2019; (ii) the estimated value, as of January 15, 2018, of common stock underlying 3,000 RSUs that were unvested as of January 15, 2018, but for which the Committee exercised discretion to accelerate vesting; and (iii) the in-the-money/intrinsic value, as of January 15, 2018, of NQSOs that were unvested as of January 15, 2018, but were scheduled to vest by January 15, 2019; and
|
|
|
(d)
|
under “Misc. Benefits,” the sum of (i) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, and prescription drug coverage for 12 months following termination; and (iii) executive outplacement services for a period of one year from termination at the rate of $75,000 per year.
|
|
|
(13)
|
Represents the sum of:
|
|
|
(a)
|
under “Cash Severance,” the sum of 6 months' base salary and 50% of Mr. Mossing's target award under our 2018 SMIP, at the annual base salary and target incentive opportunity in effect on the date of termination;
|
|
|
(b)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our 2018 SMIP;
|
|
|
(c)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our 2016 LTIP and prorated actual awards under the performance cash component of each of our 2017 LTIP and our 2018 LTIP [estimated as described in footnote (2) above];
|
|
|
(d)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of December 31, 2018, of common stock underlying RSUs that were unvested as of December 31, 2018, but were scheduled to vest by December 31, 2019,; (ii) the in-the-money/intrinsic value, as of December 31, 2018, of NQSOs that were unvested as of December 31, 2018, but were scheduled to vest by December 31, 2019; and
|
|
|
(e)
|
under “Misc. Benefits,” the sum of (i) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, and prescription drug coverage for six months following termination; and (iii) and executive outplacement services for a period of one year from termination at the rate of $75,000 per year.
|
|
|
(14)
|
Represents the sum of:
|
|
|
(a)
|
under “Cash Severance,” 6 months' base salary;
|
|
|
(b)
|
under “Annual Incentive for Year of Termination,” the amount actually earned under our 2018 SMIP;
|
|
|
(c)
|
under “LTIP Cash,” the sum of the amount actually earned under the performance cash component of our 2016 LTIP and prorated actual awards under the performance cash component of each of our 2017 LTIP and our 2018 LTIP [estimated as described in footnote (2) above];
|
|
|
(d)
|
under "Acceleration of Unvested Equity Awards," the sum of: (i) the estimated value, as of December 31, 2018, of common stock underlying RSUs that were unvested as of December 31, 2018, but were scheduled to vest by December 31, 2019; and
|
|
|
(e)
|
under “Misc. Benefits,” the sum of (i) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, and prescription drug coverage for six months following termination; and (iii) and executive outplacement services for a period of six months from termination at the rate of $75,000 per year.
|
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Foley, our Chairman and Chief Executive Officer. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
For
2018
:
|
|
•
|
The median of the annual total compensation of all employees of our company worldwide (other than our CEO), was
$13,616
; and
|
|
|
•
|
The annual total compensation of our CEO, as reported in the Summary Compensation Table in this Proxy Statement, was
$2,778,142
.
|
|
|
|
|
|
|
Based on this information for 2018, the ratio of the annual total compensation of Mr. Foley, our CEO, to the median of the annual total compensation of all employees was:
|
204
|
|
:
|
1
|
To calculate the ratio above, we used the same median employee that we had identified as of October 1, 2017. We believe there have been no changes in our employee population or our compensation arrangements in 2018 that would result in a material change in our pay ratio disclosure or our median employee.
To determine the annual total compensation of our median employee and our CEO, the methodology and the material assumptions, adjustments, and estimates that we used were as follows:
|
|
•
|
The “median employee” is a full-time, hourly employee located in Mexico. For purposes of translating to U.S. dollars the compensation elements paid in Mexican pesos, we used a year-end average rate comprised of the average month-end rate for the 12 calendar months.
|
|
|
•
|
With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of the employee’s compensation for
2018
in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
|
|
|
•
|
With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our
2018
Summary Compensation Table
included in this Proxy Statement.
|
For additional information regarding the methodology, material assumptions, adjustments and estimates that we used to identify the "median employee," as well as to determine the annual total compensation of our median employee and our CEO, see our proxy statement filed March 29, 2018.
The Securities and Exchange Commission rules for identifying the median compensated employee and calculating the pay ratio based on that employee's annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Stock Ownership Information
STOCK OWNERSHIP INFORMATION
WHO ARE THE LARGEST OWNERS OF LIBBEY STOCK?
The following table shows information, as of
March 20, 2019
unless otherwise indicated, with respect to the persons we know to be beneficial owners of 5% or more of our common stock. Except as otherwise indicated by footnote, the percentage ownership indicated is based on
22,273,568
outstanding shares of Libbey Inc. common stock as of
March 20, 2019
.
|
|
|
|
|
|
|
Name and Address of Beneficial Owner
|
|
Amount and Nature of Beneficial Ownership
|
|
Percent of Class
|
Brigade Capital Management, LP
(1)
399 Park Avenue, 16th Floor
New York, NY 10022
|
|
2,410,000
|
|
10.8
|
%
|
Russell Investments Group, Ltd.
(2)
1301 Second Avenue
Suite 1800
Seattle, WA 98101
|
|
2,276,045
|
|
10.2
|
%
|
Frontier Capital Management Co., LLC.
(3)
99 Summer Street
Boston, MA 02110
|
|
2,025,898
|
|
9.1
|
%
|
Royce & Associates, LP
(4)
745 Fifth Avenue
New York, NY 10151
|
|
1,648,249
|
|
7.4
|
%
|
Dimensional Fund Advisors LP
(5)
Building One
6300 Bee Cave Road
Austin, TX 78746
|
|
1,419,412
|
|
6.4
|
%
|
Boston Partners
(6)
One Beacon Street
Boston, MA 02108
|
|
1,238,392
|
|
5.6
|
%
|
|
|
(1)
|
Based solely on Amendment No. 1 to Schedule 13G filed with the SEC on December 17, 2018, as of December 12, 2018, Brigade Capital Management, LP, Brigade Capital Management GP, LLC, and Donald E. Morgan, III, have shared voting power and shared dispositive power over 2,410,000 shares and Brigade Leveraged Capital Structures Fund Ltd. has shared voting power and shared dispositive power over 2,290,000 shares.
|
|
|
(2)
|
Based solely on Amendment No. 1 Schedule 13G filed with the SEC on March 15, 2019, as of February 28, 2019, Russell Investments Group, Ltd., a parent holding company, was the beneficial owner of 2,276,045 common shares, with sole dispositive power as to no such shares, shared dispositive power as to all such shares, sole voting power with respect to all common shares, and shared voting power with respect to no common shares.
|
|
|
(3)
|
Based solely on Amendment No. 2 to Schedule 13G filed with the SEC on February 11, 2019, as of December 31, 2018, Frontier Capital Management Co., LLC., an investment adviser, was the beneficial owner of 2,025,898 common shares, with sole dispositive power as to all such shares, shared dispositive power as to no such shares, sole voting power with respect to 901,851 common shares, and shared voting power with respect to no common shares.
|
|
|
(4)
|
Based solely on Amendment No. 1 to Schedule 13G filed with the SEC on January 15, 2019, as of December 31, 2018, Royce & Associates, LP, an investment adviser, was the beneficial owner of 1,648,249 common shares, with sole dispositive power as to all such shares, shared dispositive power as to no such shares, sole voting power with respect to all common shares, and shared voting power with respect to no common shares.
|
|
|
(5)
|
Based solely on Amendment No. 4 to Schedule 13G filed with the SEC on February 8, 2019, as of December 31, 2018, Dimensional Fund Advisors LP, an investment adviser, was the beneficial owner of 1,419,412 common shares, with sole dispositive power as to all such shares, shared dispositive power as to no such shares, sole voting power with respect to 1,342,641 common shares, and shared voting power with respect to no common shares.
|
|
|
(6)
|
Based solely on Amendment No. 5 to Schedule 13G filed with the SEC on February 12, 2019, as of December 31, 2018, Boston Partners, an investment adviser, was the beneficial owner of 1,238,392 common shares, with sole dispositive power as to all such shares, shared dispositive power as to no such shares, sole voting power with respect to 272,710 common shares, and shared voting power with respect to no common shares.
|
Stock Ownership Information
HOW MUCH LIBBEY STOCK DO OUR DIRECTORS AND OFFICERS OWN?
STOCK OWNERSHIP/RETENTION GUIDELINES
Non-Management Director Stock Ownership and Retention Guidelines
We have stock ownership and retention guidelines for our non-management directors. Under the guidelines:
|
|
•
|
Each non-management director who joined the Board on or before August 1, 2017, must acquire, within five years from the date he or she was first elected to the Board, the number of shares of Libbey common stock determined by dividing $237,500 by the average closing price of Libbey common stock over the one-year period ending July 25, 2017.
|
|
|
•
|
Each non-management director who joined the Board after August 1, 2017, must acquire, within five years from the date on which he or she is first elected to the Board, the number of shares of Libbey common stock equal in value to at least five times the annual cash retainer for non-management directors in effect on the date the director is first elected to the Board. For purposes of determining the number of shares of Libbey common stock to be acquired, the cash equivalent value will be divided by the average closing price of Libbey common stock over the one-year period ending on the date of the director's election to the Board.
|
|
|
•
|
Until the director acquires the guideline number of shares, he or she must hold 100% of the net after-tax shares of Libbey common stock issued to him or her on the date of each annual shareholders meeting and all other Libbey shares that he or she owns or otherwise acquires.
|
|
|
•
|
Once the director has achieved the guideline number of shares, he or she may dispose of Libbey common stock subject, provided that: (a) until retirement, the director must continuously hold at least the guideline number of shares; and (b) shares of Libbey common stock purchased by the director and net after-tax shares issued to the director on the date of each annual shareholders meeting must be held by the director for at least one year from the date on which the director acquired them.
|
As of
March 20, 2019
, all of our existing non-management directors are in compliance with the Director Retention Guidelines.
Executive Stock Retention Guidelines
We have stock retention guidelines for our executives. Under the guidelines, each executive is generally required to retain, until his or her separation from service:
|
|
•
|
50% of the net after-tax shares underlying each grant of RSUs made after January 1, 2013, that subsequently vests; and
|
|
|
•
|
50% of the net after-tax shares underlying NQSOs granted after January 1, 2013, that the executive subsequently exercises.
|
Executives nearing retirement are released from our guidelines on the date the Board is notified of the planned retirement, or one year before the contemplated retirement date, whichever is later.
As of
March 20, 2019
, all applicable named executives were in compliance with the Executive Retention Guidelines.
Stock Ownership Information
BENEFICIAL OWNERSHIP TABLE
The following table shows, as of
March 20, 2019
, the number of shares of our common stock and percentage of all issued and outstanding shares of our common stock that are beneficially owned by our directors, the named executives and our directors and executive officers as a group. With respect to those named executives who were no longer employed by the Company as of
March 20, 2019
, the information included in this table is accurate to the best of our knowledge. Our address, as set forth on the Notice of Annual Meeting of Shareholders, is the address of each director and named executive set forth below. The shares owned by the named executives set forth below include the shares held in their accounts in our 401(k) plan. An asterisk indicates ownership of less than one percent of the outstanding stock.
|
|
|
|
|
|
|
Name of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership
|
|
Percent of Class
|
|
James C. Burmeister
(1)(2)
|
|
24,133
|
|
*
|
|
Carlos V. Duno
(3)
|
|
49,305
|
|
*
|
|
William A. Foley
(1)(2)(3)
|
|
268,911
|
|
1.21
|
%
|
Ginger M. Jones
(3)
|
|
25,635
|
|
*
|
|
Susan A. Kovach
(1)(2)
|
|
92,731
|
|
*
|
|
Eileen A. Mallesch
(3)
|
|
22,412
|
|
*
|
|
Deborah G. Miller
(3)
|
|
47,284
|
|
*
|
|
Salvador Miñarro Villalobos
(1)(2)(4)
|
|
39,217
|
|
*
|
|
Carol B. Moerdyk
(3)
|
|
53,842
|
|
*
|
|
William C. Mossing
(1)(2)
|
|
11,248
|
|
*
|
|
Steve Nave
(3)
|
|
11,940
|
|
*
|
|
John C. Orr
(3)
|
|
42,507
|
|
*
|
|
Sarah J. Zibbel
(1)(2)
|
|
0
|
|
*
|
|
Directors and Executive Officers as a Group
(1)(2)(3)(4)
|
|
697,395
|
|
3.13
|
%
|
|
|
(1)
|
Does not include shares of our common stock that have vested but are deferred under our Executive Deferred Compensation Plan ("EDCP"). As of
March 20, 2019
, each of our named executives, and all executive officers as a group, had the following shares of our common stock that are vested but deferred under our EDCP:
|
|
|
|
|
Named Executive
|
|
Number of Deferred Shares
|
W. Foley
|
|
0
|
J. Burmeister
|
|
0
|
S. Kovach
|
|
17,720
|
S. Miñarro
|
|
0
|
W. Mossing
|
|
0
|
S. Zibbel
|
|
0
|
All executive officers as a group
|
|
17,720
|
Does not include the following shares of phantom stock that are held by our named executives and all executive officers as a group pursuant to our EDCP and that are payable in cash:
|
|
|
|
Named Executive
|
|
Number of Phantom Shares
|
W. Foley
|
|
0
|
J. Burmeister
|
|
0
|
S. Kovach
|
|
1,014
|
S. Miñarro
|
|
0
|
W. Mossing
|
|
0
|
S. Zibbel
|
|
0
|
All executive officers as a group
|
|
1,014
|
|
|
(2)
|
Includes the following NQSOs that have been granted to our named executives and all executive officers as a group and that currently are exercisable or will be exercisable on or before May 18, 2019:
|
|
|
|
|
Named Executive
|
|
Number of Outstanding Stock Options
Exercisable Within 60 Days
|
W. Foley
|
|
139,225
|
J. Burmeister
|
|
10,594
|
S. Kovach
|
|
44,348
|
S. Miñarro
|
|
6,000
|
W. Mossing
|
|
7,531
|
S. Zibbel
|
|
0
|
All executive officers as a group
|
|
212,669
|
Stock Ownership Information
|
|
(3)
|
Includes the following shares of our common stock that are deferred by non-management directors under our 2009 Director Deferred Compensation Plan, which we refer to as our Director DCP, and that are payable as shares of our common stock:
|
|
|
|
|
Name of Director
|
|
Number of Deferred Shares
|
C. Duno
|
|
26,327
|
W. Foley
(a)
|
|
0
|
G. Jones
|
|
0
|
E. Mallesch
|
|
22,412
|
D. Miller
|
|
0
|
C. Moerdyk
|
|
0
|
S. Nave
|
|
11,940
|
J. Orr
|
|
0
|
All non-management directors as a group
|
|
60,679
|
Does not include the following shares of phantom stock that are held by non-management directors pursuant to our deferred compensation plans for outside directors and that are payable in cash:
|
|
|
|
Name of Director
|
|
Number of Phantom Shares
|
C. Duno
|
|
0
|
W. Foley
(a)
|
|
13,126
|
G. Jones
|
|
0
|
E. Mallesch
|
|
0
|
D. Miller
|
|
2,443
|
C. Moerdyk
|
|
20,566
|
S. Nave
|
|
15,768
|
J. Orr
|
|
0
|
All non-management directors as a group
|
|
51,903
|
|
|
(a)
|
Mr. Foley was a non-management director from 1994 until he assumed the role of CEO on January 12, 2016.
|
|
|
(4)
|
Based on last known information as of date of separation from service. For Mr. Miñarro, that date was January 15, 2018.
|
In addition to outstanding shares of common stock that our named executives beneficially owned as of
March 20, 2019
, or, for those no longer employed by the Company as of that date, as of their last date of employment, the named executives and all executive officers as a group have received the following grants of RSUs that have not yet vested:
|
|
|
|
Named Executive
|
|
Number of Unvested RSUs
(1)
|
W. Foley
|
|
346,994
|
J. Burmeister
|
|
58,845
|
S. Kovach
|
|
47,678
|
S. Minarro
|
|
0
|
W. Mossing
|
|
46,997
|
S. Zibbel
|
|
40,692
|
All executive officers as a group
|
|
559,076
|
|
|
(1)
|
Of these amounts,
14,963
RSUs with four-year ratable vesting were awarded on January 11, 2016;
1,932
RSUs with four-year ratable vesting were awarded on February 8, 2016;
24,773
RSUs with four-year ratable vesting were awarded on February 13, 2017;
7,008
RSUs with four-year ratable vesting were awarded on March 16, 2017;
11,907
RSUs with four-year ratable vesting were awarded on October 23, 2017;
14,000
RSUs with three-year cliff vesting were awarded on November 5, 2017;
173,797
RSUs with four-year ratable vesting were awarded on February 5, 2018;
14,000
RSUs with four-year ratable vesting were awarded on March 7, 2018;
10,000
RSUs with three-year cliff vesting were awarded on March 7, 2018;
296,534
RSUs with three-year ratable vesting were awarded on February 18, 2019; and 3,692 RSUs with three-year ratable vesting were awarded on March 1, 2019. 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
“Executive Compensation — Compensation Discussion and Analysis — What pay did Libbey's executives receive for 2018?”
and the
Outstanding Equity Awards at Fiscal Year-End Table
above.
|
|
|
Section 16(a) Beneficial Ownership Reporting Compliance
|
All of our directors and executive officers are required to file initial reports of share ownership and reports of changes in ownership with the SEC pursuant to Section 16(a) of the Exchange Act. We have reviewed these reports, including any amendments, and written representations from the executive officers and directors of the Company. Based solely on this review, we believe that all 2018 filing requirements were met for each of our directors and executive officers subject to Section 16(a).
EQUITY COMPENSATION PLAN INFORMATION
Following are the number of securities and weighted average exercise price thereof under our compensation plans approved and not approved by security holders as of December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights
(1)
|
|
Weighted Average Exercise Price of Outstanding Options and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
|
Equity compensation plans approved by security holders
|
|
1,283,501
|
|
|
16.82
|
|
|
968,232
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
1,283,501
|
|
|
16.82
|
|
|
968,232
|
|
|
|
(1)
|
This number includes 692,929 restricted stock units awarded under Libbey's equity compensation plans.
|
See
footnote 1 to the Outstanding Awards as of December 31, 2018, table on page 62 for additional information, as of March 20, 2019, regarding the number of securities to be issued upon exercise of outstanding stock options granted under our 2006 Omnibus Incentive Plan and 2016 Plan, the weighted average exercise price and weighted average life of outstanding stock options and the number of unvested RSUs outstanding at that date.
|
|
|
PROPOSAL NO. 3
|
|
AMENDED AND RESTATED LIBBEY INC. 2016 OMNIBUS INCENTIVE PLAN
|
Approval of the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan.
|
þ
|
The Board of Directors recommends a vote
FOR
this proposal.
|
We currently provide equity-based compensation under the terms of our Amended and Restated Libbey Inc. 2006 Omnibus Incentive Plan ("2006 Plan"), which was approved by the shareholders at the 2010 Annual Meeting, and the Libbey Inc. 2016 Omnibus Incentive Plan (the "
Existing 2016 Plan
"), which was approved by the shareholders at the 2016 Annual Meeting. As of
March 20, 2019
, only
161,810
and
184,093
shares remained available for grant under the 2006 Plan and Existing 2016 Plan, respectively, with
1,145,640
shares subject to outstanding awards under the 2006 Plan and
668,086
shares subject to outstanding awards under the Existing 2016 Plan. Because we have only
345,903
shares remaining available for grant, our Compensation Committee's ability to provide competitive, performance-based equity compensation that aligns our executives' interests with those of our shareholders is very limited.
We are submitting the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan (the "
Amended 2016 Plan
") to our shareholders for approval in order to ensure that we have a sufficient number of shares available for issuance in the form of equity awards in the future to attract and retain employees and non-employee directors who are critical to improving the Company's performance, to further align their interests with those of our shareholders, and to closely link executive compensation with our performance. The primary change in the
Amended 2016 Plan
is to increase the number of shares of common stock available for issuance under the plan by
1,750,000
shares. In addition, the
Amended 2016 Plan
updates the plan for certain tax law changes and modifies certain other provisions as more fully described below under "
Modifications to Other Provisions.
"
Adoption of the
Amended 2016 Plan
is critical to our success. If the Amended 2016 Plan is not approved, we will not have enough shares to provide equity compensation to our key employees. We do not believe cash awards are a viable alternative to replace the value of equity awards. Compared to equity awards, cash awards do not align executives' interests as closely with those of shareholders. Furthermore, in light of the Company's financial leverage, the Company is focused on using free cash flow to reduce debt, limiting the Company's ability to use cash for retention awards and long-term incentive compensation. Without additional shares, we will be unable to provide market-competitive compensation packages, as a result of which we may be unable to retain and attract the talent we need.
The
Amended 2016 Plan
will be effective as of the date on which our shareholders approve the
Amended 2016 Plan
. If the
Amended 2016 Plan
is not approved by our shareholders, the
Amended 2016 Plan
will not become effective, the
Existing 2016 Plan
and the 2006 Plan will continue in full force and effect, and we may continue to grant awards under the
Existing 2016 Plan
and 2006 Plan, subject to their terms, conditions and limitations, using the shares available for issuance thereunder.
Equity Compensation Plan Information
Increase in Number of Shares
The
Amended 2016 Plan
will increase the number of shares reserved for issuance under the plan by
1,750,000
shares from
1,200,000
shares to
2,950,000
shares. Under the current form of the
Existing 2016 Plan
, as of
March 20, 2019
,
184,093
shares remain available for grant. If the
Amended 2016 Plan
is approved, the maximum number of shares available for future issuance under the
Amended 2016 Plan
would be
1,934,093
. The additional shares will be available for grant over multiple years.
We believe this increase is reasonable and in the Company's best interests for the following reasons:
|
|
1.
|
Additional shares are required for Libbey to make continued equity grants as necessary in order to attract and retain key talent
. As of
March 20, 2019
, only
345,903
shares remained available for future grant under our 2006 Plan and Existing 2016 Plan combined, which is lower than our three-year average annual share utilization of
591,643
shares. Unless the proposed increase is approved, Libbey will be unable to make grants to existing high-value employees and executives, directors, and any new executive hires, which will make it difficult for us to retain and attract the talent required to successfully execute the Company's strategy and improve the Company's performance.
|
|
|
2.
|
Additional shares allow Libbey to structure compensation programs that more closely align pay with performance.
In order to conserve shares under our incentive plans and manage our burn rate in light of the decline in the Company's stock price, the components of our 2018 and 2019 long-term incentive programs are RSUs and performance cash. With additional shares, the Compensation Committee would have the flexibility to include vehicles such as stock options and/or performance shares in our executive compensation program. If the Amended 2016 Plan is approved, the Compensation Committee intends, beginning in 2020, to modify the mix of vehicles in our long-term incentive program to include performance shares. While this is the Compensation Committee's current intention, the Committee's ultimate decision as to the plan designs for future long-term incentive programs will depend on a variety of factors and circumstances as existing at the time each applicable program is adopted.
|
|
|
3.
|
The ability to grant equity awards helps Libbey conserve cash.
If the
Amended 2016 Plan
is not approved, we may have to reduce the equity component and increase the cash component of our compensation program, which would increase cash compensation expense and use cash that could be better utilized to reduce debt or reinvest in our business.
|
|
|
4.
|
Additional shares enable Libbey to act on feedback received from shareholders.
During our recent shareholder outreach, several of the shareholders with which we spoke provided feedback regarding the use of equity compensation, including a preference that we use performance equity in addition to, or instead of, performance cash, and a suggestion that we consider granting awards of stock options to attract and motivate key talent. If the Amended 2016 Plan is not approved, we will not have sufficient shares to consider acting upon these or any other shareholder suggestions that require additional share availability.
|
|
|
5.
|
We carefully manage our equity incentive compensation.
We recognize that equity compensation awards dilute shareholder equity, so we carefully manage our equity compensation. Although the additional
1,750,000
new shares to be available under the
Amended 2016 Plan
will increase the potential dilution to shareholders, the Board believes our equity compensation plans are well-managed and that our equity compensation practices are competitive and consistent with market practices. As of
March 20, 2019
, we had
22,273,568
authorized, issued and outstanding shares of our common stock. The following table sets forth, as of
March 20, 2019
, the number of shares authorized for future issuance under the 2006 Omnibus Plan and the
Amended 2016 Plan
, along with the equity dilution represented by the shares available for future awards as a percentage of the common shares outstanding on
March 20, 2019
:
|
|
|
|
|
|
|
|
|
|
Total Shares Available
|
|
Equity Dilution: Percent of Basic Common Shares Outstanding
|
Remaining shares authorized for future awards under the
2006 Omnibus Incentive Plan
|
|
161,810
|
|
|
0.7%
|
Remaining shares authorized for future awards under the 2016 Plan
|
|
184,093
|
|
|
0.8%
|
Additional shares requested under Amended 2016 Plan
|
|
1,750,000
|
|
|
7.9%
|
Total shares authorized for future awards after approval of
Amended 2016 Plan
|
|
2,095,903
|
|
|
9.4%
|
On March 25, 2019, Mr. Bauer received two equity grants in connection with his appointment as CEO: (1) under our 2019 LTIP, a grant of
116,827
RSUs with three-year ratable vesting; and (2) to induce Mr. Bauer to join the Company and to establish an immediate and meaningful link to Libbey's long-term stock performance, a new-hire grant of 150,000 non-qualified stock options that cliff vest on March 25, 2022, and are divided into four groups of 37,500 options each, with one group having an exercise price of $7.00, one group having an exercise price of $8.50, one group having an exercise price of $10.00, and one group having an exercise price of $11.50.
Equity Compensation Plan Information
The following table shows our equity overhang as of March 20, 2019 (before the grants to Mr. Bauer), and March 25, 2019 (after the grants to Mr. Bauer). Equity overhang is the percentage of outstanding shares represented by all outstanding stock options and RSUs plus those available for future awards pursuant to the Amended 2016 Plan and the 2006 Omnibus Plan.
|
|
|
|
|
|
|
|
As of March 20, 2019
(Before CEO Grants)
|
|
As of March 25, 2019
(After CEO Grants)
|
Outstanding stock options and RSUs + shares available for future awards
|
|
3,909,629
|
|
4,176,456
|
Common shares outstanding
|
|
22,273,568
|
|
22,273,568
|
Equity overhang
|
|
17.6%
|
|
18.8%
|
Actual future equity dilution will be impacted by the following factors:
|
|
•
|
The number and type of awards that actually are granted under the
Amended 2016 Plan
;
|
|
|
•
|
To the extent that awards of performance shares or performance units are granted in the future, the number of performance shares or performance units that actually are earned or paid out; and
|
|
|
•
|
The extent to which the Company conducts share buybacks, which mitigate equity dilution.
|
The following table sets forth information regarding outstanding stock options and RSUs as of December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Awards as of December 31, 2018
(1)
|
Stock Options
|
|
Unvested RSUs
|
Range of Exercise Prices
|
|
# Outstanding
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Life
|
|
$6.75 - $9.38
|
|
79,256
|
|
|
7.75
|
|
|
8.7
|
|
|
|
$10.13 - $19.02
|
|
400,389
|
|
|
16.10
|
|
|
6.6
|
|
|
|
$21.53 - $28.96
|
|
95,151
|
|
|
23.89
|
|
|
5.0
|
|
|
|
$38.06
|
|
15,776
|
|
|
38.06
|
|
|
6.2
|
|
|
|
Total
|
|
590,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
692,929
|
|
(1)
As of
March 20, 2019
, the number of securities to be issued upon exercise of outstanding stock options granted under our 2006 Plan and our 2016 Plan was
590,572
, as to which the weighted average exercise price was $
16.82
and the weighted average life was
6.4
years. As of
March 20, 2019
, there were
1,148,483
unvested RSUs outstanding.
The burn rate is generally calculated as all stock options and full value awards granted in a fiscal year
divided by
the common shares outstanding at the end of the fiscal year. The following table sets forth information regarding awards of stock options and full value awards granted, the burn rate for each of the last three fiscal years, and the average burn rate over the last three years:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018
|
|
FY 2017
|
|
FY 2016
|
|
3-Year Average
|
(A)
|
Stock options granted
|
|
0
|
|
249,392
|
|
351,590
|
|
200,327
|
(B)
|
Full value awards granted
|
|
596,688
|
|
278,351
|
|
298,909
|
|
391,316
|
(C)
|
Common shares outstanding at fiscal year end
|
|
22,157,220
|
|
22,018,010
|
|
21,864,541
|
|
22,013,257
|
Burn Rate [(A)+(B))/(C)]
|
|
2.7
|
%
|
|
2.4
|
%
|
|
3.0
|
%
|
|
2.7
|
%
|
|
|
6.
|
The Amended 2016 Plan incorporates best practices.
The Amended 2016 Plan reflects equity plan best practices including:
|
|
|
•
|
No repricing or buyouts
:
The
Amended 2016 Plan
prohibits repricing of stock options or SARs and prohibits buyouts of underwater stock options or SARs.
|
|
|
•
|
No discounted stock options or SARs
:
The
Amended 2016 Plan
prohibits discounted stock options or SARs except for those issued in substitution of outstanding awards in the context of mergers and acquisitions.
|
|
|
•
|
No reloads
:
The Amended 2016 Plan prohibits the automatic reload of stock options.
|
|
|
•
|
No liberal share counting
:
Under the
Amended 2016 Plan
, the following constitute delivered shares, will not be available for future Awards under the
Amended 2016 Plan
and will continue to be counted as outstanding for purposes of determining whether award limits have been reached:
|
|
|
◦
|
shares that are withheld from an award or separately surrendered by the participant in payment of the exercise price or in payment of taxes relating to the award; and
|
|
|
◦
|
shares that are not issued or delivered as a result of the net settlement of an outstanding stock option or SAR.
|
|
|
•
|
Minimum 1-year vesting
:
Except with respect to a maximum of 5% of the shares authorized for issuance under the
Amended 2016 Plan
, full-value awards that vest based on continued employment with or service to the Company may vest no earlier than the first anniversary of the date on which the awards are approved, and any full-value awards that vest based on attainment of performance goals must provide for a performance period of at least 12 months. Awards of
|
Equity Compensation Plan Information
stock options and SARs that vest on the basis of continued employment may vest no earlier than the first anniversary of the date on which the awards are approved.
|
|
•
|
Double trigger change in control vesting
:
If replacement awards are granted to participants in connection with a change in control, vesting of the stock options and/or SARs that they replace and that vest based on continued service generally will not be accelerated solely as a result of the change in control. Awards that are based on achievement of performance measures generally will be prorated as of the date of the change in control and deemed earned if and to the extent the performance goals actually are met as of that date unless the extent to which the performance goals actually are achieved as of that date cannot reasonably be determined by the Compensation Committee. In that case, the awards will be prorated and deemed earned at target.
|
|
|
•
|
Administered by an independent committee
:
Each member of the Compensation Committee is "independent," as defined under NYSE American exchange rules and each is an "outside director," as defined in 26 CFR §1.162-27.
|
|
|
•
|
No dividend equivalents on stock options or SARs
:
No dividend equivalents may be granted on awards of options or SARs.
|
|
|
•
|
Restrictions on payment of dividends and dividend equivalents
:
Dividend equivalents may be granted on awards of performance shares and performance units, but they will be held in escrow or deemed reinvested in additional performance shares or performance units until the performance goals are achieved and will be paid only to the extent the underlying performance shares or performance units actually are earned. Dividends or dividend equivalents with respect to any award that is subject to vesting conditions or restrictions will be deferred and held in escrow or deemed reinvested in additional shares until all vesting conditions or restrictions relating to the award (or portion of the award to which the dividend or dividend equivalent relates) have been satisfied and will be forfeited if and to the extent the vesting conditions or restrictions are not satisfied.
|
|
|
•
|
Awards subject to clawback / forfeiture
:
Awards under the
Amended 2016 Plan
are subject to forfeiture and clawback under the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and under any clawback policy that we may have in place at any time.
|
In light of the factors described above, our Board of Directors has determined that the size of the share reserve under the
Amended 2016 Plan
is reasonable and appropriate at this time.
Modifications to Other Provisions
The
Amended 2016 Plan
makes certain changes to the
Existing 2016 Plan
intended to reflect compensation and governance best practices or to conform the plan to our current practices as follows:
|
|
|
|
Existing 2016 Plan
|
|
Amended 2016 Plan
|
Prohibits dividend Equivalents on stock options or SARs; provides that dividend Equivalents granted on performance units and/or performance shares will be deferred and held in escrow or deemed reinvested in additional performance Units and/or performance Shares until achievement of the underlying performance goals and will be paid only to the extent that the underlying performance units and/or performance shares are actually earned
|
|
Same as Existing 2016 Plan, but also provides that dividends or dividend equivalents with respect to any award that is subject to vesting conditions or restrictions will be deferred and held in escrow or deemed reinvested in additional shares until all vesting conditions or restrictions relating to the award (or portion of the award to which the dividend or dividend equivalent relates) have been satisfied and will be forfeited if and to the extent the vesting conditions or restrictions are not satisfied
|
Maximum number of shares that may be granted to non-employee directors collectively in any year is 150,000 shares
|
|
Increases maximum to 200,000 shares
|
Except with respect to a maximum of 5% of the shares authorized for issuance under the plan, full value awards that vest on the basis of the participant's continued employment with or service to the Company may not vest more rapidly than pro-rata over a three-year period, with the first vesting date occurring no earlier than the first anniversary of the date on which the award is approved
|
|
Except with respect to a maximum of 5% of the shares authorized for issuance under the plan, full value awards that vest on the basis of the Participant's continued employment with or service to the Company may not vest before the first anniversary of the date on which the award is approved
|
Contained provisions that were required for awards to qualify as "performance-based" compensation under Section 162(m) of the Internal Revenue Code.
|
|
The qualified performance-based compensation exception of Section 162(m) of the Code was repealed as part of the Tax Cuts and Jobs Act of 2017. We have removed certain provisions that were otherwise required for awards to qualify as performance-based compensation under Section 162(m) prior to its repeal. Despite removing certain 162(m) provisions, the Amended 2016 Plan retains the same individual annual award limits that were in effect under the Existing 2016 Plan. These limits are described in further detail below under "
Key Features of the Amended 2016 Plan - Individual Award Limits
."
|
Equity Compensation Plan Information
Key Features of the
Amended 2016 Plan
Key Features of the
Amended 2016 Plan
are summarized below. The summary is qualified in its entirety by reference to the Amended 2016 Plan itself set forth in
Appendix B
.
|
|
•
|
Plan Administrator
:
Compensation Committee
|
|
|
•
|
Award Types
:
Stock options (both nonqualified and incentive stock options), stock appreciation rights, which we refer to as SARs, restricted stock, restricted stock units, which we refer to as RSUs, performance shares, performance units, cash-based awards and other stock-based awards.
|
|
|
•
|
Effective Date
:
May 15, 2019, if approved by our shareholders
|
|
|
•
|
Plan Term
:
10 years from the Effective Date
|
|
|
•
|
Eligible Participants
:
Employees of the Company and its affiliates and non-employee members of the Board of Directors. On
March 20, 2019
, the closing price of our common stock was $3.11 per share, there were six executive officers, seven non-employee directors and approximately 6,000 employees of the Company and its subsidiaries who were eligible to participate in the Amended 2016 Plan.
|
|
|
•
|
Total Shares Authorized / Available
:
The shares of our common stock available under the Amended 2016 Plan may be either previously authorized and unissued shares or treasury shares.
|
|
|
•
|
Individual Award Limits
:
|
|
|
|
|
Award Type
|
|
Annual Limit per Participant
|
Options
|
|
500,000 Shares
|
SARs
|
|
500,000 Shares
|
Restricted Stock or RSUs
|
|
500,000 Shares
|
Performance Units or Performance Shares
|
|
500,000 Shares, or equal to the value of 500,000 Shares as determined as of the date of payout
|
Cash-Based Awards and Other Stock-Based Awards
|
|
the value of $5,000,000 or 500,000 Shares determined as of the date of payout
|
Awards to Non-Employee Directors
|
|
20,000 Shares
|
The foregoing limits may be adjusted for changes in our capitalization and certain corporate transactions, as described below under the headings "Share Counting" and "Adjustments."
|
|
•
|
Stock Option Exercise Period
:
Determined by the Compensation Committee, but no more than ten years from the grant date
|
|
|
•
|
Stock Option Exercise Price
:
Equal to or greater than the fair market value on the grant date, defined generally as the closing stock price on the grant date
|
Summary of Principal Terms of the
Amended 2016 Plan
The following summary is qualified in its entirety by reference to the Amended 2016 Plan itself, a copy of which is attached to this proxy statement as
Appendix B
.
Administration.
The
Amended 2016 Plan
is generally administered by the Compensation Committee of our Board, or any subcommittee thereof, although the full Board of Directors may function as the Compensation Committee. The Committee is authorized to determine (a) the individuals, who we refer to as Participants, who will receive Awards, (b) when they will receive Awards, (c) the number of shares to be subject to each Award, (d) the price of the Awards granted, (e) payment terms, (f) payment method and (g) the expiration date applicable to each Award. The Committee is also authorized to accelerate the vesting of Awards and to adopt, amend and rescind rules relating to the administration of the
Amended 2016 Plan
. From time to time the Committee may delegate its authority to grant or amend awards to Libbey’s officers, but the delegation must set forth the total number of Awards the officer may grant, and the officer must report periodically to the Committee regarding the nature and scope of the Awards granted. The Committee may not, however, delegate to senior executives of the Company who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, authority to grant to, or to amend awards previously granted to, any individual who is subject to Section 162(m) of the Code.
Amendment and Termination
.
The Committee may at any time amend, modify, suspend or terminate the
Amended 2016 Plan
or any Award made under the 2016 Omnibus Plan, but the Committee may not, without shareholder approval except as described below under "
Adjustments
," (a) reprice, replace or regrant, through cancellation and substitution of another Award, options or SARs, (b) lower the option price or grant price of an option or SAR or (c) exchange for cash underwater options or SARs. If shareholder approval for any amendment to the
Amended 2016 Plan
is required by law, regulation or stock exchange rule, then neither the Committee nor Libbey is authorized to amend the
Amended 2016 Plan
without shareholder approval. However, the Board of Directors may amend the
Amended 2016 Plan
or an Award to comply with law and administrative regulations.
Equity Compensation Plan Information
Eligibility
.
Awards under the
Amended 2016 Plan
may be granted to our employees or employees of any of our present or future subsidiaries, and to any directors who are not our employees. More than one Award may be granted to an employee or to a non-employee director. All employees and non-employee directors are eligible to participate in the
Amended 2016 Plan
, although we generally limit awards to a group of approximately 75 employees and our non-employee directors.
Vesting
.
Except with respect to a maximum of 5% of the shares authorized for issuance under the
Amended 2016 Plan
, and subject to the Compensation Committee's administrative authority described above, any full-value Awards that vest on the basis of the Participant’s continued employment with or service to the Company may vest no earlier than the first anniversary of the date on which such Awards are approved, and any full-value Awards that vest upon the attainment of performance goals shall provide for a performance period of at least 12 months. Awards of SARs and/or stock options that vest on the basis of the Participant’s continued employment with or service to the Company may vest no earlier than the first anniversary of the date on which such Awards are approved.
Awards
.
Each Award will be set forth in a separate agreement with the person receiving the Award and will indicate the type, terms and conditions of the Award. The following briefly describes the characteristics of each type of Award that may be made under the
Amended 2016 Plan
.
Stock Options
.
Stock options granted under the
Amended 2016 Plan
may be either “non-qualified” or “incentive” stock options. Non-qualified stock options are options not intended to receive the favorable tax treatment for participants applicable to incentive stock options under the Code. At the time of grant, the Committee will establish the provisions of each stock option, including:
|
|
◦
|
the exercise price (which cannot be less than fair market value),
|
|
|
◦
|
whether it is a non-qualified or incentive stock option,
|
|
|
◦
|
the terms and conditions for exercise of the option; and
|
|
|
◦
|
the duration of the option, although, except for nonqualified options granted to Participants who are not U.S. residents, no option will be exercisable more than 10 years after the date of grant.
|
However, there are certain requirements under the Code that apply to incentive stock options, including requirements that incentive stock options: (1) must have an exercise price per share of stock of not less than 100% of the fair market value on the date of grant; (2) may only be granted to employees; and (3) may not have a term longer than ten years after the date of grant. In the case of an incentive stock option granted to an individual who owns, or is deemed to own, at least 10% of the total combined voting power of all classes of our stock, the exercise price must be at least 110% of the fair market value of the stock underlying the subject options on the date of grant, and the incentive stock option must expire no later than the fifth anniversary of the date of its grant.
The exercise price for options, together with any applicable tax required to be withheld, must be paid in full at the time of exercise:
|
|
◦
|
by cash or cash equivalents,
|
|
|
◦
|
by shares previously owned by the participant valued at fair market value on the date of exercise,
|
|
|
◦
|
by a broker-assisted cashless exercise procedure,
|
|
|
◦
|
by a combination of any of the above methods, or
|
|
|
◦
|
by any other method approved or accepted by the Committee.
|
Stock Appreciation Rights
.
SARs granted by the Committee will provide for payments to the holder based upon increases in the price of our common stock over a set base price. Payment for SARs may be made in cash or shares or in a combination of cash and shares, as determined by the Committee at the time of grant. A SAR may be granted either in conjunction with an option or independently. At the time of grant, the Committee will establish the provisions of each SAR, including:
|
|
◦
|
the base price (which cannot be less than fair market value),
|
|
|
◦
|
the terms and conditions for exercise of the SAR; and
|
|
|
◦
|
the duration of the SAR, although, except for SARS granted to Participants who are not U.S. residents, no SAR will be exercisable more than ten years after the date of grant.
|
Otherwise, the
Amended 2016 Plan
does not impose any restriction on the exercise of SARs or the amount of gain that can be realized. However, the Committee may restrict the shares received upon exercise of a SAR.
Restricted Stock
.
Restricted stock is the grant of shares that are nontransferable and may be subject to substantial risk of forfeiture until specific conditions are met. During the period of restriction, Participants holding shares of restricted stock may have full voting and dividend rights with respect to the shares. The restrictions on the restricted stock will lapse based upon conditions determined by the Committee at the time of grant. The restrictions can be time- or performance-based, including based on the performance criteria described in “
Performance Units/ Performance Shares
” below.
RSUs
. RSUs give the Participant the right to receive shares at some designated time in the future, subject to the satisfaction of conditions determined by the Committee at the time of grant. The conditions can be time- or performance-based, including based on the performance criteria described in
“Performance Units/ Performance Shares”
below.
Equity Compensation Plan Information
Performance Units/ Performance Shares
.
Performance Units give the Participant the right to receive an amount designated as a “unit” at the end of a specified performance period, provided that specified performance goals are satisfied. Performance Shares give the Participant the right to receive shares or cash based on the value of shares of our common stock at the end of a specified performance period, provided that specified performance goals are satisfied. The performance periods and performance goals are determined by the Committee at the time of grant.
Other Cash-Based and Other Stock-Based Awards
.
From time to time, the Committee may grant Awards denominated in cash or other types of equity-based or equity-related awards that are not otherwise described above. Awards may be designed to comply with or take advantage of applicable local laws of jurisdictions other than the U.S. These other Awards will have such terms as the Committee determines at the time and may include payment upon meeting performance goals.
Non-employee Director Awards
.
The Nominating and Governance Committee of the Board of Directors may establish the amount and types of Awards that may be granted to our non-employee directors on a periodic and nondiscriminatory basis, as well as any additional amounts based upon:
|
|
◦
|
The number of committees of the Board on which a director serves,
|
|
|
◦
|
Service as chair of a committee of the Board,
|
|
|
◦
|
Service as Chair of the Board, and
|
|
|
◦
|
First election or appointment to the Board.
|
The terms of the Awards shall be set by the Nominating and Governance Committee, but cannot otherwise be inconsistent with the terms of the
Amended 2016 Plan
.
Dividends and Dividend Equivalents
. Dividend equivalents give the participant the right to receive dividends on stock subject to another type of Award, or, if the grant is independent of another Award, on a number of shares set by the Committee at the time of the grant of the dividend equivalent. A dividend equivalent may be payable at the same time dividends are otherwise payable on the shares or at the time the shares subject to a corresponding Award are otherwise deliverable, if later. No dividend equivalents may be granted with respect to Awards of Options or SARs. Dividend equivalents that are granted with respect to performance shares or performance units will be deemed placed in escrow or reinvested in performance shares or performance units until actually earned. Dividend equivalents payable with respect to performance shares or performance units will be paid only to the extent the performance shares or performance units underlying them actually are earned. Dividends or dividend equivalents with respect to shares underlying any Award that is subject to vesting conditions or restrictions shall be deferred and held in escrow or deemed reinvested in additional shares until all vesting conditions or restrictions relating to the Award (or portion of the Award to which the dividend or dividend equivalent relates) have been satisfied and shall be forfeited if and to the extent the vesting conditions or restrictions are not satisfied.
Share Counting.
Under the
Amended 2016 Plan
, awards that are to be paid in cash pursuant to their terms will not be counted against the shares available for issuance under the
Amended 2016 Plan
. In addition, if an award is settled in cash, the number of shares of common stock on which the award is based will not count toward any limit on the number of shares that may be awarded to an individual, but will be counted against the annual award limit for cash-based awards.
To the extent an Award granted under the
Amended 2016 Plan
is canceled, expired, forfeited, surrendered, settled in cash or otherwise terminated without delivery of the shares, the shares of common stock retained by or returned to the Company will:
|
|
•
|
not be deemed to have been delivered under the
Amended 2016 Plan
;
|
|
|
•
|
be available for future Awards under the
Amended 2016 Plan
; and
|
|
|
•
|
increase the share reserve by one share for each share that is retained by or returned to the Company.
|
However, the following will constitute delivered shares, will not be available for future Awards under the
Amended 2016 Plan
and will continue to be counted as outstanding for purposes of determining whether award limits have been reached:
|
|
•
|
shares that are withheld from an Award or separately surrendered by the participant in payment of the exercise or purchase price or in payment of taxes relating to the Award; and
|
|
|
•
|
shares that are not issued or delivered as a result of the net settlement of an outstanding stock option or SAR.
|
Awards that are assumed or substituted for in a merger, consolidation, acquisition of property or stock or reorganization will not be counted against the shares available for issuance under the
Amended 2016 Plan
.
Change in Control
.
All options and SARs will become fully vested and exercisable, and all other Awards that are not then vested but vest based solely upon continued service to or employment with Libbey, will become vested and payable in full upon the occurrence of a change in control (as defined in the
Amended 2016 Plan
), unless the Participant is provided with a replacement award that relates to a publicly traded security with a value and terms and conditions that are at least equal to the value of the Award being replaced. In connection with any change in control, the Committee, in its sole discretion, may (1) provide for the cancellation or termination of any Award in exchange for a cash payment (or delivery of shares of stock, other securities or a combination of stock or other securities equivalent to the cash payment), or (2) provide that the time period in which a Participant may exercise options or SARs shall be extended, but not beyond the original expiration date.
Adjustments.
In the event of a corporate event or transaction, including merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock split, stock dividend, reverse stock split, split up, spin-off or other distribution of stock or property, combination of shares, exchange of shares or other similar change in capital structure, the Compensation
Equity Compensation Plan Information
Committee may, in its discretion, adjust the number and kind of shares granted under the
Amended 2016 Plan
, the number and kind of shares subject to Awards, the exercise or grant price of outstanding stock options or SARs, the annual award limts, and other value determinations applicable to outstanding Awards.
Miscellaneous Provisions
.
Generally, no Award granted under the
Amended 2016 Plan
may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Award has been exercised, or the shares underlying the Award have been issued, and all restrictions applicable to the shares have lapsed. The Committee may allow Awards other than incentive stock options to be transferred without value subject to such terms and conditions as the Committee may prescribe.
We may deduct or withhold, or require a Participant to remit, in order to satisfy federal, state and local withholding taxes, domestic or foreign, the maximum amount that U.S. generally accepted accounting principles permit us to deduct or withhold while still qualifying the Awards for equity accounting. A Participant may elect irrevocably to satisfy his or her withholding requirement by having us withhold shares otherwise deliverable under the Award. The number of shares to be withheld must have a fair market value equal to the tax required to be withheld.
The Committee may specify in the Award that a Participant will forfeit the Award, or any previously delivered shares, due to termination for cause or for violation of our material policies or any noncompete, confidentially or other restrictive covenants by which the Participant is bound. The issuance of shares pursuant to an Award will be subject to compliance with all laws, rules and regulations of any governmental agency or securities exchange.
U.S. Federal Income Tax Consequences
The tax consequences of the
Amended 2016 Plan
under current U.S. federal law are summarized in the following discussion. This discussion is limited to the general tax principles applicable to the
Amended 2016 Plan
, and is intended for general information only. State and local income taxes, as well as foreign income taxes, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. The tax information summarized is not tax advice.
Nonqualified Stock Options
.
For U.S. federal income tax purposes, an optionee generally will not recognize taxable income at the time a non-qualified stock option is granted under the
Amended 2016 Plan
. Upon exercise of a non-qualified stock option, the optionee will recognize ordinary income, and we generally will be entitled to a deduction. The amount of income recognized (and the amount deductible by Libbey) generally will be equal to the excess, if any, of the fair market value of the shares at the time of exercise over the aggregate exercise price paid for the shares, regardless of whether the exercise price is paid in cash or in shares or other property. An optionee’s basis for the stock for purposes of determining his or her gain or loss upon a subsequent disposition of the shares generally will be the fair market value of the stock on the date of exercise of the non-qualified stock option, and any subsequent gain or loss generally will be taxable as capital gain or loss.
Incentive Stock Options
.
An optionee generally will not recognize taxable income either at the time an incentive stock option is granted or when it is exercised. However, the amount by which the fair market value of the shares at the time of exercise exceeds the exercise price will be an “item of tax preference” to the optionee for purposes of alternative minimum tax. Generally, upon the sale or other taxable disposition of the shares acquired upon exercise of an incentive stock option, the optionee will recognize taxable income. If shares acquired upon the exercise of an incentive stock option are held for the longer of two years from the date of grant or one year from the date of exercise, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition will be treated as a long-term capital gain or loss, and we will not be entitled to any deduction. If this holding period is not met and the stock is sold for a gain, then the difference between the option price and the fair market value of the stock on the date of exercise will be taxed as ordinary income, and any gain over that will be eligible for long- or short-term capital gain treatment. If the holding period is not met and the shares are disposed of for less than the fair market value on the date of exercise, then the amount of ordinary income is limited to the excess, if any, of the amount realized over the exercise price paid. We generally will be entitled to a deduction in the amount of any ordinary income recognized by the optionee.
Stock Appreciation Rights
.
No taxable income is generally recognized upon the receipt of a SAR. Upon exercise of a SAR, the cash or the fair market value of the shares received generally will be taxable as ordinary income in the year of such exercise. Libbey generally will be entitled to a compensation deduction for the same amount that the recipient recognizes as ordinary income.
Restricted Stock
.
A Participant to whom restricted stock is issued generally will not recognize taxable income upon the issuance of the restricted stock, and we generally will not then be entitled to a deduction, unless the Participant makes an election under Section 83(b) of the Code. However, when restrictions on shares of restricted stock lapse and the shares are no longer subject to a substantial risk of forfeiture, the Participant generally will recognize ordinary income, and we generally will be entitled to a deduction for an amount equal to the excess of the fair market value of the shares at the date the restrictions lapse over the purchase price of the shares. If the Participant makes an election under Section 83(b) of the Code, then the Participant generally will recognize ordinary income at the date of issuance equal to the excess, if any, of the fair market value of the shares at that date over the purchase price for the shares, and we will be entitled to a deduction for the same amount.
Restricted Stock Unit
. A Participant will generally not recognize taxable income upon the grant of an RSU. However, when the shares are delivered to the Participant, the value of the shares at that time will be taxable to the Participant as ordinary income. Generally, Libbey will be entitled to a deduction for an amount equal to the amount of ordinary income recognized by the Participant.
Performance Unit/ Performance Shares
.
A Participant who has been granted an Award of performance units or performance stock generally will not recognize taxable income at the time of grant, and Libbey will not be entitled to a deduction at that time. When an
Equity Compensation Plan Information
Award is paid, whether in cash or shares, the Participant generally will recognize ordinary income, and Libbey will be entitled to a corresponding deduction.
Plan Benefits
The number of Awards that an employee may receive under the
Amended 2016 Plan
is in the discretion of the Committee and therefore generally cannot be determined in advance. However, awards made to our non-management directors on the date of our 2019 Annual Meeting of shareholders will be made from the
Amended 2016 Plan
. Accordingly, the following table sets forth awards to be made to our non-employee directors on May 15, 2019:
NEW PLAN BENEFITS
|
|
|
|
|
|
|
|
|
AMENDED AND RESTATED LIBBEY INC. 2016 OMNIBUS INCENTIVE PLAN
|
Name and Position
|
|
Dollar Value
($)
|
|
Number of Shares
(#)
(1)
|
Carlos V. Duno, Director
|
|
90,000
|
|
|
13,846
|
|
Ginger M. Jones, Director
|
|
90,000
|
|
|
13,846
|
|
Eileen A. Mallesch, Director
|
|
90,000
|
|
|
13,846
|
|
Deborah G. Miller, Director
|
|
90,000
|
|
|
13,846
|
|
Carol B. Moerdyk, Director
|
|
90,000
|
|
|
13,846
|
|
Steve Nave, Director
|
|
90,000
|
|
|
13,846
|
|
John C. Orr, Director
|
|
90,000
|
|
|
13,846
|
|
All non-employee directors as a group
|
|
630,000
|
|
|
96,922
|
|
(1)
The number of shares is determined by dividing the dollar value by $6.50, the average closing price of our common stock over the fourth quarter of 2018.
The Board of Directors recommends a vote FOR
approval of the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan.
AUDIT-RELATED MATTERS
|
|
|
PROPOSAL NO. 4
|
|
RATIFICATION OF AUDITORS
|
|
The Audit Committee has appointed Deloitte & Touche LLP to serve as our independent auditors for our 2019 fiscal year. Although ratification by the shareholders is not required by law, the Board of Directors believes that you should be given the opportunity to express your views on the subject. Unless otherwise directed, proxies will be voted for ratification.
|
þ
|
The Board of Directors recommends a vote
FOR
this proposal.
|
WHAT FEES DID LIBBEY PAY TO ITS AUDITORS FOR FISCAL
2018
AND
2017
?
For the years ended December 31,
2018
, and December 31,
2017
, Deloitte & Touche LLP served as the Company’s external auditors. Fees for services rendered by Deloitte & Touche LLP for the years ended December 31,
2018
, and December 31,
2017
, are as follows:
|
|
|
|
|
|
Nature of Fees
|
|
2018 Fees
($)
|
|
2017 Fees
($)
|
Audit Fees
(1)
|
|
1,163,145
|
|
1,078,000
|
Audit-Related Fees
(2)
|
|
99,586
|
|
125,500
|
Tax Fees
|
|
0
|
|
0
|
All Other Fees
|
|
0
|
|
0
|
Total
|
|
1,262,731
|
|
1,203,500
|
|
|
(1)
|
Audit Fees include fees associated with the annual audit of our internal controls, the annual audit of financial statements, the reviews of our quarterly reports on Form 10-Q and annual report on Form 10-K and statutory audit procedures.
|
|
|
(2)
|
Audit-related fees include fees for audits of our employee benefit plans.
|
WHAT ARE LIBBEY'S PRE-APPROVAL POLICIES AND PROCEDURES?
All audit-related, tax and other services were pre-approved by the Audit Committee, which concluded that the provision of these services by Deloitte & Touche LLP was compatible with the maintenance of that firm’s independence in the conduct of its audit functions. The Audit Committee’s policy regarding auditor independence requires pre-approval by the Audit Committee of audit, audit-related and tax services on an annual basis. The policy requires that engagements that the auditors or management anticipates will exceed pre-established thresholds must be separately approved. The policy also provides that the Committee will authorize one of its members to pre-approve certain services. The Committee appointed Ginger Jones, Chair of the Committee, to pre-approve these services.
For our
2018
fiscal year, Deloitte & Touche LLP served as the Company’s independent registered public accounting firm. The Audit Committee has appointed Deloitte & Touche LLP to serve as our independent auditors for our
2019
fiscal year.
Representatives of Deloitte & Touche LLP are expected to attend the Annual Meeting and will have an opportunity to make a statement if they so desire. The representatives will be available to respond to appropriate questions.
WHEN MUST SHAREHOLDER PROPOSALS BE SUBMITTED FOR THE 2020 ANNUAL MEETING?
A shareholder desiring to submit a proposal for inclusion in our Proxy Statement for our Annual Meeting must deliver the proposal so that we receive it no later than November 29, 2019. Any proposal submitted outside the processes of Rule 14a-8 under the Exchange Act will be considered untimely if submitted after February 12, 2020. A shareholder desiring to nominate one or more directors for election at our 2020 Annual Meeting must deliver the written nomination no earlier than January 16, 2020, and no later than February 17, 2020. All such proposals must be addressed to Susan A. Kovach, Senior Vice President, General Counsel and Secretary, Libbey Inc., 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio 43699-0060.
GENERAL INFORMATION
|
|
Certain Legal Proceedings
|
We are involved in various routine legal proceedings arising in the ordinary course of our business. We are a named potentially responsible party with respect to a landfill in West Covina, California, and with respect to the Lower Ley Creek and Upper Ley Creek sub-sites of the Onondaga (New York) Lake Superfund Site. For a detailed discussion of these environmental contingencies, see note 17, Contingencies, to the Consolidated Financial Statements included in Part II, Item 8 of the Company's Annual Report on Form 10-K for the year-ended December 31, 2018. In addition, the Company and its subsidiaries are subject to examination by various countries' tax authorities. These examinations may lead to proposed or assessed adjustments to our taxes. For a detailed discussion on tax contingencies, see note 7, Income Taxes, to the Consolidated Financial Statements included in Part II, Item 8 of the Company's Annual Report on Form 10-K for the year-ended December 31,
2018
.
As of the date of this proxy statement, neither the Board nor management knows of any other business that will be presented for consideration at the Annual Meeting. However, if other proper matters are presented at the meeting, it is the intention of the proxy committee to take such action as shall be in accordance with their judgment on such matters. All other matters to be voted upon by shareholders will require a majority vote of common stock represented in person or by proxy.
The Company has retained Georgeson to assist in the solicitation of proxies. We estimate the cost of Georgeson's services will be approximately $10,000, plus expenses for out-of-pocket costs. Certain of the Company’s officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Board of Directors’ recommendations, but no additional remuneration will be paid by the Company for the solicitation of those proxies. Such solicitations may be made by personal interview, telephone or electronic communication. Arrangements have been made with brokerage firms and others for the forwarding of proxy solicitation materials to the beneficial owners of common stock, and the Company will reimburse them for reasonable out-of-pocket expenses incurred in connection therewith. The Company will pay the cost of preparing and mailing this proxy statement and other costs of the proxy solicitation made by the Company’s Board of Directors.
We are pleased to take advantage of SEC rules that permit issuers to furnish their proxy materials to shareholders on the internet. Shareholders may request a paper copy of this proxy statement and the
2018
Annual Report by:
|
|
|
Internet
|
www.proxyvote.com
|
Telephone
|
1-800-579-1639
|
Email
|
sendmaterial@proxyvote.com
|
A copy of the Company’s Annual Report on Form 10-K for the year-ended December 31,
2018
, including the consolidated financial statements, as filed with the Securities and Exchange Commission, may be obtained without charge by sending a written request to Libbey Inc., Attention: Investor Relations, 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio 43699-0060.
By Order of the Board of Directors,
Susan A. Kovach
Secretary
Toledo, Ohio
March 28, 2019
APPENDIX A
Calculation of Adjusted EBITDA and Adjusted Cash Earnings
Used For Incentive Compensation Purposes
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Year-ended December 31, 2018
|
|
Adjusted EBITDA
(1)
|
|
|
|
|
Reported net income (loss) (U.S. GAAP)
|
|
$
|
(7,956
|
)
|
|
Add: Interest expense
|
|
|
21,979
|
|
|
Add: Provision for income taxes
|
|
|
10,253
|
|
|
Add: Depreciation and amortization
|
|
|
44,333
|
|
|
Add: Special item before interest and taxes
|
|
|
|
|
Fees associated with strategic initiative
|
|
|
2,341
|
|
|
Reported Adjusted EBITDA (non-GAAP)
|
|
|
70,950
|
|
|
Impact of currency to reflect results at budgeted exchange rates
|
|
|
1,516
|
|
|
Adjusted EBITDA at budgeted exchange rates (non-GAAP)
|
|
$
|
72,466
|
|
|
|
|
|
|
|
Increase in Trade Working Capital
(2)
|
|
|
|
|
Decrease in accounts receivable - net
|
|
$
|
(6,020
|
)
|
|
Increase in inventories - net
|
|
|
4,217
|
|
|
Decrease in accounts payable
|
|
|
3,510
|
|
|
Increase in Trade Working Capital (non-GAAP)
|
|
|
1,707
|
|
|
Decrease due to currency
|
|
|
2,198
|
|
|
Increase in Trade Working Capital at budgeted exchange rates (non-GAAP)
|
|
$
|
3,905
|
|
|
|
|
|
|
|
Adjusted Cash Earnings
|
|
|
|
|
Adjusted EBITDA at budgeted exchange rates (non-GAAP)
|
|
$
|
72,466
|
|
|
Increase in Trade Working Capital at budgeted exchange rates (non-GAAP)
|
|
|
(3,905
|
)
|
|
Adjusted Cash Earnings at budgeted exchange rates (non-GAAP)
|
|
$
|
68,561
|
|
|
|
|
(1)
|
We believe that Adjusted EBITDA, a non-GAAP financial measure, is a useful metric for evaluating our financial performance, as it is a measure that we use internally to assess our performance. For certain limitations and a reconciliation from net income (loss) to Adjusted EBITDA, see the "Non-GAAP Measures" and "Reconciliation of Net Income (Loss) to Adjusted EBITDA" sections included in Part II, Item 6. Selected Financial Data, in our
2018
Annual Report on Form 10-K.
|
|
|
(2)
|
Trade Working Capital, a non-GAAP financial measure, is defined as net accounts receivable plus net inventories less accounts payable. We believe that Trade Working Capital is important supplemental information for investors in evaluating liquidity in that it provides insight into the availability of net current resources to fund our ongoing operations. Trade Working Capital is a measure used by management in internal evaluations of cash availability and operational performance.
|
Trade Working Capital is used in conjunction with and in addition to results presented in accordance with U.S. GAAP. Trade Working Capital is neither intended to represent nor be an alternative to any measure of liquidity and operational performance recorded under U.S. GAAP. Trade Working Capital may not be comparable to similarly titled measures reported by other companies.
Return on Invested Capital (ROIC)
, a non-GAAP financial measure, is defined as after tax adjusted income from operations (using a 35% tax rate) over ending Trade Working Capital (accounts receivable-net plus inventory-net, less accounts payable) plus net book value of property, plant and equipment. For purposes of the 2016 LTIP (2016-2018 performance period), the calculation of ROIC for the 2016 plan year is included in Appendix A of our proxy statement filed on April 4, 2017, and the calculation of ROIC for the 2017 plan year is included in Appendix A of our proxy statement filed on March 29, 2018.
APPENDIX B
Amended and Restated
Libbey Inc. 2016 Omnibus Incentive Plan
Effective
May 10, 2016
May 15, 2019
Contents
|
|
|
|
|
|
|
Article 1. Establishment, Purpose, and Duration
|
B-3
|
Article 2. Definitions
|
B-3
|
Article 3. Administration
|
B-6
|
Article 4. Shares Subject to this Plan and Maximum Awards
|
B-7
|
Article 5. Eligibility and Participation
|
B-8
|
Article 6. Stock Options
|
B-8
|
Article 7. Stock Appreciation Rights
|
B-9
|
Article 8. Restricted Stock and Restricted Stock Units
|
B-10
|
Article 9. Performance Units/Performance Shares
|
B-11
|
Article 10. Cash-Based Awards and Other Stock-Based Awards
|
B-12
|
Article 11. Transferability of Awards
|
B-12
|
Article 12. Performance Measures
|
B-12
|
Article
13
12
. Non-employee Director Awards
|
B-13
|
Article
14
13
.
Dividends and
Dividend Equivalents
|
B-13
|
Article
15
14
. Beneficiary Designation
|
B-14
|
Article
16
15
. Rights of Participants
|
B-14
|
Article
17
16
. Change of Control
|
B-14
|
Article
18
17
. Amendment, Modification, Suspension, and Termination
|
B-15
|
Article
19
18
. Withholding
|
B-15
|
Article
20
19
. Successors
|
B-15
|
Article
21
20
. General Provisions
|
B-15
|
|
|
Amended and Restated
Libbey Inc. 2016 Omnibus Incentive Plan
Article 1. Establishment, Purpose, and Duration
1.1
Establishment
. Libbey Inc., a Delaware corporation (the “
Company
”),
establishes
originally adopted
an incentive compensation plan
to be
known as the Libbey Inc. 2016 Omnibus Incentive Plan (the “
2016 Plan
”),
effective May 10, 2016. The Company hereby amends and restates the 2016 Plan in the form of this Amended and Restated 2016 Libbey Inc. Omnibus Incentive Plan
as set forth in this document.
The 2016 Plan, as so amended and restated, is referred to as the "Plan."
This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards
and Other Stock-Based Awards.
This Plan shall become effective upon shareholder approval (the “
Effective Date
”) and shall remain in effect as provided in Section 1.3 hereof.
1.2
Purpose of this Plan
. The purpose of this Plan is to enable the Company to obtain and retain the services of Employees and Non-employee Directors considered essential to the long-range success of the Company, to provide a means whereby Employees and Non-employee Directors develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its shareholders.
1.3
Duration of this Plan
. Unless sooner terminated as provided in this Plan, this Plan shall terminate ten (10) years from the Effective Date. After this Plan is terminated, no Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and this Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten (10) years after the earlier of (a) adoption of this Plan by the Board or (b) the Effective Date.
Article 2. Definitions
Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized.
|
|
2.1
|
“Affiliate”
means any corporation or other entity (including, but not limited to, a partnership or a limited liability company) that is affiliated with the Company through stock or equity ownership, or otherwise, and is designated as an Affiliate for purposes of this Plan by the Committee. For purposes of granting Options or Stock Appreciation Rights, an entity may not be considered an Affiliate if it results in noncompliance with Code Section 409A.
|
|
|
2.2
|
“Annual Award Limit”
or
“Annual Award Limits”
has the meaning set forth in Section 4.3.
|
|
|
2.3
|
“Award”
means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards
or Other Stock-Based Awards, in each case subject to the terms of this Plan.
|
|
|
2.4
|
“Award Agreement”
or
“Agreement”
means either (i) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under this Plan or (ii) a written statement issued by the Company to a Participant describing the terms and provisions of the Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements and the use of electronic, internet or other non-paper means for the acceptance of the Award Agreements and actions under them by a Participant.
|
|
|
2.5
|
“Beneficial Owner”
or
“Beneficial Ownership”
has the meaning ascribed to that term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
|
|
|
2.6
|
“Board”
or
“Board of Directors”
means the Board of Directors of the Company.
|
|
|
2.7
|
“Cash-Based Award”
means an Award, denominated in cash, granted to a Participant as described in Article 10.
|
|
|
2.8
|
“Change in Control”
means any of the following events:
|
|
|
(a)
|
Any Person (as defined below) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then-outstanding securities. For purposes of this Plan, the term “Person” is used as that term is used in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that the term shall not include (i) the Company, any trustee or other fiduciary holding
|
securities under an employee benefit plan of the Company, or (ii) any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, and provided further that this subsection (a) shall not apply to any Person who is the Beneficial Owner, directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then-outstanding securities as of the Effective Date of this Plan if and for so long as that Person does not beneficially own, or increase its beneficial ownership to, twenty-five percent (25%) or more of the combined voting power of the Company’s then-outstanding securities;
|
|
(b)
|
During any period of two (2) consecutive years beginning after the Effective Date of this Plan, Continuing Directors (excluding any Directors designated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 2.8(a), (c) or (d)) cease for any reason to constitute at least a majority of the Board;
|
|
|
(c)
|
The consummation of a merger or consolidation of the Company with any other corporation or other entity, unless, after giving effect to the merger or consolidation, the voting securities of the Company 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 sixty-six and two-thirds percent (66 2/3%) of the combined voting power of the voting securities of the Company or the surviving entity outstanding immediately after the merger or consolidation; or
|
|
|
(d)
|
Consummation of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.
|
|
|
2.9
|
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations under the Code and any successor or similar provision.
|
|
|
2.10
|
“Committee”
means the Compensation Committee of the Board or a subcommittee thereof, or any other committee designated by the Board to administer this Plan. The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board. If the Committee does not exist or cannot function for any reason, the Board may take any action under the Plan that otherwise would be the responsibility of the Committee.
|
|
|
2.11
|
“Company”
means Libbey Inc., a Delaware corporation, and any successor thereto as provided in Article
20
19
.
|
|
|
2.12
|
“Continuing Directors”
means individuals who both (a) as of the end of the period in question are Directors of the Company or whose election or nomination for election by the Company’s shareholders has been approved by a vote of at least two-thirds (2/3) of the Directors of the Company then in office and (b) either (i) at the beginning of the period in question or (ii) after the beginning but prior to the end of the period in question were Directors of the Company or whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the Directors of the Company in office at the beginning of the period.
|
|
|
2.13
|
“Covered Employee”
means any Employee who is or may become a “Covered Employee,” as defined in Code Section 162(m), and who is designated, either as an individual Employee or class of Employees, by the Committee within the shorter of (i) ninety (90) days after the beginning of the Performance Period or (ii) twenty-five percent (25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for the applicable Performance Period.
|
|
|
2.14
|
2.13
“Director”
means any individual who is a member of the Board of Directors of the Company.
|
|
|
2.15
|
2.14
“Dividend Equivalent”
means a right to receive the equivalent value (in cash or Shares) of dividends paid on common stock, awarded under Article
14
13
.
|
|
|
2.16
|
2.15
“DRO”
means a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules under such statute.
|
|
|
2.17
|
2.16
“Effective Date”
has the meaning set forth in Section 1.1.
|
|
|
2.18
|
2.17
“Employee”
means any individual designated as an employee of the Company, its Affiliates and/or its Subsidiaries on the payroll records thereof.
|
|
|
2.19
|
2.18
“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
|
|
|
2.20
|
2.19
“Fair Market Value”
or
“FMV”
means a price that is based on the opening, closing, actual, high, low or average selling prices of a Share reported on the NYSE, NYSE
MKT
American
or other established stock exchange (or exchanges) on the applicable date, the preceding trading day, the next preceding trading day, the next succeeding trading day or an average of trading days, as determined by the Committee in its discretion. Unless the Committee determines otherwise, Fair Market Value shall be deemed to be equal to the closing price of a Share on the applicable date, or if shares were not traded on the applicable date, then on the preceding trading day. If Shares are not publicly traded at the time a determination of their value is required to be made under this Plan, then the determination of their Fair Market Value shall be made by the Committee in such manner as it deems appropriate, provided that, in the case of Options and Stock Appreciation Rights, the determination shall be made in compliance with Code Section 409A. The definition(s) of FMV shall be specified in each
|
Award Agreement and may differ depending on whether FMV is in reference to the grant, exercise, vesting, settlement or payout of an Award.
|
|
2.21
|
2.20
“Full Value Award”
means an Award other than in the form of an ISO, NQSO or SAR.
|
|
|
2.22
|
2.21
“Grant Price”
means the price established at the time of grant of an SAR pursuant to Article 7.
|
|
|
2.23
|
2.22
“Incentive Stock Option”
or
“ISO”
means an Option that is granted under Article 6 to an Employee, that is designated as an Incentive Stock Option and that is intended to meet the requirements of Code Section 422 or any successor provision.
|
|
|
2.24
|
2.23
“Insider”
means an individual who is, on the relevant date, an officer or Director of the Company, or the Beneficial Owner of more than ten percent (10%) of any class of the Company’s equity securities that are registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange Act.
|
|
|
2.25
|
2.24
“Nominating and Governance Committee”
means the Nominating and Governance Committee of the Board or a subcommittee thereof, or any other committee designated by the Board to administer the pay of Non-employee Directors pursuant to this Plan. The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board. If the Nominating and Governance Committee does not exist or cannot function for any reason, the Board may take any action under the Plan that otherwise would be the responsibility of the Nominating and Governance Committee.
|
|
|
2.26
|
2.25
“Non-employee Director”
means a Director who is not an Employee.
|
|
|
2.27
|
2.26
“Non-employee Director Award”
means any NQSO, SAR or Full Value Award granted, whether singly, in combination, or in tandem, to a Non-employee Director.
|
|
|
2.28
|
2.27
“Nonqualified Stock Option”
or
“NQSO”
means an Option that is not intended to meet the requirements of Code Section 422 or that otherwise does not meet those requirements.
|
|
|
2.29
|
2.28
“NYSE”
means the New York Stock Exchange.
|
|
|
2.30
|
2.29
“Option”
means an option granted to a Participant to purchase the Company’s Shares, including an Incentive Stock Option or a Nonqualified Stock Option, as described in Article 6.
|
|
|
2.31
|
2.30
“Option Price”
means the price at which a Participant may purchase a Share pursuant to an Option.
|
|
|
2.32
|
2.31
“Other Stock-Based Award”
means an equity-based or equity-related Award that is not otherwise described by the terms of this Plan and that is granted pursuant to Article 10.
|
|
|
2.33
|
2.32
“Participant”
means any eligible individual, as determined in accordance with Article 5, to whom an Award is granted.
|
|
|
2.34
|
“Performance-Based Compensation”
means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for certain performance-based compensation paid to Covered Employees. However, nothing in this Plan shall be construed to mean that an Award that does not satisfy the requirements for performance-based compensation under Code Section 162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A.
|
|
|
2.35
|
“Performance Measures”
means the measures, as described in Article 12, on which the performance goals are based. Performance Measures must be approved by the Company’s shareholders pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.
|
|
|
2.36
|
2.33
“Performance Period”
means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award.
|
|
|
2.37
|
2.34
“Performance Share”
means an Award that is granted pursuant to Article 9, is subject to the terms of this Plan and is denominated in Shares, the value of which at the time it is payable is determined as a function of the extent to which the corresponding performance criteria have been achieved.
|
|
|
2.38
|
2.35
“Performance Unit”
means an Award that is granted pursuant to Article 9, is subject to the terms of this Plan and is denominated in units, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria have been achieved.
|
|
|
2.39
|
2.36
“Period of Restriction”
means the period during which Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture based on the passage of time, the achievement of performance goals or the occurrence of other events as determined by the Committee, in its discretion, as provided in Article 8.
|
|
|
2.40
|
2.37
“Plan”
means the
Amended and Restated
Libbey Inc. 2016 Omnibus Incentive Plan.
|
|
|
2.41
|
2.38
“Plan Year”
means the calendar year.
|
|
|
2.42
|
2.39
“Replaced Award”
means an Award that is granted under this Plan and as to which vesting will be accelerated upon a Change in Control unless the Participant is provided with a Replacement Award.
|
|
|
2.43
|
2.40
“Replacement Award”
means an Award that meets the requirements of Section
17.2
16.2
and is provided to the Participant to replace a Replaced Award.
|
|
|
2.44
|
2.41
“Restricted Stock
” means an Award granted to a Participant pursuant to Article 8.
|
|
|
2.45
|
2.42
“Restricted Stock Unit”
means an Award that is granted to a Participant pursuant to Article 8 but as to which no Shares actually are awarded to the Participant on the date of grant.
|
|
|
2.46
|
2.43
“Share”
means a share of common stock of the Company, $.01
par value per share.
|
|
|
2.47
|
“Special Items”
means unanticipated or unusual transactions or events that were not foreseen or were foreseen but not included in the Company’s annual operating plan because the occurrence of the event was substantially uncertain at the time the annual operating plan was submitted to the Board.
|
|
|
2.48
|
2.44
“Stock Appreciation Right”
or
“SAR”
means an Award, designated as a SAR, pursuant to the terms of Article 7.
|
|
|
2.49
|
2.45
“Subsidiary”
means any corporation or other entity, whether domestic or foreign, in which the Company directly or indirectly owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock.
|
|
|
2.50
|
2.46
“Substitute Award”
means an Award that, in connection with a corporate transaction such as a merger, combination, consolidation or acquisition of property or stock, is granted under this Plan upon the assumption by the Company of, or in substitution by the Company for, an outstanding equity award previously granted by another company or entity to the corporate transaction; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an Award made in connection with the cancellation and repricing of an Option or SAR.
|
|
|
2.51
|
2.47
“Termination of Employment”
means the time when the employee-employer relationship between a Participant and the Company or any Subsidiary is terminated for any reason, with or without cause. Termination of Employment includes, but is not limited to, termination by resignation, discharge, death, disability or retirement, but excludes, at the discretion of the Committee, (a) termination where there is a simultaneous reemployment or continuing employment of a Participant by the Company or any Subsidiary, (b) termination that results in temporary severance of the employee-employer relationship, and (c) termination where there is simultaneous establishment of a consulting relationship by the Company or a Subsidiary with a former Employee. The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, without limitation, the question of whether a Termination of Employment resulted from a discharge for good cause, and all questions of whether a particular leave of absence constitutes a Termination of Employment; provided, however, that, with respect to Incentive Stock Options, unless otherwise determined by the Committee in its discretion, a leave of absence, change in status from an Employee to an independent contractor, or other change in the employee-employer relationship shall constitute a Termination of Employment if and to the extent that the leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under that Section of the Code.
|
Article 3.
Administration
3.1
General
. The Committee shall be responsible for administering this Plan, subject to this Article 3 and the other provisions of this Plan. The Committee may employ attorneys, consultants, accountants, agents and other individuals, any of whom may be an Employee, and the Committee, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions, or valuations of any such individuals. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participants, the Company, and all other interested individuals.
3.2
Authority of the Committee
. The Committee shall have full and exclusive discretionary power to interpret the terms and the intent of this Plan and any Award Agreement or other agreement or document ancillary to or in connection with this Plan, to determine eligibility of Employees for Awards and to adopt such rules, regulations, forms, instruments and guidelines for administering this Plan as the Committee may deem necessary or proper. That authority shall include, but not be limited to: selecting which Employees are Award recipients; establishing all Award terms and conditions, including the terms and conditions set forth in Award Agreements; accelerating the vesting of Awards; granting Awards as an alternative to or as the form of payment for grants or rights earned or due under compensation plans or arrangements of the Company; construing any ambiguous provision of the Plan or any Award Agreement; and, subject to Article
18
17
, adopting modifications and amendments to this Plan or any Award Agreement, including without limitation, any that are necessary to comply with the laws of the countries and other jurisdictions in which the Company, its Affiliates and/or its Subsidiaries operate.
3.3 Delegation
.
The Committee may delegate to one or more of its members or to one or more officers of the Company, and/or its Subsidiaries and Affiliates, or to one or more agents or advisors, such administrative duties or powers as the Committee may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers may employ one or more individuals to render advice with respect to any responsibility the Committee or those individuals may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the Committee:
(a) designate Employees to be recipients of Awards; and (b) determine the size of and vesting terms for any such Awards; provided, however, that (i) in the case of Awards to be granted to Employees who are considered Insiders, the Committee shall not delegate these responsibilities to any officer; (ii) the resolution providing the authorization sets forth the total number of Awards the officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the delegated authority.
Article 4. Shares Subject to this Plan and Maximum Awards
4.1
Number of Shares Available for Awards.
|
|
(a)
|
There is hereby reserved for issuance under the Plan an aggregate of
one million two hundred thousand (1,200,000)
one million nine hundred thirty-four thousand ninety-three (1,934,093)
Shares of Libbey Inc. common stock.
|
|
|
(b)
|
The maximum number of Shares that may be issued pursuant to ISOs under this Plan shall be
one million two hundred thousand (1,200,000)
one million nine hundred thirty-four thousand ninety-three (1,934,093)
Shares.
|
|
|
(c)
|
The maximum number of Shares that may be granted to Non-employee Directors collectively in any Plan Year shall be
150,000
200,000
Shares, and no Non-employee Director may receive Awards subject to more than 20,000 Shares in any Plan Year.
|
|
|
(d)
|
Except with respect to a maximum of five percent (5%) of the shares authorized for issuance under this Plan, and subject to Section 3.3 above, any Full Value Awards that vest on the basis of the Participant’s continued employment with or service to the Company shall not provide for vesting
that is any more rapid than annual pro rata vesting over a three- (3) year period, with the first vesting date occurring no earlier than
prior to
the first anniversary of the date on which such Awards are approved, and any Full Value Awards that vest upon the attainment of performance goals shall provide for a performance period of at least twelve (12) months. Subject to Section 3.3 above, Awards of SARs and/or Options that vest on the basis of the Participant’s continued employment with or service to the Company shall not provide for vesting prior to the first anniversary of the date on which such Awards are approved.
|
4.2
Share Counting
.
Awards that are required to be paid in cash pursuant to their terms will not reduce the share reserve. To the extent that an Award granted under
the
this
Plan is canceled, expired, forfeited, surrendered
, settled by delivery of fewer shares than the number underlying the Award
, settled in cash or otherwise terminated without delivery of the shares, the shares of common stock retained by or returned to the Company will (a) not be deemed to have been delivered under the Plan, (b) be available for future Awards under the Plan, and (c) increase the share reserve by one share for each share that is retained by or returned to the Company. Notwithstanding the foregoing, shares that are (i) withheld from an Award or separately surrendered by the Participant in payment of the exercise or purchase price or in payment of taxes relating to such an Award or (ii) not issued or delivered as a result of the net settlement of an outstanding Option or SAR shall be deemed to constitute delivered shares, will not be available for future Awards under
the
Plan and shall continue to be counted as outstanding for purposes of determining whether award limits have been attained. If an Award is settled in cash, the number of shares of common stock on which the Award is based shall not count toward any individual share limit, but shall count against the Annual Award Limit for Cash-Based Awards. Awards assumed or substituted for in a merger, consolidation, acquisition of property or stock or reorganization will not reduce the share reserve.
The Shares available for issuance under this Plan may be authorized and unissued Shares or treasury Shares.
4.3
Annual Award Limits
.
Unless and until the Committee determines that an Award to a Covered Employee shall not be designed to qualify as Performance-Based Compensation, the
The
following limits (each an “
Annual Award Limit
” and, collectively, “
Annual Award Limits
”) shall apply to grants of Awards under this Plan:
|
|
(a)
|
Options
: The maximum aggregate number of Shares subject to Options granted in any one Plan Year to any one Participant shall be five hundred thousand (500,000).
|
|
|
(b)
|
SARs
: The maximum number of Shares subject to Stock Appreciation Rights granted in any one Plan Year to any one Participant shall be five hundred thousand (500,000).
|
|
|
(c)
|
Restricted Stock or Restricted Stock Unit
s: The maximum aggregate grant with respect to Awards of Restricted Stock or Restricted Stock Units in any one Plan Year to any one Participant shall be five hundred thousand (500,000) Shares.
|
|
|
(d)
|
Performance Units or Performance Shares
: The maximum aggregate Award of Performance Units or Performance Shares that a Participant may receive in any one Plan Year shall be five hundred thousand (500,000) Shares, or equal to the value of five hundred thousand (500,000) Shares determined as of the date of payout.
|
|
|
(e)
|
Cash-Based Awards and Other Stock-Based Awards
: The maximum aggregate amount awarded or credited with respect to Cash-Based or Other Stock-Based Awards to any one Participant in any one Plan Year may not exceed the value of five million dollars ($5,000,000) or five hundred thousand (500,000) Shares determined as of the date of payout.
|
4.4
Adjustments in Authorized Shares
. In the event of any corporate event or transaction (including, but not limited to, a change in the Shares or the capitalization of the Company), such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or property
of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure, number of outstanding Shares or distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in its sole discretion, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as applicable, the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, the number and kind of Shares subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards, the Annual Award Limits, and other value determinations applicable to outstanding Awards.
The Committee, in its sole discretion, also may make appropriate adjustments in the terms of any Awards under this Plan to reflect or relate to the changes or distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the length of Performance Periods. Notwithstanding anything in this Plan to the contrary, the Committee may not take any action described in this Section 4.4 if the action would result in a violation of the requirements of Code Section 409A. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan.
Subject to the provisions of Article
18
17
and notwithstanding anything else in this Plan to the contrary, the Board or the Committee may authorize the issuance of Awards under this Plan in connection with the assumption of, or substitution for, outstanding benefits previously granted to individuals who become Employees of Libbey Inc. or any Subsidiary as a result of any merger, consolidation, acquisition of property or stock, or reorganization, upon such terms and conditions as the Committee may deem appropriate, subject to compliance with the rules under Code Sections 409A, 422, and 424, as and where applicable. Any Substitute Awards granted under the Plan shall not count against the share limitations set forth in Section 4.3 hereof, to the extent permitted by Section 711 of the NYSE
MKT
American
Company Guide or the comparable corporate governance standards of any other stock exchange on which the Company’s Shares may trade.
Article 5. Eligibility and Participation
5.1
Eligibility
. Individuals eligible to participate in this Plan include all Employees and Non-employee Directors.
5.2
Actual Participation
. Subject to the provisions of this Plan, the Committee from time to time may select from all eligible individuals those individuals to whom Awards shall be granted and shall determine, in its sole discretion, the nature of, any and all terms permissible by law with respect to, and the amount of each Award.
Article 6. Stock Options
6.1
Grant of Options
. Subject to the terms and provisions of this Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee in its sole discretion, provided that ISOs may be granted only to eligible Employees of the Company or of any parent or Subsidiary (as permitted under Code Sections 422 and 424). However, an Employee who is employed by an Affiliate and/or Subsidiary may be granted Options only to the extent the Affiliate and/or Subsidiary is part of: (i) the Company’s controlled group of corporations or (ii) a trade or business under common control, as of the date of grant, as determined within the meaning of Code Section 414(b) or 414(c) and substituting for this purpose ownership of at least fifty percent (50%) of the Affiliate and/or Subsidiary to determine the members of the controlled group of corporations and the entities under common control.
6.2
Award Agreement
. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which an Option shall become vested and exercisable, and such other provisions as the Committee shall determine and as are not inconsistent with the terms of this Plan. The Award Agreement also shall specify whether the Option is intended to be an ISO or a NQSO.
6.3
Option Price
. The Option Price for each grant of an Option under this Plan shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement; provided, however, the Option Price must be at least equal to one hundred percent (100%) of the FMV of the Shares as determined on the date of grant.
Notwithstanding this Section 6.3 to the contrary, in the case of an Option that is a Substitute Award, the price per share of the Shares subject to the Option may be less than the Fair Market Value per Share on the date of grant; provided, however, that X shall not exceed Y, where X is the amount, if any, by which the aggregate Fair Market Value (as of the date the Substitute Award is granted) of the Shares subject to the Substitute Award exceeds the aggregate option price thereof, and Y is the amount, if any, by which the aggregate Fair Market Value (determined by the Committee as of the time immediately preceding the transaction giving rise to the Substitute Awards) of the Shares of the predecessor entity that were subject to the grant assumed or substituted for the Company exceeds the aggregate option price of such Shares.
6.4
Term of Options
. Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant; provided, however, no Option shall be exercisable later than the tenth (10
th
) anniversary date of its grant. Notwithstanding the foregoing, the Committee has the authority to grant to Participants who are not residents of the United States Nonqualified Stock Options that have a term greater than ten (10) years.
6.5
Exercise of Options
. Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve. The terms and restrictions applicable to Options need not be the same for each grant or for each Participant.
6.6 Payment
. Options granted under this Article 6 shall be exercised by the delivery to the Company or an agent designated by the Company of a notice of exercise in a form specified or accepted by the Committee, or by complying with any alternative procedures
authorized by the Committee. The notice of exercise shall set forth the number of Shares with respect to which the Option is to be exercised and be accompanied by full payment for the Shares.
Payment of the Option Price shall be a condition to the issuance of the Shares as to which an Option shall be exercised. The Option Price of any Option shall be payable to the Company in full either: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price; (c) by a cashless (broker-assisted) exercise; (d) by a combination of (a), (b) and/or (c); or (e) any other method approved or accepted by the Committee, in its sole discretion.
Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares or, upon the Participant’s request, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s).
Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.
6.7
Restrictions on Share Transferability
. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, minimum holding period requirements or restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, or under any blue sky or state securities laws applicable to the Shares.
6.8 Termination of Employment
.
Each Participant’s Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following Termination of Employment or termination of services to the Company, its Affiliates and/or its Subsidiaries, as the case may be. These provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on the reasons for termination.
6.9 Notification of Disqualifying Disposition
. If any Participant shall make any disposition of Shares issued pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), the Participant shall notify the Company of such disposition within ten (10) days thereof.
6.10
No Other Feature of Deferral
. No Option granted pursuant to this Plan shall provide for any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Option.
Article 7. Stock Appreciation Rights
7.1 Grant of SARs
. Subject to the terms and conditions of this Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee. However, an Employee who is employed by an Affiliate and/or Subsidiary may be granted SARs only to the extent the Affiliate and/or Subsidiary is: (i) part of the Company’s controlled group of corporations or (ii) a trade or business under common control, as of the date of grant, as determined within the meaning of Code Section 414(b) or 414(c) and substituting for this purpose ownership of at least fifty percent (50%) of the Affiliate and/or Subsidiary to determine the members of the controlled group of corporations and the entities under common control.
Subject to the terms and conditions of this Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant and, consistent with the provisions of this Plan, in determining the terms and conditions pertaining to the SARs.
The Grant Price for each grant of a SAR shall be determined by the Committee and shall be specified in the Award Agreement; provided, however, the Grant Price on the date of grant must be at least equal to one hundred percent (100%) of the FMV of the Shares as determined on the date of grant.
Notwithstanding this Section 7.1 to the contrary, in the case of a SAR that is a Substitute Award, the Grant Price of the Shares subject to the SAR may be less than the Fair Market Value per Share on the date of grant; provided, however, that the X shall not exceed Y, where X is the amount, if any, by which the aggregate Fair Market Value (as of the date on which the Substitute Award is granted) of the Shares subject to the Substitute Award exceeds the aggregate Grant Price with respect to the Shares subject to the Substitute Award and Y is the amount, if any, by which the aggregate Fair Market Value (determined by the Committee as of the time immediately preceding the transaction giving rise to the Substitute Awards), of the Shares of the predecessor entity that were subject to the grant assumed or substituted for the Company exceeds the aggregate Grant Price of the Shares.
7.2
SAR Agreement
. Each SAR Award shall be evidenced by an Award Agreement that shall specify the Grant Price, the term of the SAR and such other provisions as the Committee shall determine.
7.3
Term of SAR
. The term of a SAR granted under this Plan shall be determined by the Committee, in its sole discretion, and, except as determined otherwise by the Committee and specified in the SAR Award Agreement, no SAR shall be exercisable later than the tenth (10
th
) anniversary date of its grant. Notwithstanding the foregoing, the Committee has the authority to grant to Participants who are not residents of the United States SARs that have a term greater than ten (10) years.
7.4
Exercise of SARs
. SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes.
7.5
Settlement of SARs
. Upon the exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount equal to the product of the excess of the Fair Market Value of a Share on the date of exercise over the Grant Price and the number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in cash, Shares or any combination of cash and Shares, or in any other manner approved by the Committee in its sole discretion. The Committee’s determination regarding the form of SAR payout shall be set forth in the Award Agreement pertaining to the grant of the SAR.
7.6
Termination of Employment
. Each Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the SAR following Termination of Employment with, or provision of services to, the Company, its Affiliates and/or its Subsidiaries, as the case may be. These provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with Participants, need not be uniform among all SARs issued pursuant to this Plan, and may reflect distinctions based on the reasons for termination.
7.7
Other Restrictions
. The Committee shall impose such other conditions and/or restrictions on any Shares received upon exercise of a SAR granted pursuant to this Plan as it may deem advisable or desirable. These restrictions may include, but shall not be limited to, a requirement that the Participant hold the Shares received upon exercise of a SAR for a specified period of time.
7.8
No Other Feature of Deferral
. No SAR granted pursuant to this Plan shall provide for any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the SAR.
Article 8. Restricted Stock and Restricted Stock Units
8.1
Grant of Restricted Stock or Restricted Stock Units
. Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine.
8.2
Restricted Stock or Restricted Stock Unit Agreement
. Each grant of Restricted Stock and/or Restricted Stock Units shall be evidenced by an Award Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine.
8.3
Other Restrictions
. The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may deem advisable, including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock or each Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, restrictions under applicable laws or under the requirements of any stock exchange or market upon which the Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of the Restricted Stock or Restricted Stock Units.
To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions and/or restrictions applicable to the Shares have been satisfied or have lapsed.
Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the Participant after all conditions and restrictions applicable to the Shares have been satisfied or have lapsed (including satisfaction of any applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares or a combination of cash and Shares as the Committee, in its sole discretion, shall determine.
8.4
Certificate Legend
. In addition to any legends placed on certificates pursuant to Section 8.3, each certificate representing Shares of Restricted Stock granted pursuant to this Plan may bear a legend such as the following or as otherwise determined by the Committee in its sole discretion:
The sale or transfer of Shares of stock represented by this certificate, whether voluntary, involuntary or by operation of law, is subject to certain restrictions on transfer as set forth in the
Amended and Restated
Libbey Inc.
2006
2016
Omnibus Incentive Plan, and in the associated Award Agreement. A copy of this Plan and the Award Agreement may be obtained from Libbey Inc.
8.5
Voting Rights
. Unless otherwise determined by the Committee and set forth in a Participant’s Award Agreement, to the extent permitted or required by law, Participants holding Shares of Restricted Stock granted pursuant to this Plan may be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction. A Participant shall have no voting rights with respect to any Restricted Stock Units granted pursuant to this Plan.
8.6
Termination of Employment
. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain Restricted Stock and/or Restricted Stock Units following Termination of Employment with, or provision of services to, the Company, its Affiliates and/or its Subsidiaries, as the case may be. These provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units issued pursuant to this Plan, and may reflect distinctions based on the reasons for termination.
8.7
Section 83(b) Election
. The Committee may provide in an Award Agreement that the Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Code Section 83(b). If
2019 Proxy Statement
B-10
a Participant makes an election pursuant to Code Section 83(b) concerning a Restricted Stock Award, the Participant shall be required to file promptly a copy of the election with the Company.
Article 9. Performance Units/Performance Shares
9.1
Grant of Performance Units/Performance Shares
. Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance Shares to Participants in such amounts and upon such terms as the Committee shall determine.
9.2
Value of Performance Units/Performance Shares
. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the value and/or number of Performance Units/Performance Shares that will be paid out to the Participant.
9.3
Earning of Performance Units/Performance Shares
. Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Units/Performance Shares shall be entitled to receive payout on the value and number of Performance Units/Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.
9.4 Form and Timing of Payment of Performance Units/Performance Shares
. Payment of earned Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in the Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may pay earned Performance Units/Performance Shares in the form of cash or in Shares (or in a combination thereof) equal to the value of the earned Performance Units/Performance Shares at the close of the applicable Performance Period, or as soon as practicable after the end of the Performance Period. Any Shares may be granted subject to any restrictions deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of the Awards shall be set forth in the Award Agreement pertaining to the grant of the Award.
9.5
Termination of Employment
. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain Performance Units and/or Performance Shares following Termination of Employment with, or provision of services to, the Company, its Affiliates and/or its Subsidiaries, as the case may be. These provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued pursuant to this Plan, and may reflect distinctions based on the reasons for termination.
Article 10. Cash-Based Awards and Other Stock-Based Awards
10.1
Grant of Cash-Based Awards
. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such amounts and upon such terms as the Committee may determine.
10.2
Other Stock-Based Awards
. The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or promise to deliver or offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions as the Committee shall determine. Other Stock-Based Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares, and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.
10.3
Value of Cash-Based and Other Stock-Based Awards
. Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals in its discretion. If the Committee exercises its discretion to establish performance goals, the number and/or value of Cash-Based Awards or Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the performance goals are met.
10.4
Payment of Cash-Based Awards and Other Stock-Based Awards
. Payment, if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be made, in accordance with the terms of the Award, in cash or Shares as the Committee determines.
10.5
Termination of Employment
. The Committee shall determine the extent to which the Participant shall have the right to receive Cash-Based Awards or Other Stock-Based Awards following Termination of Employment with, or provision of services to, the Company, its Affiliates and/or its Subsidiaries, as the case may be. These provisions shall be determined in the sole discretion of the Committee, may be included in an agreement entered into with each Participant, need not be uniform among all Awards of Cash-Based Awards or
Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination.
Article 11. Transferability of Awards
11.1
Transferability
.
Except as provided in Section 11.2 below, during a Participant’s lifetime, his or her Awards shall be exercisable only by the Participant. Awards shall not be transferable other than by will or the laws of descent and distribution or, subject to the consent of the Committee, pursuant to a DRO; no Awards shall be subject, in whole or in part, to attachment, execution or levy of any kind; and any purported transfer in violation of this Section 11.1 shall be null and void. The Committee may establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable or Shares deliverable in the event of, or following, the Participant’s death may be provided.
11.2
Committee Action
. The Committee may, in its discretion, determine that notwithstanding Section 11.1, any or all Awards (other than ISOs) shall be transferable to and exercisable by such transferees, and subject to such terms and conditions, as the
Committee may deem appropriate; provided, however, no Award may be transferred for value (as defined in the General Instructions to Form S-8).
Article 12. Performance Measures
12.1
Performance Measures
. The performance goals upon which the payment or vesting of an Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be limited to the following Performance Measures:
|
|
(a)
|
Net earnings or net income (before or after taxes);
|
|
|
(c)
|
Net sales or revenue growth;
|
|
|
(d)
|
Net operating profit;
|
|
|
(e)
|
Return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales or revenue);
|
|
|
(f)
|
Cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment);
|
|
|
(g)
|
Earnings before or after taxes, interest, depreciation and/or amortization;
|
|
|
(h)
|
Gross or operating margins;
|
|
|
(j)
|
Share price (including, but not limited to, growth measures and total shareholder return);
|
|
|
(l)
|
Cost reductions or savings;
|
|
|
(m)
|
Performance against operating budget goals;
|
|
|
(o)
|
Operating efficiency;
|
|
|
(p)
|
Funds from operations;
|
|
|
(r)
|
Customer satisfaction;
|
|
|
(s)
|
Working capital targets; and
|
|
|
(t)
|
Economic value added or EVA
®
(net operating profit after tax minus the sum of capital multiplied by the cost of capital).
|
Any Performance Measure(s) may be used to measure the performance of the Company, Subsidiary and/or Affiliate as a whole or any business unit of the Company, Subsidiary and/or Affiliate, or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Measure (j) above as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Article 12.
12.2
Evaluation of Performance
. The Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) acquisitions or divestitures, (g) foreign exchange gains and losses and/ or foreign currency translation adjustments; and (h) other Special Items. To the extent the inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.
12.3
Adjustment of Performance-Based Compensation
. Awards that are intended to qualify as Performance-Based Compensation may not be adjusted upward. The Committee shall retain the discretion to adjust the Awards downward, either on a formula or discretionary basis or any combination, as the Committee determines.
12.4
Committee Discretion
. If applicable tax and/or securities laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of the changes, the Committee shall have sole discretion to make the changes without obtaining shareholder approval provided the exercise of such discretion does not violate Code Section 409A. In addition, if the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make the grants without satisfying the requirements of Code Section 162(m) and base vesting on Performance Measures other than those set forth in Section 12.1.
2019 Proxy Statement
B-12
Article
13
12
. Non-employee Director Awards
Non-employee Directors may be granted Awards pursuant to this Plan only in accordance with this Article
13
12
. Awards granted to Non-employee Directors pursuant to this Plan shall not be subject to management’s discretion. From time to time, the Nominating and Governance Committee shall set the amount(s) and type(s) of Awards that shall be granted to all Non-employee Directors on a periodic basis pursuant to the Plan, as well as any additional amount(s), if any, to be awarded, also on a periodic basis, based on each of the following: (a) the number of committees of the Board on which a Non-employee Director serves, (b) service of a Non-employee Director as the chair of a committee of the Board, (c) service of a Non-employee Director as Chairman of the Board, or (d) the first selection or appointment of an individual to the Board as a Non-employee Director. Subject to the limits set forth in Section 4.1(c) and the foregoing, the Nominating and Governance Committee shall grant these Awards to Non-employee Directors and any Non-employee Chairman of the Board, and grant new Non-employee Director Awards, as it shall from time to time determine. The terms and conditions of any grant to any Non-employee Director shall be set forth in an Award Agreement.
Article
14
13
. Dividend Equivalents
Any Participant selected by the Committee may be granted Dividend Equivalents on Shares that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee. However
,
:
(a)
no Dividend Equivalents may be granted on any Award of Options or SARs
,
;
(b) dividends or Dividend Equivalents with respect to any shares underlying any Award that is subject to vesting conditions or restrictions shall be deferred and held in escrow or deemed reinvested in additional Shares until all vesting conditions or restrictions relating to the Award (or portion of the Award to which the dividend or Dividend Equivalent relates) have been satisfied and shall be forfeited if and to the extent the vesting conditions or restrictions are not satisfied;
and
(c)
Dividend Equivalents that are granted on any Performance Units and/or Performance Shares shall be deferred and held in escrow or deemed reinvested in additional Performance Units and/or Performance Shares until the achievement of the applicable Performance Measures and the shares underlying such additional Performance Units and/or Performance Shares will be paid only to the extent the shares to which the Dividend Equivalents relate are actually earned.
Article
15
14
. Beneficiary Designation
Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan is to be paid in case of his death before he receives any or all of the benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid to or exercised by the Participant’s executor, administrator or legal representative.
Article
16
15
. Rights of Participants
16
15
.1
Employment
. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Affiliates and/or its Subsidiaries to terminate any Participant’s employment or service on the Board or to the Company
at any time or for any reason not prohibited by law, nor confer upon any Participant any right to continue his employment or service as a Director for any specified period of time.
Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company, its Affiliates and/or its Subsidiaries. Accordingly, subject to Articles 3 and
18
17
, this Plan and the benefits under it may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates and/or its Subsidiaries.
16
15
.2
Participation
. No individual shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.
16
15
.3
Rights as a Shareholder
. Except as otherwise provided in this Plan, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the record holder of the Shares.
Article
17
16
. Change in Control
17
16
.1 Change of Control of the Company
. Notwithstanding any other provision of this Plan to the contrary, the provisions of this Article
17
16
shall apply in the event of a Change of Control.
Except to the extent that a Replacement Award is provided to the Participant to replace an outstanding Award upon a Change of Control:
|
|
(a)
|
all then-outstanding Options and SARs shall become fully vested and exercisable immediately;
|
|
|
(b)
|
all other Awards that are not then vested and as to which vesting depends upon only the satisfaction of a service obligation by a Participant to the Company, Subsidiary or Affiliate shall vest in full and be free of restrictions related to the vesting of the Awards; and
|
|
|
(c)
|
All then-outstanding Performance Units, Performance Shares, Other Cash-Based Awards and Other Stock Based Awards that vest upon the attainment of Performance
Measures
goals
shall be prorated as of the date of the Change
|
in Control and deemed earned if and to the extent the applicable Performance
Measures
goals
actually are achieved as of the date of the Change in Control, provided that, if the extent to which the applicable Performance
Measures
goals
actually are achieved as of the date of the Change in Control cannot reasonably be determined by the Committee, then such Awards shall be prorated as of the date of the Change in Control and deemed earned as if target performance had been achieved as of that date.
Except to the extent that a Replacement Award is provided to the Participant, the Committee may, in its sole discretion: (i) determine that any or all outstanding Awards granted under the Plan, whether or not exercisable, will be canceled and terminated and that in connection with the cancellation and termination the holder of the Award may receive for each Share of Common Stock subject to the Awards a cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities equivalent to the cash payment) equal to the difference, if any, between the consideration received by shareholders of the Company in respect of a Share of Common Stock in connection with the transaction and the product of the purchase price, if any, per share under the Award and the number of Shares of Common Stock subject to the Award; provided, however, that if the product is zero or less, or to the extent that the Award is not then exercisable, the Awards will be canceled and terminated without payment therefor; or (ii) provide that the period to exercise Options or SARs granted under the Plan shall be extended (but not beyond the expiration of the Option or SAR).
17
16
.2
Replacement Awards
. An Award shall meet the conditions of this Section
17
16
.2 (and hence qualify as a Replacement Award) if: (i) it has a value at least equal to the value of the Replaced Award as determined by the Committee in its sole discretion; (ii) it relates to publicly traded equity securities of the Company or its successor pursuant to the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control; and (iii) its other terms and conditions are not less favorable to the Participant than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change of Control). Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination as to whether the conditions of this Section
17
16
.2 are satisfied shall be made by the Committee, as constituted immediately before the Change of Control, in its sole discretion.
17
16
.3
Termination of Employment
. Upon a Termination of Employment or, in the case of Directors, a termination of service as a Director, of a Participant occurring in connection with or during the period of two (2) years after the Change in Control, other than for Cause, (i) all Replacement Awards held by the Participant shall become fully vested and (if applicable) exercisable and free of restrictions, and (ii) all Options and SARs held by the Participant immediately before the termination of employment or termination of service as a Director that the Participant held as of the date of the Change in Control or that constitute Replacement Awards shall remain exercisable for not less than one (1) year following the termination or until the expiration of the stated term of the Option or SAR, whichever period is shorter; provided that, if the applicable Award Agreement provides for a longer period of exercisability, that provision shall control.
Article
18
17
. Amendment, Modification, Suspension, and Termination
18
17
.1
Amendment, Modification, Suspension, and Termination
. Subject to Section 18.3, the Committee may, at any time and from time to time, alter, amend, modify, suspend or terminate this Plan and any Award Agreement in whole or in part; provided, however, that, without the prior approval of the Company’s shareholders and except as provided in Section 4.4, Options or SARs issued under this Plan will not be repriced, replaced or regranted through cancellation and substitution of another Award, or by lowering the Option Price of a previously granted Option or the Grant Price of a previously granted SAR, or by exchange for cash, and no amendment of this Plan shall be made without shareholder approval if shareholder approval is required by law, regulation or stock exchange rule.
18
17
.2
Awards Previously Granted
. Notwithstanding any other provision of this Plan to the contrary (other than Section
18
17
.3), no termination, amendment, suspension or modification of this Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under this Plan, without the written consent of the Participant holding the Award.
18
17
.3
Amendment to Conform to Law
. Notwithstanding any other provision of this Plan to the contrary, the Board of Directors may amend the Plan or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or an Award Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Code Section 409A), and to the administrative regulations and rulings promulgated under the present or future law.
Article
19
18
. Withholding
19
18
.1
Tax Withholding
. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, in order to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan, the maximum amount that U.S. generally accepted accounting principles permit the Company to deduct or withhold, while still qualifying the Awards for equity accounting.
19
18
.2
Share Withholding
. With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon the achievement of performance goals related to Performance Shares, or any other taxable event arising as a result of an Award granted pursuant to this Plan, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the maximum tax rate that could be imposed on the transaction and that U.S. generally accepted accounting principles permit the Company to apply while still qualifying the applicable Awards for equity
2019 Proxy Statement
B-14
accounting. All such elections shall be irrevocable, made in writing and signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
Article
20
19
. Successors
All obligations of the Company under this Plan with respect to Awards granted pursuant to this Plan shall be binding on any successor to the Company, whether the existence of the successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
Article
21
20
. General Provisions
21
20
.1
Forfeiture Events; Recoupment
.
|
|
(a)
|
The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. These events may include, but shall not be limited to, termination of employment for cause, termination of the Participant’s provision of services to the Company, Affiliate and/or Subsidiary, violation of material Company, Affiliate and/or Subsidiary policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company, its Affiliates and/or its Subsidiaries.
|
|
|
(b)
|
Notwithstanding any provision in this Plan or any Award agreement to the contrary, Awards will be subject, to the extent applicable, to: (i) the terms and conditions of the Company’s recoupment policy (as previously adopted, and as may be amended and restated from time to time); and (b) the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (the “Dodd Frank Act”), the Sarbanes-Oxley Act of 2002, as amended, and rules, regulations and binding, published guidance thereunder, and any similar legislation that may be enacted subsequent to the date hereof (including any rules, regulations and binding, published guidance thereunder). Without limiting the generality of the foregoing, the Company may, in its sole discretion, implement any recoupment policies or make any changes to the Company’s existing recoupment policies as the Company deems necessary or advisable in order to company with applicable law or regulatory guidance (including, without limitation, the Dodd-Frank Act).
|
21
20
.2
Legend
. The certificates for Shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer of the Shares.
21
20
.3
Gender and Number
. Except where otherwise indicated by the context, any masculine term used in this Plan also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.
21
20
.4
Severability
.
In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
21
20
.5
Requirements of Law
.
The granting of Awards and the issuance of Shares under this Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
21
20
.6
Delivery of Title
.
The Company shall have no obligation to issue or deliver evidence of title for Shares issued under this Plan prior to:
|
|
(a)
|
Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
|
|
|
(b)
|
Completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.
|
21
20
.7
Inability to Obtain Authority
.
The inability of the Company to obtain from any regulatory body having jurisdiction such authority as the Company’s counsel deems to be necessary to the lawful issuance and sale of any Shares under this Plan, shall relieve the Company of any liability in respect of the failure to issue or sell the Shares as to which requisite authority shall not have been obtained.
21
20
.8
Investment Representations
.
The Committee may require any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention to sell or distribute the Shares.
21
20
.9
Employees Based Outside of the United States
. Notwithstanding any provision of this Plan to the contrary, in order to comply with the laws in other countries in which the Company, its Affiliates and/or its Subsidiaries operate or in which Employees or Directors of the Company, its Affiliates and/or its Subsidiaries are located, the Committee, in its sole discretion, shall have the power and authority to:
|
|
(a)
|
Determine which Affiliates and Subsidiaries shall be covered by this Plan;
|
|
|
(b)
|
Determine which Employees and/or Directors outside the United States are eligible to participate in this Plan;
|
|
|
(c)
|
Modify the terms and conditions of any Award granted to Employees and/or Directors outside the United States to comply with applicable foreign laws;
|
|
|
(d)
|
Establish subplans and modify exercise procedures and other terms and procedures, to the extent the actions may be necessary or advisable. Any sub-plans and modifications to Plan terms and procedures established under this Section
21
20
.9 by the Committee shall be attached to this Plan document as appendices; and
|
|
|
(e)
|
Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.
|
Notwithstanding the above, the Committee may not take any actions under this Section
21
20
.9, and no Awards shall be granted, that would violate applicable law.
21
20
.10
Uncertificated Shares
. To the extent that this Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of the Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.
21
20
.11
Unfunded Plan
.
Participants shall have no right, title or interest in or to any investments that the Company and/or its Subsidiaries and/or its Affiliates may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or any other individual. To the extent that any individual acquires a right to receive payments from the Company, its Subsidiaries and/or its Affiliates under this Plan, the right shall be no greater than the right of an unsecured general creditor of the Company, a Subsidiary or an Affiliate, as the case may be. All payments to be made under this Plan shall be paid from the general funds of the Company, a Subsidiary or an Affiliate, as the case may be, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of the amounts except as expressly set forth in this Plan.
21
20
.12
No Fractional Shares
. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, Awards or other property shall be issued or paid in lieu of fractional Shares or whether fractional Shares or any rights to fractional Shares shall be forfeited or otherwise eliminated.
21
20
.13
Retirement and Welfare Plans
. Neither Awards made under this Plan nor Shares or cash paid pursuant to Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company’s or any Subsidiary’s or Affiliate’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless the other plan expressly provides that the compensation shall be taken into account in computing a Participant’s benefit.
21
20
.14
Deferred Compensation
.
It is intended that any Award made under this Plan that results in the deferral of compensation (as defined under Code Section 409A) complies with the requirements of Code Section 409A.
21
20
.15
Nonexclusivity of this Plan
. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt the other compensation arrangements as it may deem desirable for any Participant.
21
20
.16
No Constraint on Corporate Action
. Nothing in this Plan shall be construed to: (i) limit, impair or otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell or transfer all or any part of its business or assets; or (ii) limit the right or power of the Company or a Subsidiary or an Affiliate to take any action that the entity deems to be necessary or appropriate.
21
20
.17
Governing Law
. The Plan and each Award Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an Award under this Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware, to resolve any and all issues that may arise out of or relate to this Plan or any related Award Agreement.
21
20
.18
Indemnification
.
Subject to requirements of Delaware law, each individual who is or shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Article 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless the loss, cost, liability or expense is a result of his/her own willful misconduct or except as expressly provided by statute.
The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which the individuals may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
21
20
.19
No Guarantee of Favorable Tax Treatment.
Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Code Section 409A, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Code Section 409A or any other provision of federal, state, local or foreign law. The Company shall not be liable to any Participant for any tax the Participant might owe as a result of the grant, holding, vesting, exercise or payment of any Award under the Plan.
2019 Proxy Statement
B-16
|
|
|
|
|
|
|
|
|
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on May 14, 2019 for shares held directly and by 11:59 P.M. ET on May 12, 2019 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Electronic Delivery of Future PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on May 14, 2019 for shares held directly and by 11:59 P.M. ET on May 12, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
|
|
LIBBEY INC.
P.O. BOX 10060
TOLEDO, OH 43699-0060
|
|
|
|
|
|
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
KEEP THIS PORTION FOR YOUR RECORDS
|
|
|
DETACH AND RETURN THIS PORTION ONLY
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
All
|
Withhold
All
|
For All
Except
|
|
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
|
|
|
|
|
|
|
|
|
The Board of Directors recommends you vote FOR the following Class II Directors:
|
|
|
|
|
|
|
|
|
|
1.
|
Election of Directors
|
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01
|
Ginger M. Jones 02 Eileen A. Mallesch
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors recommends you vote FOR proposals 2, 3 and 4.
|
|
|
|
|
For
|
Against
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
.
|
Approve, on an advisory and non-binding basis, the 2018 compensation of the Company’s named executives.
|
|
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
Approve the Amended and Restated Libbey Inc. 2016 Omnibus Incentive Plan.
|
|
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
.
|
Ratification of the appointment of Deloitte & Touche LLP as Libbey’s independent auditors for the 2019 fiscal year.
|
|
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE:
The Directors up for election are Class II directors. At the meeting shareholders will transact such other business as properly may come before the meeting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
|
|
|
Signature (Joint Owners)
|
|
Date
|
|
|
|
|
|
|
|
|
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Notice & Proxy Statement are available at
www.proxyvote.com
.
|
|
|
|
|
|
|
|
LIBBEY INC.
Annual Meeting of Shareholders
May 15, 2019 2:00 PM
This proxy is solicited by the Board of Directors
The shareholder(s) hereby appoint(s) James C. Burmeister and Susan A. Kovach, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of LIBBEY INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of shareholders to be held at 02:00 PM, EDT on May 15, 2019, at the Libbey Corporate Showroom, 335 N. St. Clair Street, Toledo, Ohio, 43604, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
|
|
|
Continued and to be signed on reverse side
|
|