Shares held jointly by two or more registered shareholders may be voted by any joint owner unless we receive written notice from another joint owner denying the authority of the first joint owner to vote those shares.
Shares Held in Street Name
If you hold your shares in street name — in other words, you hold your shares through a broker or other nominee — you will receive from your broker a notice regarding availability of proxy materials that will tell you how to access our proxy materials and provide voting instructions to your broker over the internet. It also will tell you how to request a paper ore-mail copy of our proxy materials. If you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on any proposals on which your broker does not have discretionary authority to vote, including Proposals 1 through 3.
and 2.Shares Held Through 401(k) Plan
If you participate in the Libbey Retirement Savings Plan, which we refer to as our 401(k) plan, and if you have investments in the Libbey Inc. stock fund and have an emaile-mail address provided by Libbey for business purposes, you will receive an emaile-mail message at your Libbey-provided emaile-mail address containing instructions that you must follow in order for shares attributable toin your account to be voted. If you participate in our 401(k) plan, have investments in the Libbey Inc. stock fund and do not have an emaile-mail address provided by Libbey for business purposes, you will receive instructions from the trustee of the 401(k) plan that you must follow in order for shares attributable toin your account to be voted.
May I change my vote?
If you are a shareholder of record, you may, at any time before your shares are voted at the annual meeting, change your vote or revoke your proxy by:
sending us a proxy card dated later than your last vote;
notifying the Secretary of Libbey in writing; or
| | |
| • | sending us a proxy card dated later than your last vote; |
|
| • | notifying the Secretary of Libbey in writing; or |
|
| • | voting at the meeting. |
If you hold your shares in street name through a broker or other nominee, you should contact your broker or nominee to determine how to change your vote or revoke your proxy.
How many outstanding shares of Libbey common stock are there?
At the close of business on March 21, 2011,14, 2014, there were 19,831,14421,407,374 shares of Libbey common stock outstanding. Each share of common stock is entitled to one vote.
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How big a vote do the proposals need in order to be adopted?
Provided that a quorum is present either in person or by proxy at the Annual Meeting, each of Proposals 1 through 43 must receive the required votes set forth below:
| | |
Proposal | | Required Vote |
Proposal
| | Required Vote
|
|
Proposal 1—1 — Election of William A. Foley, Theo Killion and Deborah G. Miller and Terence P. Stewart as Class III directors | | Since the election of directors is uncontested, each director must receive the vote of the majority of the votes cast with respect to such director’s election. |
| |
| Proposal 2 — Advisory Say-on-Pay | | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. |
| |
Proposal 3 — FrequencyRatification of FutureSay-on-Pay VotesIndependent Auditors | | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. |
Proposal 4 — Ratification of Independent Auditor | | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. |
What constitutes a quorum?
Under our By-laws, the holders of a majority of the total shares issued and outstanding, whether present in person or represented by proxy, will constitute a quorum, permitting business to be transacted at the meeting.
How will votes be counted?
Votes cast in person or by proxy will be tabulated by the inspector of elections appointed for the meeting and will determine whether a quorum is present. Abstentions will be counted as shares that are present and entitled to vote for purposes of determining whether a quorum is present. For purposes of determining whether the shareholders have approved a matter, abstentions are not treated as votes cast “for,” “against”‘‘for,’’ ‘‘against’’ or “withheld,”‘‘withheld,’’ and therefore will have no effect on the outcome of any ofProposals 1-4.1 – 3. Additionally, broker non-votes will not be considered as present and entitled to vote with respect to anyeither ofProposals 1-4. Proposal 1 or Proposal 2. The common stock outstanding on the record date held by the trustee under Libbey’s 401(k) plan will be voted by the trustee in accordance with written instructions from participants in that plan or, as to those shares for which no instructions are received, in a uniform manner as a single block in accordance with the instructions received with respect to the majority of shares of the plan for which instructions were received.
What are broker non-votes?
If you hold your shares in “street name”street name through a broker or other nominee, your broker or nominee may not be permitted to vote your shares with respect to certain matters, includingProposals 1-3,1 and 2, unless you give your broker or nominee specific instructions as to how to vote. Non-voted shares on non-routine matters are called broker non-votes. They will not be counted in determining the number of shares necessary for approval but will be counted in determining whether there is a quorum.
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How will voting be conducted on other matters raised at the meeting?
The proxy committee will vote on other matters that properly come before the meeting in accordance with the Board’s recommendation or, if no recommendation is given, in the discretion of the proxy committee.
When must shareholder proposals be submitted for the 2011 annual meeting?2015 Annual Meeting?
A shareholder desiring to submit a proposal for inclusion in our Proxy Statement for our Annual Meeting to be held in 20122015 must deliver the proposal so that we receive it no later than November 30, 2011.December 3, 2014. Any proposal submitted outside the processes ofRule 14a-8 under the Exchange Act will be considered untimely if submitted after February 14, 2012.16, 2015. We request that all such proposals be addressed to Susan AlleneA. Kovach, Vice President, General Counsel and Secretary, Libbey Inc., 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio43699-0060.
Each year our shareholders are asked to elect the members |
PROPOSAL 1 — ELECTION OF DIRECTORS |
Our Board of a class for a term ofDirectors, which currently has ten directors, is divided into three years. Currently, theclasses. The term of office for members of Class III of the Board of Directors will expire on the date of the Annual Meeting in 2011. The members2014. When Richard I. Reynolds retired from his position as Executive Vice President, Strategy Program Management, he expressed his decision to likewise retire from his position as a member of Class III are William A. Foley, Deborah G. Miller andthe Board, effective at our 2014 Annual Meeting. Subsequently, Terence P. Stewart. TheStewart, a long-time member of the Board, of Directors has fixednotified the number of directorsBoard that he wished to be electedretire effective at the 2011our 2014 Annual Meeting and, as a result, he will not stand for reelection at 3our 2014 Annual Meeting.
Upon the recommendation of the Nominating and Governance Committee of the Board, the Board has determined that Theo Killion possesses the desired knowledge and experience to serve on the Board. Accordingly, the Board has nominated Messrs.Mr. Killion, as well as Mr. Foley and Stewart and Ms. Miller, for election to Class III. ThoseUpon the retirements of Mr. Reynolds and Mr. Stewart and the addition of Mr. Killion to the Board, our Board of Directors will have nine directors, and each of Class I, Class II and Class III of the Board will include three directors.
With respect to Class III, those persons who are elected directors at the 20112014 Annual Meeting will hold office until their terms expire on the date of the 20142017 Annual Meeting or until the election and qualification of their successors. The terms of office of the members of Class I and Class II of the Board of Directors will expire on the date of the Annual Meeting in 20122015 and 2013,2016, respectively. Information regarding Messrs. Foley and StewartKillion and Ms. Miller is set forth below under“‘‘Libbey Corporate Governance — Who are the current members of Libbey’sour Board of Directors?”’’
So far as the Board has been advised, only the 3 persons named above as nomineesOnly Messrs. Foley and Killion and Ms. Miller will be nominated for election as directors at the Annual Meeting. Shares represented by proxies in the accompanying form will be voted for the election of these 3 nominees unless authority to vote for any or all of these nominees is withheld. The nominees haveEach has consented to being named in this proxy statement and to serve if elected.elected, and we expect each to be available to serve. If any of them should becomebecomes unavailable to serve prior to the Annual Meeting, the proxy will be voted for a substitute nominee or nominees designated by the Board, of Directors or the number of directors may be reduced accordingly. The Board, however, expects each of the nominees to be available. As long as a quorum is present, directors shall be elected by a majority of the votes of the shares present in person orreduced.
Shares represented by proxy atproxies in the meeting.accompanying form will be voted for the election of these three nominees unless authority to vote for any or all of these nominees is withheld. A shareholder entitled to vote for the election of directors may withhold authority to vote for any or all of the nominees.
The Board of Directors recommends a vote FOR
each of Mr.Messrs. Foley and Killion and Ms. Miller and Mr. Stewart.
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Miller. |
PROPOSAL 2 — ADVISORY SAY-ON-PAY VOTE |
PROPOSAL 2 — ADVISORYSAY-ON-PAY VOTE
We are providing shareholders the opportunity to vote on a non-binding, advisory resolution to approve the pay of our named executive officers, as disclosed below under “Compensation-Related Matters — Compensation Discussion and Analysis” and the related tables and narrative disclosures. For convenience, this vote is referred to in this proxy statement as the“say-on-pay vote.”
Specifically, oursay-on-pay vote gives shareholders the opportunity to cast a non-binding, 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 executive officers,executives, as disclosed pursuant to Item 402 ofRegulation S-K in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.
discussion, pursuant to Item 402 of Regulation S-K.Our 2013 executive pay program, which is discussed in detail below under“‘‘Compensation-Related Matters — Compensation Discussion and Analysis”Analysis’’and related tables and narrative, embodies apay-for-performance philosophycontemplates the delivery of executive pay that is designed to:
performance-based and market-driven, as demonstrated in the table below: | | |
Pay Objective | • | Supportive Components of 2013 Pay Program |
Support our business strategy; drive long-term performance and shareholder value | | • Annual and long-term incentive plan performance measures focused on increasing adjusted EBITDA and profitability and reducing financial leverage • Consistent with ourLibbey 2015strategy, thereby drivingannual incentive plan financial component for regional general managers is weighted 50% at the company-wide level and 50% at the regional level to ensure line of sight • Individual objectives heavily focused on development and execution of our long-term financial and operational performance;Libbey 2015strategy |
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| |  |
| | |
Pay Objective | • | Supportive Components of 2013 Pay Program |
Align the interests of ourexecutives and shareholders and executives through “at-risk” compensation tied to our short- | | • Annual and long-term financialincentive plans that are performance-based • For named executives, 57% to 63% of target pay opportunity is “at risk” • Growth in our stock price is required in order to deliver any value to named executives pursuant to non-qualified stock options, which we refer to as NQSOs, and operational objectives;SARs • RSUs directly align interests of executives and shareholders • Stock ownership/ retention guidelines designed to require our executives to own meaningful amounts of our stock |
| |
| • | Attract and retain highly-talented and experienced senior executives who are criticalkey to the implementationimplementing our strategy and achieving future success | | • Market-driven total pay package • NQSO and RSU grants that vest ratably over four years • With respect to our CEO, a special, one-time retention award of our strategic plancash-settled SARs that were issued in December 2013 and our future success.cash-settled RSUs that were issued in February 2014, each of which cliff-vests on December 31, 2018 |
The 2010 program, which we believe provides an appropriate balance among base salary and short- and long-term compensation target opportunities, incorporated the following features:
| | |
| Align executive pay program with corporate governance best practices | | • | In February (asLimited perquisites (tax return preparation and financial planning, executive health screening program, limited ground transportation and airline club membership), but no tax gross-ups on these perquisites• Limited income protection through severance pay arrangements • No tax gross-ups except on relocation assistance • Stock ownership/ retention guidelines designed to some executive officers) and May 2010 (asrequire executives to the other executive officers), base salary increases ranging from 3.8% to 8.3%, compared to base salaries for 2008, when all but 1own meaningful amounts of our executive officers (Roberto B. Rubio, who was hired on July 1, 2009) last received salary increases; |
|
| stock • | Effective July 1, 2010, a base salary increase for Daniel P. Ibele, whose responsibilities were significantly increased in June 2010 when he became Vice President, Global Sales & Marketing;Annual and long-term incentive awards and RSU, SAR and NQSO awards are subject to clawback |
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| | |
| • | Incentive opportunities based on corporate-wide performance metrics and, in the case of our 2010 Senior Management Incentive Plan, which we refer to as our 2010 SMIP, individual objectives, in each case designed to support the following goals: |
| | |
| • | Equity awards (non-qualified stock options, which we refer to as NQSOs, and restricted stock units, which we refer to as RSUs, with4-year vesting) designed to (a) encourage our executive officers to remain with us in order to realize the value of the awards and (b) further align the interests of our executive officers with those of our shareholders generally. |
In addition,We believe that our
2013 executive pay program
incorporates stock ownership guidelines for executive officers,links directly to ourLibbey 2015 strategy. The quantitative performance metrics under both our 2013 SMIP and
the performance cash component of our
incentive compensation awards2013 LTIP are
subjectdirectly tied to
a clawbackimproving adjusted EBITDA, cash generation, profitability and financial leverage, all of which are critical to ourLibbey 2015strategy and returning Libbey to consistent, profitable growth.Additionally, as the charts on page (ii) of the Proxy Statement Summary show, the payouts to our named executives under certain circumstances.
our 2013 SMIP and the performance cash component of our 2011 LTIP are consistent with our performance in 2013, as the amounts paid under our 2013 SMIP were 86% to 89% of target, representing slightly less (93% to 97%) than target performance, and the amounts paid under the performance cash component of our 2011 LTIP were 99.3% of target, representing performance at 99.7% of target.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.
The Board of Directors recommends a vote FOR
the approval, on an advisory basis, of the resolution.
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PROPOSAL 3 — ADVISORY VOTE AS TO FREQUENCY OFSAY-ON-PAY VOTES
We are providing shareholders the opportunity to vote, on a non-binding, advisory basis, as to the frequency with which shareholders will be provided futuresay-on-pay votes. Shareholders may choose “3 years,” “2 years,” “1 year” or “abstain.”
We believe a “3 years” frequency is most consistent with our compensation philosophy because:
| | |
| • | Our compensation programs do not change significantly from year to year and we seek to be consistent; |
|
| • | Our compensation program does not contain any significant risks that might be of concern to our shareholders; |
|
| • | Consistent with our long-term compensation objectives, which reward performance over a3-year period, we encourage our shareholders to evaluate our executive pay programs over a multi-year horizon; and |
|
| • | We believe that a “3 years” frequency provides sufficient time for our Compensation Committee and Board of Directors to evaluate the results of the most recent advisory vote on executive compensation, to discuss the implications of that vote with shareholders to the extent needed and to develop and implement any adjustments to our executive compensation programs that may be appropriate in light of a past advisory vote on executive compensation, and for our shareholders to see and evaluate the Compensation Committee’s actions in context.PROPOSAL 3 — RATIFICATION OF AUDITORS |
This advisory vote on the frequency of futuresay-on-pay votes does not bind our Board of Directors. Regardless of the Board’s recommendation and the outcome of the shareholder vote on this proposal, our Board may in the future decide to conduct advisorysay-on-pay votes on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to our executive pay program. The Board will disclose its position on the frequency of futuresay-on-pay votes in ourForm 10-Q report to be filed with the SEC for the quarter ending June 30, 2011.
The Board of Directors recommends a vote FOR holding futuresay-on-pay votes every “3 years.”
PROPOSAL 4 — RATIFICATION OF AUDITORS
The Audit Committee has appointed Ernst & Young LLP to serve as our independent auditors for our 20112014 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 in the accompanying form will be voted for ratification.
The Board of Directors recommends a vote FOR this proposal.
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STOCK OWNERSHIP
Who are the largest owners of Libbey stock?
The following table shows information with respect to the persons we know to be the beneficial owners of more than five percent5% of our common stock as of December 31, 2010.
| | | | | | | | | |
| | | Amount and
| | | | |
| | | Nature
| | | | |
Name and Address
| | of Beneficial
| | | Percent
| |
of Beneficial Owner | | Ownership | | | of Class | |
| |
| Zesiger Capital Group LLC(1) | | | 1,761,700 | | | | 9.0 | % |
460 Park Avenue, 22nd Floor
New York, NY 10022 | | | | | | | | |
| | | | | | | | | |
| BlackRock, Inc.(2) | | | 1,470,561 | | | | 7.5 | % |
40 East 52nd Street
New York, NY 10022 | | | | | | | | |
| | | | | | | | | | |
Name and Address of Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | Percent of Class |
Zesiger Capital Group LLC(1) | | | | |
460 Park Avenue, 22nd Floor | | | | |
New York, NY 10022 | | 1,218,875 | | 5.7% |
| | |
RBC Global Asset Management (U.S.) Inc.(2) | | | | |
100 South Fifth Street, Suite 2300 | | | | |
Minneapolis, MN 55402 | | 1,167,210 | | 5.5% |
| | |
Robeco Investment Management, Inc. DBA Boston Partners(3) | | | | |
One Beacon Street | | | | |
Boston, MA 02108 | | 1,114,720 | | 5.2% |
| | |
| (1) | | Amendment No. 710 to Schedule 13G filed with the SEC on behalf of Zesiger Capital Group LLC (‘‘Zesiger’’), an investment advisor, indicates that, as of December 31, 2010,2013, Zesiger Capital Group LLC iswas the beneficial owner of 1,761,7001,218,875 common shares, with sole dispositive power as to 1,761,700all such common shares and sole voting power as to 1,354,000954,250 common shares. The schedule further states that all securities reported in the schedule are held in discretionary accounts that Zesiger Capital Group LLC manages, and that no single client of Zesiger Capital Group LLC owns more than 5% of the class. |
|
| (2) | | Schedule 13G filed with the SEC by BlackRock,on behalf of RBC Global Asset Management (U.S.) Inc. (‘‘RBC’’), the parent holding company of subsidiaries BlackRock Japan Co. Ltd., BlackRock Institutional Trust Company, N.A., BlackRock Fund Advisors, BlackRock Advisors, LLC, BlackRock Investment Management, LLC and State Street Research & Management Company,an investment advisor, indicates that, as of December 31, 2010,2013, RBC was the parent holding company and subsidiaries beneficially owned 1,470,561beneficial owner of 1,167,210 common shares, with sole dispositive power andas to 490 of such shares, shared dispositive power as to 1,166,720, sole voting power with respect to 490 common shares and shared voting power with respect to 745,810 common shares. |
| (3) | Amendment No. 2 to Schedule 13G filed with the SEC on behalf of Robeco Investment Management, Inc. DBA Boston Partners, an investment advisor, indicates that, as of December 31, 2013, Boston Partners was the beneficial owner of 1,114,720 common shares, with sole dispositive power as to all such shares and sole voting power with respect to 814,120 common shares. The schedule further states that all securities reported in the schedule are held in discretionary accounts. |
How much Libbey stock do our directors and officers own?
Stock Ownership Guidelines
Non-EmployeeNon-Management Director Stock Ownership Guidelines.Guidelines Effective May 6, 2010, our Board of Directors adopted new. We have stock ownership guidelines that are applicable to non-employeenon-management directors. For individuals who were non-employeenon-management directors as of May 6, 2010, when we revised the guidelines, the deadline for compliance is May 6, 2015. For an individual whoindividuals subsequently becomes a non-employee director,becoming non-management directors, the deadline will be the fifth anniversary of the date on which he or she becomes a non-employee director.they become non-management directors. We refer to the deadline as the Compliance Deadline.
Under the new guidelines, a non-employeenon-management director must, on or before the applicable Compliance Deadline, own Libbey common stockand/or its equivalents, as described below, in an amount at least equal to 4four times the amount of the annual cash retainer payable to the director for service on the Board of Directors (excluding the cash retainer or fees payable for service on any committee of the Board). We refer to this amount as the Ownership Threshold.
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The following forms of equity, which we refer to as Libbey Shares, will be counted inIn determining whether a
non-employeenon-management director has achieved
thehis or her Ownership Threshold,
applicable to him or her:we include:Shares of Libbey common stock held by the non-management director; and
“Phantom stock” into which deferred compensation is deemed invested under any deferred compensation plan for non-management directors.
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| • | Shares of Libbey common stock held by the non-employee director; and |
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| | • | “Phantom stock” into which deferred compensation is deemed invested under any deferred compensation plan for non-employee directors. |
If a non-employeenon-management director achieves the Ownership Threshold on any date prior to his or her Compliance Deadline, that director generally will be deemed to continue to comply with the Ownership Threshold even if the value of his or her Libbey Sharesshares subsequently declines as a result of a decline in the closing price of Libbey common stock. If, after achievingA non-management director who has achieved the Ownership Threshold subsequently may sell or dispose of shares as long as the non-employeenon-management director sells or otherwise disposes of Libbey Shares and after the sale or disposition fails to holdretains at least the minimum number of Libbey Sharesshares that s/he or she was required to hold when s/he or she first achieved the Ownership Threshold. If the non-management director’s share ownership drops below that Ownership Threshold, then the director’shis or her holdings of Libbey Shares will be re-valued based on the then-current market price of Libbey common stock, and the directors/he will be required to achieve the Ownership Threshold based on his or her re-valued holdings.
As of March 21, 2011,14, 2014, all of our non-employeeexisting non-management directors, other than Ms. Jones (who joined the Board in August 2013), comply with these stock ownership guidelines.
Executive Stock Ownership Guidelines.Guidelines. In October 2007, we established guidelines pursuant to which our executive officers also are required to achieve ownership of meaningful amounts of equity in Libbey. Specifically,In late 2012, we modified the guidelines as described below. We refer to the guidelines, as originally established, as the Original Guidelines.
Under the Original Guidelines, each executive officer iswas required to achieve ownership of a specified number of shares of Libbey common stock equal to a multiple of his or her base salary in effect on January 1, 2008 or, if later, the date on which the executive officer becomesbecame subject to the guidelines. For individuals who were executive officers as of January 1, 2008, the applicable deadline for compliance with the guidelines is December 31, 2012. For individuals who become executive officers after January 1, 2008, the applicable deadline is the fifth anniversary of the date on which they become executive officers.
The applicable multiples for the executive officers areunder the Original Guidelines were as follows:
| | | | | |
Executive Officer Title | | Multiple of
Base Salary | |
Executive Officer Title
| | Base Salary | |
|
Chief Executive Officer | | | 5X | |
President, Executive Vice President, group or divisional president(1) | president | | 3X | |
Other Vice Presidents | | | 2X | |
Under the Original Guidelines, an executive may achieve the required ownership by a variety of forms of unpledged equity ownership (which we refer to as Qualifying Shares), including outright ownership, by the officer and/or his or her spouse and minor children, of shares of Libbey stock; shares held in 401(k) savings accounts, individual retirement accounts or trust or other estate planning vehicles; shares underlying vested RSUs (even if deferred); and vested, ‘‘in-the-money’’ stock options to the extent of 50% of the required guideline.
The following table shows, for each named executive who was employed by us at December, 31, 2013 and was subject to the Original Guidelines, the applicable guideline and number of Qualifying Shares, excluding vested, ‘‘in-the-money’’ stock options, held as of March 14, 2014:
| | | | |
Named Executive | | Applicable Guideline (Number of Shares) | | Number of Qualifying Shares Held |
Daniel P. Ibele | | 31,061 | | 58,013 |
Susan A. Kovach | | 31,556 | | 52,885 |
Timothy T. Paige | | 29,024 | | 57,729 |
In late 2012, we elected to transition our executive stock ownership guidelines to stock retention guidelines. This decision was made in order to provide greater parity between long-time executive officers and our newer executive officers and to further align our executives’ interests with those of shareholders. Under the retention guidelines, which we refer to as the Retention Guidelines, each executive generally will be 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 that are granted after January 1, 2013 and that the executive subsequently exercises.
Executives who satisfied the Original Guidelines prior to December 31, 2012 are exempt from the Retention Guidelines until January 2018. During the period between January 2, 2013 and January 1, 2018, those executives are permitted to sell or otherwise dispose of our stock, but only to the extent of any shares in excess of their respective ownership guidelines under the Original Guidelines.
Executives nearing retirement are released from our guidelines on the later to occur of the date that is one year prior to the contemplated retirement date or the date on which the Board is notified of the planned retirement.
| | |
(1) | | No individuals currently occupy the positions of President or group or divisional president. Mr. Reynolds currently is Libbey’s only Executive Vice President. |
We generally determine the number of shares of stock that each executive officer is required to own by the applicable deadline as follows. First, we multiply the applicable executive officer’s annual base salary on January 1, 2008 (or the date on which he or she becomes subject to the guidelines, if later) by the appropriate multiple from the above table. We then divide the product by the average closing price of Libbey common stock over a period of time to be determined by the Nominating and Governance Committee of Libbey’s Board of Directors. For those individuals who were executive officers as of January 1, 2008, the Nominating and Governance Committee determined that the average closing price of Libbey common stock over 2007, $16.84, would be used to determine the number of shares that they are required to own as of December 31, 2012.
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In light of the significant volatility in our stock price during the1-year period prior to July 1, 2009, when Mr. Roberto Rubio joined us as Vice President, Managing Director, Libbey Mexico, the Nominating and Governance Committee considered a number of different methodologies for determining the number of shares that Mr. Rubio should be required to own by the fifth anniversary of his date of hire. Ultimately, the Nominating and Governance Committee based its decision as to Mr. Rubio’s equity ownership guideline on internal equity factors, comparing his annualized base salary to the annualized base salary of the other executive officers and positioning his guideline so that it exceeds that of the other Vice Presidents, whose guidelines were determined using a 2X multiple of base salary but have annualized base salaries that are lower than Mr. Rubio’s. Mr. Rubio’s guideline is lower than the guidelines of our CEO and Executive Vice President, whose respective guidelines were determined based upon higher multiples of base salary.
The following forms of equity, which we refer to as Qualifying Shares, will be counted in determining whether an executive officer has achieved the guideline applicable to him or her:
| | |
| | • | Shares of Libbey common stock held by the officer, his or her spouseand/or his or her minor children (as long as they are minors), if: |
| | |
| • | The shares are not subject to forfeiture under the terms of any award of those shares or the terms of any plan pursuant to which those shares are purchasedand/or held; and |
|
| • | The shares are not pledged to secure any indebtedness; |
| | |
| • | Awards, pursuant to any plan approved by the Compensation Committee of the Board of Directors, of restricted shares, RSUs or shares issued in settlement of performance shares, but only if and to the extent the vesting requirements (whether continued service to Libbey or achievement of performance targets) associated with the shares already have been satisfied; |
|
| • | Shares of Libbey common stock that are held for the benefit of the executive officer or his or her spouse or minor children in a 401(k) savings account, in any individual retirement account or in any trust or other estate planning vehicle; |
|
| • | “Phantom stock” into which any restricted shares, RSUs or shares issued in settlement of performance shares are deferred pursuant to any plan approved by the Compensation Committee of the Board of Directors; and |
|
| • | Vested,“in-the-money” stock options, but only to the extent they do not exceed 50% of the shares required by the guideline applicable to the particular executive officer. |
As of March 21, 2011, the number of Qualifying Shares held by the executive officers whom we refer to as the named executive officers was as follows:
| | | | | | | | | |
| | | Applicable Guideline
| | | Number of
| |
Named Executive Officer | | (Number of Shares) | | | Qualifying Shares Held | |
| |
| G. Geswein(1) | | | 40,099 | | | | 56,643 | |
| D. Ibele | | | 31,061 | | | | 53,605 | |
| J. Meier | | | 204,869 | | | | 399,375 | |
| R. Reynolds | | | 79,504 | | | | 162,786 | |
| R. Rubio | | | 48,800 | | | | 20,511 | |
| | |
(1) | | As to Mr. Geswein, the number of qualifying shares held does not include 1,641 RSUs that are scheduled to vest on May 23, 2011. These RSUs are included under“Beneficial Ownership Table” below. |
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The Nominating and Governance Committee, which is responsible for monitoring compliance with the guidelines, has authority to address extenuating circumstances that prevent an executive officer from complying with the guidelines by the deadline applicable to him or her. In addition, the Nominating and Governance Committee has authority to work out transition plans for executive officers nearing retirement.
Beneficial Ownership Table
The following table shows, as of March 21, 2011,14, 2014, the number of shares of our common stock and percentage of all issued and outstanding shares of our common stock that are beneficially owned (unless otherwise indicated) by our directors (including Messrs. Reynolds and Stewart, who will not be standing for reelection at our 2014 Annual Meeting of stockholders), the named executive officers (who are identified on page 11)executives (including Mr. Reynolds, who was no longer employed by us at that date) and our directors and executive officers as a group. Our address, as set forth on the Notice of Annual Meeting of Shareholders, is the address of each director and named executive officer set forth below. The shares owned by the executive officersnamed executives set forth below include the shares held in their accounts in the Libbey Inc. Retirement Savings Plan, which we refer to as our 401(k) plan. An asterisk indicates ownership of less than one percent of the outstanding stock.
| | | | | | | |
| | | Amount and Nature
| | | |
| | | of Beneficial
| | | Percent
|
Name of Beneficial Owner | | Ownership | | | of Class |
| |
| Carlos V. Duno(1) | | | 7,239 | | | * |
| William A. Foley(1) | | | 20,607 | | | * |
| Gregory T. Geswein(2)(3) | | | 93,263 | | | * |
| Jean-René Gougelet(1) | | | 8,319 | | | * |
| Peter C. McC. Howell(1)(4) | | | 13,472 | | | * |
| Daniel P. Ibele(2)(3) | | | 118,415 | | | * |
| John F. Meier(2)(3)(5) | | | 431,777 | | | 2.18% |
| Deborah G. Miller(1) | | | 10,110 | | | * |
| Carol B. Moerdyk(1) | | | 21,407 | | | * |
| John C. Orr(1) | | | 11,290 | | | * |
| Richard I. Reynolds(2)(3) | | | 277,849 | | | 1.40% |
| Roberto B. Rubio(2)(3) | | | 22,649 | | | * |
| Terence P. Stewart(1) | | | 7,928 | | | * |
| Directors & Executive Officers as a Group(1)(2)(3)(4)(5) | | | 1,405,103 | | | 7.09% |
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| | | | | | | | | | |
Name of Beneficial Owner | | Amount and Nature
of Beneficial Ownership | | Percent
of Class |
Sherry Buck(1)(3) | | | | 14,278 | | | * |
Carlos V. Duno(2) | | | | 30,547 | | | * |
William A. Foley(2) | | | | 35,659 | | | * |
Ginger M. Jones | | | | 1,000 | | | * |
Peter C. McC. Howell(2)(4) | | | | 32,059 | | | * |
Daniel P. Ibele(1)(3) | | | | 112,803 | | | * |
Susan A. Kovach(1)(3) | | | | 61,223 | | | * |
Deborah G. Miller(2) | | | | 16,644 | | | * |
Carol B. Moerdyk(2) | | | | 31,459 | | | * |
John C. Orr(2) | | | | 21,342 | | | * |
Timothy T. Paige(1)(3) | | | | 78,348 | | | * |
Richard I. Reynolds(1)(3) | | | | 327,606 | | | 1.53% |
Terence P. Stewart(2) | | | | 44,995 | | | * |
Stephanie A. Streeter(1)(3) | | | | 83,486 | | | * |
Directors and Executive Officers as a Group(1)(2)(3) | | | | 938,221 | | | 4.38% |
| | |
| (1) | | Does not include the following number of shares of our common stock that are deferred under our 2009 Director Deferred Compensation Plan, which we refer to as our Director DCP, or shares of phantom stock held by non-management directors pursuant to our previous deferred compensation plans for outside directors, in each case as of March 21, 2011: |
| | | | |
| | Number of
| |
| | Deferred or
| |
Name of Director
| | Phantom Shares | |
|
C. Duno | | | 14,748 | |
W. Foley | | | 11,778 | |
J.R. Gougelet | | | 5,428 | |
P. Howell | | | 14,568 | |
D. Miller | | | 2,192 | |
C. Moerdyk | | | 18,453 | |
J. Orr | | | 0 | |
T. Stewart | | | 67,307 | |
All non-employee directors as a group | | | 134,475 | |
For more information regarding our deferred compensation plans for non-management directors, see“Compensation-Related Matters — Compensation Discussion and Analysis — How are Libbey’s directors compensated?”below.
| | |
(2) | | Does not include shares of our common stock that have vested but are deferred under our Executive Deferred Compensation Plan, which we refer to as our EDCP. As of March 21, 2011,14, 2014, each of Messrs. Geswein, Ibele, Meier,Paige and Reynolds and Rubio,Ms. Streeter, Ms. Buck and Ms. Kovach, and all executive officers as a group, had the following number of shares of our common stock that are vested but deferred under our EDCP: |
| | | | | | | |
Named Executive | | Number of
Deferred Shares | | |
S. Buck | | | | |
| | Number of
| |
| | Shares of
| |
Named Executive Officer
| | Deferred Stock | |
|
G. Geswein5,111 | | | 17,187 | |
D. Ibele | | | | 0 | |
J. Meier | | | 105,650 |
S. Kovach | | | | 15,910 | | | |
T. Paige | | | | 3,280 | | | |
R. Reynolds | | | | 82,390 | | | |
S. Streeter | | | | 0 | |
R. Rubio | | | 0 | |
All executive officers as a group | | | 165,304 | 106,691 | | | |
| (2) | Includes the following number of shares of our common stock that are deferred by non-management directors under our 2009 Director Deferred Compensation Plan, which we refer to as our Director DCP, and that are payable as shares of our common stock: |
| | | | | |
Name of Director | | Number of
Deferred Shares |
C. Duno | | | | 21,309 | |
W. Foley | | | | 0 | |
P. Howell | | | | 14,421 | |
G. Jones | | | | 0 | |
D. Miller | | | | 0 | |
C. Moerdyk | | | | 0 | |
J. Orr | | | | 0 | |
T. Stewart | | | | 30,559 | |
All non-management directors as a group | | | | 66,289 | |
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| | |
(3) | | |
Does not include the following number of 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 | | | | 11,778 | |
P. Howell | | | | 5,784 | |
G. Jones | | | | 0 | |
D. Miller | | | | 2,192 | |
C. Moerdyk | | | | 18,453 | |
J. Orr | | | | 0 | |
T. Stewart | | | | 54,286 | |
All non-management directors as a group | | | | 92,493 | |
For more information regarding our deferred compensation plans for non-management directors, see‘‘Compensation-Related Matters — Non-Management Directors’ Compensation in 2013’’below.
| (3) | Includes the following number of NQSOs that have been granted to Messrs. Geswein, Ibele, Meier, Reynoldsour named executives and Rubioall executive officers as a group and that currently are exercisable or will be exercisable on or before May 30, 2011:13, 2014: |
| | | | | | | |
Named Executive | | Number of
Outstanding Stock Options
Exercisable Within 60 Days | | |
S. Buck | | | | |
| | Number of
| |
| | Outstanding Stock
| |
| | Options Exercisable
| |
Named Executive Officer
| | Within 60 Days | |
|
G. Geswein7,395 | | | 69,828 | |
D. Ibele | | | 80,340 | |
J. Meier54,790 | | | 238,978 | |
R. ReynoldsS. Kovach | | | 154,815 | |
R. Rubio24,248 | | | 6,721 |
T. Paige | | | | 28,899 | | | |
R. Reynolds | | | | 158,526 | | | |
S. Streeter | | | | 38,440 | | | |
All executive officers as a group | | | 744,643 | 332,219 | |
| (4) | | Includes 750 shares held by family members of Mr. Howell. Mr. Howell disclaims any beneficial interest in these shares. |
|
(5) | | Includes 8,406 shares held by family members of Mr. Meier. Mr. Meier disclaims any beneficial interest in these shares. |
In addition to outstanding shares of common stock that our named executive officersexecutives beneficially owned as of March 21, 2011,14, 2014, 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) | | |
S. Buck | | | | |
| | No. of
| |
Named Executive Officer
| | Unvested RSUs(1) | |
|
G. Geswein32,612 | | | 33,536 | |
D. Ibele | | | 24,483 | |
J. Meier24,903 | | | 117,409 | |
R. ReynoldsS. Kovach | | | 58,848 | |
R. Rubio15,301 | | | 40,023 |
T. Paige | | | | 14,736 | | | |
R. Reynolds(2) | | | | 0 | | | |
S. Streeter | | | | 209,785 | | | |
All executive officers as a group | | | 368,202 | 306,664 | |
| (1) | | Of these amounts, a total of 1,6416,339 RSUs with 4 yearfour-year vesting were granted to Mr. Gesweinawarded on May 23, 2007;February 10, 2011; a total of 17,87211,380 RSUs with 4 year vesting were granted to all executive officers on February 15, 2008; a total of 81,403 RSUs with 4 year vesting were granted to all executive officers on February 12, 2009; a total of 11,742 RSUs with 4 year vesting were granted to Mr. Rubio on July 1, 2009; a total of 143,088 RSUs with 4 yearfour-year vesting were awarded to all executive officersMs. Streeter on July 29, 2011; a total of 33,813 RSUs with four-year vesting were awarded on February 8, 2010 (but17, 2012; a total of 15,333 RSUs with four-year vesting were not granted until May 6, 2010, after our shareholders approved our Amended and Restated Libbey Inc. 2006 Omnibus Incentive Plan, which we referawarded to as our Omnibus Plan);Ms. Buck on August 1, 2012; a total of 56,491 RSUs with four-year vesting were awarded on February 11, 2013; a total of 67,621 RSUs with four-year vesting were awarded on February 24, 2014; and a total of 111,338115,687 RSUs, with 4 year vestingwhich cliff vest on December 31, 2018, were awarded on February 24, 2014. Except for the 115,687 RSUs that were awarded to all executive officersMs. Streeter as a special retention award on February 10, 2011. One24, 2014, and that will be settled in cash, 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, seesee “Compensation-Related‘‘Compensation-Related Matters — Compensation Discussion and Analysis — In what forms does Libbey deliver pay to its executives, and what purposes do the various forms of pay serve?”’’ and the Outstanding Equity Awards at Fiscal Year-End table below. |
14
| (2) | Pursuant to the RSU agreements under which awards were made to Mr. Reynolds in 2013, vesting was accelerated with respect to RSUs that were granted in 2013. Additionally, in recognition of Mr. Reynolds’s contributions to the Company during his more than 43 years of service to the Company, the Compensation Committee of the Board elected to accelerate vesting, to the date of Mr. Reynolds’s retirement, of all other unvested RSUs that were granted to Mr. Reynolds prior to 2013. |
Section 16(a) Beneficial Ownership Reporting Compliance Based solely on our review of filings with the SECSecurities and Exchange Commission and written representations that no other reports were required to be filed by the relevant persons, we believe that, during the fiscal year ended December 31, 2010,2013, all officers, directors andgreater-than-ten-percent greater-than-10% beneficial owners complied, on a timely basis, with the filing requirements applicable to them pursuant to Section 16 of the Exchange Act on a timely basis.
LIBBEY CORPORATE GOVERNANCE
Who are the current members of Libbey’s Board of Directors?
Our Board of Directors is divided into 3 classes of directors.three classes. Each year, 1one class of directors stands for election at our annual meetingAnnual Meeting of shareholders. It is importantRichard I. Reynolds, who was reelected to usthe Board in 2013, will retire from the Board, and Terence P. Stewart has informed the Board that he will not stand for reelection, at our directors2014 Annual Meeting of shareholders. Based on the recommendation of our Nominating and candidates forGovernance Committee, our Board not only meet the “Requisite Qualifications for Board Candidates” described under“How doeshas nominated Theo Killion, who will be new to our Board, select nomineesand William A. Foley and Deborah G. Miller, who are incumbents, for the Board?”below, but also possess experience, qualifications or skills in the substantive areas that impactelection by our business. The biographies below highlight the individual attributesshareholders at our 2014 Annual Meeting of each director that enhance the Board’s collective knowledgeshareholders.
Standing for Election – Class III
| | |
William A. Foley Age 66 Independent Chairman of the Board Director since 1994; Chairman since August 2011 | | Professional Experience: Mr. Foley served as Chairman and Chief Executive Officer of Blonder Accents, LLC (since June 2011) and served as Chairman and Chief Executive Officer of Blonder Company (from 2008 to 2011). Blonder Company was appointed a receiver in April 2011 in connection with a negotiated sale transaction, and the acquiring company, Blonder Accents LLC, voluntarily filed for protection under Chapter 7 of the U.S. Bankruptcy Code in December 2011. Previously, Mr. Foley was President and a director of Arhaus, Inc.; co-founder of Learning Dimensions LLC; Chairman and Chief Executive Officer of LESCO Inc.; and Chairman and Chief Executive Officer of Think Well Inc. Mr. Foley has also fulfilled the roles of Vice President, General Manager for The Scotts Company Consumer Division, and Vice President and General Manager of Rubbermaid Inc.’s Specialty Products division. Mr. Foley spent the first 14 years of his career with Anchor Hocking Corp. in various positions, including Vice President of Sales & Marketing. |
| | Education: Mr. Foley holds a bachelor’s degree from Indiana University and an M.B.A. from Ohio University. Public Company Boards: Mr. Foley is currently on the Board of Directors of Myers Industries, Inc. (NYSE: MYE), and has previous experience on the board of LESCO Inc. Director Qualifications: • Consumer product marketing experience, particularly in the glass tableware industry • Significant organizational leadership and management skills • Public company board and corporate governance experience |
| |
Theo Killion Age 62 Nominated in 2014 | | Professional Experience: Mr. Killion has served as Chief Executive Officer of Zale Corporation (NYSE: ZLC) since September 2010. Prior to his appointment as Chief Executive Officer, Mr. Killion held a variety of other positions with Zale Corporation, including Interim Chief Executive Officer from January 2010 to September 2010, President from August 2008 to September 2010 and Executive Vice President of Human Resources, Legal and Corporate Strategy from January 2008 to August 2008. From May 2006 to January 2008, Mr. Killion was employed with the executive recruiting firm Berglass+Associates, focusing on companies in the retail, consumer goods and fashion industries. From April 2004 through April 2006, Mr. Killion served as Executive Vice President of Human Resources at Tommy Hilfiger. From 1996 to 2004, he held various management positions with Limited Brands. |
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| |  |
| | |
| | Education: Mr. Killion holds a bachelor’s degree and a masters degree in education from Tufts University. Public Company Boards: Mr. Killion serves on the boards of directors of Zale Corporation and Express, Inc. (NYSE: EXPR) Director Qualifications: • Extensive experience in retail merchandising, business development and strategic planning • Deep human resources expertise, including in talent identification, evaluation, development and succession planning • Extensive organizational leadership experience in a complex environment • Public company board and corporate governance experience |
| |
Deborah G. Miller Age 64 Director since 2003 | | Professional Experience: From 2003 to the present, Ms. Miller has been the Chief Executive Officer of Enterprise Catalyst Group, a management consulting firm specializing in high technology and biotechnology transformational applications. Ms. Miller was also President, Chief Executive Officer and Chairman of Ascendent Systems, a provider of enterprise voice mobility solutions, from 2005 to 2007. Ms. Miller has more than 30 years of global management experience, including roles as Chief Executive Officer of Maranti Networks; President and Chief Executive Officer of Egenera; Chief Executive Officer of On Demand Software; and various positions with IBM. Throughout her career, Ms. Miller has contributed to the success of international business enterprises with her innovative approach to sales and marketing. Education: Ms. Miller holds a bachelor’s degree from Wittenberg University, of which she is an Emeritus member of the Board of Directors. Public Company Boards: Ms. Miller has been a member of the Board of Directors of Sentinel Group Funds, Inc. (SENCX) since 1995. Director Qualifications: • Global management experience • Sales and marketing ingenuity • Strategic planning • Extensive information technology experience |
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| | |
Continuing Directors – Classes I and experience.
| | | | | | | | | | | |
| | | | | | | Director
|
Director | | Age | | Experience | | Since |
| |
| Carlos V. Duno (Class II) | | | 63 | | | Mr. Duno is the Owner and Chief Executive Officer of Marcia Owen Associates/Group Powell One (since 2006), the premier recruiting and staffing firm in Northern New Mexico, and Owner and Chief Executive Officer of CDuno Consulting (since 2004). From 2001 to 2004, Mr. Duno served as Chairman of the Board and Chief Executive Officer of Clean Fuels Technology, a leading developer of emulsified fuels for transportation and power generation applications. Mr. Duno’s glass industry experience began during his 6 years as President of Business Development and Planning for Vitro S.A. in Monterrey, Mexico from 1995 to 2001. Mr. Duno’s earlier professional experience includes a 2-year term as Vice President Strategic Planning for Scott Paper Company and a combined 10 years of international assignments for Scott Paper Company, McKinsey & Co. and Eli Lilly. Mr. Duno holds a B.S. in industrial engineering from the National University of Mexico, and an M.B.A. in finance and an M.S. in industrial engineering, both from Columbia University. He is also an Audit Committee Financial Expert. Mr. Duno is Chairman of the board for the Santa Fe Botanical Garden (since 2006) and a former member of the Boards of Directors of Clean Fuels Technology, Inc. and Anchor Glass Container Corporation. The Board believes Mr. Duno’s extensive experience in strategic planning for international organizations, together with his first-hand glass industry experience in Mexico, make him well-qualified to serve as a director of the Company. | | | 2003 | |
| William A. Foley (Class III) | | | 63 | | | Mr. Foley currently serves as Chairman and Chief Executive Officer of Blonder Home Accents (since 2008). Previously, Mr. Foley was President and a director of Arhaus, Inc.; co-founder of Learning Dimensions LLC; Chairman and Chief Executive Officer of LESCO Inc.; and Chairman and Chief Executive Officer of Think Well Inc. Mr. Foley has also fulfilled the roles of Vice President, General Manager for The Scotts Company Consumer Division, and Vice President and General Manager of Rubbermaid Inc.’s Specialty Products division. Mr. Foley spent the first 14 years of his career with Anchor Hocking Corp. in various positions, including Vice President of Sales & Marketing. Mr. Foley is currently on the Board of Directors of Blonder Home Accents (since 2001), and has previous experience on the boards of several public and private companies, including Arhaus Inc., LESCO Inc. and Associated Estates. Mr. Foley holds a bachelor’s degree from Indiana University and an M.B.A. from Ohio University. Mr. Foley’s consumer product marketing experience, particularly in the glass tableware industry, along with his significant leadership and management skills, strengthen the Board’s collective qualifications, skills and experience. | | | 1994 | |
15
II | | |
Carlos V. Duno Age 66 Class II Director since 2003 | | Professional Experience: Mr. Duno is the Owner and Chief Executive Officer of Marcia Owen Associates/ Santa Fe Staffing (since 2006), the premier recruiting and staffing firm in Northern New Mexico, and Owner and Chief Executive Officer of CDuno Consulting (since 2004). From 2001 to 2004, Mr. Duno served as Chairman of the Board and Chief Executive Officer of Clean Fuels Technology, a leading developer of emulsified fuels for transportation and power generation applications. Mr. Duno’s glass industry experience began during his six years as President of Business Development and Planning for Vitro S.A. in Monterrey, Mexico from 1995 to 2001. Mr. Duno’s earlier professional experience includes a two-year term as Vice President Strategic Planning for Scott Paper Company and several years with McKinsey & Co. and Eli Lilly. Education: Mr. Duno holds a B.S. in industrial engineering from the National University of Mexico, and an M.B.A. in finance and an M.S. in industrial engineering, both from Columbia University. He also is certified in leadership and transition coaching by the Hudson Institute of Coaching. Public Company Boards: None. Director Qualifications: • Strategic planning in international organizations • Glass industry experience, both at Vitro S.A. and as a former director of Anchor Glass Container Corporation • Audit committee financial expert |
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Peter C. McC. Howell Age 64 Class II Director since 1993 | | Professional Experience: Since 1997, Mr. Howell has been an advisor to various business enterprises in the areas of acquisitions, marketing and financial reporting, particularly with respect to operations in the People’s Republic of China. Mr. Howell’s positions before 1997 include Chairman and Chief Executive Officer of Signature Brands USA Inc. (formerly Health-O-Meter); President, Chief Executive Officer and a director of Mr. Coffee Inc.; and Chief Financial Officer of Chemical Fabrics Corporation. Mr. Howell also spent 10 years as an auditor for Arthur Young & Co. (now Ernst & Young). Education: Mr. Howell holds B.A. and M.A. degrees in economics from Cambridge University and is a Fellow of the Institute of Chartered Accountants of England & Wales. Public Company Boards: Since 1989, Mr. Howell has been a director of one or more public companies. His current directorships include Pure Cycle Corporation (NASDAQ: PCYO) (since 2004), and Lite Array Inc. and Global Lite Array Inc., subsidiaries of the publicly held Global-Tech Applied Innovations (NASDAQ: GAI) (since 2001). |
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| | |
| | Director Qualifications: • Significant financial expertise that qualifies him as an audit committee financial expert • Public company board and corporate governance experience • Retail and foodservice industry knowledge • Experience with international businesses operating in China |
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Ginger M. Jones Age 49 Class II Director since 2013 | | Professional Experience: Since 2007, Ms. Jones has served as senior vice president, chief financial officer of Plexus Corp. (NASDAQ: PLXS), a global electronic, engineering and manufacturing services company. Prior to joining Plexus Corp., Ms. Jones served in a variety of financial roles with companies in the consumer packaged goods industry and the software industry. A certified public accountant, Ms. Jones began her career with Deloitte & Touche, culminating in her role as audit manager for audits of middle market companies. Eduction: She holds a bachelor’s degree in accounting from the University of Utah and an M.B.A. from The Ohio State University Fisher College of Business. Public Company Boards: None. Director Qualifications: • Experience as chief financial officer of a public company with over $2 billion in revenues • Significant executive leadership experience in financial strategy and experience in public audit functions, resulting in her qualification as an audit committee financial expert • Experience in global supply chain |
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Carol B. Moerdyk Age 63 Class I Director since 1998 | | Professional Experience: Ms. Moerdyk retired from OfficeMax Incorporated (formerly Boise Cascade Office Products Corporation) in 2007. At OfficeMax, she served as Senior Vice President, International from August 2004 until her retirement. Previously, she held various roles at Boise Cascade Office Products Corporation, including Senior Vice President Administration, Senior Vice President North American and Australasian Contract Operations, and Chief Financial Officer. Ms. Moerdyk began her professional career as an assistant professor of finance at the University of Maryland. Education: Ms. Moerdyk is a Chartered Financial Analyst and holds a bachelor’s degree from Western Michigan University and a Ph.D. Candidate’s Certificate in finance from the University of Michigan. Public Company Boards: Ms. Moerdyk has served on the Board of Directors of American Woodmark Corporation (NASDAQ: AMWD) since 2005. Director Qualifications: • Significant financial expertise, developed through her experience as a CFA and public company chief financial officer • Audit committee financial expert • Executive leadership and international operations experience |
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John C. Orr Age 63 Class I Director since 2008 | | Professional Experience: Since 2005, Mr. Orr has been the President, Chief Executive Officer, and a director of Myers Industries, Inc. (NYSE: MYE), an international manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets. Before assuming his current positions, Mr. Orr was President and Chief Operating Officer of Myers Industries and General Manager of Buckhorn Inc., a Myers Industries subsidiary. Mr. Orr’s earlier career included 28 years with The Goodyear Tire and Rubber Company, where he gained experience in production and plant management at facilities throughout North America and Australia, eventually holding such positions as Director of Manufacturing in Latin America and Vice President Manufacturing for the entire company worldwide. Education: Mr. Orr holds a B.S. in communication from Ohio University and has additional training from Harvard Business School in business strategy, finance and operations. Public Company Boards: Mr. Orr currently serves on the Board of Myers Industries, Inc. (NYSE: MYE). Director Qualifications: • Extensive international manufacturing and plant management experience • Extensive organizational leadership experience • Public company board and corporate governance experience |
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Stephanie A. Streeter Age 56 Class I Director since 2011 | | Professional Experience: Ms. Streeter has served as Chief Executive Officer of Libbey since August 1, 2011. Prior to joining Libbey as Co-CEO on July 1, 2011, Ms. Streeter was interim Chief Executive Officer of the United States Olympic Committee from March 2009 to March 2010 and served on its Board of Directors from 2004 to 2009. Ms. Streeter also was employed as Chairman and Chief Executive Officer of Banta Corporation, a NYSE-listed provider of printing, supply chain management and related services that was acquired by R.R. Donnelley & Sons Company (NYSE: RRD) in 2007. She joined Banta in 2001 as President and Chief Operating Officer and was appointed Chief Executive Officer in 2002. Prior to joining Banta, Ms. Streeter was Chief Operating Officer at Idealab. Ms. Streeter also spent 14 years at Avery Dennison Corporation in a variety of product and business management positions, culminating in her role as Group Vice President of Worldwide Office Products from 1996 to 2000. Education: Ms. Streeter holds a bachelor’s degree from Stanford University. Public Company Boards: A member of the Board of Directors of Banta from 2001 to 2007, Ms. Streeter was elected Chairman in 2004. She currently is a member of the Boards of Directors of The Goodyear Tire & Rubber Company (NYSE: GT) (since 2008) and Kohl’s Corporation (NYSE: KSS) (since 2007). Director Qualifications: • Demonstrated executive leadership and management skills • Public company board and corporate governance experience • Consumer and business-to-business marketing experience • Supply chain experience • Retail industry knowledge |
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| | | | | | | Director
|
Director | | Age | | Experience | | Since |
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| Jean-René Gougelet (Class I) | | | 62 | | | In January 2011 Mr. Gougelet retired as President of Burnes Home Accents, LLC, a manufacturer and marketer of photo display products, where he had served since 2007. Mr. Gougelet is Chief Executive Officer of Vido Enterprises, a consultancy founded by Mr. Gougelet to provide strategic planning and growth management services to middle market companies, where he served in the same capacity from 2005 to 2007. Prior to founding Vido Enterprises, Mr. Gougelet served as Chief Executive Officer of Arc International’s Mikasa division and Chief Executive Officer of Arc North America. Mr. Gougelet’s early career included various roles in general management, advertising, marketing and brand management in Europe and the United States. Mr. Gougelet holds degrees in marketing and communication from EFIEM and EFAP in Paris and has received additional training in marketing, finance, management and corporate governance from CESAM-University of Louvain-la-Neuve in Belgium, University of Chicago Graduate School of Business, and Harvard Business School. Mr. Gougelet is a French Foreign Trade Advisor (Conseillers du Commerce Extérieur de la France). Mr. Gougelet’s participation on the Board increases the depth of the Board’s executive leadership, strategic planning, manufacturing, marketing and brand management experience, particularly with respect to the North American and European glass tableware and consumer goods industries. | | | 2007 | |
| Peter C. McC. Howell (Class II) | | | 61 | | | Since 1997, Mr. Howell has been an advisor to various business enterprises in the areas of acquisitions, marketing and financial reporting, particularly with respect to operations in the People’s Republic of China. Mr. Howell’s positions before 1997 include Chairman and Chief Executive Officer of Signature Brands USA Inc. (formerly Health-O-Meter); President, Chief Executive Officer and a director of Mr. Coffee Inc.; and Chief Financial Officer of Chemical Fabrics Corporation. Mr. Howell also spent 10 years as an auditor for Arthur Young & Co. (now Ernst & Young). Since 1989, Mr. Howell has been a director of a number of public companies. His current directorships include Pure Cycle Corporation (NASDAQ: PCYO) (since 2004); Lite Array Inc. and Global Lite Array Inc., subsidiaries of the publicly held Global-Tech Applied Innovations (NASDAQ: GAI) (since 2001); and Great Lakes Cheese Company Limited (since 2006). Mr. Howell holds B.A. and M.A. degrees in economics from Cambridge University, is a Fellow of the Institute of Chartered Accountants of England & Wales, and is an Audit Committee Financial Expert. In addition to his significant financial expertise, public directorship experience, and retail and foodservice industry knowledge, Mr. Howell provides the Board with a unique perspective on the issues facing international businesses operating in China. | | | 1993 | |
| John F. Meier (Class I) | | | 63 | | | Mr. Meier and has served as Chairman of the Board and Chief Executive Officer of Libbey since the Company went public in June 1993. Before the Company’s initial public offering, Mr. Meier was General Manager of Libbey and a corporate Vice President of Owens-Illinois, Inc., Libbey’s former parent company. Mr. Meier has also served in various marketing positions since he first joined the Company in 1970, including a 5-year assignment with Durobor, S.A., Belgium. In 1997, Mr. Meier served as Chairman of the National Housewares Manufacturers Association (now the International Housewares Association). Mr. Meier’s corporate governance experience includes current directorships with Cooper Tire and Rubber Company (NYSE: CTB) (since 1997) and Applied Industrial Technologies (NYSE: AIT) (since 2005). Mr. Meier received a B.S. in business administration from Wittenberg University and an M.B.A. from Bowling Green State University. Having worked for Libbey for 41 years, Mr. Meier brings to the Board a comprehensive understanding of the Company and the glass tableware industry. | | | 1987 | |
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| | | | | | | | | | | |
| | | | | | | Director
|
Director | | Age | | Experience | | Since |
| |
| Deborah G. Miller (Class III) | | | 61 | | | From 2003 to the present, Ms. Miller has been the Chief Executive Officer of Enterprise Catalyst Group, a management consulting firm specializing in high technology and biotechnology transformational applications. Ms. Miller was also President and Chief Executive Officer and Chairman of Ascendent Systems, a provider of enterprise voice mobility solutions, from 2005 to 2007. Ms. Miller has more than 30 years of global management experience, including roles as Chief Executive Officer of Maranti Networks; President and Chief Executive Officer of Egenera; Chief Executive Officer of On Demand Software; and various positions with IBM. Throughout her career, Ms. Miller has contributed to the success of international business enterprises with her innovative approach to sales and marketing. She is a member of the Board of Directors of Sentinel Group Funds, Inc. (SENCX) (since 1995) and Wittenberg University (since 1999), from which she received her bachelor’s degree. As a result of Ms. Miller’s global management experience, sales and marketing ingenuity, strategic thinking, and extensive information technology experience, she is uniquely qualified to serve as a director of the Company. | | | 2003 | |
| Carol B. Moerdyk (Class I) | | | 60 | | | Ms. Moerdyk retired from OfficeMax Incorporated (formerly Boise Cascade Office Products Corporation) in 2007. At OfficeMax, she served as Senior Vice President, International from August 2004 until her retirement. Previously, she held various roles at Boise Cascade Office Products Corporation, including Senior Vice President Administration, Senior Vice President North American and Australasian Contract Operations, and Chief Financial Officer. Ms. Moerdyk began her professional career as an assistant professor of finance at the University of Maryland. Ms. Moerdyk serves on the Boards of Directors of American Woodmark Corporation (NASDAQ: AMWD) (since 2005) and Kids Sports Stars/Azimuth Foundation (since 2009). An Audit Committee Financial Expert, Ms. Moerdyk is a Chartered Financial Analyst and holds a bachelor’s degree from Western Michigan University and a Ph.D. Candidate’s Certificate in finance from the University of Michigan. Ms. Moerdyk’s significant financial expertise, developed through her experience as a CFA and public company Chief Financial Officer, together with her executive leadership and international operations experience, make her a valuable contributor to the Board. | | | 1998 | |
| John C. Orr (Class II) | | | 60 | | | Since 2005, Mr. Orr has been the President, Chief Executive Officer, and a director of Myers Industries, Inc. (NYSE: MYE), an international manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets. Before assuming his current position, Mr. Orr was President and Chief Operating Officer of Myers Industries and General Manager of Buckhorn Inc., a Myers Industries subsidiary. Mr. Orr’s earlier career included 28 years with The Goodyear Tire and Rubber Company, where he gained experience in production and plant management at facilities throughout North America and Australia, eventually holding such positions as Director of Manufacturing in Latin America and Vice President Manufacturing for the entire company worldwide. Mr. Orr holds a B.S. in communication from Ohio University and has additional training from Harvard Business School in business strategy, finance and operations. Mr. Orr has served on the board of Akron General Medical Center since 2006. Mr. Orr’s extensive experience in international manufacturing and plant management is an important asset to the Board. | | | 2008 | |
| Richard I. Reynolds (Class II) | | | 64 | | | Mr. Reynolds currently services as Libbey’s Executive Vice President, Chief Financial Officer. From 1995 to June 10, 2010, Mr. Reynolds served as Libbey’s Executive Vice President and Chief Operating Officer. Now in his forty-first year with the Company, Mr. Reynolds has held various positions at Libbey, including Vice President and Chief Financial Officer from 1993 to 1995; and Director of Finance and Administration from 1989 to 1993. Mr. Reynolds holds a B.B.A. from the University of Cincinnati. In addition to his work for the Company, Mr. Reynolds serves on the boards of several non-profit organizations. As a result of the breadth and depth of his experience with the Company, Mr. Reynolds provides the Board with a learned perspective on the financial, administrative and operational aspects of Libbey’s business. | | | 1993 | |
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| | | | | | | | | | | |
| | | | | | | Director
|
Director | | Age | | Experience | | Since |
| |
| Terence P. Stewart (Class III) | | | 62 | | | Mr. Stewart is the Managing Partner of Stewart and Stewart, a Washington, D.C.-based law firm specializing in trade and international law issues, where he has been employed since 1976. He has worked with various industries to solve trade matters in the United States and abroad. Mr. Stewart is an adjunct professor at Georgetown University Law Center, from which he received his law degree. He also holds a B.A. from the College of the Holy Cross and an M.B.A. from Harvard University. Both the Ukrainian Academy of Foreign Trade and the Russian Academy of Sciences have granted Mr. Stewart Honorary Doctorates. Recently, Mr. Stewart has written extensively on trade relations with the People’s Republic of China, including volumes on WTO accession commitments undertaken and progress made in meeting those commitments over time, a review of intellectual property protection within China and steps being taken to address problems in enforcement, and reports on subsidies provided to major sectors of the Chinese economy. Mr. Stewart currently serves on the boards of several private societies and associations and is a former member of the Company’s Nominating and Governance Committee. Mr. Stewart possesses particular knowledge and experience in international legal, regulatory and government affairs, including foreign trade matters relevant to the glass industry, that strengthen the Board’s collective qualifications, skills and experience. | | | 1997 | |
How is our Board leadership structured?
As noted above, ourOur Board currently includes 8 non-employeenine non-management directors and 2one employee directors. Of our 8 non-employeedirector. Effective at the 2014 Annual Meeting of shareholders, we will have eight non-management directors 7and one employee director, as Messrs. Reynolds and Stewart will be retiring and the Board has nominated a new, independent director, Mr. Killion, for election.
All of the non-management directors who will serve after the annual meeting have been determined to be independent. For more information with respect to how the Board determines which directors are considered to be independent, see“‘‘How does the Board determine which directors are considered independent?”’’ below. Mr. Meier, our CEO, has served as Chairman of the Board since 1993, when we became a publicly-held company.
We currently are well-served by the Board leadership structure described above. Given Mr. Meier’s long history withWhen Ms. Streeter joined the Company and his close working relationshipswas named our chief executive officer on August 1, 2011, the Board elected to separate the roles of the chairman and chief executive officer in order to enable Ms. Streeter to devote herself to becoming familiar with key customersour business, industry and other stakeholders, we believecustomers. As a result of the Board’s most recent assessment of its leadership structure, the Board has concluded that unifyingcontinued separation of the Chairmanroles of chairman and CEO roles in Mr. Meier demonstrates to our employees, suppliers, customers and other stakeholders that we are under strong leadership, with a single person who has extensive institutional and industry knowledge setting the tone and having primary responsibility for managing our operations.
Although Mr. Meier serves as both Chairman and CEO, a number of factors about our directors and the way our Board operates promote independent oversight of management, including our Chairman and CEO:
| | |
| • | More than 2/3 of our directors are independent; |
|
| • | Each of our Board’s standing committees (the Audit Committee, the Compensation Committee and the Nominating and Governance Committee), as well as our Board’sad hocsuccession committee, consist solely of independent directors; |
|
| • | Our Board meets regularly in executive session outside the presence of management and has designated one of the independent directors (currently Deborah G. Miller) to chair and lead those executive sessions and to serve as a liaison to Mr. Meier; and |
|
| • | Our independent directors routinely interact with members of management who are not members of the Board, obtaining and sharing information and viewpoints with respect to our business. |
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Finally, our Board periodically evaluates the appropriateness of combining the Chairman and CEO roleschief executive officer is appropriate at this time and will do so again in connection with Mr. Meier’s planned retirement.
enable Ms. Streeter to continue to focus on implementation of ourLibbey 2015 strategy and returning Libbey to profitable growth.
Does Libbey have Corporate Governance Guidelines?
Our Board of Directors has adopted Corporate Governance Guidelines that govern the Board of Directors. Our Corporate Governance Guidelines, as well as the charters for each of the Audit, Compensation and Nominating and Governance committees, are available on our website(www.libbey.com).
What isare the roleroles of the Board’s committees?
Our Board of Directors currently has the following standing committees:
| | | | |
Standing Committee | | Key Functions | | Number of 2013 Meetings |
Audit Committee | | |
| | | | | | Number of
|
Standing Committee
| | Key Functions
| | Members for 2011
| | 2010 Meetings
|
|
Audit Committee | | See“Audit-Related Matters —– Report of the Audit Committee”below. | | Carlos V. Duno, Chair(1)(2)
Jean-René Gougelet(2)
Peter C. McC. Howell(1)(2)
Carol B. Moerdyk(1)(2)below. | | 9 |
| | |
| Compensation Committee | | • Consider the potential impact of our executive pay program on our risk profile.
profile• Review executive pay at comparable companies and recommend to the Board pay levels and incentive compensation plans for our executives.
executives• Review and approve goals and objectives relevant to the targets of the executive incentive compensation plans.
plans• Establish the CEO’s pay, and in determining the long-term incentive compensation component of the CEO’s pay, consider the Company’s performance, relative shareholder return, the value of similar awards to chief executive officers at comparable companies and the awards given to the Company’sour CEO in prior years.
years• Perform an annual evaluation of the performance and effectiveness of the Compensation Committee.
Committee• Produce an annual report on executive compensation for inclusion in the proxy statement or annual report on Form 10-K, as required by the SEC.
SEC• Approve grants of awards under our equity participation plans and provide oversight and administration of these plans. plans | | Carol B. Moerdyk, Chair
Carlos V. Duno
William A. Foley
Deborah G. Miller
John C. Orr | | 7 |
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| | | | | | 5 |
| | | | | | Number of
|
Standing Committee
| | Key Functions
| | Members for 2011
| | 2010 Meetings
|
|
| Nominating and Governance Committee | | • Develop and implement policies and practices relating to corporate governance.
governance• Establish a selection process for new directors to meet the needs of the Board, for evaluating and recommending candidates for Board membership, for assessing the performance of the Board and reviewing that assessment with the Board and for establishing objective criteria to evaluate the performance of the CEO.
• Report to the Board trends in director pay practices and the competitiveness of the Company’s director pay practices.
| | William A. Foley, Chair
Jean-René Gougelet
Peter C. McC. Howell
Deborah G. Miller
John C. OrrCEO | | 5 |
| | |
| | |
Our Board believes that it is desirable from time to time to rotate committee assignments and leadership. Accordingly, effective upon the conclusion of our 2014 Annual Meeting of shareholders, the leadership and composition of each of our Board’s standing committees will change. The following table identifies, for each of our non-management directors, the committees on which he or she served in 2013 and will serve beginning on May 13, 2014:
| | | | | | | | | | | | |
| | | Audit Committee | | Compensation
Committee | | Nominating and
Governance Committee |
Director | | 2013 | | 2014 | | 2013 | | 2014 | | 2013 | | 2014 |
Carlos V. Duno(1)(2) | | Chair | | | | Member | | Chair | | | | Member |
William A. Foley(3)(4) | | | | Member | | | | | | | | Member |
Peter C. McC. Howell(1)(2)(3)(4) | | Member | | Member | | | | | | Chair | | Member |
Ginger Jones(3)(4) | | | | Chair | | | | Member | | | | |
Theo Killion | | | | | | | | | | | | |
Deborah G. Miller(4) | | | | Member | | Member | | Member | | Member | | |
Carol B. Moerdyk(1)(2) | | Member | | | | Chair | | Member | | | | Member |
John C. Orr(2)(3)(4) | | Member | | Member | | | | | | Member | | Chair |
| (1) | | DeterminedFor 2013, determined by the Board to be qualified as an audit committee financial expert, as defined in SEC regulations. |
|
| (2) | | DeterminedFor 2013, determined by the Board as beingto be financially sophisticated and literate and havingto have accounting and related financial management expertise, as those qualifications are interpreted by the Board in its business judgment. |
| (3) | For 2014, determined by the Board to be qualified as an audit committee financial expert, as defined in SEC regulations. |
| (4) | For 2014, determined by the Board to be financially sophisticated and literate and to have accounting and related financial management expertise, as those qualifications are interpreted by the Board in its business judgment. |
The Board has determined that all members of each of its standing committees are independent, within the meaning of SEC regulations and the listing standards of the NYSE Amex exchange.MKT Company Guide. The Board also has determined that all members of the Compensation Committee are “outside‘‘outside directors,”’’ within the meaning of 26 CFR § 1.162-27.
In addition to our Board’s standing committees, the Board, in connection with the announcement in February 2011 that Mr. Meier, our Chairman and CEO, intends to retire by the end of this year, has appointed anad hocsuccession committee to evaluate, and make recommendations to the Board regarding, candidates to succeed Mr. Meier and to address related succession issues. Members of thead hocsuccession planning committee are William A. Foley (Chair), Carlos V. Duno, Peter C. McC. Howell, Deborah G. Miller, Carol B. Moerdyk and John C. Orr, each of whom has been determined by the Board to be independent.
How does our Board oversee risk?
Our management is responsible forday-to-day risk management and our Board, through the Audit Committee and the Board’s other committees, is responsible for oversight of management’sour risk management processes. We have implemented an enterprise-wide risk management program. Our Director, Enterprise Risk Management,Vice President, Treasurer has primary responsibility for this program and reports to our Executive Vice President, Chief Financial Officer. We also have an Enterprise Risk Management Steering Committee consisting of members of senior management from across our operations.
Through our enterprise risk management program, we identify, evaluate and address actual and potential risks that may impact our business and our financial results. Our Director, Enterprise Risk ManagementVice President, Treasurer routinely reports routinely to the Audit Committeeour Board with respect to the status of our program and particular risk strategies,risks and we apprise our Board of particular risk management matters in connection with its general oversight of our business.
How does our Board select nominees for the Board?
Our Board selects new directors following review and evaluation by the Nominating and Governance Committee, which also proposes and reviews the criteria for membership at least biannually and proposes and reviews the selection process. The Nominating and Governance Committee evaluates governance needs and skill requirements, and solicits input from all Board members and makes its recommendation to the Board. An invitation to join the boardBoard is extended by the Chairman of the Board on behalf of the Board. A shareholder who
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wishes to recommend a prospective nominee for the Board may notify our Corporate Secretary or any member of the Nominating and Governance Committee in writing, including such supporting material as the shareholder deems appropriate. Candidates for director nominated by shareholders will be given the same consideration as candidates nominated by other sources.
The Board, in its Corporate Governance Guidelines, has determined that Board members must satisfy the following standards and qualifications:
Requisite Characteristics for Board Candidates
| | |
| | • | | the highest professional and personal ethics and values, consistent with longstanding Libbey values and standards |
| |
| | • | | broad experience at the policy-making level in business, government, education, technology or public interest |
| |
| | • | | commitment to enhancing shareholder value |
| |
| | • | | devotion of sufficient time to carry out the duties of Board membership and to provide insight and practical wisdom based upon experience |
| |
| | • | | expertise in areas that add strategic value to the Boardand/or knowledge of business in foreign locations strategic to our then-current or potential future operations. For example, current or recent experience as a chief executive officer or chief financial officer of a public company; expertise in the consumer products industry, asset-intensive manufacturing, logistics andand/or advanced supply chain management; experience as an executive with a large multinational company or as an expatriate executive in the Far East, Europe or Latin America; management experience in the foodservice industry; or management or board experience in a highly leveraged environment.environment | |
| • | | serve on the boards of directors of no more than three other public companies and, if intending to serve on the Audit Committee of the Board, serve on the audit committees of no more than two other public companies | |
In addition, the Board’s Corporate Governance Guidelines set forth the Board’s intention to seek directors who are strategic thinkers, understand complex capital structures and the operational constraints that they create, are members of the boards of directors of other public companies and have experience and expertise in corporate governance, marketing expertiseand/or experience in the consumer products industry. Consistent with the Board’s Corporate Governance Guidelines, the Board also seeks directors who, as compared to then-existing members of the Board, are diverse with respect to geography, employment, age, race or gender. Reflecting this desire to foster a diverse Board, 2three of our non-management directors are women, and 1one non-management director is Hispanic.Hispanic and Mr. Killion, a nominee for the Board, is African-American. In addition, 1 director is French and brings us his deep knowledge of the European glass tableware industry, and anotherone non-management director is British and, through his wide travels around the world, brings us his perspective as to the international business environment, particularly in China.
Finally, the Board considers such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors, the need for Audit Committee or other subject-matter expertise and the Board’s evaluations of other prospective nominees.
The Nominating and Governance Committee employed the services of a third-party search firm to identify and recruit Ms. Moerdyk to the Board in 1998 and Mr. Orr to the Board in 2008, and, under its charter, the Nominating and Governance Committee continues to have the authority to employ the services of a third-party search firm in fulfilling its duties to select nominees to the Board.
How does our Board determine which directors are considered independent?
Pursuant to the Corporate Governance Guidelines approved by the Board, the Board has made a determination as to the independence of each of the members of the Board. In making this determination, the Board has considered the existence or absence of any transactions or relationships between each
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director or any member of his or her immediate family and Libbey and its subsidiaries and affiliates, including those reported under“‘‘Corporate Governance — Certain Relationships and Related Transactions — What transactions involved directors or other related parties?”’’below. The Board also examined the existence or absence of any transactions or relationships between directors or their affiliates and members of Libbey’s senior management or their affiliates.
As provided in the Guidelines, the purpose of this review was to determine whether there is any relationship that is inconsistent with a determination that a director is independent of Libbey or its management. Specifically, the Guidelines preclude a determination by the Board that a director is independent if the director does not meet the independence requirements set forth in the listing standards of the New York Stock Exchange, which are substantially the same as the independence requirements set forth in the listing standards of the NYSE Amex exchange, on whichMKT Company Guide, since our common stock currently is listed.
listed on the NYSE MKT exchange.As a result of this review, the Board has affirmatively determined that Carlos V. Duno, William A. Foley, Jean-René Gougelet, Peter C. McC. Howell, Theo Killion, Deborah G. Miller, Carol B. Moerdyk and John C. Orr are independent of Libbey and its management under the standards set forth in the Corporate Governance Guidelines. Messrs. MeierIn addition, the Board has affirmatively determined that, notwithstanding that Stewart & Stewart provides Libbey with legal services relating to international trade matters, Terence P. Stewart is independent of Libbey and its management, as the fees paid to
| | |
| | |
Stewart & Stewart in each of the last three (3) years were less than 5% of the consolidated gross revenues of Stewart & Stewart. Each of Ms. Streeter and Mr. Reynolds are(who retired from Libbey on November 30, 2013) is considered to be an inside directorsdirector because of their employment as senior executives of Libbey. Mr. Stewart is considered a non-independent director because in the past 3 years Stewart and Stewart, the law firm of which Mr. Stewart is managing partner, has provided legal services to Libbey in connection with international trade matters and is expected to continue to do so. For more information with respect to the compensation paid to Mr. Stewart’s law firm for services provided to Libbey in 2010,2013, see“‘‘Corporate Governance — Certain Relationships and Related Transactions — What transactions involved directors or other related parties?”’’below.
How often did our Board meet during fiscal 2010?2013?
TheDuring 2013, the Board of Directors met 12 times during 2010. Fiveheld eight meetings, five of these meetingswhich were regularly scheduled meetings and 7three of themwhich were special meetings. During 2010,2013, each member of the Board of Directors attended 75% or more of the aggregate number of meetings of the Board and at least 75% of the aggregate number of meetings of the committees of the Board that he or she was eligible to attend.
Certain Relationships and Related Transactions — What transactions involved directors or other related parties?
We desire to maintain a Board of Directors in which aA substantial majority of our directors areis independent, as defined in the NYSE MKT Company Guide and our Corporate Governance Guidelines. Those Guidelines preclude a determination by the Board that a director is independent if the director does not meet the independence requirements set forth in the listing standardsOur Code of the New York Stock Exchange,Business Ethics and Conduct, which are substantially the samewe refer to as the independence requirements set forth in the listing standardsour Code of the NYSE Amex exchange, on which our common stock currently is listed. WeEthics, generally prohibitprohibits related-party transactions involving directors. OurHowever, our Board makes a single exception to that policy in order to enablepermits us to obtain legal services with respect to international trade matters from the law firm of Stewart and Stewart, of which Mr. Stewart is managing partner. During 20102013, Stewart and Stewart received fees of approximately $31,100$22,394 from us for legal services in connection with various international trade matters. We anticipate that we will continue to utilize the legal services of Stewart and Stewart in the future in connection with international trade matters. In that connection, because ourOur Board believes that Libbey’s General Counsel is best suited to select legal counsel for Libbey, so the Board does not require that we seek the approval of the Board, or of any committee of the Board, in connection with our engagement of Stewart & Stewart. Mr. Stewart and Stewart. However,our General Counsel are responsible for monitoring whether the fees paid to Stewart & Stewart would render Mr. Stewart not independent, within the meaning of the NYSE MKT Company Guide and our Corporate Governance Guidelines, and for informing the Chairman of the Board has determinedand the Nominating and Governance Committee of any issues in that as a result of our engagement of Stewart and Stewart with respect to international trade matters, Mr. Stewart is not independent of Libbey.
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regard.
In addition, our Code of Business Ethics and Conduct, which we refer to as ourOur Code of Ethics requires that all of Libbey’s directors, officers and other employees avoid conflicts of interest. Related-partyRelated- party transactions that are of the nature and magnitude that they must be disclosed pursuant to Item 404(b) ofRegulation S-K would be considered transactions that could give rise to a conflict of interest, and therefore are covered by our Code of Ethics. Our Code of Ethics requires that any conflicts of interest be reported to our Legal Department, and that the written concurrence of our General Counsel is required to waive any conflict of interest. In addition, our Code of Ethics requires that waivers of our Code of Ethics with respect to executive officers or directors may be granted only by the Board of Directors and only if the noncompliance with our Code of Ethics is or would be immaterial or if the Board of Directors otherwise determines that extraordinary circumstances exist and that the waiver is in the best interests of our shareholders.
How do shareholders and other interested parties communicate with the Board?
Shareholders and other parties interested in communicating directly with the non-management directors as a group may do so by writing to Non-Management Directors,c/o Corporate Secretary, Libbey Inc., 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio43699-0060. The Nominating and Governance Committee has approved a process for handling letters that we receive and that are addressed to the non-management members of the Board. Under that process, the Corporate Secretary is responsible for reviewing all such correspondence and regularly forwarding to the non-management members of the Board a summary of all correspondence and copies of all correspondence that, in the opinion of the Corporate Secretary, deals with the function of the Board or committees thereof or that the Corporate Secretary otherwise determines requires the attention of the Board. Directors may, at any time, review a log of all correspondence that we receive and that are addressed to the Non-Management Directors or other members of the Board and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters are brought immediately to the attention of our internal auditors and Audit Committee and are handled in accordance with procedures established by the Audit Committee with respect to such matters.
Are Libbey’s Corporate Governance Guidelines, Code of Business Ethics and Conduct and Committee Charters available to shareholders?
Our Corporate Governance Guidelines and Code of Business Ethics and Conduct (which applies to all of our employees, officers and directors), as well as the Charters for each of the Audit Committee, the Compensation Committee and the Nominating and Governance Committee, are available on our website (www.libbey.com). They also are available in print, upon request, to any holder of our common stock. Requests should be directed to Corporate Secretary, Libbey Inc., 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio43699-0060.
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| | |
Are Libbey’s directors required to attend Libbey’s annual meetingAnnual Meeting of shareholders?
While ourOur directors are not required to attend our annual meetingAnnual Meeting of shareholders, but we typically schedulehold a meeting of the Board of Directors to take place at the same location and on the same day as the annual meeting of shareholders.Annual Meeting. As a result, we anticipate that a substantial majority of our directors will be present at the annual meetingAnnual Meeting of shareholders to be held on May 19, 2011.13, 2014. In 2010,2013, all members of the Board of Directors attended our annual meeting of shareholders.
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Annual Meeting.
AUDIT-RELATED MATTERS
Who are Libbey’s auditors?
Upon the recommendation of the Audit Committee, the Board of Directors has appointed Ernst & Young LLP as Libbey’s independent auditors for the fiscal year ending December 31, 2011.2014. 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. See“‘‘Proposal 43 — Ratification of Auditors”Auditors’’below.
above.A representative of Ernst & Young LLP is expected to attend the Annual Meeting and will have an opportunity to make a statement if the representative so desires. The representative will be available to respond to appropriate questions.
What fees hasdid Libbey paidpay to its auditors for Fiscal 20102013 and 2009?2012?
For the years ended December 31, 2013 and December 31, 2012, Ernst & Young LLP served as the Company’s external auditors. Fees for services rendered by Ernst & Young LLP for the years ended December 31, 20102013 and 20092012 are as follows:
| | | | | | | | | |
Nature of Fees | | 2010 Fees | | | 2009 Fees | |
| |
| Audit Fees(1) | | $ | 1,235,506 | | | $ | 1,314,690 | |
| Audit Related Fees(2) | | $ | 80,000 | | | $ | 80,000 | |
| Tax Fees | | $ | 0 | | | $ | 0 | |
| All Other Fees | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
Total | | $ | 1,315,506 | | | $ | 1,394,690 | |
| | | | | | | | | |
| | | | | | | | | | |
Nature of Fees | | 2013 Fees | | 2012 Fees |
Audit Fees(1) | | | $ | 1,189,612 | | | | $ | 1,132,613 | |
Audit Related Fees(2) | | | | 80,000 | | | | | 80,000 | |
Tax Fees(3) | | | | 19,966 | | | | | 0 | |
All Other Fees | | | | 0 | | | | | 0 | |
| | | | | | | | | | |
Total | | | $ | 1,289,578 | | | | $ | 1,212,613 | |
| | | | | | | | | | |
| | |
| (1) | | Audit Fees include fees associated with the annual audit of our internal controls, the annual audit of financial statements, and the reviews of our quarterly reports onForm 10-Q and annual report onForm 10-K.10-K and statutory audit procedures. |
|
| (2) | | Audit-related fees include fees for audits of our employee benefit plans. |
| (3) | Tax fees include fees for services provided to our Mexican subsidiaries for the filing of customs declarations for imports of products into Mexico. |
All audit-related, tax and other services were pre-approved by the Audit Committee, which concluded that the provision of these services by Ernst & Young 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 has appointed Carlos V. Duno, Chair of the Committee, to pre-approve these services.
Report of the Audit Committee
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by Libbey under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Libbey specifically incorporates this Report by reference therein.
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The Audit Committee oversees the integrity of our financial statements on behalf of the Board of Directors; the adequacy of our systems of internal controls; our compliance with legal and regulatory requirements; the qualifications and independence of our independent auditors; and the performance of our independent auditors and of our internal audit function.
In fulfilling its oversight responsibilities, the Audit Committee has direct responsibility for, among other things:
confirming the independence of our independent auditors;
appointing, compensating and retaining our independent auditors;
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| • | confirming the independence of our independent auditors; |
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| • | appointing, compensating and retaining our independent auditors; |
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| • | reviewing the scope of the audit services to be provided by our independent auditors, including the adequacy of staffing and compensation; |
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| • | approving non-audit services; |
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| • | overseeing management’s relationship with our independent auditors; |
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| • | overseeing management’s implementation and maintenance of effective systems of internal and disclosure controls; |
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| • | reviewing our internal audit program; and |
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| • | overseeing our enterprise risk management program. |
reviewing the scope of the audit services to be provided by our independent auditors, including the adequacy of staffing and compensation;
approving non-audit services;
overseeing management’s relationship with our independent auditors;
overseeing management’s implementation and maintenance of effective systems of internal and disclosure controls;
reviewing our internal audit program; and
together with the Board and its other standing committees, overseeing our enterprise risk management program.
The Audit Committee reviews and discusses with management and the independent auditors all annual and quarterly financial statements prior to their issuance. The Audit Committee’s discussions with management and the independent auditors include a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
TheWith respect to the audited financial statements for the year ended December 31, 2013, the Audit Committee met both with management and with the independent auditors who are responsible for auditing the financial statements prepared by management and expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States. The Audit Committee also met with each of the independent auditors and the internal auditors without management being present. The Audit Committee discussed with the independent auditors and management the results of the independent auditors’ examinations; their judgments as to the quality, not just the acceptability, of our accounting principles; the adequacy and effectiveness of our accounting and financial internal controls; the reasonableness of significant judgments; the clarity of disclosures in the financial statements; and such other matters as are required to be communicated to the Audit Committee under generally accepted auditing standards, including Accounting Standards Board Statement on Auditing Standards No. 61, Communication with Audit Committees. In addition, the Audit Committee discussed with the independent auditors the auditor’sauditors’ independence from management and Libbey, including the matters in the written disclosures required by the Independence Standards Board, Standard No. 1, Independence Discussions with Audit Committees.
Taking all of these reviews and discussions into account, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in our Annual Report onForm 10-K for the year ended December 31, 2010,2013, for filing with the SEC.
Securities and Exchange Commission.Carlos V. Duno, Chair
Jean-René Gougelet
William A. Foley(1)
Peter C. McC. Howell
Carol B. Moerdyk
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John C. Orr
| (1) | Appointed to the Audit Committee in October 2013. |
COMPENSATION-RELATED MATTERS
Compensation Discussion and Analysis
Executive Summary
FinancialThis Compensation Discussion and Operational HighlightsAnalysis provides information regarding our 2013 executive pay program, particularly as it relates to the following individuals, who are our ‘‘named executives’’ for 2010. For Libbey, 2010 got off to a fast start. After our stock was delisted by the New York Stock Exchange in April 2009 and we restructured our 16%payment-in-kind notes, which we refer to as the PIK Notes, in October 2009, on January 4, 2010 our stock reclaimed the “LBY” ticker symbol and began trading on the NYSE Amex exchange. Shortly after that, on February 8, 2010 we completed a successful offering of $400 million of senior secured notes, while also amending our asset-based loan facility to replace it with a smaller facility. Using the proceeds of the new senior secured notes, which have a5-year term and bear interest at a fixed annual rate of 10%, together with cash on hand, we paid off our $306 million of floating rate senior secured notes as well as the remaining PIK Notes.
During the balance of 2010, we continued to focus on generating cash and strengthening our balance sheet, while at the same time improving our sales and operating performance. As a result, we paid down approximately $10 million of debt in Portugal and China in late 2010, and on March 25, 2011, we further strengthened our balance sheet by redeeming $40 million of our 10% senior secured notes due 2015.
Additionally:
2013: | | |
Named Executive | • | We increased net sales by 6.8%, from $748.6 million in 2009 to $799.8 million in 2010. International sales increased 12.2%, including a 29.4% increase in sales to Libbey China customers, a 12.8% increase in sales to customersTitle |
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Stephanie A. Streeter | | Chief Executive Officer |
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Sherry Buck | | Vice President, Chief Financial Officer |
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Richard I. Reynolds | | Executive Vice President, Strategy Program Management, until November 30, 2013, when he retired after 43 years of our Portuguese subsidiary and a 10.8% increase in sales to customers of our Dutch subsidiary. In our North American Glass segment, sales to customers of our Mexican subsidiary increased by 21.9%, with sales todedicated service |
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Daniel P. Ibele | | Vice President, General Manager, U.S. and Canadian retail glassware customers increasing 6.2%. In addition, sales to U.S. and Canadian foodservice customers registered sequential quarterly improvements in 2010 over the comparable periods for 2009, finishing with an 8.6% increase during the fourth quarter of 2010 compared to the prior-year quarter.Canada |
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Susan A. Kovach | • | According to NPD Retail Tracking Service, we increased our share of the U.S. retail market for casual glass beverageware by 450 basis points to 46.6%.Vice President, General Counsel and Secretary |
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Timothy T. Paige | • | We were named by Sysco Inc., the largest foodservice distributor in the U.S., as a Top 100 Supplier for the ninth consecutive year. |
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| | • | We completed a highly successful secondary offering, by Merrill Lynch PCG, Inc. , of over 4 million shares of Libbey stock, placing those shares in the hands of new and more strategic, long-term investors.Vice President, Human Resources |
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Executive Summary2013 Financial and Operational Highlights.As we announced in our 2012 Annual Report, our goal for 2013 was to build a foundation for future growth --Setting the Table for Tomorrow --by continuing to implementLibbey 2015, our cohesive strategic roadmap, announced in July 2012, for improving efficiency and better leveraging our strengths. As the charts set forth on page (ii) of the Proxy Statement Summary demonstrate, we made great strides toward this goal.
Although we failed to achieve top-line growth in 2013 (experiencing instead a 0.8% decline in net sales that was partially attributable to our decision to exit some unprofitable sales as we realigned our North American capacity), we achieved:
net income of $28.5 million, an increase of $21.5 million, or 307%, compared to 2012;
EBIT of $73.7 million, an increase of $23.3 million, or 46.2%, compared to 2012;record-high adjusted EBITDA of $134.4 million;
adjusted EBITDA margin of 16.4%, within our target range of 15-18% and our highest adjusted EBITDA margin since 2002;
net debt to adjusted EBITDA of 2.8X, within our target range of 2.5-3.0X; and
return on invested capital of 14.7%, well above our target range of 11-13%.
The following graphs demonstrate the significant progress thatIn addition, we have made since 2008 with respectcontinued our trend of positive returns to 4 key performance measures — Adjusted EBITDA, Long-Term Debt (Net of Cash), Net Income (Loss) Per Diluted Share, and, perhaps most importantly, our closing stock price:
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In fact,shareholders, as
can be seen in the performance graph
below:
See“How does Libbey determine the forms and amounts of pay?”below shows,for information regarding the peer group referred to in the above graph and table.
Finally, in 2013 we took a number of significant steps to position Libbey for future growth:
In February 2013, we announced a plan to recalibrate our1-year total shareholder return product assortment to adapt to existing market conditions and focus on a more profitable product mix. Pursuant to that plan, we realigned our North American production by reducing capacity in our Shreveport, Louisiana manufacturing facility, and we exited the sale of certain glassware items, enabling us to better leverage available capacity at other locations.
We invested $20 million in an expanded furnace and related equipment at our Monterrey, Mexico facility to enable us to leverage our existing manufacturing footprint and position us for 2009future growth and expansion in our business in Mexico and Latin America.
In November 2013, we announced a $20 million investment that will bring to our operations in Shreveport, Louisiana, new, state-of-the-art technology capable of 512%innovative, proprietary glass-making processes designed to keep us at the forefront of the glass tableware industry.
2013 Executive Compensation Highlights.At our 2013 Annual Meeting of shareholders, our say-on-pay proposal garnered the support of over 96% of the shares voted. Our Compensation Committee interpreted the results of the vote as an affirmation of our executive pay program and, our1-year total shareholder return for 2010 of 102.2% significantly exceeded bothas a result, the Russell 2000 Index (27.17% in 2009 and 26.85% in 2010) and S&P 600 Housewares & Specialties Index (52.97% in 2009 and – 6.53% in 2010) duringCommittee generally retained the same period:
| | | | | | | | | | | | | | | | | | | | | |
| | | ANNUAL RETURN PERCENTAGE
| |
| | | Years Ending | |
Company/Index | | Dec06 | | | Dec07 | | | Dec08 | | | Dec09 | | | Dec10 | |
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| Libbey Inc. | | | 21,97 | | | | 29.12 | | | | -92.00 | | | | 512.00 | | | | 102.22 | |
| Russell 2000 Index | | | 18,37 | | | | -1.57 | | | | -33.79 | | | | 27.17 | | | | 26.85 | |
| S & P 600 Houseweres & Specialties | | | 10,07 | | | | 8.57 | | | | -40.75 | | | | 52.97 | | | | -6.53 | |
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structure for our 2013 executive pay program.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | INDEXED RETURNS
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| | | Years Ending | |
| | | Base
| | | | | | | | | | | | | | | | |
| | | Period
| | | | | | | | | | | | | | | | |
Company/Index | | Dec05 | | | Dec06 | | | Dec07 | | | Dec08 | | | Dec09 | | | Dec10 | |
| |
| Libbey Inc. | | | 100 | | | | 121.97 | | | | 157.49 | | | | 12.59 | | | | 77.08 | | | | 155.88 | |
| Russell 2000 Index | | | 100 | | | | 118.37 | | | | 116.51 | | | | 77.15 | | | | 98.11 | | | | 124.48 | |
| S & P 600 Houseweres & Specialties | | | 100 | | | | 110.07 | | | | 119.50 | | | | 70.80 | | | | 108.31 | | | | 101.24 | |
Named Executive Officers. For purposesHowever, during 2013 the Committee did take the following notable actions regarding the pay of this proxy statement, our named executive officers for 2010 were:
executives: | | |
Date | • | John F. Meier, Chairman and Chief Executive OfficerAction Taken: |
February 2013 |
| | • | Richard I. Reynolds, Executive Vice President and Chief Financial Officer (and, until June 10, 2010, our Chief Operating Officer) |
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| • | Gregory T. Geswein, Vice President, Strategic Planning & Business Development (and, until June 10, 2010, our Chief Financial Officer) |
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| • | Daniel P. Ibele, Vice President, Global Sales & Marketing (and, until June 10, 2010, our Vice President, General Sales Manager, North America) |
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| • | Roberto B. Rubio, Vice President, Global Manufacturing & Engineering (and, until June 10, 2010, Vice President, General Manager, International Operations) |
2010 Executive Compensation Highlights. The structure of our executive pay program remained largely unchanged in 2010 compared to 2009. However, our strong performance in 2009, coupled with the rebound in our stock price and our receipt of shareholder approval of our Omnibus Plan, enabled the Compensation Committee to:
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| • | approveApproved base salary increases, (the first in 25 months)to be effective April 1, 2013, averaging 3.2% and ranging from 3.8%0% to 8.3%7.4%.• Approved slightly modified designs for our executive officers,2013 SMIP and the performance cash component of our 2013 LTIP. The 2013 SMIP design eliminates the separate payout opportunity for individual performance, choosing instead to use individual performance to differentiate payouts based on company performance through application of an individual performance modifier. Under the performance cash component of the 2013 LTIP, the Committee replaced the adjusted EBITDA performance metric with effective dates occurringtwo performance metrics – one (adjusted EBITDA margin) designed to focus on February 1, 2010 for some officersprofitability, and May 1, 2010 for others;the other (the ratio of net debt to adjusted EBITDA) designed to focus on financial leverage. These performance metrics are consistent with the financial goals articulated as part of ourLibbey 2015strategy (discussed on page (i) of the Proxy Statement Summary) and |
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| • | revert to the methodology used prior to 2009 for determining the number of NQSOs and RSUs to be granted to executive officers and other employees; |
In addition, on February 7, 2011, after reviewing our performance for 2010, the Compensation Committee:
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| • | determined that our executive officers had earned a payout under each of are distinct from the performance metrics included(adjusted EBITDA and cash generation) employed in the corporate component of our 2010 SMIP (representing 70% of each executive officer’s annual incentive opportunity,) as follows: |
| | | | | | | | | | | | | |
| | | | | | | | | Percentage of
| | Payout
|
Performance Metric | | Actual | | | Budget | | | Actual to Budget | | Percentage |
| |
| Free Cash Flow | | $ | 48.9 million | | | $ | 47.9 million | | | 102% | | 110% |
| Adjusted EBITDA | | $ | 115.0 million | | | $ | 108.7 million | | | 106% | | 129% |
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2013 SMIP.• Awarded RSUs and NQSOs with ratable, four-year vesting.
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October 2013 | | • | determined that eachApproved the accelerated vesting of our named executive officers had earned a payout under the individual componentunvested RSUs and NQSOs upon Mr. Reynolds’s November 30, 2013 retirement in recognition of our 2010 SMIP (representing 30%his significant accomplishments during his more than 43 years of each executive officer’s annual incentive opportunity,) as follows: |
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| | | Individual
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Named Executive Officer | | Component Payout | |
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| G. Geswein | | $ | 65,529 | |
| D. Ibele | | | 48,476 | |
| J. Meier | | | 243,067 | |
| R. Reynolds | | | 134,483 | |
| R. Rubio | | | 111,483 | |
| | service to Libbey. |
December 2013 | • | determined that some of our executive officers, including Messrs. Geswein and Ibele, had earned small discretionary bonuses for 2010 performance: |
| | | | | |
| | | Amount of
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Named Executive Officer | | Discretionary Bonus | |
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| G. Geswein | | $ | 7,421 | |
| D. Ibele | | $ | 7,891 | |
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| | • | determined that, during the3-year performance cycle beginning January 1, 2008 and endingIn order to ensure Ms. Streeter’s continued leadership of Libbey until December 31, 2010, we had achieved adjusted EBITDA2018, authorized Libbey to enter into a CEO Retention Award Agreement pursuant to which Libbey granted to Ms. Streeter cash-settled SARs having an economic value, at the date of grant, equal to 91.5%$2,500,000 and agreed to grant to Ms. Streeter, in February 2014, cash-settled RSUs having an economic value, at the date of budgeted EBITDA for that period, resulting in a payout of performance shares under our 2008 long-term incentive plan, which we refer to as our 2008 LTIP,grant, equal to 71.8% of the target number of performance shares awarded in 2008 under that plan.$2,500,000. |
For more information with respect to these awards, see“What pay did Libbey’s executives receive for 2010?”below.
In addition, in connection with strategic changes to management roles that we announced in June 2010, our Compensation Committee increased Mr. Ibele’s base salary to $312,000, effective July 1, 2010, in recognition of his expanded responsibilities as Vice President, Global Sales & Marketing and increased the target annual and long-term incentive opportunities for Mr. Ibele and Mr. Rubio in recognition of their new responsibilities. The increase in the target annual incentive opportunities applied to pay earned during the second half of the year, and the increase in the target long-term incentive opportunities applies to awards made beginning in 2011. The Committee also increased the 2011 target long-term incentive opportunity of another executive officer (who is not a named executive officer) in recognition of his work restructuring the Company’s capital structure and to ensure internal equity among executive officers.
Finally, for 2011 we elected to discontinue the practice of providing taxgross-ups on the financial and tax planning and executive physical examination perquisites that we provide to executive officers.
What are the objectives of Libbey’s executive pay program?
Our 2013 executive pay program for 2010 was structured to achieve the following objectives:
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| | • | | Talent Attraction and Retention Objective.Objective Our business continued. The Compensation Committee and Board believe that attracting and retaining talented executives are critical to face challenges during 2010,achieving ourLibbey 2015strategy and significant effort continuesreturning Libbey to be required to strengthenconsistent, profitable growth over the long term. Accordingly, our balance sheet, improve operations to reduce costs2013 executive pay program made use of market-competitive base salaries and increase our market shares. In addition, our 2 most senior executives,incentive opportunities, limited perquisites such as financial and tax planning and executive physical examinations, and limited retention tools such as time-based RSUs, NQSOs and SARs. |
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Messrs. Meier and Reynolds, were (and continue to be) approaching retirement. Accordingly, retention of our other highly qualified and experienced executives was critical during 2010 and will continue to be critical during 2011.
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| | • | | Motivational Objective.Objective.As noted elsewhere in this proxy statement, execution of ourLibbey 2015 We have a complex business, with operations in 5 countries on 3 continents and salesstrategy is critical to more than 100 countries around the globe. We have more debt thanreturning Libbey to consistent, profitable growth. Accordingly, we would like to have, although we have made significant progress in reducing our debt. In addition, geopolitical and economic uncertainties around the world continued to challenge our markets in 2010 and thus far in 2011. We structured our 20102013 executive pay program to provide adequatemarket-competitive financial incentivesincentive opportunities, including cash awards under our 2013 SMIP and the cash component of our LTIP, to keepmotivate our executives motivated to meet these challenges.execute ourLibbey 2015 strategy. |
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| | • | | Alignment Objective.Objective We structured the. Our executive pay program was structured to align the interests of our executives with those of our shareholders generally, ensuringgenerally. Our 2013 SMIP and the performance cash component of our LTIP provide meaningful incentive opportunities to ensure that if our shareholders profited, our executives also would profit.take the necessary actions to achieve our strategy, which we believe will continue to create long-term shareholder value. Additionally, because the value, if any, that our executives will realize upon vesting of the RSUs, NQSOs and SARs included in our 2013 executive pay program fluctuates with our stock price, we believe that these forms of pay, together with the cash incentive opportunities under our 2013 SMIP and our LTIP, significantly align the interests of our named executives and our other shareholders. This alignment can be seen in the following chart, which compares our CEO’s realized pay to the closing price of our stock on December 31st of each year and to the total compensation shown for her under the “Total” column (which we refer to as “SCT Pay”) of the Summary Compensation Table set forth on page 41 of this proxy statement: |
| | (1) | SCT Pay is reflected in the “Total” column of the Summary Compensation Table. |
| (2) | Realized Pay is the sum of (a) base salary; (b) bonus, if any; (c) annual incentive actually paid under our SMIP; (d) performance cash actually paid for the performance cycle, if any, ending on December 31st of the applicable year; (d) the pre-tax compensation earned upon the exercise of NQSOs or SARs during the applicable year; (e) the pre-tax compensation earned on RSUs that vested during the applicable year; and (f) the amounts appearing for the applicable year under the “All Other” column of the Summary Compensation Table. | |
| | • | | Reasonableness Objective.Objective. We designed our pay program to balance the need to provide sufficient financial incentives to achieve the 3three objectives described above with the need to ensure that executive pay is reasonable and appropriate. We generally target pay opportunities at or near the median of our peer group and/ or general industry surveys, with variances from the median generally as a result of time in position, individual performance and anticipated ability to affect our performance. |
In what forms did Libbey deliver pay to its executives in 2010,2013, and what purposes do the various forms of pay serve?
Balanced Program with Significant Pay At Risk.For 2010,2013, the pay opportunities of our CEO and our other named executive officersexecutives were designed to provide a balance of stable and competitive pay in the form of base salary, fringe benefits and perquisites; equityequity-based compensation (NQSOs, RSUs and RSUs)SARs) that alignaligns our executives’ interests with those of shareholders generally and also serveserves as a retention tools;tool; and equity-based compensation and annual and long-term incentive awards that are designed to motivate our executives to driveexecute our strategy, thereby driving our financial and operational performance. The charts set forth below show the balancemix of these pay elements (excluding the special retention award of SARs made to Ms. Streeter in December 2013) and reflect the significant portion of the paysubstantial portions of our named executive officersexecutives’ target pay opportunities that is performance-based pay.
Components of Total Target Compensation Opportunity(1) for 2010
(1) Includes Base Salary earned in 2010; Performance-Based Pay payableare at a target (100%) payout; and Time-Vested Pay. Performance-Based Pay includes the opportunity to earn annual incentive compensation under our 2010 SMIP and the opportunity to earn performance-based cash awards, payable in 2013, under the performance component of our 2010 LTIP. Time-Vested Pay includes the intended grant-date value of NQSOs and RSUs awarded in 2010. Vesting of NQSOs and RSUs is subject to continued service over a 4-year period.
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risk:
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| | 
|
Components of Total Maximum Compensation Opportunity(1) for 2010
(1) Includes Base Salary earned in 2010; Performance-Based Pay payable at a maximum (200%) payout; and Time-Vested Pay. Performance-Based Pay includes the opportunity to earn annual incentive compensation under our 2010 SMIP and the opportunity to earn performance-based cash awards, payable in 2013, under the performance component of our 2010 LTIP. Time-Vested Pay includes the intended grant-date value of NQSOs and RSUs awarded in 2010. Vesting of NQSOs and RSUs is subject to continued service over a 4-year period.
The following table sets forth the respective forms of pay for which our executive officers were eligible for 2010,in 2013 and the characteristics of those forms of pay, and the purposes or objectives that each form of pay is designed to fulfill:
pay: | | | | |
Form of Pay | | Characteristics | | Purpose/Objective |
Annual cash compensation
| | | | |
| | | | | Applicable Compensation
Objective |
Base SalaryForm of Pay | | • Fixed component, reviewed annually.Key Characteristics | | Talent Attraction
• Differences among executives are a function of level of responsibility, experience, tenure, individual performance, comparison to market pay information and applicable law.
| | Motivational | | Alignment with
Shareholder
Interests |
| | | |
| Annual cash compensation | | | | | | |
• Pay based upon level of responsibility, experience, tenure, individual performance and comparison to market pay information.
• Provides for stable and fixed level of competitive pay; contributes to talent attraction and retention objective. | | | | |
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| Base salary | | Fixed component; reviewed annually | | |
Form of PayX | | Characteristics | | Purpose/Objective |
| | | | |
Annual incentive award under our SMIP(SMIP) | | • At-risk variable pay opportunity for short-term performance.
• Target awardperformance; no guaranteed minimum payout; maximum payout equal to a percentage225% of actual base salary.(1)
• Differences in target awards are a function of level of responsibility, anticipated ability to affect company performance and comparison to market pay information.
• Amount actually payable varies based upon company and individual performance.
| | • Motivates sustained performance.
• Motivates achievement of short-term company and individual goals.
• Attracts and retains talent by providing a market-competitive cash incentive opportunity.
X | | X | | X |
Discretionary | | | |
| Long-term incentives under our LTIP | | | | | | |
| | | | |
| Performance cash awards | | • Payout based on Compensation Committee’s qualitative assessmentFormula-driven, at-risk cash award that comprises 40% of each executive officer’s individual performance, performance relativeLTIP opportunity; no guaranteed minimum payout; maximum payout equal to internal peers, the extent to which the leadership200% of the executive officer contributed to our success during the year and any outstanding achievements during the year that were not contemplated when individual goals under the SMIP were set.
target | | • Rewards individual performance that demonstrates excellence in the execution and achievement of short-term goals without sacrificing focus on Libbey’s long-term goals.
|
| X | | X | | |
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| | | | X |
Form of Pay | | Characteristics | | Purpose/Objective |
Long-term Incentives under our LTIP(2)
| | | | |
| | | | |
Performance component | | • At-risk variable pay opportunity for sustained, long-term performance.
• Target opportunity equal to a percentage of base salary.
• Differences in target opportunities are a function of level of responsibility, anticipated ability to affect company performance over the long term and comparison to market pay information.
• Amount actually earned is formula-driven.
• For 2008-2010 performance cycle, payable in the form of 1 share of Libbey common stock for each earned performance share. For 2010-2012 performance cycle, payable in the form of cash.
• With respect to performance cycles as to which the award earned is payable in shares of Libbey common stock, performance shares having a grant date fair value equal to a target payout are awarded at inception of the performance cycle, but the underlying shares of common stock are issued only if and to the extent earned. No dividends are payable on the common stock underlying unearned performance shares, and the executive does not have voting rights with respect to unearned performance shares.
| | • Motivates long-term performance because amount realized varies based upon actual financial performance.
• Aligns interests with shareholders.
• Attracts and retains high-caliber executive talent.
|
| | | | |
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| | | | |
Form of Pay | | Characteristics | | Purpose/Objective |
| NQSOs | | • Inherently performance-based award.
• ExerciseComprise 20% of LTIP opportunity; exercise price equal to closing stock price on grant date.
• Differences in value (and therefore number)date of NQSOsgrant; generally awarded to various executives are a function of level of responsibility, anticipated ability to affect company performance over the long term, comparison of grant date value to be transferred to market pay information and differences in Black Scholes values of the NQSOs on their respective grant dates.
• Generally awarded annually, with 1/4 vestingannually; vest ratably at the end of each of the first 4four years of a 10-year term. Awards to new hires that cliff vest on the third anniversary of date of hire also may be made.
| | • Motivates long-term performance because amount realized is based on the stock price appreciation from the date of grant.
• Aligns interests with shareholders.
• Attracts talent by providing market-competitive awards; time-based vesting also serves to retain talent.
X | | X | | X |
| | | | |
| RSUs | | • Differences inComprise 40% of LTIP opportunity; vest ratably at the value (and therefore number) of RSUs awarded to various executives are a function of level of responsibility, anticipated ability to affect company performance over the long term, comparison to market pay information and the closing price used to determine the number of RSUs awarded.
• Generally awarded annually, with 1/4 vesting on eachend of the first through fourth anniversariesfour years of the grant date.
• Noa ten-year term; no dividends are payable on the common stock underlying unvested RSUs, and the executive does not haveor voting rights with respect to unvested RSUs.
| | • Attracts talent by providing market-competitive awards; time-based vesting also serves to retain talent.
• Motivates performance because amount realized varies based upon stock price performance over an extended period of time.
|
| X | | X | | X |
| | | |
| Fringe benefits and limited perquisites | | | | |
| | |
| | | | |
| Medical, dental and life insurance benefits | | • Benefits provided tofor U.S. executive officersexecutives on the same basis as for all U.S. salaried U.S. employees.
employees | | X | | | | |
• Provides market-competitive fringe benefits that further talent attraction and retention objective. | | | | | | | |
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| | | | |
Form of Pay | | Characteristics | | Purpose/Objective |
Limited perquisites | | | | |
• Tax return preparation and financial planning
| | • Direct payment or reimbursement of fees incurred in connection with personal financial planning and tax return preparation together with related “gross-ups.” We have discontinued tax gross-ups on this benefit beginning in 2011.
| | X | | | | |
• Provides access to knowledgeable resources that can assist our executives in efficiently and effectively managing their personal financial and tax planning issues.
| | | | | | • Executive health screening program
| | • Annual executive physical examination and related services.
| | |
• Provides executives with health screening and related services to help them maintain their overall health, thereby contributing to continuity of management.• Limited ground transportation
| | • For each executive officer based in Toledo, Ohio, ground transportation for trips between Toledo, Ohio and the Detroit/Wayne County Metropolitan airport for the executive when traveling for business purposes and for the executive and his or her spouse when traveling together.
• For our executive officer based in Monterrey, Mexico, ground transportation for travel between the executive’s home, our facilities in Monterrey and the Monterrey airport.
| | • Provides fringe benefits that further our talent attraction and retention objective and our reasonableness objective.
• For our executive officer based in Monterrey, Mexico, provides secure transportation in light of the heightened risk of kidnap for ransom in that location.
|
Airline club membership | | • Membership in 1 airline club of the executive’s choice
| | |
• Enables executives who travel frequently to maximize the amount of travel time available for performing services to Libbey. | | | | |
Income protection
| | | | |
| | | | |
Retirement plans | | | | |
• Cash balance pension plan, which we refer to as our Salary Plan
| | • Qualified plan for all U.S. salaried employees hired before January 1, 2006; certain long-term employees, including our CEO and COO, are eligible for a benefit at least equal to the benefit that would have been provided under our previous defined benefit plan.
| | |
• Provides a reasonable level of replacement income upon retirement, serving as an incentive for a long-term career with Libbey. | | | | |
36
| | | | | Applicable Compensation
Objective |
Form of Pay | | Key Characteristics | | Purpose/ObjectiveTalent Attraction
and Retention | | Motivational | | Alignment with
Shareholder
Interests |
•
| | | | |
| Executive health screening | | Annual executive physical examination and related services | | X | | | | |
| | | | |
| Limited ground transportation | | Ground transportation for trips between Toledo, Ohio and the Detroit, Wayne County Metropolitan airport for the executive when traveling for business purposes and the executive and his or her spouse when traveling together; maximizes time available for performing services to Libbey and contributes to safety of those returning to Toledo after long and often tiring flights | | X | | | | |
| | | | |
| Airline club membership | | Membership in one airline club of the executive’s choice; maximizes time available for performing services to Libbey | | X | | | | |
| | | | |
| Relocation assistance | | For executives relocating at Libbey’s request, moving and related expenses associated with the move; when necessary to attract talent, also includes loss-on-sale protection | | X | | | | |
| | | |
| Limited income protection | | | | | | |
| | | | |
| Retirement Plans | | Qualified plan for all U.S. salaried employees hired before January 1, 2006; company contribution credit discontinued at end of 2012 | | X | | | | |
| | | | |
| Supplemental Retirement Benefit Plan, which we refer to as our SERP | | • An excess, nonqualifiedExcess, 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 limitations set forth in the Internal Revenue CodeIRS limitations; no enhanced credit has ever been provided; company contribution credit discontinued at end of 1986, as amended, which we refer to as the Code or the Internal Revenue Code.
2012 | | • Provides a reasonable level of replacement income upon retirement, serving as an incentive for a long-term career with Libbey.
|
| X | | • We have provided no enhancement of service credit under the SERP.
| | |
•
| | | | |
| 401(k) savings plan | | • Matching contributions to our 401(k) savings plan provided on the same basis as for all U.S. salaried U.S. employees.
employees | | X | | | | |
• Provides an opportunity to save for retirement on a tax-deferred basis up to limits established by the Code. | | | • Executive Deferred Compensation Plan, an unfunded plan that we refer to as our EDCP
| | • Permits deferrals of up to 60% of base pay and cash incentive compensation, and up to 100% of equity compensation.
• Deferred cash compensation deemed invested in 1 of 13 measurement funds, including a Libbey Inc. phantom stock fund; deferred equity compensation deemed invested in the Libbey Inc. phantom stock fund.
• With respect to deferrals of eligible pay in excess of IRS limitations applicable to qualified plans, matching contributions equal to 100% of first 1%, and 50% of next 2-6%, of eligible pay deferred.
• No guaranteed return on amounts deferred, which are subject to the rights of our general creditors in the event of our insolvency.
| | |
• Restores benefits that would have been available to the executives under the 401(k) plan but for IRS limitations on qualified plans, and provides an additional vehicle that enables executives to save for retirement on a tax-deferred basis, in each case contributing to our talent attraction and retention objective. To the extent cash or equity compensation is deemed invested in the Libbey Inc. phantom stock fund, also provides executive officers with an additional vehicle to meet the stock ownership guidelines applicable to executive officers.Executive long-term disability coverage | | • Enhances the standard 60% long-term disability benefit that we provide to all U.S. salaried employees with an additional, portable benefit of up to 15% of regular earnings and incentive and bonus pay, or $7,500 per month, for a total long-term disability benefit of up to 75% of pay.
| | |
• Provides a higher level of replacement income upon disability than is provided under our disability coverage available to all U.S. salaried employees, thereby contributing to our talent attraction and retention objective and our objective of motivating our executives to focus on business issues. | | | | |
37
| | | | |
Form of Pay | | Characteristics | | Purpose/Objective |
Employment andSeparation benefits under employment agreements, change in control agreements or our executive severance policy | | • Contingent component; payoutscomponent payable only if employment is terminated under certainspecified circumstances although certain annual incentive and other performance-based compensation may vest on an accelerated basis solely upon a change in control (without the requirement that employment be terminated). | | • Facilitates attraction and retention of high caliber executives in a competitive labor market in which formal severance plans are common.
• Ensures executives focus on exploring opportunities that will result in maximum value for our shareholders, including actions that might result in a loss of employment with, or a change in position or standing within, Libbey.
|
| X | | | | |
| | |
(1) | | The following table sets forth the target percentage of actual base salary for each of the named executive officers in 2010: |
| | | | |
| | Target SMIP Opportunity as a
| |
| | Percentage of Actual Base Salary
| |
Named Executive Officer
| | (%)
| |
|
G. Geswein | | | 60 | % |
D. Ibele (for period January 1 — June 30) | | | 50 | % |
D. Ibele (for period July 1 — December 31) | | | 60 | % |
J. Meier | | | 90 | % |
R. Reynolds | | | 75 | % |
R. Rubio (for period January 1 — June 30) | | | 55 | % |
R. Rubio (for period July 1 — December 31) | | | 60 | % |
| | |
(2) | | In 2010, each executive officer’s long-term incentive opportunity comprised a cash-based performance component and an award of NQSOs and 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 following table sets forth the target percentage for each of the named executive officers in 2010: |
| | | | |
| | Target LTIP Opportunity as a
| |
| | Percentage of Base Salary
| |
Named Executive Officer
| | (%)
| |
|
G. Geswein | | | 100 | % |
D. Ibele | | | 85 | % |
J. Meier | | | 180 | % |
R. Reynolds | | | 140 | % |
R. Rubio | | | 100 | % |
38
How does Libbey determine the forms and amounts of executive pay?
Compensation Committee Independence. In determining whether the members of our Compensation Committee are independent, within the meaning established by the NYSE MKT Company Guide, our Board takes into account all factors specifically relevant to a determination of whether any Compensation Committee member has a relationship to us that is material to his or her ability to be independent in connection with his or her duties as a Compensation Committee member. The factors considered include, but are not limited to, the source of compensation of the member and whether the member is affiliated with us or one of our subsidiaries or affiliates. After taking into account all of these factors, our Board has determined that all of the members of our Compensation Committee are independent within the meaning established by the NYSE MKT Company Guide.
Role of Compensation Consultants. In 2013, the Compensation Committee retained Exequity, LLP to serve as the Committee’s independent compensation consultant. All expense that we incurred in 2013 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 disclosure requirements set forth in the NYSE MKT Company Guide regarding the independence of compensation consultants, 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.
Development and Implementation of the Executive Pay Program.Program. The Compensation Committee of our Board of Directors is responsible for overseeing the design, development and implementation of our executive pay program. In discharging that responsibility, the Compensation Committee engaged Hewitt Associates as its independent executive compensation consultant from 2005 through February 8, 2010. As a result of personnel changes at Hewitt, the Compensation Committee conducted a search for a new independent executive compensation consultant and, in May 2010, engaged Compensation Advisory Partners, LLC, which we refer to as CAP, as its independent executive compensation consultant. All amounts that we incurred in 2010 for services provided by both Hewitt and CAP were attributable to services provided by them to the Compensation Committee in connection with its executive pay decisions.
The Compensation Committee consults with its independent executive compensation consultant when determined to be appropriate by the Compensation Committee. A representative of HewittExequity attended the February 20102013 meeting at which the Compensation Committee made decisions regarding our executive pay program for 2013 and a representative of CAP attended each ofalso advised the Committee in connection with other meetings in 2010 at whichpay decisions made during the Compensation Committee made decisions regarding our executive pay.year. Our CEO, our Vice President, — AdministrationHuman Resources and our 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 in order 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 being present, to discuss and make its final pay decisions.
decisions with respect to our executive compensation program.Our non-CEO executives play no direct role in determining their own pay, except to the extent they provide the CEO with an assessment of their own performance against their individual performance objectives and to the extent that the Vice President, — AdministrationHuman Resources and the Vice President, General Counsel &and Secretary provide information to the Compensation Committee with respect to pay programs affecting all executive officers.
members of the senior leadership team.With respect to our SMIP and our long-term incentive plans, the Compensation Committee sets the performance goals based upon input from our CEO with respect to those goals, including suggested individual performance objectives and metrics under the SMIP.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.
In determining awards to be made for current and future performance periods, the Compensation Committee considers internal pay equity within the executive officer group,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 yearprior-year periods.
In connection with the preparation of our proxy statement each year, the Committee reviews “tally sheets”‘‘tally sheets’’ that summarize, for each of our executive officers, 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 the executive officer’s employment had been terminated under a variety of scenarios as of December 31 of the prior year. The Committee uses these “tally‘‘tally sheets,”’’ which are prepared by management and provide substantially the same information as is provided in the tables included in this proxy statement, primarily for purposes of ensuring that our executives’ estimated pay is consistent with the Committee’s intent in adopting the program and for reviewing internal pay equity within the executive officer group.
39
senior leadership team.
Process for Setting 20102013 Executive Pay.Pay As noted above under“Executive Summary — 2010 Executive Compensation Highlights,”. Generally the structure of our
20102013 executive pay program remained
substantially the same as
the structure of our
20092012 executive pay
program. Decisions asprogram in that the components of pay, and the weight accorded each component, remained the same.With respect to the base salary increases that were implemented in February and May 2010April 2013, the decisions were made by the Compensation Committee at its February 20102013 meeting after receiving input from our CEOMs. Streeter and Exequity. Ms. Streeter and a representative of Exequity also provided input into the Committee’s independent consultant. decisions made by the Compensation Committee in October 2013 to accelerate the vesting of certain RSUs and NQSOs upon Mr. Reynolds’s retirement.
As noteddisclosed in our proxy statement last year, in the fall of 2012 Exequity worked with management to develop a peer group to use as a reference point in setting 2013 executive pay. In developing the peer group, Exequity utilized a database assembled by Equilar in connection with its so-called “Top 25 Survey,” in which participating companies
submit executive compensation data for their 25 most highly compensated executive positions. Initially, we reviewed for inclusion in the peer group public companies having revenues in the range of .5 to 2.0 times our 2010 annual meeting of shareholders, the Compensation Committee determinedrevenues and having businesses that are engaged in late 2009manufacturing or that Mr. Rubio’s target long-term incentive opportunity for 2010 should be increased to 100% of his annual base salary in effect on January 1, 2010, when Mr. Rubio was transferredotherwise are asset-intensive. Because we are a multinational manufacturer with asset-intensive operations, we eliminated from the payrollpeer group companies that do not have operations outside the U.S., companies that do not have manufacturing operations (i.e., that source substantially all of our Mexican subsidiary to our U.S. payroll. This increase in Mr. Rubio’s target long-term incentive opportunity for 2010 was designed to reflect Mr. Rubio’s promotion from Vice President, General Manager, Libbey Mexico to Vice President, General Manager, International Operations.
In June 2010, whenthe products that they sell) and companies that merely have light assembly-type operations. As a result, we
announced strategic management changes, our CEO recommended,identified, and the Compensation Committee
and its independent consultant concurred, thatapproved for use in developing our 2013 executive pay program, the
2010 annual incentive targets for Mr. Ibele and Mr. Rubio should be adjustedfollowing group of 18 companies: | | |
| Barnes Group | | Integra LifeSciences Holdings |
Callaway Golf | | Neenah Paper |
Coherent | | Nordson |
ESCO Technologies | | Polypore International, Inc. |
Entegris | | Tecumseh Products |
Furniture Brands International Inc. | | Tempur Pedic International |
H.B. Fuller | | TriMas |
Graco | | West Pharmaceutical Services |
Infinera | | Zep |
At the time the peer group was selected, we ranked, by revenues, just above the mid-point of the peer group.
Using data submitted by these peer companies in response to reflectEquilar’s 2012 Top 25 Survey as reference points, Exequity compared the changecompensation of our top officer positions to the peer group in their scopeterms of duties. Because Mr. Ibele’s duties for the second half of 2010 were expanded significantly to comprise global sales and marketing, Mr. Ibele’sbase pay, target annual incentivebonus opportunity, target total cash, long-term incentives and target total direct compensation (target total cash plus long-term incentives). As noted on page (ii) of the Proxy Statement Summary, the market study conducted by Exequity disclosed that base salaries for most executives were generally within a reasonable range of the second half of 2010 was increased from 50% of base salary to 60% of base salary actually earned. Similarly, since Mr. Rubio’s responsibilities were modified to encompass manufacturingmedian, but that annual and engineering for our operations worldwide, his target annual incentive opportunity for the second half of 2010 was increased from 55% to 60% of base salary actually earned. At the same time, the Committee increased the target long-term incentive opportunities applicablefor most named executives were well below median, driving the target total direct compensation opportunities for a number of them well below median. Accordingly, in order to Mr. Ibeleensure that we maintain market-competitive pay programs in order to achieve our retention, motivational and Mr. Rubioalignment objectives, in 2011February 2013, our Compensation Committee approved adjustments to 110%base salaries and target annual and long-term incentive opportunities of annual base salarythe named executives as set forth in effectthe table appearing on January 1, 2011.
page (iii) of the Proxy Statement Summary.In February 2011,2014, the Compensation Committee, with input from our CEOMs. Streeter and Exequity, or, in the case of Ms. Streeter’s pay, Exequity and the Committee’sother independent consultant,directors, reviewed our 20102013 performance and made the awards under our 2013 SMIP and the performance cash component of our 2011 LTIP (for the 2011-2013 performance cycle) described above underon page (iv) of the Proxy Statement Summary“Executive Summary — 2010 Executive Compensation Highlights.”.
Specifically, the named executives were awarded the following payouts: | | | | | | | | |
| | | | | | | | | 2011 LTIP |
| | | | | 2013 SMIP Payout | | | | Performance Cash Payout |
Named Executive | | | | ($) | | | | ($) |
| | | | |
S. Buck | | | | 208,737 | | | | 72,213 |
D. Ibele | | | | 202,206 | | | | 136,319 |
S. Kovach | | | | 140,210 | | | | 92,232 |
T. Paige | | | | 133,194 | | | | 89,326 |
R. Reynolds | | | | 303,025 | | | | 250,927 |
S. Streeter | | | | 662,533 | | | | 417,061 |
Our Equity Grant Practices.Grants of equity awards have been made under the following circumstances:
In February of each year, the Compensation Committee typically makes awards of RSUs and NQSOs to our senior leadership team under our long-term incentive compensation program. In February 2013, the Compensation Committee authorized these awards at its meeting, which occurred before we announced financial results for the recently concluded fiscal year. The number of RSUs awarded was a function of the average closing price of our common stock over a period of 20 consecutive trading days ending on the grant date, and the number of NQSOs granted was a function of the Black-Scholes value (calculated using the average closing price of Libbey Inc. common stock over a period of 20 consecutive trading days ending on the grant date, and capping volatility at 50%) of the NQSOs on the grant date. In each case, the grant date was the first business day after we released our fiscal 2012 financial results.
In 2013, the Compensation Committee delegated authority to the Chairman of the Board to make limited grants of NQSOs, restricted stock and RSUs to senior managers and other employees who are not executive officers. The Chairman’s authority to make these grants was subject to the following limitations and conditions:
| | |
| | • ¡ | We occasionally grant “sign-on” awards of NQSOs to individuals who have accepted offers of employment for executive positions with Libbey. With respect to each grant of NQSOs, the exercise price of the NQSOs is the closing price of Libbey common stock on the date on which the Compensation Committee authorizes the award or, if later, the date on which the individual reports to work at Libbey. We had no new executive officers in 2010, so there were no “sign-on” awards of NQSOs made to executive officers in 2010. |
|
| | • | In February of each year the Compensation Committee typically makes awards of RSUs and NQSOs to our executive officers and other key executives under our long-term incentive compensation program. In each year from 2006 through 2008, the Committee also awarded performance shares that could be earned to the extent we achieved cumulative adjusted EBITDA over specified performance periods. Although the Compensation Committee typically authorizes these awards at its meeting in early February of each year, before we announce financial results for the recently concluded fiscal year, the number of RSUs, NQSOs and performance shares (if applicable) is not determined, and the grants are not made, until after we announce those financial results. In determining the number of RSUs and performance shares (if any) to be awarded, the Committee typically divides the economic value intended to be granted by the average closing price of our common stock over a period of 60 consecutive trading days ending on the first business day after we announce financial results. Similarly, in determining the number of NQSOs to be awarded, the Committee typically divides the economic value to be transferred by the Black Scholes values of the NQSOs on the respective grant dates. As disclosed in our proxy statement for our 2010 annual meeting of shareholders, the Compensation Committee modified the methodologies used for determining the number of RSUs and NQSOs to be awarded in February 2009. The Committee did so because we wanted to control the rate at which we delivered equity compensation to |
40
| | |
| | executives in the light of the significant reduction in our share price in late 2008 and early 2009. In light of the rebound in our stock price late in 2009 and early in 2010, the Compensation Committee reverted to the original methodology for purposes of determining the number of RSUs and NQSOs awarded in February 2010.1 |
| | |
| • | The Compensation Committee has delegated authority to the Chairman of the Board to make limited grants of NQSOs, restricted stock and RSUs to senior managers and other employees who are not executive officers. The Chairman’s authority to make these grants is subject to the following limitations and conditions: |
| | |
| • | The Compensation Committee has limited the total number of shares that may be granted as NQSOs, restricted stock or RSUs, as the case may be, that may be granted;was limited; |
|
| | • ¡ | | The exercise price of any NQSOs that the Chairman awards cannotwas permitted to award could not be less than the closing price of our common stock on the date of grant; |
|
| | • ¡ | | Grants of NQSOs maywere not permitted to be made during “quiet periods”‘‘quiet periods’’; and |
|
| | • ¡ | | The Chairman mustwas required to report periodically to the Compensation Committee with respect to the awards that he has made pursuant to this delegation of authority. |
Potential Impact of Misconduct on Compensation.Our SMIP and long-term incentive plans are authorized under our Omnibus Plan. Under theThe Omnibus Plan 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 |
|
| • | any of our executives knowingly engaged, or was grossly negligent in engaging, in the misconduct, or knowingly failed, or was grossly negligent in failing, to prevent the misconduct or is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, |
then the executivecontains a ‘‘clawback’’ provision that obligates an individual receiving a cash or equity award to reimburse us under certain circumstances. Specifically, reimbursement is required
if:we are required, as a result of misconduct, to reimburse usprepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the securities laws; and
the individual 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 that was made in settlement of an award made under the Omnibus Plan and that was earned or accrued during the12-month period following the first public issuance or filing with the SEC of the financial document embodying the financial reporting requirement in question.
Share Ownership Guidelines.Guidelines In 2010 we significantly modified the share ownership guidelines applicable to. We obligate our non-employee directors. In October 2007, we established guidelines pursuant to whichnon-management directors and our executive officers also are required to achieve or retain ownership of meaningful amounts of equity in Libbey. For further information regarding our stock ownership or retention guidelines for non-employeenon-management directors and executive officers, see“‘‘Stock Ownership — How much Libbey stock do our directors and officers own? — Stock Ownership Guidelines”Guidelines’’above.
1 The grants of RSUs awarded in February 2010 were contingent on our receipt of shareholder approval of our Omnibus Plan. Upon our receipt of shareholder approval at our annual meeting of shareholders on May 6, 2010, the RSUs were granted subject to a4-year vesting schedule, with the first 25% vesting on February 11, 2011.
41
What pay did Libbey’s executives receive for 2010?2013?
Base Salaries.Salaries. In February 2010,2013, the Compensation Committee increased annualized salaries for the named executives, as shown below, effective April 1, 2013:
| | | | | | | | | | |
| | | Annualized | | Annualized |
| | | Salary Before | | Salary After |
| | | Increase | | Increase |
Named Executive | | ($) | | ($) |
| | |
S. Buck | | 350,000 | | 364,000 |
D. Ibele | | 354,000 | | 362,850 |
S. Kovach | | 298,242 | | 320,312 |
T. Paige | | 294,624 | | 300,516 |
R. Reynolds | | 494,796 | | 494,796 |
S. Streeter | | 725,004 | | 750,000 |
Annual Incentive Compensation. Our 2013 SMIP provided each of our named executives with a target annual incentive opportunity equal to a percentage of his or her actual base salary in accordance with the table set forth on page (iii) of the Proxy Statement Summary. The performance measures used for the 2013 SMIP were adjusted EBITDA and adjusted cash earnings. The Committee approved salary increasesthese performance measures for the following reasons:
Given the asset intensity of our business, as well as our relatively high degree of financial leverage over the last few years, the Committee believes that adjusted EBITDA is an appropriate measure of core operating performance, since it is unaffected by capital structure, capital investments and ages of capital assets.
Our ability to generate cash to further de-lever our balance sheet is critical to returning LIbbey to consistent, profitable growth. We believe that use of the adjusted cash earnings performance measure appropriately gauges how well we manage inventory, accounts payable and accounts receivable – all potential consumers of cash if not appropriately managed.
The named executives’ 2013 annual incentive performance targets were established based on a budget approved by the Board of Directors. These targets are disclosed on page (iii) of the Proxy Statement Summary. Weightings of the metrics are as follows:
| | | | | | |
All Named Executives Other than Mr. Ibele | | Mr. Ibele |
Weight | | Financial Performance Measure | | Weight | | Financial Performance Measure |
| 60% | | Company-wide adjusted EBITDA | | 30% | | Company-wide adjusted EBITDA |
| 40% | | Company-wide adjusted cash earnings | | 30% | | Regional adjusted EBITDA |
| | | | 20% | | Company-wide adjusted cash earnings |
| | | | 20% | | Regional adjusted cash earnings |
At the beginning of 2013, the Committee developed the following payout scale to determine the amount of the unmodified payouts indicated on page (iv) of the Proxy Statement Summary for each of the executive officers. These salary increases were the first salary increases in 25 monthscorporate and followedregional financial performance measures:
| | | | | | | | |
| | | | | | | | | Percent of Targeted EBITDA |
| | | | | Payout Percentage | | | | or Cash Earnings Achieved |
Performance Level | | | | (%) | | | | (%) |
| | | | |
| Below threshold | | | | 0 | | | | Below 80 |
| Threshold | | | | 50 | | | | 80 |
| Target | | | | 100 | | | | 100 |
| Maximum | | | | 200 | | | | 115 |
Payout percentages between threshold, target and maximum performance are linear.
Instead of providing for a 91/2 month period in 2009 during whichseparate payout opportunity based on individual performance, we elected to use individual performance to differentiate payouts under our executive officers’ monthly pay was cut by 7.5%. Salary increases for the named executive officers were:
| | | | | | | | | | | | | |
| | | Annualized Salary
| | | Annualized Salary
| | | % Increase in
| |
Named Executive Officer | | Before Increase | | | After Increases | | | Annualized Salary | |
| |
| G. Geswein | | $ | 337,632 | | | $ | 354,258 | | | | 4.9 | % |
| D. Ibele | | $ | 272,652 | | | $ | 283,560 | | | | 4 | % |
| J. Meier | | $ | 690,000 | | | $ | 724,512 | | | | 5 | % |
| R. Reynolds | | $ | 446,280 | | | $ | 464,136 | | | | 4 | % |
| R. Rubio | | $ | 410,000 | | | $ | 444,168 | | | | 8.3 | % |
In addition, Mr. Ibele’s annualized base salary was increased to $312,000 effective July 1, 2010, when he assumed responsibility for our global sales and marketing.
Annual Incentive Compensation. As indicated under“Executive Summary — 2010 Executive Compensation Highlights”above, our 2010 SMIP included two components in 2010: a corporate component and2013 SMIP. Through application of an individual component. We employed 2 performance metricsmodifier, the payout amounts earned by our named executives with respect to the financial performance measures were subject to potential modification based on individual performance, including with respect to individual objectives approved by the Committee early in connection with the corporate component of the plan: (1) the ratio of actual adjusted EBITDA to budgeted EBITDA and (2) the ratio of actual free cash flow to budgeted free cash flow.2year. As a result, eachan executive officer’s annual incentive opportunity for 2010 was divided as follows:
2 The 2010 budgetwho demonstrates exceptional performance in developing and/or implementing a process or tool that
we submittedmay not have impacted the current year’s financial results but is likely to
our Board for approvalfavorably impact future success may be awarded a payout in
late 2009 assumed that during 2010 we would make 2 interest payments on our senior secured notes. As a resultexcess of the
refinancingpayout that is based strictly on financial performance measures. Additionally, application of
those notes completedthe individual performance modifier 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
February 2010, we were required to make only 1 interest payment during 2010. Accordingly, we submitted an adjusted budget to the
Board that increased budgeted free cash flow for 2010, and the portionexecution of our
executive officers’ actual 2010 SMIP awards attributablestrategy.While a number of the individual objectives were tied closely to performance against the free cash flow metric is based onleadership of a comparisonvariety of actual free cash flow to the increased budgeted free cash flow.
42
initiatives contemplated by ourLibbey 2015strategy, examples of others are as follows: | | | | |
Named Executive | | Examples of Individual Objective |
S. Buck | | • | | Achieve financial flexibility to support theLibbey 2015strategy, including by driving debt levels to our target range and developing a tax optimization strategy to reduce cash taxes paid |
| | |
D. Ibele | | • | | Enhance safety programs within the U.S. and Canada region in order to reduce work- related injuries |
| | |
S. Kovach | | • | | Ensure appropriate risk mitigation/ avoidance throughout the year relative to actions taken throughout the year to implement theLibbey 2015strategy |
| | |
T. Paige | | • | | Design and implement a new healthcare program for all U.S. salaried associates |
| | |
R. Reynolds | | • | | Mentor “high-potential” associates around the world |
| | |
S. Streeter | | • | | Enhance leadership development and change management capabilities |
2010 SMIP Opportunity
Reconciliations of adjusted EBITDA and EBITDA to net income (loss) and of free cash flow to adjusted EBITDA are set forth on Attachment 1. We selected adjusted EBITDA and free cash flow as our corporate-wide performance measures for 2010 because we wanted to achieve a balance between our continuing need to generate cash to fund our operations and reduce our debt and our need to generate EBITDA to increase our stock price and ensure that, when we refinance our debt in the coming years, we are able to do so on as favorable terms as possible.
On February
7, 2011,17, 2014, the
Compensation Committee met and reviewed our performance and the performance of our
executive officerssenior leadership team during
2010.2013. The Committee reviewed
our actual free cash flowboth company-wide and
regional adjusted EBITDA for
2010,2013 and
compared themcompany-wide and regional adjusted cash earnings for 2013 relative to our
budgeted freecompany-wide and regional targeted EBITDA and our targeted cash
flow and budgeted EBITDA (adjusted for special items)earnings, respectively, for the year.
ApplyingIn each case, the
scale describedCommittee adjusted actual results for special items that the Committee does not believe are indicative of our core operating performance. For example,
the Committee believes that our executives should not be penalized by accounting charges for loss on redemption of debt, given that de-leveraging of our balance sheet through the redemption of our 6.875% senior secured notes is necessary to position Libbey for future growth and, accordingly, is in footnote 2our shareholders’ best interests. Similarly, the Committee believes that our executives should neither be penalized by, nor profit from, the unanticipated malfunction of one of our furnaces in 2013 and the insurance proceeds received in connection with that malfunction. Additionally, the plan design for the 2013 SMIP contemplated that, to the Grants of Plan-Based Awards Table,extent currency fluctuations impact actual results by more than 15%, the Committee determined that we had achieved 102% of budgeted free cash flow and 106% of budgeted EBITDA for 2010, resulting in a combined payout under the corporate component of approximately 121% of target.
With respect to the individual component applicable to our named executive officers in 2010, the Compensation Committee approved individual objectives for each of them early in the year. In June 2010, the responsibilities of 4 of our named executive officers changed. Specifically, Mr. Reynolds moved from the Chief Operating Officer position to the Chief Financial Officer position, which Mr. Geswein vacated to become Vice President, Strategic Planning and Business Development; Mr. Ibele assumed responsibility for global sales and marketing, in contrast to his previous responsibility only for North American
2 The 2010 budget that we submitted to our Board for approval in late 2009 assumed that during 2010 we would make 2 interest payments on our senior secured notes. As a resultimpact of the
refinancing of those notes completed in February 2010, we were required to make only 1 interest payment during 2010. Accordingly, we submitted an adjusted budget to the Board that increased budgeted free cash flow for 2010, and the portion of our executive officers’ actual 2010 SMIP awards attributable to performance against the free cash flow metric is based on a comparisoncurrency fluctuations would be excluded.A reconciliation of actual freecompany-wide adjusted EBITDA and adjusted cash flowearnings to the increased budgeted freetargeted company-wide EBITDA and cash flow.
43
earnings is attached as Appendix A.
sales; and Mr. Rubio assumed responsibility for global manufacturing and engineering, in contrast to his previous responsibility only for international operations. As a result, the Compensation Committee determined that, for each of these named executive officers, an additional individual objective should be added to reflect his new responsibilities. The Compensation Committee then determined to weight the individual objectives attributable to the first 6 months of the year at 50% of the individual component, with the individual objectives attributable to the latter 6 months of the year making up the other 50% of the individual component.
Although disclosure of certain of the individual objectives of our executives may result in competitive harm, the following table provides examples of the individual objectives, and corresponding scores, of our named executive officers for 2010:
| | | | |
Named Executive Officer
| | Individual Objective
| | Score
|
|
| | | | |
G. Geswein | | • Working together with our Vice President, General Manager, International Operations, improve the return on invested capital of our International operations | | 103.3% |
| | • Achieve specified objectives relating to leadership of our global finance team | | |
| | • Conclude specified strategic initiatives | | |
| | | | |
D. Ibele | | • Ensure that we achieve specified sales and margin targets | | 93.9% |
| | • Achieve specified objectives relating to leadership of our sales team | | |
| | | | |
J. Meier | | • Achieve budgeted EBITDA | | 125.0% |
| | • Complete strategic plan for period ending 2015 | | |
| | • Achieve specified succession planning objectives | | |
| | | | |
R. Reynolds | | • Achieve budgeted EBITDA | | 129.4% |
| | • Implement specified information technology solutions | | |
| | • Improve our annual business budget process | | |
| | | | |
R. Rubio | | • Achieve increased International sales and International EBITDA | | 146.4% |
| | • Analyze and refine our go-to-market strategies in specified markets | | |
| | • Achieve specified overall equipment effectiveness targets | | |
The Committee received input from our CEO asMs. Streeter regarding the other named executives’ individual performance review scores, including an evaluation of the extent to the performance by our other executive officers relative towhich they achieved their individual objectives. In addition, prior to the meeting, the Committeeobjectives, and reviewed the performance evaluation completed by our non-employeenon-management directors with respect to our CEO’sMs. Streeter’s performance in 2010,2013, including hisher performance with respectrelative to hisher individual objectives. After meeting in executive session with the Committee’s independent compensation consultant,Exequity, the Committee determined that the respectivepayout amount earned by each named executive officers had achievedwith respect to the scores earned in the table above.
44
Asfinancial performance measures should not be modified either up or down because each named executive’s individual performance review score fell within a result, each of the named executive officers earned the following annual incentive compensation for 2010:
| | | | | |
Named Executive Officer | | Annual Incentive | |
| |
| G. Geswein | | $ | 244,415 | |
| D. Ibele | | | 186,698 | |
| J. Meier | | | 791,426 | |
| R. Reynolds | | | 427,561 | |
| R. Rubio | | | 326,222 | |
Discretionary Cash Awards. For some of our executives, including Messrs. Geswein and Ibele, the Compensation Committee determinedrange that discretionary cash awards were warranted. Specifically,signified successful achievement. Accordingly, the Committee determined that Messrs. Geswein and Ibele merited small discretionary awards of $7,421 and $7,891 for the following reasons:
amounts were earned by the named executives under our 2013 SMIP: | | |
Named Executive Officer
| | Rationale for Discretionary Award
|
|
G. Geswein | | Mr. Geswein’s leadership in connection with the refinancing completed in February 2010 was critical to its success. |
D. Ibele | | Mr. Ibele cost-effectively realigned sales and marketing personnel in key markets and provided significant leadership to developing sales and marketing managers, contributing to substantial increases in sales to customers of our Mexican, Portuguese and Dutch subsidiaries. |
Long-Term Performance-Based Compensation. The long-term performance-based compensation opportunity provided to our executive officers for performance during 2010 consisted of the following components:
| | |
| | • | Performance shares awarded under the 2008 LTIP, which the Compensation Committee adopted early in 2008. The 2008 LTIP provided the opportunity to earn performance shares over a single,3-year performance cycle beginning on January 1, 2008 and ending December 31, 2010. TheAnnual |
| | SMIP Payout |
Named Executive | | ($) |
| |
S. Buck | | 208,737 |
D. Ibele | | 202,206 |
S. Kovach | | 140,210 |
T. Paige | | 133,194 |
R. Reynolds | | 303,025 |
S. Streeter | | 662,533 |
Long-Term Performance-Based Compensation. In 2013, each named executive’s long-term incentive opportunity included a cash-based performance component and an award of NQSOs and 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 table set forth on page (iii) of the Proxy Statement Summary sets forth the target percentage for each of the named executives in 2013.
During 2013, the cash-based performance opportunity provided to our named executives for performance during 2013 consisted of the following components:
A performance component under our 2011 LTIP (for the 2011-2013 performance cycle) that provided for cash awards if and to the extent we achieved, over the three-year performance cycle, cumulative EBITDA (adjusted as described below) equal to the sum of EBITDA targeted for each of the three years during the performance cycle.
A performance component under our 2012 LTIP (for the 2012-2014 performance cycle) that provides for cash awards if and to the extent we achieve, over the three-year performance cycle, cumulative EBITDA (adjusted as described below) equal to the sum of EBITDA targeted for each of the three years during the performance cycle.
A performance component under our 2013 LTIP (for the 2013-2015 performance cycle) that provides for cash awards based on our performance, over the three-year performance cycle, against the following performance measures that are aligned with the financial goals identified on page (i) of the Proxy Statement Summary:
| ¡ | | A profitability measure under the 2008 LTIP was the ratio of cumulative EBITDA over the performance cycle (adjusted as described below) to the sum of EBITDA budgeted for each of the 3 years during the performance cycle. For purposes of determining– namely, the extent to which we achieve our targeted EBITDA margin over the performance shares are earned under our 2008 LTIP, EBITDA is calculatedcycle; and adjusted as described under |
| ¡ | | A financial leverage measure – namely, the heading“— Annual Incentive Compensation”above. EBITDA also may be adjusted to take into account the impact of any acquisition or disposition with respectextent to which we achieve our targeted net debt to adjusted EBITDA forratio over the business that is acquired or sold, as the case may be, exceeds $5.0 million.performance cycle. |
For purposes of determining the extent to which the cash award is earned, EBITDA is calculated as described in Appendix A and is adjusted to exclude special items that are not indicative of our core operating performance and the impact of any acquisitions or dispositions. Additionally, to the extent that currency fluctuations impact actual results by more than 15%, the impact of the currency fluctuations is excluded.
In February 2014, the Compensation Committee reviewed our performance for the three-year performance cycle ended December 31, 2013 and determined that we had achieved 99.7% of targeted EBITDA for that period. The Committee then applied the following scale, which the Committee approved at the beginning of the year, to determine the amount earned under the performance cash component of the 2011 LTIP:
The scale applied to determine this payout is as follows:
| | | | | | | | |
| | | | | Percentage of | | | | |
| | | | | Cumulative Targeted EBITDA | | | | Payout Percentage |
Performance Level | | | | (%) | | | | (%) |
| | | | |
| Below Threshold | | | | Less than 80 | | | | 0 |
| Threshold | | | | 80 | | | | 50 |
| Target | | | | 100 | | | | 100 |
| Outstanding | | | | 120 | | | | 200 |
Accordingly, the Compensation Committee authorized payments to the participants in the 2011 LTIP (for the 2011-2013 performance cycle) in an amount equal to 99.3% of their respective target awards, as a result of which the named executives received payouts in the following amounts:
| | | | |
| | 2011 LTIP | |
| | • | A performance component under our 2010 LTIP, which the Compensation Committee adopted early in 2010. Under this component, cash awards are payable if and to the extent we achieve, over a3-year performance cycle beginning January 1, 2010 and ending December 31, 2012, cumulative EBITDA (adjusted as described below) equal to the sum of EBITDA budgeted for each of the 3 years during the performance cycle. Again, for purposes of determining the extent to which the cash award is earned, EBITDA is calculated and adjusted as described under the heading“— Annual Incentive Compensation”above and may be further adjusted to take into account the impact of any acquisition or disposition with respect to which EBITDA for the business that is acquired or sold, as the case may be, exceeds $5.0 million. Cash Payouts | |
On February 7, 2011, the Compensation Committee determined that our cumulative adjusted EBITDA for the period January 1, 2008 through December 31, 2010 was $290.4 million, or 91.5% of the sum of adjusted EBITDA budgeted for each year during that3-year period. The Committee then used
45
the following scale and determined that participants under the 2008 LTIP had earned 71.8% of the target number of performance shares awarded to them for the period January 1, 2008 through December 31, 2010:
| | | | | | | | | |
| | | Percentage of
| | | Payout as
| |
| | | Budgeted EBITDA
| | | Percentage of Target
| |
Payout Level | | (%) | | | (%) | |
| |
| Threshold | | | 85 | % | | | 50 | % |
| Target | | | 100 | % | | | 100 | % |
| Maximum | | | 115 | % | | | 200 | % |
As a result, in February 2011, we settled the earned performance shares by issuing the following number of common shares to the named executive officers:
Named Executive | | ($) | |
| |
S. Buck | | | 72,213 | |
Named Executive Officer
| | No. of Shares(1) | |
|
G. GesweinD. Ibele | | | 5,060136,319 | |
D. IbeleS. Kovach | | | 3,43092,232 | |
J. MeierT. Paige | | | 19,39089,326 | |
R. Reynolds | | | 9,615250,927 | |
R. Rubio(2)S. Streeter | | | 5,621417,061 | |
| | |
(1) | | Each of the named executive officers other than Mr. Rubio elected to have us withhold shares to cover taxes on these awards. Net of the withheld shares, we issued to the named executive officers the following number of shares: Mr. Geswein — 3,431 shares; Mr. Ibele — 2,326 shares; Mr. Meier — 13,146 shares; and Mr. Reynolds — 6,519 shares. |
|
(2) | | Mr. Rubio’s target opportunity for this3-year performance cycle was prorated based upon his July 1, 2009 date of hire. |
Stock Options and RSUs.RSUs When the Compensation Committee adopted our equity-based 2006 LTIP, it contemplated that, for each 3-year period covered by an LTIP, executives would be entitled to grants of NQSOs and RSUs equal to a total of 60% of their respective target LTIP opportunities. As described in our proxy statement for our 2010 annual meeting of shareholders, the Compensation Committee changed the methodology for determining the number of NQSOs and RSUs awarded in 2009 in reaction to our low stock price and the limited number of shares available for awards under our 2006 Omnibus Incentive Plan, with the result that the economic value of the NQSOs and RSUs granted to our executives in 2009 was reduced by 88% and 83%, respectively. After noting the significant increase in our stock price since that time, as well as the submission to our shareholders (and subsequent receipt of shareholder approval at our 2010 annual meeting of shareholders) of the Omnibus Plan, the Compensation Committee determined that it was appropriate to revert to the previous methodology for purposes of determining the number of NQSOs and RSUs to be awarded in 2010. Accordingly, in. In February 20102013, the Compensation Committee awarded to participants in our executive officers2013 LTIP NQSOs and RSUs (each subject to4-year four-year vesting) having an economic value at the time of award equal to 20% and 40%, respectively, of our executive officers’ respectivetheir target long-term incentive opportunity.opportunities.
Special Retention Award of Cash-Settled SARs. Throughout 2013, our independent directors discussed the transformation that we began when Ms. Streeter joined us in July 2011. They also discussed the fact that Ms. Streeter is a highly attractive candidate for CEO positions with companies that are much larger than Libbey, While recognizing that we have made great strides in executing our strategy, improving our profitability and positioning us for future growth, they also acknowledged that considerable work remains to be done to return Libbey to consistent, profitable growth. And they believe that Ms. Streeter is best able to lead us in this transformative period.
Accordingly, the independent directors charged the Compensation Committee with working with its independent consultant and independent outside counsel to develop a special retention award designed to induce Ms. Streeter to continue to lead Libbey, and the execution by Libbey of its long-term strategic goals, through 2018.
After more than a year of reviewing different alternatives and consulting with the other non-management directors, in December 2013 the Committee authorized Libbey to enter into a CEO Retention Award Agreement with Ms. Streeter. Pursuant to that agreement, the Company issued to Ms. Streeter 240,829 SARs that cliff vest, subject to Ms. Streeter’s continued employment, on December 31, 2018.1 Each SAR will entitle Ms. Streeter to a cash payment equal to the amount by which the closing price of our stock on the date of exercise (which may occur on or before December 16, 2023) exceeds $21.29, the closing price of our stock on the grant date.
In structuring the CEO Retention Award Agreement, the Committee elected, for the following reasons, to award to Ms. Streeter SARs that are not subject to performance conditions and that cliff vest on December 31, 2018:
1 Notwithstanding the five-year cliff vesting feature of the retention SARs, there are limited circumstances under which vesting of the SARs may accelerate automatically. Specifically, vesting of the SARs will accelerate automatically if Ms. Streeter’s employment with the Company is terminated during the retention period as a result of her death or permanent disability, by the Company without Cause or by Ms. Streeter for Good Reason. See footnotes 1 and 2 on page 39 below for the meanings of “Cause” and “Good Reason,” respectively.
The use of SARs that cliff vest on December 31, 2018 maximizes the handcuffs on Ms. Streeter and ensures that no value actually is delivered to her unless she serves the entire desired period of retention.
46The Committee and the other non-management directors believe that establishing meaningful performance goals for the five-year retention period, particularly given the current choppy economic environment and the uncertainties inherent in the transformative process underway at the Company, would be quite difficult.
While recognizing that some investors and investor advisory firms take the view that time-based SARs are not “performance-based,” the Committee nevertheless believes that tying the value realized by Ms. Streeter under the SARs to appreciation in Libbey’s stock price appropriately incentivizes her to maximize the value returned to shareholders over the five-year retention period.
Although the Committee and the other independent directors believe the CEO Retention Award Agreement and the awards of SARs and RSUs made under it are in the best interest of our shareholders, they nevertheless view the CEO Retention Award Agreement, and the grants of SARs and RSUs made under it, as extraordinary in nature, and they do not currently anticipate entering into any additional special retention agreements with the CEO.
What is the Compensation Committee’s policy regarding deductibility of compensation?
Pursuant to Section 162(m) of the Internal Revenue Code, publicly-held corporations are prohibited from deducting compensation paid to certain executive officers, as of the end of the fiscal year, in excess of $1.0 million, unless the compensation is “performance-based.” It‘‘performance-based.’’ The Committee believes that preserving the tax deductibility is an important, but not the Compensation Committee’s policy thatsole, objective when designing executive compensation paidprograms. Accordingly, while our 2013 SMIP and the performance cash component of our 2013 LTIP (for the 2013-2015 performance cycle) are designed to qualify as “performance-based” compensation, other components of our named executive officers should, to the extent it exceeds $1.0 million in any year, qualify under Section 162(m) as “performance-based,” provided that compliance with Section 162(m) is consistent with our overall corporate tax planning strategies and our2013 executive pay objectives, as set forth in“Whatprogram (base salary, RSUs and NQSOs) are not. Additionally, in certain circumstances the objectives of Libbey’s executive pay program?”
HowCommittee may authorize compensation arrangements that are Libbey’s directors compensated?
Our management directors do not receive additional pay for service on the Board of Directors. Through April 2010, we paid the following forms and amounts of compensation to our non-management directors:
| | |
Annual Retainer:
| | $25,000 (paid in quarterly installments of $6,250) |
Equity Awards:
| | On the date of each annual meeting of shareholders, outright grant of shares of common stock valued at $40,000 on the date of grant |
Audit Committee Chair Retainer:
| | $7,500 per year |
Compensation Committee Chair and Nominating and Governance Committee Chair Retainers:
| | $5,000 per year |
Regular Board Meeting Fees:
| | $1,500 per meeting |
Regular Committee Meeting Fees:
| | $750 per meeting |
Telephonic Board or Committee Meeting Fees:
| | $500 per meeting |
Other Fees:
| | $500 per half day for performance of special Board or committee business requested of the director |
On May 6, 2010, our Board adopted a new pay program for our non-management directors. Under the new program,tax deductible in whole or in part, but which went into effect on May 1, 2010, the following changes were made to the director pay program:
| | |
| • | Meeting fees for Board and committee meetings were eliminated; |
|
| • | The annual cash retainer payable to non-management directors for Board service was increased to $40,500; |
|
| • | Annual cash retainers for service by non-management directors on Board committees were instituted as follows: |
| | | | | |
Committee | | Member Retainer | |
| |
| Audit Committee | | $ | 6,500 | |
| Compensation Committee | | $ | 6,000 | |
| Nominating and Governance Committee | | $ | 5,000 | |
47
| | |
| • | The annual cash retainers payable to the chairs of the Audit Committee, Compensation Committee and Nominating and Governance Committee were set at $10,000, $7,500 and $5,000, respectively; and |
|
| • | The value of common stock granted to non-management directors at each annual meeting of shareholders was increased to $52,500. |
We continue to pay $500 perhalf-day for special board or committee service,promote other important objectives such as
the service provided by certain directors in connection with ourattracting and retaining key executive leaders who can drive financial and strategic
planning during 2010 and service to be provided by members of theobjectives that maximize long-term shareholder value.ad hocsuccession planning committee recently appointed by the Board.
Concurrently, in a further attempt to align the interests of our non-employee directors with those of our shareholders, we significantly modified (and increased) the stock ownership guidelines for non-employee directors. For more information with respect to our stock ownership guidelines for non-employee directors, see“Stock Ownership — How much Libbey stock do our directors and officers own? — Stock Ownership Guidelines”above.
Directors may elect, pursuant to the Director DCP, to defer cashand/or equity compensation into any of 13 measurement funds. The Director DCP, as well as the predecessor deferred compensation plans under which non-employee directors were eligible to participate, are unfunded plans, and the Company does not guarantee an above-market return on amounts deferred under any of these plans. Amounts deferred under the Director DCP, as well as under a predecessor plan, are, at the election of the applicable director, 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 retirement from our Board or, if earlier, upon death of the director.
In addition to paying the compensation listed above, we reimburse our non-management directors for their travel expenses incurred in attending meetings of the Board or its committees, as well as for fees and expenses incurred in attending director education seminars and conferences. The directors do not receive any other personal benefits.
Potential Payments Upon Termination or Change in Control
As discussed under“In what forms did Libbey deliver pay its executives in 2010, and what purposes do the various forms of pay serve?”above, weWe have employment agreements with each of our executive officersnamed executives other than Ms. Buck and Mr. Reynolds, who was not a party to an employment agreement at the time of his retirement and was not entitled to any severance benefits under our Executive Severance Policy because he retired in the ordinary course pursuant to our Salary Plan.
Ms. Buck is a party to a change in control agreementsagreement that provides for payments under the circumstances described below in the event of termination of employment in connection with our executive officers and certain other key members of senior management. We have made no changes to the employment anda change in control agreements that werecontrol. In addition, under our Executive Severance Policy, Ms. Buck is entitled to certain separation benefits in effect on the dateevent of our 2010 annual meetingtermination of shareholders, and we have not entered into any additional employment orwithout cause in the absence of a change in controlcontrol. Finally, the terms of award agreements sincepursuant to which awards of some RSUs, NQSOs and SARs were made provide for acceleration of unvested equity in the dateevent of that meeting.
Ourtermination of employment
andin connection with a change in
controlcontrol.The following tables summarize the trigger events under which payments may be made and/or other benefits provided under these agreements eachor plans, the material payments or benefits to be provided, the conditions to our obligations to make the payments and/or provide the benefits, and the reasons why we believe that the provision of which renews automatically each calendar year unless we give notice of non-renewal by September 30 ofthese payments and/ or benefits is appropriate under the year before the next automatic extension would be effective1, reflect the continued belief of our Compensation Committee and Board that it is in the best interests of our shareholders to provide our executive officers with income replacement upon the occurrence of any of the “triggers” described in the employment and change in control agreements. That belief is based upon the following:
Retirement – Mr. Reynolds
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
• Accrued benefits(1) • A prorated target award under our SMIP • A prorated target award under the performance cash component of any LTIP performance cycle during which his retirement occurred • Accelerated vesting of all unvested RSUs and NQSOs | Surveys demonstrate that a | None | | • To compensate for service to us • To recognize for significant majorityaccomplishments over 43 years of companiesdedicated service to Libbey • Consistent with competitive market practice for an employee of similar size (as determined by revenues) and in similar industries provide their executive officers with change in control and other severance benefits. Accordingly, we would be at a competitive disadvantage in attracting andMr. Reynolds’s tenure |
1 Under the circumstances described in the “Employment Agreements” table that follows, non-renewal of an employment agreement may constitute a “trigger” under which benefits are payable to the executive whose agreement is not renewed.
48
| (1) | Includes base salary through date of termination, earned but unpaid vacation pay as of the 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 prior to the date of termination. |
Death or Permanent Disability – Named Executives Other Than Ms. Buck and Mr. Reynolds
| | | | |
Benefits | | retaining high-caliber senior executives if we wereConditions to eliminatePayment of Benefits | | Rationale |
• Accrued benefits(1) • A prorated target award under our SMIP • A prorated target award under the benefits provided by these agreements. The lossperformance cash component of any LTIP performance cycle during which death or permanent disability occurs • Accelerated vesting of a senior executivepro rata portion of unvested RSUs and NQSOs granted prior to another company that provides these benefits could adversely impact our ability to achieve our business strategies and our succession planning for Libbey’s future. |
| | |
| • | In periods of uncertainty concerning the future control of Libbey or the future responsibilities or standing of our respective executive officers (such as during our current period, when our CEO has announced his intended retirement by the end of this year and our Board is in the process of planning for his succession), it is imperative that each of our executive officers be focused on building value for our shareholders rather than pursuing career alternatives. |
|
| • | Foreign countries, including all of the countries outside of the U.S. in which we have operations, require that employers provide employees in those countries, including executives, with employment agreements and pay severance to employees, including executives, upon termination of employment under most circumstances. For example, when we hired Mr. Rubio on July 1, 2009 as our Vice President, General Manager, Libbey Mexico, we were obligated under the Federal Labor Law of Mexico to provide him with an employment agreement that met certain minimum requirements. At that time, the Compensation Committee authorized us to enter into an employment control agreement with Mr. Rubio in substantially the same form as the employment agreements relating to executive officers other than our CEO, COO and CFO. The Committee also authorized us to enter into a change in control agreement with Mr. Rubio in substantially the same form as the change in control agreements relating to our other executive officers. We entered into those agreements with Mr. Rubio effective January 1, 2010, when we moved his employment from our Mexican subsidiary to our U.S. company to reflect his new responsibilities as Vice President, General Manager, International Operations. |
Following are tables containing summaries of the material terms of the employment and change in control agreements to which our named executive officers are party and the rationale for the respective benefits provided under those agreements. You should refer to the entire agreements, the forms of which are attached as exhibits to ourForms 10-K filed with the Securities and Exchange Commission on March 16, 2009 (as to our named executive officers other than Mr. Rubio) and March 15, 2010 (as to Mr. Rubio), for a complete description of their terms.
49
2013
Employment Agreements —
| | | | | | |
| | | | Conditions to
| | |
Triggers(1)
| | Benefits
| | Payment of Benefits
| | Rationale
|
|
Death of the executive officer | | • Base salary through the date of death
• Annual and long-term incentive compensation paid in a lump sum at target but prorated through the date of death
• In the case of Mr. Meier, 2death, our receipt of reasonable evidence of the authority of the estate • In the case of permanent disability, our receipt of a release of claims against Libbey | | • To compensate for service to us • Aids in attraction and retention of executive officers • Consistent with competitive market practice |
| (1) | Includes base salary through date of termination, earned but unpaid vacation pay as of the 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 prior to the date of termination. |
Death or Permanent Disability – Ms. Buck and Mr. Reynolds
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
• Accrued benefits(1) • A prorated target award under the performance cash component of our 2013 LTIP (for the 2013-2015 performance cycle) • Accelerated vesting of all unvested RSUs and NQSOs granted in 2013 | | None | | • To compensate for service to us • Aids in attraction and retention of executive officers • Consistent with competitive market practice |
| (1) | Includes base salary through date of termination, earned but unpaid vacation pay as of the 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 prior to the date of termination. |
Termination without Cause(1) or Quit for Good Reason(2)– Named Executives Other than Ms. Buck and Mr. Reynolds
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
• Accrued benefits(3) • For the year in which termination occurs, a prorated award under our SMIP based on actual performance(4) • As to performance-based compensation under our LTIP, payment of the amount actually earned for each performance cycle in effect on the date of termination, prorated to the date of termination(4) • If the employment termination is not in connection with a change in control(5), accelerated vesting of unvested RSUs, NQSOs and SARs that scheduled to vest within one year of termination or, in the case of Ms. Streeter, on or before the next June 30thfollowing the date of termination(6) | | • Our receipt of a release of claims against Libbey • Confidentiality obligations • Obligation to assign intellectual property rights • Obligation to assist with litigation as to which the executive has knowledge • Obligation not to interfere with customer accounts for 12 months (24 months in the case of Ms. Streeter) | | • To compensate for service to us and bridge the gap between employment with us and the executive’s next job • Aids in attraction and retention of executive officers • To provide compensation in exchange for restrictive covenants that protect Libbey’s future interests • Consistent with competitive market practice |
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
• If employment is terminated in connection with a change in control, accelerated vesting of all unvested equity awards(6) • As to Ms. Streeter, payment of two times his(two and one-half times if termination is in connection with a change in control) the sum of her annual base salary in effect on the date of termination and the greater of her target SMIP opportunity or the average of the SMIP awards actually paid to her over the two-year period preceding the date of termination(7) • As to Messrs. Ibele and Paige and Ms. Kovach, if the employment termination is not in connection with a change in control payment of the greater of the executive’s annual base salary in effect on the date notice of termination is given plus the executive’s target SMIP opportunity for the year in which the notice of termination is given or the amount of severance to which the executive would be entitled under our Executive Severance Policy if the executive did not have an employment agreement(7) | | • Obligation not to compete for 12 months (24 months in the case of Ms. Streeter) • Obligation not to divert business opportunities for 12 months (24 months in the case of Ms. Streeter) • Obligation not to solicit our employees for 12 months (24 months in the case of Ms. Streeter) • Obligation not to disparage us for 12 months (24 months in the case of Ms. Streeter) | | |
• As to Messrs. Ibele and Paige and Ms. Kovach, if the employment termination is in connection with a change in control, payment of two times the sum of the executive’s annual base salary in effect on the date notice of termination is given plus the executive’s target SMIP opportunity for the year in which the notice of termination is given(7) | | | | |
• As to Ms. Streeter, executive level outplacement services by a provider selected by Ms. Streeter, with the cost to Libbey not to exceed $75,000 | | | | |
• As to Messrs. Ibele and Paige and Ms. Kovach, executive level outplacement services by a provider approved by Libbey, with the cost being limited to 15% of the executive’s base salary at the time of termination if the termination is in connection with a change in control | | | | |
• As to Messrs. Ibele and Paige and Ms. Kovach, if employment is terminated in connection with a change in control, financial planning services, with the cost to Libbey not to exceed $10,000 | | | | |
• As to Ms. Streeter, continuation of medical, prescription drug, dental and life insurance benefits for a period of 18 months or until | | | | |
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
she obtains medical or life insurance through a future employer, with the executive continuing to pay the employee’s portion of the cost of such insurance | | | | |
• As to Messrs. Ibele and Paige and Ms. Kovach, continuation of medical, prescription drug, dental and life insurance benefits for a period of 12 months (18 months if employment is terminated in connection with a change in control) or until the executive obtains medical or life insurance through a future employer, with the executive continuing to pay the employee’s portion of the cost of such insurance | | | | |
| (1) | Cause means (a) willful and continuous failure to substantially perform duties; (b) willful and continuous failure to substantially follow and comply with directives of the Board; (c) commission of an act of fraud or dishonesty that results in a material adverse effect on us or commission of an act in material violation of our Code of Business Ethics and Conduct; or (d) willful, illegal conduct or gross misconduct that is materially and demonstrably injurious to us. |
| (2) | Good reason means (a) we materially diminish the executive’s authority, duties or responsibilities, including, in the case of Ms. Streeter, we remove her from the CEO position and/or we cause her to cease reporting directly to the Board, and in the case of the Company’s general counsel, we cause her to cease reporting directly to the CEO; (b) we reduce the executive’s base salary and, in the case of all executives other than Ms. Streeter, we do not apply the reduction in the same or similar manner to specified other executive officers; (c) we reduce the executive’s incentive compensation opportunity by a percentage greater than that applicable to the other executive officers; (d) we reduce or eliminate an executive benefit or an employee benefit and we do not apply the reduction to all other officers 1 times hisin the same or her annualsimilar manner; (e) in the case of Ms. Streeter, she fails to be elected as a member of the Board; (f) we materially breach the agreement and fail to remedy the breach within 60 days (30 days in the case of Ms. Streeter) after our receipt from the executive of written notice of breach; and (g) in the case of all executive officers other than Ms. Streeter, we exercise our right not to renew the agreement unless we concurrently exercise our right not to renew the agreements of specified other executive officers. |
| (3) | Includes base salary in each case at the rate in effect on thethrough date of death; payable in a lump sum
• Continuation of medical, prescription drug, dental and vision benefits for covered dependents for a period of 12 months following the date of death
• Vesting,termination, earned but unpaid vacation pay as of the date of death, of previously unvested RSUstermination, any amounts to which the executive is entitled under any retirement savings plan, equity participation plan, medical benefit plan or employment policy and NQSOs. NQSOs will be exercisableany incentive compensation earned but not yet paid for a performance period of 3 years followingended prior to the date of death or for such longer period following the date of death as is specified by the award
• Benefits are payable within 60 days after receipt of the written notice and evidence referred to under the adjacent column entitled“Conditions to Payment of Benefits”
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| (4) | | • Our receipt of written notice of appointment of a personal representative on behalf of the executive officer’s estate, together with evidence of the personal representative’s authority to act
• Our receipt from the personal representative of a release of claims against the Company
| | • Provides, on a cost-effective basis, death benefits that exceed the available benefitsAmounts paid under our group life insurance policy for all U.S. salaried employees. Benefits are consistent with death benefits provided under executive life insurance policies provided to executives by similar companies
• Supports a market-competitive pay package, thereby serving to attractSMIP and retain talent and to motivate focused and sustained performance
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| | | | | | |
| | | | Conditions to
| | |
Triggers(1)
| | Benefits
| | Paymentthe cash component of Benefits
| | Rationale
|
|
Permanent disability of the executive officer | | • Any long-term disability coverage in effect
• Base salary accrued through the date of termination, payable within 5 business days after termination
• Annual incentive compensation for the year in which termination occurs;our LTIP will be paid at target but prorated (subject to a 50% minimum) through the date of termination; payable between January 1 and March 15 of the year following the year in which termination occurs
• Performance-based equity compensation under all plans in effect at the date of termination, paid based upon the amount actually earned but prorated through the date of termination; payable between January 1 and March 15 of the year following the end of the applicablerelevant performance cycle
• 2 times (or, in the case of Mr. Meier, 3 times) the sum of the executive officer’s (a) annual base salary at the then current rate and (b) target annual incentive opportunity at the time notice of termination is given; payable upon first to occur of (1) the date of termination or (2) the first day of the seventh month following the date of termination
• Continuation of medical, prescription drug, dental and life insurance benefits for a period of 24 months (or, in Mr. Meier’s case, 36 months) following the date of termination
| | • The executive officer’s execution and delivery to us of a release of all claims
• The executive officer’s obligations to us to:
• maintain the confidentiality of our proprietary information
• assign to us any inventions and copyrights obtained in connection with his employment
• assist us with any litigation with respect to which the named executive has, or may have reason to have, knowledge, information or expertise
• not interfere with customer accounts for 12 months
• not compete for 12 months
• for 12 months, not divert business opportunities of which the named executive became aware while an employee
• not solicit our employees for 12 months
• not disparage us for 12 months
| | • Provide, on a cost-effective basis, disability benefits under circumstances that may not be covered by our standard disability policy or our enhanced executive long-term disability coverage
• Support a market-competitive pay package, thereby serving to attract and retain talent and to motivate focused and sustained performance
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| | • Vesting, as of the date of termination, of previously unvested RSUs and NQSOs. NQSOs will be exercisable for a period of 3 years following the date of termination or for such longer period following the date of termination as is specified by the award
| | | | cycle. |
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| (5) | | | | | | |
| | | | Conditions to
| | |
Triggers(1)
| | Benefits
| | Payment of Benefits
| | Rationale
|
|
We terminate the executive officer’s employment without cause(2)or the executive officer terminates his or her employment for good reason(3) | | • Same as for termination upon permanent disability
| | • Same as for termination upon permanent disability | | • To promote sustained focus on building shareholder value during periods of uncertainty as to Libbey’s future or the executive’s job standing or responsibilities |
| | |
(1) | | We are obligated to provide the benefits described in the employment agreements if an executive officer’s employment is terminated upon or as a result of the occurrence of any of the events or circumstances described in this column. |
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(2) | | Cause means any of: |
| | |
| • | the executive officer’s willful and continued failure (other than as a result of incapacity due to physical or mental illness or after the executive officer issues a notice of termination for good reason) to substantially perform his or her duties after our Board delivers to the executive officer a written demand for substantial performance that specifically identifies the manner in which the Board believes that the executive officer has not substantially performed his or her duties; |
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| • | the executive officer’s willful and continued failure (other than as a result of incapacity due to physical or mental illness or after the executive officer issues a notice of termination for good reason) to substantially follow and comply with the specific and lawful directives of our Board, as reasonably determined by our Board, after our Board delivers to the executive officer a written demand for substantial performance that specifically identifies the manner in which our Board believes that the executive officer has not substantially followed or complied with the directives of the Board; |
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| • | the executive officer’s willful commission of an act of fraud or dishonesty that results in material economic or financial injury to Libbey; or |
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| • | the executive officer’s willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to Libbey. |
We cannot terminate an executive officer for cause unless and until we deliver to the executive officer a copy of a resolution, duly adopted by the affirmative vote of not less than3/4 of the entire membership of our Board at a meeting of our Board, finding that, in the Board’s good faith opinion, the executive officer committed any of the conduct described in the definition of “cause” and specifying, in reasonable detail, the particulars of that conduct. We must provide the executive officer with reasonable notice of the meeting of the Board and the opportunity, together with the executive officer’s legal counsel, to be heard before the Board. We also must provide the executive officer with reasonable opportunity to correct the conduct that he or she is alleged to have committed.
| | |
(3) | | Good reason means any of the following, unless we have corrected the circumstances fully (if they are capable of correction) prior to the date of termination: |
| | |
| • | With respect to Mr. Meier only: |
| | |
| • | He ceases to be our CEO reporting to the Board, or he fails to be elected as a member of the Board. |
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| • | There is a change in the reporting or responsibilities of any other executive officer that has not been approved by Mr. Meier. |
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| | |
| • | With respect to each of our named executive officers other than Mr. Meier, the named executive officer ceases to be an executive officer reporting to another executive officer. |
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| • | With respect to each of our named executive officers, including Mr. Meier: |
| | |
| • | His base salary is reduced by a greater percentage than the reduction applicable to any other executive officer. |
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| • | There is a reduction in the annual incentive compensation opportunity or equity compensation opportunity established for the position held by the named executive officer, and the reduction is not applied in the same or similar manner to all other executive officers. |
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| • | An executive benefit provided to the named executive officer is reduced or eliminated and the reduction or elimination is not applicable to all other executive officers in the same or similar manner. |
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| • | We materially breach the employment agreement and do not remedy our breach within 30 days after we receive written notice of breach from the named executive officer. |
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| • | We exercise our right not to extend the term of the named executive officer’s employment agreement beyond the then current term, unless we exercise that right with respect to the employment agreements in effect with respect to the other executive officers in the same group. In that connection, Mr. Meier, Mr. Reynolds and Mr. Geswein are members of one group, and all of our other executive officers are members of another group. |
In order to terminate his employment for “good reason,” the named executive officer must assert the basis for terminating his employment for “good reason” by providing written notice to the Board within 90 days of the date the named executive knew or should have known of the event that is the basis for terminating for good reason.
Other obligations. If we terminate the named executive officer’s employment with cause, or if the named executive officer resigns or retires other than at our request or for good reason, we nevertheless are obligated to pay or provide to the named executive officer base salary, when due, through the date of termination at the then current rate, plus all other amounts and benefits to which the named executive officer is entitled under any pension plan, retirement savings plan, equity participation plan, stock purchase plan, medical benefits and other benefits that we customarily provide or are required by law to provide at the time the payments are due.
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Change in Control Agreements —
| | | | | | |
| | | | Conditions to
| | |
Triggers
| | Benefits(1)
| | Payment of Benefits
| | Rationale
|
|
• A change in control(2) occurs
| | • Cash value of performance-based equity compensation (for example, performance shares) to be paid at target but prorated through the date of the change in control
• Annual incentive compensation for the year in which the change in control occurs; paid at target but prorated (subject to a 50% minimum) through the date of the change in control
• Accelerated vesting of NQSOs, but cancellation of NQSOs as to which the exercise price exceeds the closing stock price immediately prior to the change in control
• Value of unvested shares of restricted stock and unvested RSUs to be frozen upon change in control, but no payout unless and until vesting criteria of awards are met or employment is terminated by us without “cause” or by the executive for “good reason” pursuant to the employment agreement or change in control agreement | | None | | • Since a change in control frequently is accompanied by a material shift in strategy, a significant increase in leverage or other events that may impact the likelihood that corporate performance metrics established early in the year prior to the change in control will be achieved, it is appropriate to pay, at the time of the change in control, a prorated amount of incentive compensation that relates to performance during a period that straddles the change in control. Similarly, it is appropriate to accelerate vesting of stock options so that they may be exercised, and the value realized by the executive, at the time of the change in control. |
• Without cause(3), we terminate the executive’s employment (other than as a result of his or her death or permanent disability) either (a) after a potential change in control(4)occurs but before the change in control occurs, or (b) prior to a potential change in control, if the executive reasonably demonstrates that the termination was at the request of, or was induced by, a third party who has taken steps reasonably calculated to effect a change in control, or (c) within 2 years following a change in control
| | • Base salary through the date of termination at the rate then in effect
• A lump sum equal to 3 times the sum of (a) the executive’s annual base salary in effect as of the date of termination or immediately prior to the change in control, whichever is greater, and (b) the greater of (1) the executive’s target annual incentive compensation as in effect as of the date of termination or immediately prior to the change in control, whichever is greater, or (2) the executive’s actual annual bonus for the year immediately preceding the date of termination; payable on the first day of the seventh month after termination | | • Our receipt of an agreement, signed by the executive, obligating him or her to:
• maintain the confidentiality of our proprietary information for 2 years after the date of termination
• not compete with us for a period of 12 months after the date of termination
• not solicit our employees for a period of 24 months after the date of termination | | • In periods of uncertainty concerning the future control of Libbey or the future responsibilities or standing of the executive, permits the executive to focus on performance that increases shareholder value rather than pursuing career alternatives
• Supports a market-competitive pay package, thereby serving to attract and retain talent |
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| | | | | | |
| | | | Conditions to
| | |
Triggers
| | Benefits(1)
| | Payment of Benefits
| | Rationale
|
|
| | • Continuation of medical and dental benefits for a period of 36 months following the date of termination, subject to reduction or elimination to the extent the executive receives comparable benefits under any other employment that the executive obtains during the 36-month period.
• For 1 year following the date of termination, financial planning services
• For 2 years following the date of termination, outplacement services, subject to a maximum out-of-pocket cost to us of $15,000
• Payment in cash of the value, frozen at the time of the change in control, of restricted stock or RSUs that were outstanding and unvested at the time of the change in control; payable on the first day of the seventh month after termination
• Full and immediate vesting of accrued benefits under any qualified and unqualified pension, profit-sharing, deferred compensation or supplemental plans that we maintain for the executive’s benefit, plus a lump sum, payable on the first day of the seventh month after termination, equal to the greater of $250,000 or the present value of the additional benefit that would have accrued had the executive continued his or her employment for 3 additional years following the date of termination.
• A tax gross-up(6)
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55
| | | | | | |
| | | | Conditions to
| | |
Triggers
| | Benefits(1)
| | Payment of Benefits
| | Rationale
|
|
• The executive terminates his or her employment for good reason(5) either (a) after a potential change in control but before the change in control occurs, or (b) prior to a potential change in control, if the executive reasonably demonstrates that the events triggering the executive’s good reason were at the request of, or were induced by, a third party who has taken steps reasonably calculated to effect a change in control, or (c) within 2 years following a change in control
| | • Same as for termination by the Company without “cause,” as described above | | • Same as for termination by the Company without cause, as described above | | • Same as for termination by the Company without cause, as described above |
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(1) | | The benefits set forth in this column are payable upon the occurrence of the corresponding “triggers” identified in the “Triggers” column. |
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(2) | | Change in control generally means any of the following events: |
A person (other than Libbey, any trustee or other fiduciary holding securities under one of 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;
| | |
| | • | A person (other than Libbey, any trustee or other fiduciary holding securities under one of Libbey’s employee benefit plans, or any corporation owned, directly or indirectly, by Libbey’s shareholders in substantially the same proportions as their ownership of Libbey’s common stock) becomes the “beneficial owner,” directly or indirectly, of Libbey securities representing 30% or more of the combined voting power of our then-outstanding securities; |
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| | • | The consummation of a merger or consolidation pursuant to which Libbey iswe are merged or consolidated with any other corporation (or other entity),unless the our voting securities of Libbey outstanding immediately prior to the merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 662/⁄3% of the combined voting power of securities of the surviving entity outstanding immediately after the merger or consolidation; |
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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
| | • | The consummation of a plan of complete liquidation or an agreement for the sale or disposition of all or substantially all of our assets; or |
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| • | During any period of 2 consecutive years (not including any period prior to the execution of the amended change in control agreement), Continuing Directors (as defined below) cease for any reason to constitute at least a majority of the Board. Continuing Directors means (i) individuals who were members of the Board at the beginning of the2-yearperiod referred to above and (ii) any individuals elected to the Board, after the beginning of the2-year two-year period referred to above, by a vote of at least2/⁄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 the2-year 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. |
| (6) | To the extent Internal Revenue Code Section 409A imposes a six-month delay on issuance of the shares underlying RSUs with respect to which vesting is accelerated, the shares are delivered to the executive on the first day of the seventh month after the executive’s employment is terminated. |
| (7) | If we terminate the executive’s employment without cause or the executive terminates his or her employment for good reason and the termination is not in connection with a change in control, then, generally speaking, the cash payments will be made in the form of salary continuation in accordance with our normal payroll practices. To the extent Internal Revenue Code Section 409A imposes a six-month delay on payment, the first installment will be made on the first day of the seventh month after termination and will represent payment for the first six months of severance, and the remaining payments will begin on the first payroll date in the seventh month. |
Termination without Cause(1) (No Change in Control) – Ms. Buck and, Prior to His Retirement, Mr. Reynolds
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
• Accrued Benefits(2) • Annual and/or long-term incentive compensation, to the extent actually earned and not paid prior to termination, for any performance cycle that ended prior to termination • Continuation of base salary for 52 weeks • Continuation of medical, dental, prescription drug and life insurance coverage for 52 weeks, subject to payment by the executive of premiums at employee rates | | • Our receipt of a release of claims against Libbey • Confidentiality obligations • Obligation to assign intellectual property rights • Obligation to assist with litigation as to which the executive has knowledge • Obligation not to interfere with customer accounts for 12 months • Obligation not to compete for 12 months • Obligation not to divert business opportunities for 12 months • Obligation not to solicit our employees for 12 months • Obligation not to disparage us for 12 months | | • To compensate for service to us and bridge the gap between employment with us and the executive’s next job • Aids in attraction and retention of executive officers • To provide compensation in exchange for restrictive covenants that protect Libbey’s future interests |
| (1) | Cause means (a) willful and continuous failure to substantially perform duties; (b) willful and continuous failure to substantially follow and comply with directives of the Board; (c) commission of an act of fraud or dishonesty that results in 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; (e) commission of illegal conduct or gross misconduct that causes harm to us; or (f) 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. |
| (2) | Includes base salary through date of termination, earned but unpaid vacation pay as of the 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 prior to the date of termination. |
Termination without Cause(1) or Quit for Good Reason(2) in connection with Change in Control(3) – Ms. Buck
| | | | |
Benefits | | Conditions to Payment of Benefits | | Rationale |
• Accrued Benefits(4) • For the year in which termination occurs, a prorated award under our SMIP based on actual performance(5) • As to performance-based compensation under our LTIP, payment of the amount actually earned for each performance cycle in effect on the date of termination, prorated to the date of termination(5) • Accelerated vesting of all unvested equity awards(6) • Payment of two times the sum of the executive’s annual base salary in effect on the date notice of termination is given plus the executive’s target SMIP opportunity for the year in which the notice of termination is given(6) • Executive level outplacement services by a provider approved by Libbey, with the cost being limited to 15% of the executive’s base salary at the time of termination • Financial planning services, with the cost to Libbey not to exceed $10,000 • Continuation of medical, prescription drug, dental and life insurance benefits for a period of 12 months (18 months if employment is terminated in connection with a change in control) or until the executive obtains medical or life insurance through a future employer, with the executive continuing to pay the employee’s portion of the cost of such insurance | | • Our receipt of a release of claims against Libbey • Confidentiality obligations • Obligation to assign intellectual property rights • Obligation to assist with litigation as to which the executive has knowledge • Obligation not to interfere with customer accounts for 12 months • Obligation not to compete for 12 months • Obligation not to divert business opportunities for 12 months • Obligation not to solicit our employees for 12 months • Obligation not to disparage us for 12 months | | • Aids in attraction and retention of executive officers • To provide compensation in exchange for restrictive covenants that protect Libbey’s future interests • Consistent with competitive market practice |
| (1) | Cause means (a) willful and continuous failure to substantially perform duties; (b) willful and continuous failure to substantially follow and comply with directives of the Board; (c) commission of an act of fraud or dishonesty that results in a material adverse effect on us or commission of an act in material violation of our Code of Business Ethics and Conduct; or (d) willful, illegal conduct or gross misconduct that is materially and demonstrably injurious to us. |
| (2) | Good reason means (a) we materially diminish the executive’s authority, duties or responsibilities; (b) we reduce the executive’s base salary and we do not apply the reduction in the same or similar manner to specified other executive officers; (c) we reduce the executive’s incentive compensation opportunity by a percentage greater than that applicable to the other executive officers; (d) we reduce or eliminate an executive benefit or an employee benefit and we do not apply the reduction to all other officers in the same or similar manner; (e) we materially breach the agreement and fail to remedy the breach within 60 days after our receipt from the executive of written notice of breach; and (f) we exercise our right not to renew the agreement unless we concurrently exercise our right not to renew the agreements of specified other executive officers. |
| (3) | 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”‘‘beneficial owner’’ of securities if the person has or shares the voting power associated with those securities.
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| | |
(3) | | Cause has the same meaning as it has under the employment agreements. We cannot terminate an executive officer for cause unless and until we deliver to the executive officer a copy of a resolution, duly adopted by the affirmative vote of not less than3/4 of the entire membership of our Board at a meeting of our Board, finding that, in the Board’s good faith opinion, the executive officer committed any of the conduct described in the definition of “cause” and specifying, in reasonable detail, the particulars of that conduct. We must provide the executive officer with reasonable notice of the meeting of the Board and the opportunity, together with the executive officer’s legal counsel, to be heard before the Board. We also must provide the executive officer with reasonable opportunity to correct the conduct that he or she is alleged to have committed. |
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| (4) | | Potential change in control means: |
| | |
| • | We enter into an agreement, the consummationIncludes base salary through date of which would result in a change in control; |
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| • | A person (which may include Libbey) publicly announces an intention to take or consider taking actions that, if consummated, would result in a change in control; |
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| • | Our Board adopts a resolution to the effect that, for purposestermination, earned but unpaid vacation pay as of the change in control agreements, a potential change in control has occurred; or |
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| • | A person (other than Zesiger Capital Group, which currently holds approximately 9% of our common stock) who is or becomes the beneficial owner of 10% or more of the voting power of our common stock increases its beneficial ownership by 5% or more, or Zesiger Capital increases its beneficial ownership to 25% or more of our common stock. |
| | |
(5) | | Good reason means any of the following, unless we have corrected the circumstances fully (if they are capable of correction) prior to the date of termination: |
| | |
| • | We assign to the executive duties that are inconsistent with the executive’s position immediately prior to the change in control, or we significantly and adversely alter the nature or status of the executive’s responsibilities or the conditions of the executive’s employment from those in effect immediately prior to the change in control (including if we cease to be a publicly-held corporation), or we taketermination, any other action that results in the material diminution of the executive’s position, authority, duties or responsibilities; |
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| • | We reduce the executive’s annual base salary as in effect on the date of the executive’s change in control agreement and as increased from time to time thereafter; |
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| • | We relocate the offices at which the executive principally is employed immediately prior to the date of the change in control (which we refer to as the executive’s principal location) to a location more than 30 miles from that location, or we require the executive, without his or her written consent, to be based anywhere other than his or her principal location, except for required travel on business to an extent substantially consistent with the executive’s present business travel obligations; |
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| • | We fail to pay to the executive any portion of his or her current compensation or to pay to him or her any portion of an installment of deferred compensation under any deferred compensation program within 7 business days of the date on which the compensation is due; |
|
| • | We fail to continue in effect any material pay or benefit plan or practice in which the executive participates immediately prior to the change in control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to the plan, or we fail to continue |
57
| | |
| | the executive’s participation in the plan (or in the substitute or alternative plan) on a basis that is not materially less favorable, both in terms of the amount of benefits provided and the level of the executive’s participation relative to other participants, as existed at the time of the change in control; |
| | |
| • | We fail to continue to provide the executive with benefits substantially similar in the aggregate to those enjoyed by the executive under any of our life insurance, medical, health and accident, disability, pension, retirement or other benefit plans or practices in which the executive and his or her eligible family members were participating at the time of the change in control, or we take any action that would directly or indirectly materially reduce any of those benefits, or we fail to provide the executive with the number of paid vacation daysamounts to which the executive is entitled onunder 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 prior to the basisdate of yearstermination. |
| (5) | Amounts paid under our SMIP and the cash component of service with us in accordance with our normal vacation policy in effect at the timeLTIP will be paid between January 1 and March 15 of the change in control or, if more favorableyear following the end of the relevant performance cycle. |
| (6) | To the extent Internal Revenue Code Section 409A imposes a six-month delay on issuance of the shares underlying RSUs with respect to which vesting is accelerated, the shares are delivered to the executive on the basisfirst day of the executive’s initial employment with the Company; |
|
| • | We fail to obtain a satisfactory agreement from any successor to assume and agree to perform our obligations under the executive’s change in control agreement; or |
|
| • | We purport to terminateseventh month after the executive’s employment without complying with our obligations with respect to providing notice of termination.is terminated. |
| | |
(6) | | Nogross-up is required if the “present value” of the “parachute payments” payable to the executive or his estate does not exceed 1.10 multiplied by 3 times the executive’s “base amount.” The terms “present value,” “parachute payments” and “base amount” are defined in Section 280G of the Internal Revenue Code. |
Compensation Committee Interlocks and Insider Participation
William A. Foley,Carlos V. Duno, Deborah G. Miller and Carol B. Moerdyk and John C. Orr served on our Compensation Committee during 2010, and Mr. Duno has been added to the Compensation Committee for 2011.2013. None of Mr. Duno, Mr. Foley, Ms. Miller or Ms. Moerdyk or Mr. Orr has been an officer or employee of Libbey or its subsidiaries.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with Libbey’s management the Compensation Discussion and Analysis set forth in this proxy statement. Taking all of these reviews and discussions into account, the Compensation Committee has recommended toapproved the Boardinclusion of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporatedhas approved the incorporation by reference of the Compensation Discussion and Analysis in our Annual Report onForm 10-K for the fiscal year ended December 31, 2010.
2013.Carol B. Moerdyk, Chair
William A. Foley
John C. Orr
58
Summary Compensation Table
The following narrative tables and footnotestables describe the “total compensation”‘‘total compensation’’ earned during 2010, 20092013 and 20082012 by Ms. Buck and during 2013, 2012 and 2011 by Ms. Streeter, Messrs. Geswein, Ibele, Meier, Reynolds and Rubio. Information for 2008 was not provided for Mr. Rubio, since he did not join Libbey until July 2009.
Paige and Ms. Kovach.The total compensation presented below does not reflect the actual pay received by, or the target pay of, the named executive officersexecutives in 2010, 20092013, 2012 or 2008.2011. The actual value realized by our named executive officersexecutives in 20102013 from long-term incentives (NQSOs,NQSOs and RSUs and performance shares) is presented in the Option Exercises and Stock Vested Table below. Target annual and long-term incentive awards for 20102013 are presented in the Grants of Plan-Based Awards Table below.
The individual components of the total compensation calculation reflected in the Summary Compensation Table are as follows:
Salary. Base salary earned during 2010, 2009 and 2008.
Bonus. Cash awards made, at the discretion of the Compensation Committee, in recognition of achievements that were not contemplated by the individual component of the SMIP but nevertheless played important roles in Libbey’s ability to achieve its results for the year in question. No bonuses were paid to our named executive officers for 2009 or 2008 performance.
Stock Awards. The awards disclosed under the heading “Stock Awards” consist of performance shares and RSUs awarded during each of 2010, 2009 and 2008, respectively. Details with respect to the awards are included in the Grants of Plan-Based Awards Table below. The dollar amounts for the awards represent the respective grant date fair values of these awards under FASB ASC Topic 718 for each named executive. The actual values received by the respective named executive officers will depend upon the number of shares earned, the number of RSUs that actually vest and the price of our common stock when shares of our common stock are issued in settlement of the performance shares or RSUs, as applicable.
Option Awards. The awards disclosed under the heading “Option Awards” generally represent annual grants of NQSOs. As to Mr. Rubio, the amounts disclosed for 2009 include an award of 25,000 NQSOs made in order to induce Mr. Rubio to join Libbey as our Vice President, General Manager, Libbey Mexico, in July 2009. The dollar amounts for the awards represent the grant date fair values of these awards under FASB ASC Topic 718 for each named executive. The actual values received by the respective named executive officers will depend upon 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.
Non-Equity Incentive Compensation. The awards disclosed under the heading “Non-Equity Incentive Compensation” consist of (a) amounts earned by the named executive officers in 2010, 2009 and 2008 under our SMIP and (b) for 2009, amounts earned by the named executive officers under the cash component of our 2009 LTIP. There were no awards paid for 2008 performance under our SMIP. The awards under our SMIP for 2010 and 2009 performance were paid in February of 2011 and 2010, respectively. The awards under the cash component of our 2009 LTIP will not be paid until early 2012. In order to collect the awards earned under the cash component of our 2009 LTIP, named executive officers must remain continuously employed by us through December 31, 2011. However, we are obligated to pay the awards earned under the cash component of our 2009 LTIP to Messrs. Meier and Reynolds on the first day of the seventh month after their respective retirements, even if they retire before January 1, 2012. In that connection, Mr. Meier has announced his intention to retire by the end of 2011.
Change in Pension Value and Nonqualified Deferred Compensation Earnings. The amounts disclosed under the heading “Change in Pension Value and Nonqualified Deferred Compensation Earnings” represent the actuarial increase, if any, during each of 2010, 2009 and 2008 in the pension value provided
59
under our Libbey Inc. Salaried Cash Balance Pension Plan, which we refer to as our Salary Plan, and our Supplemental Retirement Benefit Plan, which we refer to as our SERP. With respect to Messrs. Meier and Reynolds, the amounts do not reflect the decline in actuarial value of their pension benefits under our Salary Plan and SERP during 2009. Because we do not guarantee any particular rate of return on deferred compensation under our Executive Savings Plan or Executive Deferred Compensation Plan, which we refer to as our ESP and EDCP, respectively, there are no earnings on nonqualified deferred compensation included in the amounts disclosed.
All Other Compensation. The amounts disclosed under the heading “All Other Compensation” include: (a) annual company matching contributions under our 401(k) savings plan (a broad-based plan open to all U.S. salaried employees); (b) annual company matching contributions under our ESP or EDCP, as the case may be; (c) the cost that we paid for tax return preparation and financial planning for the respective named executive officers, together with tax“gross-ups” on that cost; (d) for ourU.S.-based named executive officers, our incremental cost for ground transportation for personal and business trips from the Toledo, Ohio area to the Detroit/Wayne County Metropolitan airport, and, for Mr. Rubio, who currently is based in Monterrey, Mexico, the cost incurred for a driver to provide secure ground transportation to Mr. Rubio while traveling in the Monterrey, Mexico vicinity, which has an elevated risk of kidnap for ransom; (e) the annual premiums that we pay to provide executive long-term disability coverage for each of the named executive officers; (f) in 2010, the cost of airline club memberships; and (g) as to Mr. Geswein only, our cost of an annual executive physical examination in 2008. In addition, because Mr. Rubio was employed by our Mexican subsidiary during 2009, the amounts under this heading for Mr. Rubio in 2009 include (a) contributions made on Mr. Rubio’s behalf to Instituto Mexicano Del Seguro Social (Mexico’s equivalent to the U.S. Social Security Administration); (b) amounts paid on Mr. Rubio’s behalf for supplemental medical insurance provided by our Mexican subsidiary; and (c) the amount payable by the our Mexican subsidiary to Mr. Rubio’s previous employer as partial reimbursement for severance payable to Mr. Rubio in connection with his resignation and decision to accept our offer of employment.
SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Change in
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Pension
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Value and
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Nonqualified
| | | | | | | |
| | | | | | | | | | | | | | | | | | Non-Equity
| | | Deferred
| | | | | | | |
| | | | | | | | | | | | | | | | | | Incentive
| | | Compensation
| | | All Other
| | | | |
| | | | | | Salary
| | | Bonus
| | | Stock Awards
| | | Option Awards
| | | Compensation
| | | Earnings
| | | Compensation
| | | Total
| |
Name and Principal Position | | Year | | | ($)(1) | | | ($) | | | ($)(2) | | | ($)(3) | | | ($)(4) | | | ($)(5) | | | ($)(6) | | | ($) | |
| |
| Gregory T. Geswein | | | 2010 | | | | 352,416 | | | | 7,421 | | | | 233,525 | | | | 67,528 | | | | 244,415 | | | | 0 | | | | 11,661 | | | | 916,966 | |
| Vice President, Strategic Planning and Business Development(7) | | | 2009 | | | | 317,585 | | | | 0 | | | | 17,244 | | | | 11,751 | | | | 651,208 | | | | 0 | | | | 6,498 | | | | 1,004,286 | |
| | | | 2008 | | | | 337,632 | | | | 0 | | | | 216,374 | | | | 54,022 | | | | 0 | | | | 0 | | | | 12,160 | | | | 620,188 | |
| Daniel P. Ibele | | | 2010 | | | | 295,329 | | | | 7,891 | | | | 160,286 | | | | 46,352 | | | | 189,148 | | | | 74,992 | | | | 10,247 | | | | 784,245 | |
| Vice President, Global Sales & Marketing(8) | | | 2009 | | | | 256,463 | | | | 25,186 | | | | 11,836 | | | | 8,066 | | | | 397,445 | | | | 71,919 | | | | 9,408 | | | | 780,323 | |
| | | | 2008 | | | | 269,872 | | | | 0 | | | | 146,964 | | | | 26,612 | | | | 0 | | | | 37,625 | | | | 20,205 | | | | 511,278 | |
| John F. Meier | | | 2010 | | | | 720,198 | | | | 0 | | | | 859,005 | | | | 248,398 | | | | 791,426 | | | | 72,923 | | | | 26,301 | | | | 2,718,251 | |
| Chairman and Chief Executive Officer | | | 2009 | | | | 649,031 | | | | 0 | | | | 63,434 | | | | 43,226 | | | | 2,161,856 | | | | 0 | | | | 12,371 | | | | 2,929,918 | |
| | | | 2008 | | | | 690,000 | | | | 0 | | | | 829,084 | | | | 207,003 | | | | 0 | | | | 147,871 | | | | 15,541 | | | | 1,889,499 | |
| Richard I. Reynolds | | | 2010 | | | | 461,904 | | | | 0 | | | | 432,134 | | | | 124,962 | | | | 427,561 | | | | 45,681 | | | | 16,867 | | | | 1,509,109 | |
| Executive Vice President and Chief Financial Officer(9) | | | 2009 | | | | 419,782 | | | | 0 | | | | 31,911 | | | | 21,745 | | | | 1,066,858 | | | | 0 | | | | 9,615 | | | | 1,549,911 | |
| | | | 2008 | | | | 446,280 | | | | 0 | | | | 411,104 | | | | 102,643 | | | | 0 | | | | 91,990 | | | | 14,509 | | | | 1,066,526 | |
| Roberto B. Rubio | | | 2010 | | | | 441,320 | | | | 0 | | | | 283,563 | | | | 82,002 | | | | 326,222 | | | | 0 | | | | 15,747 | | | | 1,149,148 | |
| Vice President, Global Manufacturing & Engineering (10) | | | 2009 | | | | 237,399 | | | | 0 | | | | 35,762 | | | | 42,310 | | | | 437,315 | | | | 0 | | | | 504,955 | | | | 1,257,741 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary
($) | | Bonus
($)(1) | | | Stock
Awards
($)(2) | | | Option
Awards
($)(3) | | | Non-Equity
Incentive
Compensation
($)(4) | | | Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5) | | | All Other
Compensation
($)(6) | | | Total
($) | |
| | | | | | | | | |
Sherry Buck | | 2013 | | 360,500 | | | 0 | | | | 198,968 | | | | 100,423 | | | | 280,950 | | | | 0 | | | | 81,553 | | | | 1,022,394 | |
Vice President, Chief | | 2012 | | 145,833 | | | 87,500 | | | | 285,398 | | | | 205,748 | | | | 79,557 | | | | 0 | | | | 17,405 | | | | 821,441 | |
Financial Officer(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Daniel P. Ibele | | 2013 | | 360,638 | | | 0 | | | | 201,251 | | | | 101,567 | | | | 338,525 | | | | 0 | | | | 20,049 | | | | 1,022,030 | |
Vice President, | | 2012 | | 340,691 | | | 0 | | | | 147,744 | | | | 70,396 | | | | 450,984 | | | | 197,685 | | | | 15,437 | | | | 1,222,937 | |
General Manager, | | 2011 | | 317,558 | | | 0 | | | | 154,343 | | | | 68,636 | | | | 153,380 | | | | 104,482 | | | | 16,542 | | | | 814,941 | |
U.S. and Canada(8) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Susan A. Kovach | | 2013 | | 314,795 | | | 0 | | | | 115,052 | | | | 58,065 | | | | 232,442 | | | | 0 | | | | 18,685 | | | | 739,039 | |
Vice President, | | 2012 | | 298,242 | | | 25,000 | | | | 100,328 | | | | 47,806 | | | | 319,606 | | | | 82,986 | | | | 13,737 | | | | 887,705 | |
General Counsel & | | 2011 | | 296,246 | | | 0 | | | | 104,431 | | | | 46,436 | | | | 98,816 | | | | 42,463 | | | | 14,370 | | | | 602,762 | |
Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Timothy T. Paige | | 2013 | | 299,043 | | | 0 | | | | 113,664 | | | | 57,358 | | | | 222,520 | | | | 0 | | | | 25,972 | | | | 718,557 | |
Vice President, | | 2012 | | 293,180 | | | 0 | | | | 97,162 | | | | 46,297 | | | | 309,874 | | | | 115,155 | | | | 17,904 | | | | 879,572 | |
Human Resources | | 2011 | | 286,913 | | | 0 | | | | 101,133 | | | | 44,976 | | | | 99,983 | | | | 71,521 | | | | 18,013 | | | | 622,539 | |
| | | | | | | | | |
Richard I. Reynolds | | 2013 | | 453,563 | | | 0 | | | | 281,287 | | | | 141,964 | | | | 553,952 | | | | 0 | | | | 37,883 | | | | 1,468,649 | |
Executive Vice | | 2012 | | 491,193 | | | 0 | | | | 785,354 | | | | 134,755 | | | | 880,136 | | | | 0 | | | | 20,846 | | | | 2,312,284 | |
President, Strategy | | 2011 | | 476,322 | | | 0 | | | | 292,230 | | | | 129,957 | | | | 310,354 | | | | 40,984 | | | | 21,541 | | | | 1,271,388 | |
Program Management(9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Stephanie A. Streeter | | 2013 | | 743,751 | | | 0 | | | | 735,998 | | | | 2,718,936 | | | | 1,079,594 | | | | 0 | | | | 41,538 | | | | 5,319,817 | |
Chief Executive Officer | | 2012 | | 718,754 | | | 0 | | | | 529,835 | | | | 252,461 | | | | 1,432,665 | | | | 0 | | | | 50,521 | | | | 2,984,236 | |
| | 2011 | | 350,001 | | | 340,000 | | | | 352,113 | | | | 350,001 | | | | 0 | | | | 0 | | | | 167,102 | | | | 1,559,217 | |
| (1) | As to Ms. Buck for 2012, represents her minimum guaranteed award under our 2012 SMIP; the balance of Ms. Buck’s award under our 2012 SMIP is included under the ‘‘Nonequity Incentive Plan Compensation’’ column. As to Ms. Kovach in 2012, represents a special award made in May 2012 in recognition of leadership relating to our 2012 refinancing. As to Ms. Streeter for 2011, represents the sum of (a) her minimum guaranteed incentive in the amount of $315,000 and (b) a discretionary award in the amount of $25,000. |
| | |
(1) | | Mr. Rubio joined our Mexican subsidiary on July 1, 2009 and was transferred to the U.S. payroll on January 1, 2010. For 2009, the amount for Mr. Rubio represents base salary paid to Mr. Rubio from July 1 through December 31, 2009, as well as other fixed components of pay that our Mexican subsidiary was required under Mexican law to pay to Mr. Rubio. These amounts were paid to Mr. Rubio in Mexican pesos, and the amount included in this column is translated to U.S. currency using the interbank exchange rate in effect at the time of payment to Mr. Rubio. |
| | |
| (2) | | Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to (a) performance shares awarded during 2008 based upon the expectation that those performance shares would be earned at a target payout; and (b) RSUs granted in 2010, 20092013, 2012 and 2008,2011, respectively. Performance shares awarded during 2008 for the2008-2010 performance cycle actually were earned at 71.8% of target. SeeCompensation Discussion and Analysis — What pay did Libbey’s executives receive for 2010? — Long-Term Performance-Based Compensation.”Had a maximum (200%) payout been earned withWith respect to performance shares awarded during 2008,all awards made in 2013, 2012 and 2011 other than the grantaward made to Mr. Reynolds in August 2012, the awards vest ratably over a four-year period from the date fair values, in accordance with FASB ASC Topic 718, withof grant. With respect to those performancethe award made to Mr. Reynolds in August 2012, 100% of these shares would have been: |
| | | | |
| | Grant Date Fair Value
|
| | of Performance Shares
|
| | at Maximum Payout
|
Named Executive Officer
| | ($) |
|
G. Geswein | | | 216,366 | |
D. Ibele | | | 146,650 | |
J. Meier | | | 829,080 | |
R. Reynolds | | | 411,113 | |
R. Rubio | | | 22,075 | |
| | |
| | vested upon his retirement. For more information, see Footnote 12,“ ‘‘Employee Stock Benefit Plans,”’’ to the consolidated financial statements included in our Annual Report onForm 10-K filed with the Securities and Exchange Commission on March 14, 2011.12, 2014. 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 shares of our common stock are issued in settlement of the RSUs. |
|
| (3) | | Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to NQSOs and cash-settled SARs granted in 2010, 20092013, 2012 and 2008, respectively, including2011, respectively. With respect to all awards other than a sign-on‘‘new hire’’ award of 15,750 NQSOs made to Mr. RubioMs. Buck in 2009.August 2012 and the special retention award of 240,829 cash-settled SARs made to Ms. Streeter in December 2013, the awards vest ratably over a four-year period from the date of grant. A ‘‘new hire’’ award of 15,750 NQSOs made to Ms. Buck in August 2012 is scheduled to cliff vest on August 1, 2016, and the special retention award of 240,829 cash-settled SARs made to Ms. Streeter in December 2013 is scheduled to cliff vest on December 31, 2018. For more information, see Footnote 12,“ ‘‘Employee Stock Benefit Plans,”to the consolidated financial statements included in our Annual Report onForm 10-K filed with the Securities and Exchange Commission on March 14, 2011.12, 2014. The actual values received by the respective named executives depend on the number of NQSOs and cash-settled SARs that actually vest, the number of shares with respect to which NQSOs and cash-settled SARs are exercised and the price of our common stock on the date on which the NQSOs and cash-settled SARs are exercised. |
|
| (4) | | Represents (a) amounts earned by the sumnamed executives in 2013, 2012 and 2011 under our SMIP and (b) for 2013 and 2012, amounts earned by the named executives under the cash component of (a) annualour 2011 LTIP and 2010 LTIP, respectively. The awards under our SMIP were paid in March of 2014 and February of 2013 and 2012, respectively; the awards under the cash incentive compensationcomponent of our 2011 LTIP were paid in February 2011of 2014; and 2010 for performance during 2010 and 2009, respectively; and (b) for 2009, cash incentive compensation payablethe awards under the performancecash component of our 20092010 LTIP forwere paid in February of 2013. As to Ms. Buck in 2012, represents the performance cycle beginning January 1, 2009 and ending December 31, 2009. Noamount by which the annual cash incentive compensation was paid for performance during 2008. The cashaward actually earned under our 2012 SMIP exceeds the minimum annual incentive compensation payable under the 2009 performance component of our 2009 LTIP is subject to an additional vesting requirement. In order to collect that award, named executive officers must be continuously employed by us through December 31, 2011. We are obligated, however,we committed to pay that award to Messrs. Meier and Reynolds on the first day of the seventh month after their respective retirements, even if they retire prior to January 1, 2012.her when we hired her. |
|
| (5) | | Represents the sum (but not less than $0) of the changeactuarial increase in pension value under our Salary Plan and our SERP. Because the net pension value under our Salary Plan and SERP declined during 2013 for all named executives who are participants under those plans, the amount of the actuarial increase is $0. We do not guarantee any particular rate of return on deferred compensation under our ESPExecutive Savings Plan (which we refer to as our ESP) or 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. |
61
| | |
| | We had no other nonqualified plans pursuant to which our executives were entitled to defer compensation earned prior to January 1, 2011. Neither Mr. Geswein nor Mr. Rubio is Ms. Buck and Ms. Streeter are not eligible to participate inparticipants under our Salary Plan and Mr. Rubio was not eligible to participate in the EDCP in 2009.or SERP. |
|
| (6) | | Includes the following: (a) annual company matching contributions to our 401(k) savings plan (a broad-based plan open to all U.S. salaried employees); (b) annual company matching contributions to our ESP or EDCP, as the case may be;EDCP; (c) the cost that we paid for tax return preparation and financial planning for the respective named executive officers, together with tax“gross-ups” on that cost;executives; (d) for ourU.S.-based named executive officers, our incremental cost for ground transportation for personal and business trips from the Toledo, Ohio area to the Detroit/Wayne County Metropolitan airport, and, for Mr. Rubio, the cost incurred for a driver to provide secure ground transportation to Mr. Rubio while traveling in the Monterrey, Mexico vicinity, which has an elevated risk of kidnap for ransom;airport; (e) the annual premiums that we paypaid to provide executiveexecutives with supplement long-term disability coverage in 2012 (after which this perquisite was discontinued) and 2011; (f) for each of the named executive officers; (f)Mr. Ibele in 2010,2011, for Mr. Ibele and Ms. Buck in 2012, and for Mr. Ibele, Ms. Buck and Ms. Streeter in 2013, airline club memberships; (g) for Ms. Streeter in 2012 and (g) as to2013, and for Mr. Geswein only, ourPaige in 2013, the cost of an annual executive physical examinationexamination; (h) for Ms. Streeter in 2008.2011, reimbursement equal to 50% of the legal expenses she incurred in negotiating her employment agreement; and (i) for Ms. Streeter (in 2011), and Ms. Buck (in 2012 and 2013), relocation assistance, including, for Ms. Streeter, loss-on-sale protection in 2011, and tax gross-ups on relocation assistance other than Ms. Streeter’s loss-on-sale-protection. For 2009, for Mr. Rubio includesReynolds, the following: (a) contributions made on Mr. Rubio’s behalfamounts under this heading exclude the value of RSUs and NQSOs as to Instituto Mexicano Del Seguro Social (Mexico’s equivalent towhich vesting was accelerated, because the U.S. Social Security Administration); (b) amounts paid on Mr. Rubio’s behalf for supplemental medical insurance provided bycumulative grant date fair values have been included under the columns ‘‘Stock Awards’’ and ‘‘Option Awards’’ in this table and in the Summary Compensation Tables included in our Mexican subsidiary; and (c) the amount payable by our Mexican subsidiary to Mr. Rubio’s previous employer as partial reimbursement for severance payable to Mr. Rubioproxy statements filed in connection with his resignation and decision to accept our offer of employment. |
|
| | The following table provides additional detail with respect to the perquisites that we provided to our named executive officers in 2010:2011 through 2013. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Tax Return
| | Tax
| | | | | | | | | | | | | | |
| | | | | Preparation
| | Gross-Up On Tax
| | | | Executive
| | Annual
| | | | | | | | |
| | | EDCP
| | and Financial
| | Return/
| | | | Long-Term
| | Executive
| | | | | | | | |
| | | Matching
| | Planning
| | Financial
| | Ground
| | Disability
| | Physical
| | Airline Club
| | | | | | |
| | | Contributions
| | Fees
| | Planning Fees
| | Transportation
| | Coverage
| | Examination
| | Membership
| | Total
| | | | |
Named Executive Officer | | ($) | | ($) | | ($) | | ($)(a) | | ($) | | ($) | | ($) | | ($) | | | | |
| |
| G. Geswein | | | 3,619 | | | | 0 | | | | 0 | | | | 306 | | | | 3,868 | | | | 0 | | | | 0 | | | | 7,793 | | | | | | | | | |
| D. Ibele | | | 0 | | | | 2,649 | | | | 1,258 | | | | 392 | | | | 2,874 | | | | 0 | | | | 200 | | | | 7,373 | | | | | | | | | |
| J. Meier | | | 15,849 | | | | 700 | | | | 332 | | | | 787 | | | | 4,254 | | | | 0 | | | | 125 | | | | 22,047 | | | | | | | | | |
| R. Reynolds | | | 7,446 | | | | 605 | | | | 287 | | | | 0 | | | | 4,265 | | | | 0 | | | | 0 | | | | 12,603 | | | | | | | | | |
| R. Rubio | | | 5,830 | | | | 0 | | | | 0 | | | | 2733 | | | | 3,592 | | | | 0 | | | | 292 | | | | 16,039 | | | | | | | | | |
The following table provides additional detail with respect to the perquisites that we provided to our named executives in 2013:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Named
Executive | | | | | | | | EDCP
Matching
Contribution
($) | | | | | | | | Tax Return
Preparation/
Financial
Planning
($) | | | | | | | | Relocation
Assistance
($) | | | | | | | | Relocation
Assistance
Tax Gross-Up
($) | | | | | | | | Ground
Transport
($)(a) | | Annual
Executive
Physical
Examination
($) | | Airline Club
Membership
($) | | | | Total
($) |
S. Buck | | | | | | | | | | 6,370 | | | | | | | | | | | 11,000 | | | | | | | | | | | 44,670 | | | | | | | | | | | 6,093 | | | | | | | | | | | 948 | | | | | 0 | | | | | 450 | | | | | | | 69,531 | |
D. Ibele | | | | | | | | | | 0 | | | | | | | | | | | 3,138 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | | | | | | | 1,261 | | | | | 0 | | | | | 350 | | | | | | | 4,749 | |
S. Kovach | | | | | | | | | | 3,230 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | | | | | | | 182 | | | | | 0 | | | | | 0 | | | | | | | 3,385 | |
T. Paige | | | | | | | | | | 2,522 | | | | | | | | | | | 4,638 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | | | | | | | 397 | | | | | 3,116 | | | | | 0 | | | | | | | 10,673 | |
R. Reynolds | | | | | | | | | | 11,133 | | | | | | | | | | | 11,450 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | 0 | | | | | 0 | | | | | | | 22,583 | |
S. Streeter | | | | | | | | | | 0 | | | | | | | | | | | 25,000 | | | | | | | | | | | 0 | | | | | | | | | | | 0 | | | | | | | | | | | 1,529 | | | | | 1,808 | | | | | 450 | | | | | | | 28,787 | |
| (a) | | For all named executive officers other than Mr. Rubio, includesIncludes (i) for personal trips, the entire cost that we incurred for such transportation and (ii) for business trips, the amount in excess of the amount to which the respective named executive officersexecutives would have been entitled toas reimbursement for mileage and parking under our travel policy applicable to all employees. For Mr. Rubio, represents 15% of the cost incurred for the driver who provides the transportation, since the driver transports customers and suppliers and other employees during the remainder of his time. |
| | |
| (7) | | Mr. Geswein was named to the position of Vice President, Strategic Planning and Business Development, effective June 10, 2010. He servedMs. Buck joined us on August 1, 2012 as Vice President, Chief Financial Officer from May 2007, when he joined us, until that time.Officer. |
|
| (8) | | Mr. Ibele was named Vice President, Global Sales & Marketing,General Manager, U.S. and Canada, on June 10, 2010.August 1, 2012. He previously served as Vice President, GeneralGlobal Sales Manager, North America from June 2006 through June 9, 2010.and Marketing. |
|
| (9) | | Mr. Reynolds was named Executive Vice President, Chief Financial Officer,Strategy Program Management, on June 10, 2010. From 1995 until that date,August 1, 2012. In 2011 through July 2012, he served as Executive Vice President, Chief OperatingFinancial Officer. He retired on November 30, 2013 after 43 years with Libbey. |
62
| | |
(10) | | Mr. Rubio was named Vice President, Global Manufacturing & Engineering on June 10, 2010. From July 1, 2009, when he joined us, to November 2, 2009, he served as Vice President, General Manager, Libbey Mexico. From November 3, 2009 until June 10, 2010, Mr. Rubio served as Vice President, General Manager, International Operations. |
Grants of Plan-Based Awards Table
During 2010,2013, the Compensation Committee granted to our named executive officersexecutives RSUs and NQSOs under our Omnibus Plan and 20102013 LTIP. Recipients of RSUs 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. We do not engage in repricing of NQSOs, nor have we repurchased underwater NQSOs. On February 7, 2011,17, 2014, the Compensation Committee approved the payment of cash awards under our 2010 SMIP.
2013 SMIP and our 2011 LTIP.Information with respect to each of these awards, including information with respect to the performance measures applicable to the cash awards under our 2013 SMIP and 20102013 LTIP, and vesting schedules with respect to RSUs and NQSOs, is set forth, on agrant-by-grant basis, in the table and footnotes that follow.
GRANTS OF PLAN-BASED AWARDS TABLE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Grant
|
| | | | | | | | | | | | | | | All
| | All
| | | | Date
|
| | | | | | | | | | | | | | | Other
| | Other
| | | | Fair
|
| | | | | | | | | | | | | | | Stock
| | Option
| | | | Value
|
| | | | | | | | | | | | | | | Awards:
| | Awards:
| | Exercise
| | of
|
| | | | | | | | | Estimated Possible Payouts Under
| | Number of
| | Number of
| | or Base
| | Stock
|
| | | | | | | | | Non-Equity
| | Shares of
| | Securities
| | Price of
| | and
|
| | | | | Award
| | Grant
| | Incentive Plan Awards(2) | | Stock or
| | Underlying
| | Option
| | Option
|
| | | Plan
| | Date
| | Date
| | Threshold
| | Target
| | Maximum
| | Units
| | Options
| | Awards
| | Awards
|
Name | | Name | | (1) | | (1) | | ($) | | ($) | | ($) | | (#)(3) | | (#)(4) | | ($/Sh) | | ($)(5) |
| |
| G. Geswein | | 2010 SMIP | | | 2/8/2010 | | | | | | | | 105,725 | | | | 211,450 | | | | 422,899 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP (cash component) | | | 2/8/2010 | | | | | | | | 67,527 | | | | 135,053 | | | | 270,106 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | 16,861 | | | | | | | | | | | | 233,525 | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | | | | | 8,897 | | | | 10.13 | | | | 67,528 | |
| D. Ibele | | 2010 SMIP | | | 2/8/2010 | | | | | | | | 81,692 | | | | 163,383 | | | | 326,766 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP (cash component) | | | 2/8/2010 | | | | | | | | 46,351 | | | | 92,702 | | | | 185,404 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP | | | 2/8/2910 | | | | 2/11/2010 | | | | | | | | | | | | | | | | 11,573 | | | | | | | | | | | | 160,286 | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | | | | | 6,107 | | | | 10.13 | | | | 46,352 | |
| J. Meier | | 2010 SMIP | | | 2/8/2010 | | | | | | | | 324,089 | | | | 648,178 | | | | 1,296,356 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP (cash component) | | | 2/8/2010 | | | | | | | | 248,400 | | | | 496,800 | | | | 993,600 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | 62,022 | | | | | | | | | | | | 859,005 | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | | | | | 32,727 | | | | 10.13 | | | | 248,398 | |
| R. Reynolds | | 2010 SMIP | | | 2/8/2010 | | | | | | | | 173,214 | | | | 346,428 | | | | 692,856 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP (cash component) | | | 2/8/2010 | | | | | | | | 124,959 | | | | 249,917 | | | | 499,834 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | 31,201 | | | | | | | | | | | | 432,134 | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | | | | | 16,464 | | | | 10.13 | | | | 124,962 | |
| R. Rubio | | 2010 SMIP | | | 2/8/2010 | | | | | | | | 126,915 | | | | 253,830 | | | | 507,660 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP (cash component) | | | 2/8/2010 | | | | | | | | 82,000 | | | | 164,000 | | | | 328,000 | | | | | | | | | | | | | | | | | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | 20,474 | | | | | | | | | | | | 283,565 | |
| | | 2010 LTIP | | | 2/8/2010 | | | | 2/11/2010 | | | | | | | | | | | | | | | | | | | | 10,804 | | | | 10.13 | | | | 82,002 | |
63
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Estimated Possible Payouts under Non-
Equity Incentive Plan Awards(2) | | | All Other
Stock
Awards:
Number of
Shares of | | All Other
Option
Awards:
Number of
Securities | | Exercise or
Base Price | | Grant Date
Fair Value of
Stock and | |
| | | | | | | | | | | | | | | | Stock or | | Underlying | | of Option | | Option | |
Named Executive | | Plan Name | | Award Date(1) | | Grant Date(1) | | Threshold
($) | | Target
($) | | Maximum
($) | | | Units
(#)(3) | | Options
(#)(4) | | Awards
($/Sh) | | Awards
($)(5) | |
| | | | | | | | | | |
S. Buck | | 2013 SMIP | | 2/11/2013 | | | | 58,581 | | 234,325 | | | 527,231 | | | | | | | | | | | |
| | 2013 LTIP (cash component) | | 2/11/2013 | | | | 98,000 | | 196,000 | | | 392,000 | | | | | | | | | | | |
| | 2013 LTIP (RSUs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | 10,461 | | | | | | | 198,968 | |
| | 2013 LTIP (NQSOs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | | | 11,937 | | 19.02 | | | 100,423 | |
| | | | | | | | | | |
D. Ibele | | 2013 SMIP | | 2/11/2013 | | | | 58,604 | | 234,415 | | | 527,434 | | | | | | | | | | | |
| | 2013 LTIP (cash component) | | 2/11/2013 | | | | 99,120 | | 198,240 | | | 396,480 | | | | | | | | | | | |
| | 2013 LTIP (RSUs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | 10,581 | | | | | | | 201,251 | |
| | 2013 LTIP (NQSOs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | | | 12,073 | | 19.02 | | | 101,567 | |
| | | | | | | | | | |
S. Kovach | | 2013 SMIP | | 2/11/2013 | | | | 39,350 | | 157,398 | | | 354,146 | | | | | | | | | | | |
| | 2013 LTIP (cash component) | | 2/11/2013 | | | | 56,666 | | 113,332 | | | 226,664 | | | | | | | | | | | |
| | 2013 LTIP (RSUs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | 6,049 | | | | | | | 115,052 | |
| | 2013 LTIP (NQSOs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | | | 6,902 | | 19.02 | | | 58,065 | |
| | | | | | | | | | |
T. Paige | | 2013 SMIP | | 2/11/2013 | | | | 37,381 | | 149,522 | | | 336,425 | | | | | | | | | | | |
| | 2013 LTIP (cash component) | | 2/11/2013 | | | | 55,979 | | 111,957 | | | 223,914 | | | | | | | | | | | |
| | 2013 LTIP (RSUs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | 5,976 | | | | | | | 113,664 | |
| | 2013 LTIP (NQSOs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | | | 6,818 | | 19.02 | | | 57,358 | |
| | | | | | | | | | |
R. Reynolds | | 2013 SMIP | | 2/11/2013 | | | | 85,043 | | 340,172 | | | 765,387 | | | | | | | | | | | |
| | 2013 LTIP (cash component) | | 2/11/2013 | | | | 42,333 | | 84,665 | | | 169,330 | | | | | | | | | | | |
| | 2013 LTIP (RSUs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | 14,789 | | | | | | | 281,287 | |
| | 2013 LTIP (NQSOs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | | | 16,875 | | 19.02 | | | 141,964 | |
| | | | | | | | | | |
S. Streeter | | 2013 SMIP | | 2/11/2013 | | | | 185,938 | | 743,751 | | | 1,673,440 | | | | | | | | | | | |
| | 2013 LTIP (cash component) | | 2/11/2013 | | | | 362,502 | | 725,004 | | | 1,450,008 | | | | | | | | | | | |
| | 2013 LTIP (RSUs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | 38,696 | | | | | | | 735,998 | |
| | 2013 LTIP (NQSOs) | | 2/11/2013 | | 2/22/2013 | | | | | | | | | | | | 44,154 | | 19.02 | | | 371,455 | |
| | Omnibus Plan (SARs) | | 12/9/2013 | | 12/16/2013 | | | | | | | | | | | | 240,829 | | 21.29 | | | 2,347,481 | |
| | |
| | |
| (1) | | For Non-Equity Incentive Plan Awards, the Award Date and the Grant Date for awards made under the 20102013 SMIP are the date on which the Compensation Committee approved the 20102013 SMIP. The Award Date and the Grant Date for awards made under the cash component of the 20102013 LTIP are the date on which the Compensation Committee approved the 20102013 LTIP. For All Other Stock Awards and All Other Option Awards, the Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determinedetermined the number of NQSOs, RSUs or RSUs,cash-settled SARs, as the case may be, to be, awarded. The number of NQSOs and RSUs awarded to the executive officersnamed executives in February 2010 (but, as to RSUs, granted in May 2010)2013 under our Omnibus Plan2013 LTIP was determined by dividing the target dollar value of the applicable component of equity to be awarded by (a) in the case of NQSOs, the Black ScholesBlack-Scholes value of the options, determined using the average closing price of Libbey common stock over a period of 20 consecutive trading days ending on the Grant Dategrant date and capping the volatility at 50%, as of February 22, 2013, or (b) in the case of RSUs, the average closing price of Libbey common stock over athe 20 consecutive trading-day period ending February 22, 2013. The number of 60 consecutive trading days ending oncash-settled SARs awarded to Ms. Streeter pursuant to the CEO Retention Award Date.Agreement was determined by dividing $2,500,000 by the Black-Scholes value, determined in the same manner as with respect to awards of NQSOs, as of December 16, 2013. We inform grant recipients of their awards after we determine the number of RSUs, NQSOs and/or NQSOsSARs to be awarded.granted. For awards made in February 2010,2013, we determined the number of RSUs and NQSOs to be granted on the first business day after we announced our results of operations for the 20092012 fiscal year. |
|
| (2) | | Represents the range of possible cash awards under (a) our SMIP for performance during 20102013 and (b) the cash component of our 20102013 LTIP. |
| | |
| (a) | | Under our SMIP, each named executive officer is eligible for an annual incentive award in an amount up to 200%225% of the executive officer’s target award, which in turn is a percentage of the executive’s anticipated full-year base salary, as set forth in the following table: |
| | | | | |
| | | Target Award as a |
| | | Percentage of |
| | | Target Award as a
Anticipated Full-Year |
| | | Percentage of Anticipated
Base Salary |
| | Full-Year Base Salary
|
| | (%) |
| |
G. GesweinS. Buck | | | 60 | %65 |
D. Ibele (for period January 1 — June 30) | | 65 |
S. Kovach | | 50 | % |
D. Ibele (for period July 1 — December 31)T. Paige | | | 60 | %50 |
J. Meier | | | 90 | % |
R. Reynolds | | | 75 | % |
R. Rubio (for period January 1 — June 30)S. Streeter | | | 55 | % |
R. Rubio (for period July 1 — December 31) | | | 60 | %100 |
Prior to 2013, our SMIP comprised two separate payout opportunities – one based on company and region performance and the other based on achievement of individual objectives. In February 2013, the Compensation Committee adopted a new plan design for our 2013 SMIP in order to more closely tie payouts under the plan to company and region performance. Under the 2013 SMIP, the only payout opportunity is based on company and region performance, although the amount of the payout may be modified up or down by 25% based on individual performance, as described below. Accordingly, the amount disclosed under the ‘‘Threshold’’ column represents only 25% of target performance (reflecting the maximum downward impact of the individual modifier), while the amount disclosed under the “Maximum” column represents 225% of target performance (reflecting the maximum upward impact of the individual modifier). As noted under‘‘Compensation Discussion and Analysis — Executive Summary — 2013 Executive Compensation Highlights’’and‘‘Compensation Discussion and Analysis — What pay did Libbey’s executives receive for 2013?,’’the performance metrics under the financial performance component included the ratio of adjusted EBITDA to targeted EBITDA and the ratio of adjusted cash earnings to targeted cash earnings.
| | |
| | In establishing the 2010 SMIP, the Compensation Committee took into account the continuing uncertainty caused by the economic crisis that impacted our business beginning in late 2008. In light of that uncertainty, the Committee desired to retain flexibility and chose not to employ a rigid payout scale under the corporate component of the 2010 SMIP, which represents 70% of the respective named executive officers’ target awards and is dependent upon corporate-wide performance measures. Instead, the Committee established guidelines for payouts but reserved the discretion to adjust the payouts following an evaluation of the effectiveness of the strategic business decisions made and executed during the plan. The amount disclosed under the “Threshold” column is at the lower end of the guidelines with respect to the corporate component. The amount disclosed under the “Target” column is the midpoint in the guidelines, and the amount disclosed under the “Maximum” column is at the higher end of the guidelines. As noted under“Compensation Discussion and Analysis — Executive Summary — 2010 Executive Compensation Highlights”and“Compensation Discussion and Analysis — What pay did Libbey’s Executives Receive for 2010?,”the performance metrics under the corporate component included the ratio of adjusted EBITDA to budgeted EBITDA and the ratio of actual free cash flow to budgeted free cash flow. |
64
| | | | |
Approximate Percent of Targeted EBITDA (%) | | | | Payout as a
Percentage of Target
(%) |
| | |
| 80 | | | | 50 |
| 100 | | | | 100 |
| 115 | | | | 200 |
| | |
| | The guidelines with respect to the adjusted EBITDA performance metric (comprising 40% of each executive officer’s annual incentive opportunity) were as follows: |
| | | | | | | |
Approximate Percent
| | | | |
of Budgeted
| | Approximate
| | Guideline Payout
|
EBITDA
| | Adjusted EBITDA
| | as a Percent of Target
|
(%) | | ($) | | (%) |
|
80% — 89% | | | $86.9 million - $96.7 million | | | 50% |
90% — 110% | | | $97.8 million - $119.5 million | | | 100% |
Above 110% | | | Above $119.5 million | | | Above Target |
| | |
| | The guidelines with respect to the free cash flow performance metric were: |
| | | | | | |
Approximate Percent
| | | | |
of Budgeted
| | Approximate
| | Guideline Payout
|
Free Cash Flow
| | Free Cash Flow
| | as a Percent of Target
|
(%) | | ($) | | (%) |
|
75% — 85% | | | $35.9 million - $40.7 million | | | 50% |
90% — 110% | | | $43.1 million - $52.7 million | | | 100% |
Above 110% | | | Above $52.7 million | | | Above Target |
| | |
| | Although the corporate component of the 2010 SMIP provided the Committee with the latitude to make awards in accordance with the guidelines summarized above, management recommended to the Committee, and the Committee and its consultant agreed, that payouts under the corporate component should be based on the same scale that applied to other managers under our 2010 management incentive plan. That scale, which applied to both performance metrics, was: |
| | | | | | | | | | | |
Percent
| | | | | | |
of Budgeted EBITDA
| | | | | | |
or Free Cash Flow Actually
| | | | | | Guideline Payout
|
Achieved
| | EBITDA
| | Free Cash Flow
| | as a Percent of Target
|
| (%) | | ($) | | ($) | | (%) |
| |
| 80% | | $ | 87.0 million | | | $ | 38.3 million | | | 50% |
| 100% | | $ | 108.7 million | | | $ | 47.9 million | | | 100% |
| 120% or above | | $ | 130.4 million | | | $ | 57.5 million | | | 200% |
| | |
| | Performance and payout levels in between the data points listed above were linear. As a result, application of the scale to the adjusted EBITDA performance measure generated payouts equal to 129% of target, and application of the scale to the free cash flow performance measure generated payouts equal to 110% of target. |
|
| | With respect to the 30% of target awards under our 2010 SMIP that was dependent upon achievement by our named executive officers of their individual objectives, payouts were subject to our achievement of adjusted EBITDA of at least $81.5 million and cash earnings (defined as adjusted EBITDA plus or minus changes in working capital) of at least $81.9 million. Having achieved these threshold levels of corporate performance, management recommended to the Compensation Committee, and the Committee and its consultant concurred, that funding of the individual |
65
| | |
| | component under the 2010 SMIP should be subject to achievement, on a corporate-wide basis, of adjusted EBITDA in accordance with the following scale: |
| | |
Percent of
| | Funding Limit for
|
Budgeted
| | All Annual Incentive
|
EBITDA Achieved
| | Plans Combined
|
(%) | | (%) |
|
75% | | 50% of target |
100% | | 100% of target |
120% or above | | 200% of target |
| | |
| | Applying this scale, management recommended, and the Committee and its consultant concurred, that funding for all of our annual incentive plans for 2010, including our SMIP, be limited to approximately 125% of the aggregate target payouts under those plans. |
|
| (b) | | Under the cash component of our 20102013 LTIP, each named executive officer is eligible for a cash award in an amount up to 200% of the executive officer’snamed executive’s target award. In the case of Mr. Reynolds, the target award is prorated to reflect his retirement on November 30, 2013. Each named executive’s target award under the cash component is 40% of the named executive’s target award under all components of the 2010relevant LTIP. Each named executive’s target award under all components of the 2013 LTIP asis set forth in the following table: |
| | | | | | | | |
| | | | | 2013 Target Long-Term Award | | | | 2013 LTIP Performance Cash |
| | | | | as a Percentage of Annualized | | | | Target as Percentage of |
| | | | | 1/1/2013 Base Salary | | | | Annualized 1/1/2013 Base Salary |
Named Executive | | | | (%) | | | | (%) |
| | | | |
S. Buck | | | | 140 | | | | 56 |
D. Ibele | | | | 140 | | | | 56 |
S. Kovach | | | | 95 | | | | 38 |
T. Paige | | | | 95 | | | | 38 |
R. Reynolds | | | | 140 | | | | 17 |
S. Streeter | | | | 250 | | | | 100 |
| | | | | | | | |
There are two performance metrics used to determine the extent to which a payout is earned under the cash component of the 2013 LTIP, with each performance metric representing 50% of an executive’s target award under the plan. The two performance metrics are (a) our average adjusted EBITDA margin, expressed as a percentage and calculated by dividing adjusted EBITDA by net sales, for the three one-year performance periods (calendar years 2013, 2014 and 2015) included in the three-year performance cycle ended December 31, 2015, and (b) the ratio of year-end net debt to average adjusted EBITDA for the three one-year performance periods included in the three-year performance cycle ended December 31, 2015. The scales to be used to determine the amount, if any, of the payouts are:
| | | | | | | | | |
| | | 2010 LTIP
| | 2010 LTIP
|
| | | Target Award as a
| | Cash Component Target as
|
| | | Percentage of Annualized
| | Percentage of Annualized
|
| | | Base Salary on January 1, 2010
| | Base Salary on January 1, 2010
|
Named Executive Officer | | (%) | | (%) |
| |
| G. Geswein | | | 100 | % | | | 40 | % |
| D. Ibele | | | 85 | % | | | 34 | % |
| J. Meier | | | 180 | % | | | 72 | % |
| R. Reynolds | | | 140 | % | | | 56 | % |
| R. Rubio | | | 100 | % | | | 40 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | % of Targeted EBITDA Margin Achieved | | | | Payout % | | | | | | | | If Targeted Net Debt to Adjusted EBITDA is Reduced By: | | | | Payout % | | |
| | | 115 | | | | 200 | | | | | | | | 115 | | | | 200 | | |
| | | 100 | | | | 100 | | | | | | | | 100 | | | | 100 | | |
| | | 80 | | | | 50 | | | | | | | | 80 | | | | 50 | | |
| | | Less than 80 | | | | 0 | | | | | | | | Less than 80 | | | | 0 | | |
| | |
| | The performance measure used to determine the extent to which a payout is earned under the cash component of the 2010 LTIP is the ratio of our cumulative EBITDA over the period January 1, 2010 through December 31, 2012 to the sum of budgeted EBITDA for each year during that3-year performance cycle, in each case as calculated and adjusted as described under“Compensation Discussion and Analysis — What pay did Libbey’s executives receive for 2009? — Long-Term Performance-Based Compensation”above. The scale to be used to determine the amount of any payout is: |
| | | | | | | | | |
| | | Percentage of
| | Payout as
|
| | | Budgeted EBITDA
| | Percentage of Target
|
Payout Level | | (%) | | (%) |
| |
| Threshold | | | 85 | % | | | 50 | % |
| Target | | | 100 | % | | | 100 | % |
| Maximum | | | 115 | % | | | 200 | % |
| | |
| (3) | | Represents grants of RSUs made pursuant to our 2010 LTIP and our Omnibus Plan.2013 LTIP. The grant vestsgrants vest 25% per year beginning on February 11, 2011.22, 2014. Pursuant to the award agreements, Mr. Reynolds’s award vested automatically upon his retirement since he was at least age 65. |
| (4) | | Represents grants of NQSOs made pursuant to our 20102013 LTIP in February 2013 and, in the case of Ms. Streeter, a special retention grant of cash-settled SARs made in December 2013 pursuant to our Omnibus Incentive Plan. The grant vestsFebruary 2013 grants vest 25% per year beginning on February 11, 2011.22, 2014. The December 2013 special retention grant of SARs to Ms. Streeter cliff vests on December 31, 2018. Pursuant to the award agreements under which the February 2013 grants of NQSOs were issued, Mr. Reynolds’s award vested automatically upon his retirement since he was at least age 65. |
66
| | |
| (5) | | Represents the respective grant date fair values, determined in accordance with FASB ASC Topic 718, of (a) the RSUs, NQSOs and (b) the NQSOs.cash-settled SARs. |
| | |
| | |
Outstanding Equity Awards at Fiscal Year-End Table
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Our named executive officersexecutives had the following types of equity awards outstanding at the end of the 20102013 fiscal year:
NQSOs granted under our Omnibus Plan and predecessor plans;
| | |
| • | NQSOs granted under our Omnibus Plan and predecessor plans; and |
|
| • | RSUs granted under our Omnibus Plan. |
RSUs granted under our Omnibus Plan; and
Cash-settled SARs granted under our Omnibus Plan.
The following table shows, for each of the named executive officers,executives, (a) the number, exercise price and expiration date of NQSOs and cash-settled SARs that, as of December 31, 2010,2013, were vested but not yet exercised and of NQSOs and cash-settled SARs that, as of December 31, 2010,2013, were not vested; and (b) the number and market value of RSUs that were not vested as of December 31, 2010:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Option Awards | | | | | | | | | | Market
| |
| | | | | | | | | Number of
| | | Number of
| | | | | | | | Number of
| | Value of
| |
| | | | | | | | | Securities
| | | Securities
| | | | | | | | Shares or
| | Shares or
| |
| | | | | | | | | Underlying
| | | Underlying
| | | | | | | | Units of
| | Units of
| |
| | | | | | | | | Unexercised
| | | Unexercised
| | Option
| | | | | | Stock That
| | Stock That
| |
| | | Award
| | | Grant
| | | Options
| | | Options
| | Exercise
| | | Option
| | | Have Not
| | Have Not
| |
| | | Date
| | | Date
| | | (#)
| | | (#)
| | Price
| | | Expiration
| | | Vested
| | Vested
| |
Named Executive Officer | | (1) | | | (2) | | | Exercisable | | | Unexercisable | | ($) | | | Date | | | (#)(3) | | ($)(4) | |
| |
| G. Geswein | | | 5/02/2007 | | | | 5/23/2007 | | | | 50,000 | | | 0 | | | 19.85 | | | | 5/23/2017 | | | 1,641 | | | 25,386 | |
| | | | | | | | | | | | 3,807 | | | (b) 1,269 | | | 19.85 | | | | 5/23/2017 | | | | | | | |
| | | | 2/04/2008 | | | | 2/15/2008 | | | | 3,680 | | | 3,680 | | | 15.35 | | | | 2/15/2018 | | | 3,524 | | | 54,516 | |
| | | | 2/09/2009 | | | | 2/12/2009 | | | | 4,138 | | | 12,413 | | | 1.07 | | | | 2/12/2019 | | | 12,087 | | | 186,986 | |
| | | | 2/08/2010 | | | | 2/11/2010 | | | | 0 | | | 8,897 | | | 10.13 | | | | 2/11/2020 | | | | | | | |
| | | | 2/08/2010 | | | | 5/06/2010 | | | | | | | | | | | | | | | | | 16,861 | | | 260,840 | |
| D. Ibele | | | 11/13/2001 | | | | | | | | 13,500 | | | 0 | | | 30.55 | | | | 11/14/2011 | | | | | | | |
| | | | 11/20/2002 | | | | | | | | 13,500 | | | 0 | | | 23.93 | | | | 11/21/2012 | | | | | | | |
| | | | 12/15/2003 | | | | | | | | 9,500 | | | 0 | | | 28.53 | | | | 12/16/2013 | | | | | | | |
| | | | 12/10/2004 | | | | | | | | 11,000 | | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | | | |
| | | | 12/8/2005 | | | | | | | | 11,000 | | | 0 | | | 11.79 | | | | 12/09/2015 | | | | | | | |
| | | | 2/05/2007 | | | | 2/16/2007 | | | | 4,198 | | | (a) 1,399 | | | 12.80 | | | | 2/17/2017 | | | (a) 1,457 | | | 22,540 | |
| | | | | | | | | | | | 5,294 | | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | | | |
| | | | 2/04/2008 | | | | 2/15/1008 | | | | 2,494 | | | 2,494 | | | 15.35 | | | | 2/15/2018 | | | 2,388 | | | 36,942 | |
| | | | 2/09/2009 | | | | 2/12/2009 | | | | 2,841 | | | 8,520 | | | 1.07 | | | | 2/12/2019 | | | 8,296 | | | 128,339 | |
| | | | 2/08/2010 | | | | 2/11/2010 | | | | 0 | | | 6,107 | | | 10.13 | | | | 2/11/2020 | | | | | | | |
| | | | 2/08/2010 | | | | 5/06/2010 | | | | | | | | | | | | | | | | | 11,573 | | | 179,034 | |
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2013:OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Option Awards | | | Stock Awards |
| | | | | | | | |
Named Executive | | Award Date(1) | | | Grant Date(1) | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(3) | | Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(4) |
| | | | | | | | |
S. Buck | | | 7/6/2012 | | | | 8/1/2012 | | | 4,410 | | 28,979 | | | 13.96 | | | | 8/1/2022 | | | 15,333 | | 321,993 |
| | | 2/11/2013 | | | | 2/22/2013 | | | 0 | | 11,937 | | | 19.02 | | | | 2/22/2023 | | | 10,461 | | 219,681 |
| | | | | | | | |
D. Ibele | | | 12/10/2004 | | | | | | | 11,000 | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | |
| | | 12/8/2005 | | | | | | | 11,000 | | 0 | | | 11.79 | | | | 12/8/2015 | | | | | |
| | | 2/5/2007 | | | | 2/16/2007 | | | 5,597 | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | |
| | | | | | | | | | 5,294 | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | |
| | | 2/4/2008 | | | | 2/15/2008 | | | 4,988 | | 0 | | | 15.35 | | | | 2/15/2018 | | | | | |
| | | 2/9/2009 | | | | 2/12/2009 | | | 11,361 | | 0 | | | 1.07 | | | | 2/12/2019 | | | | | |
| | | 2/8/2010 | | | | 2/11/2010 | | | 4,581 | | 1,526 | | | 10.13 | | | | 2/11/2020 | | | | | |
| | | 2/8/2010 | | | | 5/6/2010 | | | | | | | | | | | | | | | 2,894 | | 60,774 |
| | | 2/7/2011 | | | | 2/10/2011 | | | 2,679 | | 2,679 | | | 17.00 | | | | 2/10/2021 | | | 4,539 | | 95,319 |
| | | 2/6/2012 | | | | 2/17/2012 | | | 1,703 | | 5,106 | | | 13.95 | | | | 2/17/2022 | | | 7,943 | | 166,803 |
| | | 2/11/2013 | | | | 2/22/2013 | | | 0 | | 12,073 | | | 19.02 | | | | 2/22/2023 | | | 10,581 | | 222,201 |
| | | | | | | | |
S. Kovach | | | 12/10/2004 | | | | | | | 9,500 | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | |
| | | 2/4/2008 | | | | 2/15/2008 | | | 3,621 | | 0 | | | 15.35 | | | | 2/15/2018 | | | | | |
| | | 2/8/2010 | | | | 2/11/2010 | | | 3,278 | | 1,092 | | | 10.23 | | | | 2/11/2020 | | | | | |
| | | 2/8/2010 | | | | 5/6/2010 | | | | | | | | | | | | | | | 2,760 | | 57,960 |
| | | 2/7/2011 | | | | 2/10/2011 | | | 1,813 | | 1,812 | | | 17.00 | | | | 2/10/2021 | | | 3,071 | | 64,491 |
| | | 2/6/2012 | | | | 2/17/2012 | | | 1,156 | | 3,468 | | | 13.95 | | | | 2/17/2022 | | | 5,394 | | 113,274 |
| | | 2/11/2013 | | | | 2/22/2013 | | | 0 | | 6,902 | | | 19.02 | | | | 2/22/2023 | | | 6,049 | | 127,029 |
| | | | | | | | |
T. Paige | | | 12/10/2004 | | | | | | | 6,500 | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | |
| | | 12/8/2005 | | | | | | | 8,000 | | 0 | | | 11.79 | | | | 12/8/2015 | | | | | |
| | | 2/5/2007 | | | | 2/16/2007 | | | 4,504 | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | |
| | | | | | | | | | 4,128 | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | |
| | | 2/4/2008 | | | | 2/15/2008 | | | 3,995 | | 0 | | | 15.35 | | | | 2/15/2018 | | | | | |
| | | 2/9/2009 | | | | 2/12/2009 | | | 1,207 | | 0 | | | 1.07 | | | | 2/12/2019 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Option Awards | | | Stock Awards |
| | | | | | | | |
Named Executive | | Award Date(1) | | | Grant Date(1) | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(3) | | Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(4) |
| | | 2/8/2010 | | | | 2/11/2010 | | | 4,116 | | 1,371 | | | 10.13 | | | | 2/11/2020 | | | | | |
| | | 2/8/2010 | | | | 5/6/2010 | | | | | | | | | | | | | | | 2,600 | | 54,600 |
| | | 2/7/2011 | | | | 2/10/2011 | | | 1,756 | | 1,755 | | | 17.00 | | | | 2/10/2021 | | | 2,975 | | 62,475 |
| | | 2/6/2012 | | | | 2/17/2012 | | | 1,120 | | 3,358 | | | 13.95 | | | | 2/17/2022 | | | 5,223 | | 109,683 |
| | | 2/11/2013 | | | | 2/22/2013 | | | 0 | | 6,818 | | | 19.02 | | | | 2/22/2023 | | | 5,976 | | 125,496 |
| | | | | | | | |
R. Reynolds | | | 12/10/2004 | | | | | | | 13,500 | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | |
| | | 12/8/2005 | | | | | | | 13,500 | | 0 | | | 11.79 | | | | 12/8/2015 | | | | | |
| | | 2/5/2007 | | | | 2/16/2007 | | | 15,690 | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | |
| | | | | | | | | | 14,707 | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | |
| | | 2/4/2008 | | | | 2/15/2008 | | | 13,984 | | 0 | | | 15.35 | | | | 2/15/2018 | | | | | |
| | | 2/9/2009 | | | | 2/12/2009 | | | 30,627 | | 0 | | | 1.07 | | | | 2/12/2019 | | | | | |
| | | 2/8/2010 | | | | 2/11/2010 | | | 16,464 | | 0 | | | 10.13 | | | | 2/11/2020 | | | | | |
| | | 2/7/2011 | | | | 2/10/2011 | | | 10,145 | | 0 | | | 17.00 | | | | 2/10/2021 | | | | | |
| | | 2/6/2012 | | | | 2/17/2012 | | | 13,034 | | 0 | | | 13.95 | | | | 2/17/2022 | | | | | |
| | | 2/11/2013 | | | | 2/22/2013 | | | 16,875 | | 0 | | | 19.02 | | | | 2/22/2023 | | | | | |
| | | | | | | | |
S. Streeter | | | 6/21/2011 | | | | 7/29/2011 | | | 15,191 | | 15,191 | | | 15.47 | | | | 7/29/2021 | | | 11,380 | | 238,980 |
| | | 2/6/2012 | | | | 2/17/2012 | | | 6,105 | | 18,314 | | | 13.95 | | | | 2/17/2022 | | | 28,485 | | 598,185 |
| | | 2/11/2013 | | | | 2/22/2013 | | | 0 | | 44,154 | | | 19.02 | | | | 2/22/2023 | | | 38,696 | | 812,616 |
| | | 12/9/2013 | | | | 12/16/2013 | | | 0 | | 280,829 | | | 21.29 | | | | 12/16/2023 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Option Awards | | | | | | | | | | Market
| |
| | | | | | | | | Number of
| | | Number of
| | | | | | | | Number of
| | Value of
| |
| | | | | | | | | Securities
| | | Securities
| | | | | | | | Shares or
| | Shares or
| |
| | | | | | | | | Underlying
| | | Underlying
| | | | | | | | Units of
| | Units of
| |
| | | | | | | | | Unexercised
| | | Unexercised
| | Option
| | | | | | Stock That
| | Stock That
| |
| | | Award
| | | Grant
| | | Options
| | | Options
| | Exercise
| | | Option
| | | Have Not
| | Have Not
| |
| | | Date
| | | Date
| | | (#)
| | | (#)
| | Price
| | | Expiration
| | | Vested
| | Vested
| |
Named Executive Officer | | (1) | | | (2) | | | Exercisable | | | Unexercisable | | ($) | | | Date | | | (#)(3) | | ($)(4) | |
| |
| J. Meier | | | 11/13/2001 | | | | | | | | 35,000 | | | 0 | | | 30.55 | | | | 11/14/2011 | | | | | | | |
| | | | 11/20/2002 | | | | | | | | 35,000 | | | 0 | | | 23.93 | | | | 11/21/2012 | | | | | | | |
| | | | 12/15/2003 | | | | | | | | 17,500 | | | 0 | | | 28.53 | | | | 12/16/2013 | | | | | | | |
| | | | 12/10/2004 | | | | | | | | 17,500 | | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | | | |
| | | | 12/08/2005 | | | | | | | | 17,500 | | | 0 | | | 11.79 | | | | 12/09/2015 | | | | | | | |
| | | | 2/05/2007 | | | | 2/16/2007 | | | | 22,212 | | | (a) 7,403 | | | 12.80 | | | | 2/17/2017 | | | (a) 7,714 | | | 119,336 | |
| | | | | | | | | | | | 27,087 | | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | | | |
| | | | 2/04/2008 | | | | 2/15/2008 | | | | 14,102 | | | 14,100 | | | 15.35 | | | | 2/15/2018 | | | 13,502 | | | 208,876 | |
| | | | 2/09/2009 | | | | 2/12/2009 | | | | 15,221 | | | 45,661 | | | 1.07 | | | | 2/12/2019 | | | 44,463 | | | 687,843 | |
| | | | 2/08/2010 | | | | 2/11/2010 | | | | 0 | | | 32,727 | | | 10.13 | | | | 2/11/2020 | | | | | | | |
| | | | 2/08/2010 | | | | 5/06/2010 | | | | | | | | | | | | | | | | | 62,022 | | | 959,480 | |
| R. Reynolds | | | 11/13/2001 | | | | | | | | 27,000 | | | 0 | | | 30.55 | | | | 11/14/2011 | | | | | | | |
| | | | 11/20/2002 | | | | | | | | 27,000 | | | 0 | | | 23.93 | | | | 11/21/2012 | | | | | | | |
| | | | 12/15/2003 | | | | | | | | 13,500 | | | 0 | | | 28.53 | | | | 12/16/2013 | | | | | | | |
| | | | 12/10/2004 | | | | | | | | 13,500 | | | 0 | | | 20.39 | | | | 12/11/2014 | | | | | | | |
| | | | 12/08/2005 | | | | | | | | 13,500 | | | 0 | | | 11.79 | | | | 12/09/2015 | | | | | | | |
| | | | 2/05/2007 | | | | 2/16/2007 | | | | 11,768 | | | (a) 3,922 | | | 12.80 | | | | 2/17/2017 | | | (a) 4,086 | | | 63,210 | |
| | | | | | | | | | | | 14,707 | | | 0 | | | 12.80 | | | | 2/17/2017 | | | | | | | |
| | | | 2/04/2008 | | | | 2/15/2008 | | | | 6,992 | | | 6,992 | | | 15.35 | | | | 2/15/2018 | | | 6,695 | | | 103,572 | |
| | | | 2/09/2009 | | | | 2/12/2009 | | | | 7,657 | | | 22,970 | | | 1.07 | | | | 2/12/2019 | | | 22,367 | | | 346,017 | |
| | | | 2/08/2010 | | | | 2/11/2010 | | | | 0 | | | 16,464 | | | 10.13 | | | | 2/11/2020 | | | | | | | |
| | | | 2/08/2010 | | | | 5/06/2010 | | | | | | | | | | | | | | | | | 31,201 | | | 482,679 | |
| R. Rubio | | | 7/01/2009 | | | | 7/01/2009 | | | | 0 | | | (c) 25,000 | | | 1.41 | | | | 7/01/2019 | | | (d) 11,742 | | | 181,649 | |
| | | | 7/01/2010 | | | | 7/01/2009 | | | | 4,020 | | | (d) 12,058 | | | 1.41 | | | | 7/01/2019 | | | | | | | |
| | | | 2/08/2010 | | | | 2/11/2010 | | | | 0 | | | 10,804 | | | 10.13 | | | | 2/11/2020 | | | | | | | |
| | | | 2/08/2010 | | | | 5/06/2010 | | | | | | | | | | | | | | | | | 20,474 | | | 316,733 | |
| | |
| (1) | | The Award Date is the date on which the Compensation Committee took action.action, and the Grant Date is the date on which we determined the number of NQSOs, SARs or RSUs, as the case may be, awarded. Until 2006, the award dateAward Date and the grant dateGrant Date typically were the same. |
|
| (2) | | See“‘‘Compensation Discussion and Analysis — How does Libbey determine the forms and amounts of executive pay? — Our Equity Grant Practices”Practices’’for information as to how we determine the number of NQSOs, SARs and RSUs awarded to our named executive officers.executives. We inform grant recipients of their awards after we have determined the number of NQSOs, andcash-settled SARs and/or RSUs to be granted to them. For awards made in February 2010,2013, the grant date was the first business day after we announced our results of operations for the 20092012 fiscal year. |
68
| | |
| (3) | | Represents RSUs awarded pursuant to our Omnibus Plan. One share of our common stock underlies each RSU. |
|
| (4) | | Represents the market value, as of December 31, 2010,2013, of unvested RSUs. We have estimated the market value by multiplying the number of shares of common stock underlying the RSUs by $15.47,$21.00, the closing price of our common stock on December 31, 2010.2013, the last trading day of 2013. |
| (5) | Upon Mr. Reynolds’s retirement, vesting was accelerated as to all NQSOs and RSUs that had not previously vested. |
The following table shows the vesting schedules with respect to those NQSOs and cash-settled SARs that were not yet exercisable, and those RSUs that were not yet vested, as of December 31, 2010:
| | |
| | |
| | | | | | |
Option Awards (NQSOs and SARs) Vesting Schedule | | Stock Awards (RSU) Vesting Schedule |
Grant Date | | |
Option Awards (NQSOs) Vesting Schedule | | Stock Awards (RSUs) Vesting Schedule |
| | Vesting Schedule |
2/11/2010 | | Grant Date | | Vesting Schedule |
2/16/2007 | | (a) 75% were vested as of February 16, 2010; the balance11, 2013; an additional 25% are scheduled to vest on February 16, 2011.11, 2014 | | 2/16/20075/6/2010 | | (a) 75% were vested as of February 16, 2010; the balance11, 2013; an additional 25% are scheduled to vest on February 16, 2011.11, 2014 |
5/23/20072/10/2011 | | (b) 75% were vested as of May 23, 2010; the balance are scheduled to vest on May 23, 2011. | | 5/23/2007 | | 75% were vested as of May 23, 2010; the balance are scheduled to vest on May 23, 2011. |
2/15/2008 | | 75%50% were vested as of February 15, 2010;10, 2013; an additional 25% are scheduled to vest on each of February 15, 201110, 2014 and February 15, 2012.10, 2015. | | 2/15/200810/2011 | | 75%50% were vested as of February 15, 2010;10, 2013; an additional 25% are scheduled to vest on each of February 15, 201110, 2014 and February 15, 2012.10, 2015. |
| | | |
| 7/29/2011 | | 50% were vested on June 30, 2013; an additional 25% are scheduled to vest on each of June 30, 2014 and June 30, 2015. | | 7/29/2011 | | 50% were vested on June 30, 2013; an additional 25% are scheduled to vest on each of June 30, 2014 and June 30, 2015. |
| | | |
2/12/200917/2012 | | 25% were vested on February 12, 2010;17, 2013; an additional 25% are scheduled to vest on each of February 12, 2011,17, 2014, February 12, 201217, 2015 and February 12, 2013.17, 2016. | | 2/12/200917/2012 | | 25% were vested on February 12, 2010;17, 2013; an additional 25% are scheduled to vest on each of February 12, 2011,17, 2014, February 12, 201217, 2015 and February 12, 2013.17, 2016. |
7/01/2009 | | | |
| 8/1/2012 | | (c) 100% are scheduledAs to vest on July 1, 2012.(d)17,639 NQSOs, 25% were vested on JulyAugust 1, 2010;2013; an additional 25% are scheduled to vest on each of JulyAugust 1, 2011, July2014, August 1, 20122015 and JulyAugust 1, 2013.2016. As to 15,750 NQSOs, 100% are scheduled to vest on August 1, 2016. | | 7/01/20098/1/2012 | | (d)As to 17,639 NQSOs, 25% were vested on JulyAugust 1, 2010;2013; an additional 25% are scheduled to vest on each of JulyAugust 1, 2011, July2014, August 1, 20122015 and JulyAugust 1, 2013.2016. As to 15,750 NQSOs, 100% are scheduled to vest on August 1, 2016. |
| | | |
2/11/201022/2013 | | 25% are scheduled to vest on each of February 11, 2011,22, 2014, February 11, 2012,22, 2015, February 11, 201322, 2016 and February 11, 2014.22, 2017. | | 5/06/20102/22/2013 | | 25% are scheduled to vest on each of February 11, 2011,22, 2014, February 11, 2012,22, 2015, February 11, 201322, 2016 and February 11, 2014.22, 2017. |
| | | |
| 12/16/2013 | | 100% of the SARs cliff vest on December 31, 2018. All SARs will be settled in cash. | | | | |
| | |
| | | | | | |
| | | | | | |
| | | | | | |
69
Option Exercises and Stock Vested for Fiscal 20102013 Table
The following table sets forth information concerning the exercise of stock options by the named executive officersexecutives in 2010,2013 and the value of RSUs that vested in 2010 and the number and value of shares of common stock underlying performance shares that the named executive officers earned in 2010 under the 2008 LTIP.
2013.OPTION EXERCISES AND STOCK VESTED IN FISCAL 20102013
| | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Stock Awards | |
| | | Number of
| | | | | | Number of
| | | | |
| | | Shares
| | | Value Realized
| | | Shares
| | | Value Realized
| |
| | | Acquired on
| | | on
| | | Acquired on
| | | on
| |
| | | Exercise
| | | Exercise
| | | Vesting
| | | Vesting
| |
Named Executive Officer | | (#) | | | ($) | | | (#)(1) | | | ($)(1) | |
| |
| G. Geswein | | | 0 | | | | 0 | | | | 12,493 | | | | 161,369 | |
| D. Ibele | | | 0 | | | | 0 | | | | 10,671 | | | | 127,724 | |
| J. Meier | | | 0 | | | | 0 | | | | 58,007 | | | | 698,430 | |
| R. Reynolds | | | 0 | | | | 0 | | | | 29,521 | | | | 354,544 | |
| R. Rubio | | | 0 | | | | 0 | | | | 9,535 | | | | 136,722 | |
| | | | | | | | | | | | | | | | | | | | |
Named Executive | | Number of Shares
Acquired on Exercise
(#) | | Value Realized on
Exercise
($)(1) | | Number of Shares Acquired
on Vesting
($)(2) | | Value Realized on
Vesting
($)(3) |
S. Buck | | 0 | | 0 | | | | 5,111 | | | | | 127,571 | |
D. Ibele | | 0 | | 0 | | | | 10,577 | | | | | 195,228 | |
S. Kovach | | 5,420 | | 110,080 | | | | 8,733 | | | | | 161,111 | |
T. Paige | | 5,000 | | 107,975 | | | | 8,313 | | | | | 153,369 | |
R. Reynolds | | 0 | | 0 | | | | 107,010 | | | | | 2,349,167 | |
S. Streeter | | 0 | | 0 | | | | 15,186 | | | | | 311,970 | |
| | |
| (1) | Represents the sum of the differences between the market prices and the exercise prices for the respective awards of NQSOs exercised by the named executive during the fiscal year. |
| (2) | Represents the number of RSUs that vested during 2013. Includes 5,111 shares, receipt of which was deferred by Ms. Buck pursuant to our EDCP. Pursuant to the EDCP, each named executive had the opportunity to defer receipt of shares underlying RSUs vesting during the year. Deferred shares accrue dividends, but Libbey did not pay any dividends on its common stock in 2013. One share of Libbey common stock will be issued for each share underlying RSUs deferred pursuant to the EDCP. Shares that are deferred will be distributed upon the date of distribution elected by the named executive pursuant to, or as otherwise contemplated by, the EDCP. |
| (3) | Represents the value of the sum of (a) the number of performance shares earnedRSUs vested (even if deferred under the 2008 LTIP and (b)EDCP) during 2013. For RSUs that vested during 2010. For RSUs that vested in 2010,2013, the value was determined by multiplying the number of shares by the closing price of our common stock on the applicable vesting dates ($10.2218.44 for RSUs vesting on February 10, 2013 and February 11, 2013; $18.37 for RSUs vesting on February 12, 2010 and February 15, 2010; $10.172013; $18.90 for RSUs vesting on February 16, 2010; $13.8217, 2013; $24.19 for RSUs vesting on May 23, 2010; and $12.37June 30, 3013; $24.96 for RSUs vesting on JulyAugust 1, 2010). For performance shares that were earned under our 2008 LTIP, the value was determined by multiplying the number of shares by $15.71, the closing price of our common stock2013; $23.00 for RSUs vesting on February 7, 2011, the dateNovember 29, 2013; and $22.62 for RSUs vesting on which the Compensation Committee determined the shares had been earned.November 30, 2013). |
Executives hired before January 1, 2006 are eligible for benefits under our Salary Plan and our SERP. The Salary Plan is a qualified plan, and the SERP is an excess, non-qualified plan that is 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 set forth in the Internal Revenue Code. Prior to January 1, 1998, the Salary Plan and the SERP provided that benefits would be determined based upon the highest consecutive 3-yearthree-year annual earnings. Effective January 1, 1998, the Salary Plan and the SERP were amended to provide that benefits no longer will be based upon the highest consecutive 3-yearthree-year annual earnings but will be determined by annual contribution credits equal to a percentage of annual earnings plus interest. Employees who were active employees, were at least age 45, had at least 10 years of service as of December 31, 1997, and had a combined age and years of service of at least 65 as of December 31, 1997, are eligible for a pension benefit under the Salary Plan and SERP based on the greater of 2two benefit formulas: (1) 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, or (2) the final average pay formula
70
described below. 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 the30-year Treasury rate.
The final average pay formula is as follows: [(A) × (B) × (C)] + [(D) × (E) × (C)] + [(F) × (A) × (G)]
(A) Monthly final average earnings for the three highest consecutive calendar years prior to 2010
(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 the calculation of final average earnings.
The retirement benefit may be adjusted if the employee has more or less than 35 years of credited service or retires prior to 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 lump sum option is designed to be equivalent in value to that of the lifetime annual annuity benefit. Mr. Meier and Mr. Reynolds werewas an active employees, wereemployee, was at least age 45 and had more than 20 years of service as of December 31, 1997. Accordingly, they are eligible forMr. Reynolds received a pension benefit under the Salary Plan and SERP based on the greater of the two benefit formulas described above. Each of Mr. MeierIbele, Ms. Kovach and Mr. Reynolds also is eligible for early retirement, with an unreduced benefit, under the Salary Plan and the SERP, because each of them is over the age of 55 and has more than 30 years of service with Libbey and Owens-Illinois, Inc., Libbey’s former parent company. Mr. Ibele isPaige are entitled to a benefit computed only in accordance with the cash balance formula. Neither Mr. GesweinMs. Buck nor Mr. RubioMs. Streeter is eligible for a pension benefit under either the Salary Plan or the SERP, because their employment with Libbey did not begin until May 23, 2007 and Julybefore January 1, 2009, respectively.
71
2006.
The following table sets forth information concerning the benefits provided to the named executive officersexecutives under the Salary Plan and the SERP as of December 31, 2010,2013, the date that we use for pension plan measurement for financial statement reporting purposes.
PENSION BENEFITS IN FISCAL 20102013 TABLE
| | | | | | | | | | | | | | | |
| | | | | Number of Years
| | Present Value of
| | Payments During
|
| | | | | Credited Service
| | Accumulated Benefit
| | Last Fiscal Year
|
Named Executive Officer | | Plan Name | | (#)(1) | | ($)(2) | | ($) |
| |
| G. Geswein | | N/A | | | N/A | | | | N/A | | | | N/A | |
| D. Ibele | | Salary Plan | | | 27.58 | | | | 297,813 | | | | 0 | |
| | | SERP | | | 27.58 | | | | 120,283 | | | | 0 | |
| J. Meier | | Salary Plan | | | 40.25 | | | | 1,281,656 | | | | 0 | |
| | | SERP | | | 40.25 | | | | 3,744,585 | | | | 0 | |
| R. Reynolds | | Salary Plan | | | 40.83 | | | | 1,262,098 | | | | 0 | |
| | | SERP | | | 40.83 | | | | 2,011,219 | | | | 0 | |
| R. Rubio | | N/A | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
Named Executive | | Plan Name | | Number of Years of
Credited Service
(#)(1) | | Present Value of
Accumulated Benefit
($)(2) | | Payments During Last
Fiscal Year
($)(3) |
S. Buck | | N/A | | N/A | | | | N/A | | | | | N/A | |
D. Ibele | | Salary Plan | | 30.58 | | | | 416,743 | | | | | 0 | |
| | SERP | | 30.58 | | | | 249,571 | | | | | 0 | |
S. Kovach | | Salary Plan | | 10.08 | | | | 133,105 | | | | | 0 | |
| | SERP | | 10.08 | | | | 105,579 | | | | | 0 | |
T. Paige | | Salary Plan | | 18.58 | | | | 282,628 | | | | | 0 | |
| | SERP | | 18.58 | | | | 142,918 | | | | | 0 | |
R. Reynolds | | Salary Plan | | 43.75 | | | | N/A | | | | | 1,646,246 | |
| | SERP | | 43.75 | | | | 2,638,263 | | | | | 0 | |
S. Streeter | | N/A | | N/A | | | | N/A | | | | | N/A | |
| | |
| (1) | | Represents actual years of service to Libbey and Owens-Illinois, Inc., our former parent company. We haveThe plans were frozen at the end of 2012, after which additional pension service is not granted additional years of service to any of our executives.credited. |
| | |
| | |
| (2) | | Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31, 2010,2013, except that assumptions relating to expected retirement age are as follows. Participantsfollows: Mr. Reynolds is assumed to have retired immediately, since he retired on November 30, 2013. All others who are eligible for pension benefits under the Salary Plan’s final average pay formula (namely, Messrs. Meier and Reynolds)Plan are assumed to retire at the earliest age at which they can receive an unreduced benefit under the Salary Plan. Mr. Ibele is assumed to receive benefits under the cash balance design at histheir normal retirement age of 65. For Mr. Reynolds, payment of the amount set forth under this column with respect to the SERP is subject to a six-month delay pursuant to Internal Revenue Code Section 409A. |
72
| (3) | Includes the lump sum benefit paid to Mr. Reynolds, pursuant to the Salary Plan, upon his retirement. |
Nonqualified Deferred Compensation
The following table sets forth information with respect to our ESP and our EDCP. The ESP was the only nonqualified deferred compensation plan under which employees could defer pay earned prior to January 1, 2009. The EDCP was the only nonqualified deferred compensation plan under which employees could defer pay earned in 2010:
2013:NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 20102013 TABLE
| | | | | | | | | | | | | | | | | | | | | |
| | | | | Registrant
| | | | Aggregate
| | |
| | | Executive
| | Contributions in
| | Aggregate Earnings
| | Withdrawals/
| | Aggregate Balance
|
| | | Contributions in
| | Last FY
| | in Last FY
| | Distributions
| | at Last FYE
|
Named Executive Officer | | Last FY | | ($)(1) | | ($)(2) | | ($) | | (3) |
| |
| G. Geswein | | $ | 6,204 | | | | 3,619 | | | | 623 | | | | 0 | | | $ | 10,446 | |
| | | | 7,325 RSUs | | | | | | | | | | | | | | | | 7,325 RSUs | |
| D. Ibele | | | 0 | | | | 0 | | | | 1,025 | | | | 0 | | | $ | 7,984 | |
| J. Meier | | $ | 45,282 | | | | 15,849 | | | | 85,958 | | | | 0 | | | $ | 1,781,743 | (4) |
| | | | 38,057 RSUs | | | | | | | | | | | | | | | | 61,508 RSUs | |
| R. Reynolds | | $ | 12,764 | | | | 7,446 | | | | 49,219 | | | | 0 | | | $ | 890,591 | (4) |
| R. Rubio | | $ | 9,994 | | | | 5,830 | | | | 1 | | | | 0 | | | $ | 15,825 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 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 | |
S. Buck | | | 7,432 | | | 0 | | | 6,370 | | | | 0 | | | | (12) | | | 0 | | | 0 | | | 0 | | | 13,789 | | | | 5,111 | |
D. Ibele | | | 0 | | | 0 | | | 0 | | | | 0 | | | | 3,009 | | | 0 | | | 0 | | | 0 | | | 12,413 | | | | 0 | |
S. Kovach | | | 3,203 | | | 0 | | | 3,203 | | | | 0 | | | | 4,375 | | | 0 | | | 0 | | | 0 | | | 44,047 | | | | 15,910 | |
T. Paige | | | 17,522 | | | 0 | | | 2,522 | | | | 0 | | | | 7,745 | | | 0 | | | 0 | | | 0 | | | 45,112 | | | | 3,280 | |
R. Reynolds | | | 11,133 | | | 0 | | | 11,133 | | | | 0 | | | | 147,472 | | | 0 | | | (422,516) | | | 0 | | | 255,382 | | | | 82,390 | |
S. Streeter | | | 0 | | | 0 | | | 0 | | | | 0 | | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | | 0 | |
| | |
| (1) | | As to Messrs. Geswein, Meier, Reynolds and Rubio, theThe following amounts are included in the column headed“‘‘All Other Compensation”Compensation’’in the Summary Compensation Table above: Ms. Kovach — $3,203; Mr. GesweinPaige — $3,619; Mr. Meier — $15,849;$2,522; Mr. Reynolds — $7,446; and Mr. Rubio — $5,830.$11,133. |
|
| (2) | | Not included in column headed“‘‘Change in Pension Value and Nonqualified Deferred Compensation Earnings”Earnings’’in the Summary Compensation Table because earnings are not at an above-market rate. |
|
| (3) | | Of the total amounts shown in this column, the following amounts have been reported as “Salary,” “Stock Awards”‘‘Salary’’ or “Non-Equity Incentive Plan Compensation”‘‘Stock Awards’’ in the Summary Compensation Table in this proxy statement for the last2013, 2012 and/or 2011 fiscal year and previous fiscal years: |
| | | | |
| | Salary
| |
Named Executive Officer
| | ($) | |
|
G. Geswein | | | 6,204 | |
D. Ibele | | | 0 | |
J. Meier | | | 45,282 | |
R. Reynolds | | | 12,764 | |
R. Rubio | | | 9,994 | |
| | |
(4) | | As to Messrs. Meier and Reynolds, includes amount ($993,600 for Mr. Meier and $449,834 for Mr. Reynolds) payable under the cash component of our 2009 LTIP for the1-year performance cycle ended December 31, 2009. The award is payable on the first day of the seventh month after retirement if |
73
| | | | | | | | | | |
Named Executive | | Salary
($) | | Stock Awards
($) |
S. Buck | | | | 7,432 | | | | | 71,350 | |
D. Ibele | | | | 0 | | | | | 0 | |
S. Kovach | | | | 8,422 | | | | | 0 | |
T. Paige | | | | 22,475 | | | | | 0 | |
R. Reynolds | | | | 38,619 | | | | | 1,250,118 | |
S. Streeter | | | | 0 | | | | | 0 | |
| | |
| | retirement occurs before December 31, 2011. Each of the other named executive officers must be employed by us on December 31, 2011 in order to receive his award under the cash component of our 2009 LTIP. |
The ESP, which was frozen at the end of 2008, was a mirror plan of our qualified 401(k) savings plan. Its purpose was to restore certain benefits that would have been available to executives under our 401(k) plan but for IRS limitations on qualified plans. These limits include the annual maximum recognizable compensation for retirement plans and the restrictions on excess contributions by highly compensated employees. In addition to restoring the benefits (including the benefit of our matching contribution) that otherwise would be lost by virtue of these IRS limitations on qualified plans, the ESP and EDCP enable executives to save additional amounts, including equity compensation,RSUs, on a tax-deferred basis.
Under the EDCP, our named executive officersexecutives and other members of senior management may elect to defer base pay, cash incentive and bonus compensation and equity compensationRSUs into an account that is deemed invested in one of 13 measurement funds, including a Libbey common stock measurement fund. Equity compensationRSUs in all events will be 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 prior to the year in which they are earned or they vest. They make deferral elections with respect to performance share compensation on a date that is not later than six months prior to the end of the relevant performance cycle.
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 equity compensationRSUs that isare earned or vestsvest 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 are obligated to pay the account balance in a lump sum made on, or in installments that begin on, the distribution date elected by the participant. However, if a participant dies prior to the date on which his or her account balance is distributed in full, we are obligated to distribute the account balance in a lump sum to the participant’s beneficiaries no later than 60 days after the participant’s death. If a participant ceases to be an employee of Libbey prior to his or her 62nd birthday, we are obligated to pay the participant his or her account balance in a lump sum within 60 days after the date of his or her separation from service, unless the participant is a “specified employee”‘‘specified employee’’ for purposes of Internal Revenue Code Section 409A. In that event, we are obligated to 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 an employee of Libbey on or after his or her 62nd birthday, we are obligated to 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”‘‘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 prior to 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 date of the change in control.
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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
As discussed under“‘‘Compensation Discussion and Analysis — Potential Payments Upon Termination or Change in Control,”’’we have employment agreements with named executives and an Executive Severance Policy pursuant to which our executive officers andnamed executives may be entitled to severance payments and/or other benefits upon termination of their employment, including in connection with a change in control agreements with our executive officers and certain other key members of senior management. Libbey.
The following tables provide information with respect to the amounts payable to each of the named executive officersexecutives based upon the following significant assumptions:
We have assumed that the employment of the respective named executives was terminated on December 31, 2013 under the various scenarios described in that table, except that no amounts would have been payable to Mr. Reynolds because he retired on November 30, 2013.
For purposes of illustrating the amounts payable on or in connection with a change in control of Libbey, we have assumed that a change in control occurred on December 31, 2013, and we have assumed that the employment of the respective named executives was terminated concurrently with the change in control.
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT(1)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Named Executive | | Cash
Severance
($) | | Annual
Incentive for
Year of
Termination
($) | | LTIP Cash
($) | | Acceleration of
Unvested
Equity Awards
($) | | Misc. Benefits
($) | | Total
($) |
Sherry Buck | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or permanent disability(2) | | | | 0 | | | | | 208,737 | | | | | 72,213 | | | | | 769,321 | | | | | 0 | | | | | 1,050,271 | |
Voluntary termination for Good Reason – no change in control triggering event(3) | | | | 0 | | | | | 208,737 | | | | | 72,213 | | | | | 0 | | | | | 0 | | | | | 280,950 | |
Involuntary termination without Cause – no change in control triggering event(4) | | | | 364,000 | | | | | 208,737 | | | | | 72,213 | | | | | 199,203 | | | | | 19,869 | | | | | 864,022 | |
Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(5) | | | | 1,021,200 | | | | | 208,737 | | | | | 220,226 | | | | | 769,321 | | | | | 94,404 | | | | | 2,313,888 | |
Involuntary termination for Cause | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | |
| | | | | | |
Daniel P. Ibele | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or permanent disability(2) | | | | 0 | | | | | 234,414 | | | | | 297,034 | | | | | 542,138 | | | | | 0 | | | | | 1,073,586 | |
Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) | | | | 598,703 | | | | | 202,206 | | | | | 296,073 | | | | | 259,921 | | | | | 49,869 | | | | | 1,406,772 | |
Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) | | | | 1,197,405 | | | | | 202,206 | | | | | 296,073 | | | | | 632,302 | | | | | 94,232 | | | | | 2,422,218 | |
Involuntary termination for Cause | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | |
| | |
| • | For purposes |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Named Executive | | Cash
Severance
($) | | Annual
Incentive for
Year of
Termination
($) | | LTIP Cash
($) | | Acceleration of
Unvested
Equity Awards
($) | | Misc. Benefits
($) | | Total
($) |
Susan A. Kovach | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or permanent disability(2) | | | | 0 | | | | | 157,397 | | | | | 194,278 | | | | | 361,872 | | | | | 0 | | | | | 713,547 | |
Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) | | | | 480,468 | | | | | 140,210 | | | | | 193,628 | | | | | 190,744 | | | | | 44,727 | | | | | 1,049,777 | |
Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) | | | | 960,936 | | | | | 140,210 | | | | | 193,628 | | | | | 437,135 | | | | | 80,137 | | | | | 1,812,046 | |
Involuntary termination for Cause | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | |
| | | | | | |
Timothy T. Paige | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or permanent disability(2) | | | | 0 | | | | | 149,522 | | | | | 188,889 | | | | | 351,317 | | | | | 0 | | | | | 689,728 | |
Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) | | | | 450,774 | | | | | 133,194 | | | | | 188,259 | | | | | 183,442 | | | | | 49,862 | | | | | 1,005,530 | |
Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) | | | | 901,548 | | | | | 133,194 | | | | | 188,259 | | | | | 411,350 | | | | | 84,870 | | | | | 1,719,221 | |
Involuntary termination for Cause | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | |
| | | | | | |
Richard I. Reynolds | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Retirement(8) | | | | 0 | | | | | 303,025 | | | | | 524,713 | | | | | 2,134,001 | | | | | 0 | | | | | 2,961,739 | |
| | | | | | |
Stephanie A. Streeter | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or permanent disability(2) | | | | 0 | | | | | 743,751 | | | | | 997,596 | | | | | 1,609,202 | | | | | 0 | | | | | 3,350,549 | |
Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) | | | | 3,000,000 | | | | | 662,533 | | | | | 994,656 | | | | | 628,942 | | | | | 104,804 | | | | | 5,390,935 | |
Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) | | | | 3,750,000 | | | | | 662,533 | | | | | 994,656 | | | | | 1,950,326 | | | | | 104,804 | | | | | 7,462,319 | |
Involuntary termination for Cause | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | | | | | 0 | |
| (1) | Represents potential payments pursuant to: (a) in the case of the Potential Payments Upon Termination Under Employment Agreements table, we have assumed thatnamed executives other than Ms. Buck, their respective employment agreements, and (b) in the employmentcase of the respective named executive officers was terminated on December 31, 2010 under the various scenarios described in that table. |
|
| • | For purposes of the Potential Payments Upon Change in Control table, we have assumed that aMs. Buck, our Executive Severance Policy or her change in control occurred on December 31, 2010, but that none of the named executive officers was terminated in connection with that change in control. |
|
| • | For purposes of the Potential Payments Upon Termination in Connection with Change in Control table, weagreement, as applicable. No amounts would have assumed that abeen payable to Mr. Reynolds under any employment agreement, change in control occurredagreement or severance policy, because Mr. Reynolds retired on December 31, 2010 and that the employment of the respective named executive officers was terminated on December 31, 2010 under the various scenarios described in that table.November 30, 2013. |
POTENTIAL PAYMENTS UPON TERMINATION UNDER EMPLOYMENT AGREEMENTS
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Annual
| | | Long-Term
| | | Acceleration of
| | | | | | | |
| | | Base
| | | Incentive
| | | Incentive
| | | Unvested Equity
| | | Misc.
| | | | |
| | | Salary
| | | Compensation
| | | Compensation
| | | Awards
| | | Benefits
| | | Total
| |
Named Executive Officer | | ($)(1) | | | ($)(2) | | | ($)(3) | | | ($)(4) | | | ($)(5) | | | ($)(6) | |
| |
Gregory T. Geswein | | | | | | | | | | | | | | | | | | | | | | | | |
| Death | | | 354,528 | | | | 211,450 | | | | 379,138 | | | | 754,427 | | | | 12,000 | | | | 1,711,543 | |
| Permanent disability | | | 709,056 | | | | 634,350 | | | | 348,384 | | | | 754,427 | | | | 26,916 | | | | 2,473,133 | |
| Voluntary termination for Good Reason or Involuntary termination without Cause | | | 709,056 | | | | 634,350 | | | | 348,384 | | | | 754,427 | | | | 26,916 | | | | 2,473,133 | |
| Involuntary termination for Cause | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Daniel P. Ibele | | | | | | | | | | | | | | | | | | | | | | | | |
| Death | | | 312,000 | | | | 163,383 | | | | 259,304 | | | | 526,188 | | | | 16,500 | | | | 1,277,375 | |
| Permanent disability | | | 624,000 | | | | 490,149 | | | | 238,465 | | | | 526,188 | | | | 35,916 | | | | 1,914,718 | |
| Voluntary termination for Good Reason or Involuntary termination without Cause | | | 624,000 | | | | 490,149 | | | | 238,465 | | | | 526,188 | | | | 35,916 | | | | 1,914,718 | |
| Involuntary termination for Cause | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
75
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Annual
| | | Long-Term
| | | Acceleration of
| | | | | | | |
| | | Base
| | | Incentive
| | | Incentive
| | | Unvested Equity
| | | Misc.
| | | | |
| | | Salary
| | | Compensation
| | | Compensation
| | | Awards
| | | Benefits
| | | Total
| |
Named Executive Officer | | ($)(1) | | | ($)(2) | | | ($)(3) | | | ($)(4) | | | ($)(5) | | | ($)(6) | |
| |
John F. Meier | | | | | | | | | | | | | | | | | | | | | | | | |
| Death | | | 1,449,024 | | | | 648,178 | | | | 1,411,383 | | | | 2,829,273 | | | | 12,000 | | | | 6,349,858 | |
| Permanent disability | | | 2,173,536 | | | | 2,592,712 | | | | 1,293,563 | | | | 2,829,273 | | | | 36,875 | | | | 8,925,959 | |
| Voluntary termination for Good Reason or Involuntary termination without Cause | | | 2,173,536 | | | | 2,592,712 | | | | 1,293,563 | | | | 2,829,273 | | | | 36,875 | | | | 8,925,959 | |
| Involuntary termination for Cause | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Richard I. Reynolds | | | | | | | | | | | | | | | | | | | | | | | | |
| Death | | | 464,136 | | | | 346,428 | | | | 706,993 | | | | 1,425,476 | | | | 12,000 | | | | 2,955,033 | |
| Permanent disability | | | 928,272 | | | | 1,039,284 | | | | 648,578 | | | | 1,425,476 | | | | 24,583 | | | | 4,066,193 | |
| Voluntary termination for Good Reason or Involuntary termination without Cause | | | 928,272 | | | | 1,039,284 | | | | 648,578 | | | | 1,425,476 | | | | 24,583 | | | | 4,066,193 | |
| Involuntary termination for Cause | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Roberto B. Rubio | | | | | | | | | | | | | | | | | | | | | | | | |
| Death | | | 444,168 | | | | 253,830 | | | | 416,299 | | | | 1,077,110 | | | | 16,500 | | | | 2,207,907 | |
| Permanent disability | | | 888,336 | | | | 761,490 | | | | 349,357 | | | | 1,077,110 | | | | 35,916 | | | | 3,112,209 | |
| Voluntary termination for Good Reason or Involuntary termination without Cause | | | 888,336 | | | | 761,490 | | | | 349,357 | | | | 1,077,110 | | | | 35,916 | | | | 3,112,209 | |
| Involuntary termination for Cause | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| | |
(1) | | |
| (2) | Represents (a) in the eventsum of: |
| (a) | under the column headed ‘‘Annual Incentive for Year of termination due to death, 2 times base salary in the case of Mr. Meier and 1 times base salaryTermination,’’ (i) in the case of the named executives other named executive officers (in each case at the rate in effect on December 31, 2010, the date of termination),than Ms. Buck, a target award under our 2013 SMIP; and (b) in the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, 3 times 2010 base salary(ii) in the case of Mr. Meier and 2 times 2010 base salaryMs. Buck, the amount actually earned by her under our 2013 SMIP; |
| (b) | under the column headed ‘‘LTIP Cash,’’ (i) in the case of the named executives other named executive officers (in each case at the rate in effect on the date of termination). Since termination is assumed to have occurred on December 31, 2010, we have assumed that all 2010 base salary has been paid when due. The base salary and annual incentive compensation components are payable in a lump sum, with the payment being made on the first day of the seventh month following termination, except if termination is a result of the named executive’s death, in which case the payment would be made within 60 days after Libbey receives written notice of the appointment of a personal representative for the named executive’s estate. |
|
(2) | | In the case of termination due to death, represents the target annual incentive for 2010 performance under our SMIP. In the case of termination due to permanent disability, by us without cause or by the executive for good reason, represents the sum of (a) the executive’s target award for the year in which termination occurs and (b) a multiple of the executive’s target award for 2010 under our SMIP. The multiple is 3 for Mr. Meier and 2 for each of the other named executive officers. Because termination is assumed to occur on December 31, 2010, the executive’s target award for 2010 is not prorated. If termination were to occur during a year, the executive’s target award for 2010 would be prorated, but would not be less than 50% of the target award unless termination is a result of death. |
|
(3) | | Represents, in the event of termination due to death, the sum of (a) the estimated value of shares of common stock issued as payment for performance shares, paid at target, for the performance cycle beginning January 1, 2008, (b)Ms. Buck, a target award under the cash component of our 20092011 LTIP (for the 2011 – 2013 performance cycle) and (c) an award |
76
| | |
| | prorated target awards under the cash component of our 20102012 LTIP paid at target(for the 2012 – 2014 performance cycle) and prorated toour 2013 LTIP (for the date2013 – 2015 performance cycle); and (ii) in the case of death. InMs. Buck, the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause, represents the sum of (a) the estimated value of shares of common stock issued as payment for performance sharesamount actually earned under the 2008 LTIP for the performance cycle ending December 31, 2010, and (b) the actual award earned under the cash component of our 2009 LTIP.2011 LTIP (for the 2011 – 2013 performance cycle); and |
| (c) | under the column headed ‘‘Acceleration of Unvested Equity Awards,’’ in the case of the named executives other than Ms. Buck, the sum of (i) the estimated value, as of December 31, 2013, of common stock underlying a pro rata portion of RSUs that were not vested on December 31, 2013, and (ii) the in-the-money/ intrinsic value, as of December 31, 2013, of a pro rata portion of the NQSOs that were not vested on December 31, 2013. In the case of Ms. Buck, represents the sum of (i) the estimated value, as of December 31, 2013, of common stock underlying RSUs that were granted in 2013 and are scheduled to vest on or before December 31, 2014, and (ii) the in-the-money/ intrinsic value, as of December 31, 2013, of NQSOs that were granted in 2013 and are scheduled to vest on or before December 31, 2014. As to Ms. Buck, this column does not include the value of unvested RSUs and NQSOs granted prior to 2013, since the decision to accelerate vesting remains in the discretion of the Compensation Committee. If a payoutthe Compensation Committee were to elect to accelerate vesting of all unvested RSUs and NQSOs that were granted prior to 2013 and were held by Ms. Buck as of December 31, 2013, then as of that date the estimated value of the common stock underlying RSUs would equal $429,324, and the in-the-money/ intrinsic value of accelerated NQSOs would equal $235,059. |
We have estimated the value of common stock underlying RSUs by multiplying the applicable number of RSUs by $21.00, the closing price of our common stock on December 31, 2013. We have determined the in-the-money/ intrinsic value of the applicable NQSOs by deducting the respective exercise prices for the NQSOs from $21.00 and multiplying the result by the applicable number of NQSOs.
| (3) | Represents the sum of (a) under the column headed ‘‘Annual Incentive for Year of Termination,’’ the amount actually isearned under our 2013 SMIP; and (b) under the column headed ‘‘LTIP Cash,’’ the amount actually earned under the cash component of our 20102011 LTIP (for the 2011 – 2013 performance cycle). |
| (4) | Represents the sum of: |
| (a) | under the column headed ‘‘Cash Severance,’’ salary continuation for 52 weeks; |
| (b) | under the performance cycle beginning January 1, 2010 and ending December 31, 2012,column headed ‘‘Annual Incentive for Year of Termination,’’ the named executive officer would receive a payout, inamount actually earned under our 2013 SMIP; |
| (c) | under the event of termination due to permanent disability, voluntary termination for good reason or involuntary termination without cause on December 31,2010, in ancolumn headed ‘‘LTIP Cash,’’ the amount equal to1/3 of the payout the executive would haveactually earned had he been employed by us throughout the3-year performance cycle. We have not included in this table any amounts attributable tounder the cash component of our 2010 LTIP. 2011 LTIP (for the 2011 – 2013 performance cycle); and |
| (d) | under the column headed ‘‘Misc. Benefits,’’ the estimated cost (net of contributions by Ms. Buck, at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for a period of 12 months following termination. |
| (5) | Represents the sum of: |
| (a) | under the column headed ‘‘Cash Severance,’’ the sum of two times Ms. Buck’s annual base salary and two times Ms. Buck’s target award under our 2013 SMIP; |
| (b) | under the column headed ‘‘Annual Incentive for Year of Termination,’’ the amount actually earned under our 2013 SMIP; |
| (c) | under the column headed ‘‘LTIP Cash,’’ the sum of the amount actually earned under the performance component of our 2011 LTIP (for the 2011 – 2013 performance cycle) and an estimate of the prorated amount Ms. Buck would earn under the cash component of each of our 2012 LTIP (for the 2012 – 2014 performance cycle) and our 2013 LTIP (for the 2013 – 2015 performance cycle); |
| (d) | under the column headed ‘‘Acceleration of Unvested Equity Awards,’’ the estimated value, as of December 31, 2013, of common stock underlying RSUs not yet vested as of that date and the in-the-money/ intrinsic value, as of December 31, 2013, of NQSOs not yet vested as of that date; and |
| (e) | under the column headed ‘‘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 Ms. Buck at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for 18 months following termination; and (iii) and the maximum cost ($10,000) to provide financial planning services to Ms. Buck. |
We have estimated the payouts under the cash component of our 2012 LTIP (for the 2012 – 2014 performance cycle) and 2013 LTIP (for the 2013 – 2015 performance cycle) assuming achievement of target levels of performance and have prorated them through the assumed date of termination. The prorated amounts actually earned under the cash component of our 2012 LTIP and 2013 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle.
We have estimated the value, as of December 31, 2013, of unvested RSUs by multiplying the number of RSUs by $21.00, the closing price of our common stock on December 31, 2013. We have determined the in-the-money/ intrinsic value of unvested NQSOs as of December 31, 2013, by deducting the respective exercise prices for the NQSOs from $21.00 and multiplying the result by the applicable number of NQSOs.
| (6) | Represents the sum of: |
| (a) | under the column headed ‘‘Cash Severance,’’ the sum of (i) in the case of the applicable named executives other than Ms. Streeter, 52 weeks of salary continuation and a target award under our 2013 SMIP; and (ii) in the case of Ms. Streeter, 104 weeks of salary continuation and a target award under our 2013 SMIP; |
| (b) | under the column headed ‘‘Annual Incentive for Year of Termination,’’ the amount actually earned under our 2013 SMIP; |
| (c) | under the column headed ‘‘LTIP Cash,’’ the sum of the amount actually earned under the performance component of our 2011 LTIP (for the 2011 – 2013 performance cycle) and an estimate of the prorated amount that would be earned under the cash component of each of our 2012 LTIP (for the 2012 – 2014 performance cycle) and our 2013 LTIP (for the 2013 – 2015 performance cycle); |
| (d) | under the column headed ‘‘Acceleration of Unvested Equity Awards,’’ (i) in the case of the applicable named executives other than Ms. Streeter, the sum of the estimated value, as of December 31, 2013, of common stock underlying RSUs scheduled to vest on or before December 31, 2014 and the in-the-money/ intrinsic value, as of December 31, 2013, of NQSOs scheduled to vest on or before December 31, 2014; and (ii) in the case of Ms. Streeter, the sum of the estimated value, as of December 31, 2013, of common stock underlying RSUs scheduled to vest on or before June 30, 2014 and the in-the-money/ intrinsic value, as of December 31, 2013, of NQSOs scheduled to vest on or before June 30, 2014; |
| (e) | under the column headed ‘‘Misc. Benefits,’’ (i) in the case of the applicable named executives other than Ms. Streeter, the sum of the estimated cost to be incurred by Libbey to provide executive level outplacement services for two years following termination and the estimated cost (net of contributions by the named executive) to provide medical, dental, prescription drug and life insurance coverage for 12 months following termination; and (ii) in the case of Ms. Streeter, the sum of the maximum cost ($75,000) to be incurred by Libbey to provide executive level outplacement services for two years following termination and the estimated cost (net of contributions by Ms. Streeter at the active employee rate) to provide medical, dental, prescription drug and life insurance coverage for 18 months following termination. |
| (f) | We have estimated the payouts under the cash component of our 2012 LTIP (for the 2012 – 2014 performance cycle) and 2013 LTIP (for the 2013 – 2015 performance cycle) assuming achievement of target levels of performance and have prorated them through the assumed date of termination. The prorated amounts actually earned under the cash component of our 2012 LTIP and 2013 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle. |
| | |
| | |
| (g) | We have estimated the value, as of December 31, 2010,2013, of the performance shares attributable to the 2008 LTIPunvested RSUs by multiplying the number of sharesRSUs by $15.47,$21.00, the closing price of our common stock on December 31, 2010. |
|
(4) | | Represents2013. We have determined the sum of (a) the estimated value of common stock underlying RSUs that were granted in 2007, 2008, 2009 and 2010 and that had not vested as of December 31, 2010, and (b) thein-the-money/intrinsic value of unvested NQSOs as of December 31, 2010. We have2013, by deducting the respective exercise prices for the NQSOs from $21.00 and multiplying the result by the applicable number of NQSOs. |
| (7) | Represents the sum of: |
| (a) | under the column headed ‘‘Cash Severance,’’ (i) in the case of each of the applicable named executives other than Ms. Streeter, the sum of two times the named executive’s annual base salary and two times the named executive’s target award under our 2013 SMIP, and (ii) in the case of Ms. Streeter, the sum of two and one-half times her annual base salary and two and one-half times a target award under our 2013 SMIP; |
| (b) | under the column headed ‘‘Annual Incentive for Year of Termination,’’ the amount actually earned under our 2013 SMIP; |
| (c) | under the column headed ‘‘LTIP Cash,’’ the sum of the amount actually earned under the performance component of our 2011 LTIP (for the 2011 – 2013 performance cycle) and an estimate of the prorated amount that would be earned under the cash component of each of our 2012 LTIP (for the 2012 – 2014 performance cycle) and our 2013 LTIP (for the 2013 – 2015 performance cycle); |
| (d) | under the column headed ‘‘Acceleration of Unvested Equity Awards,’’ the estimated the value, as of December 31, 2013, of common stock underlying unvested RSUs by multiplyingnot yet vested as of that date and the numberin-the-money/ intrinsic value, as of RSUs by $15.47, the closing price of our common stock on December 31, 2010. We have estimated2013, of NQSOs not yet vested as of that date; and |
| (e) | under thein-the-money/intrinsic value column headed ‘‘Misc. Benefits,’’ (i) in the case of unvested NQSOs by multiplying the numbereach of unvested NQSOs having exercise prices above $15.47 by the amount by which $15.47 exceeds the applicable exercise prices. |
|
(5) | | Representsnamed executives other than Ms. Streeter, the sum of (a)the maximum cost (15% of base salary) to be incurred by Libbey to provide executive level outplacement services for two years after termination, the estimated cost (net of medical, prescription drug, dental and vision benefits forcontributions by the named executive officer and/or his covered dependents for (i) 12 months followingat the date of termination if termination is a result of death or (ii) 24 months (or, in Mr. Meier’s case, 36 months) following the date of termination if termination is a result of permanent disability, voluntary termination for good reason or involuntary termination without cause;active employee rate) to provide medical, dental, prescription drug and (b) in the event of termination as a result of permanent disability, voluntary termination for good reason or involuntary termination without cause, the estimated cost of continued life insurance coverage for a period18 months following termination, and the maximum cost ($10,000) to provide financial planning services to the named executive; and (ii) in the case of 24 months (or, in Mr. Meier’s case, 36 months)Ms. Streeter, the sum of the maximum cost ($75,000) to be incurred by Libbey to provide executive level outplacement services for two years following termination and the dateestimated cost (net of termination, under our groupcontributions by Ms. Streeter at the active employee rate) to provide medical, dental, prescription drug and life insurance policy applicable to all salaried employees. |
|
(6) | | Does not include any taxgross-up because the excise tax contemplated by Section 4999 of the Internal Revenue Code does not apply in the absence of a change in control. Does not include any qualified or nonqualified pension benefit or other deferred compensation to which any of the named executive officers otherwise may be entitled upon their retirement or other termination of employment. For further information regarding those benefits, see “Retirement Plans” and “Nonqualified Deferred Compensation” above.coverage for 18 months following termination. |
POTENTIAL PAYMENTS UPON CHANGE IN CONTROL
| | | | | | | | | | | | | | | | | |
| | | Cash Incentive
| | | Equity Incentive
| | | Unvested Stock
| | | | |
| | | Compensation
| | | Plan Awards
| | | Options
| | | Total
| |
Named Executive Officer | | ($)(1) | | | ($)(2) | | | ($)(3) | | | ($) | |
| |
G. Geswein | | | 256,017 | | | | 109,033 | | | | 226,699 | | | | 591,741 | |
D. Ibele | | | 193,975 | | | | 73,900 | | | | 159,334 | | | | 427,209 | |
J. Meier | | | 812,122 | | | | 417,783 | | | | 853,739 | | | | 2,083,644 | |
R. Reynolds | | | 428,901 | | | | 207,159 | | | | 429,997 | | | | 1,066,056 | |
R. Rubio | | | 307,950 | | | | 121,099 | | | | 578,729 | | | | 1,007,778 | |
77
We have estimated the payouts under the cash component of our 2012 LTIP (for the 2012 – 2014 performance cycle) and 2013 LTIP (for the 2013 – 2015 performance cycle) assuming achievement of target levels of performance and have prorated them through the assumed date of termination. The prorated amounts actually earned under the cash component of our 2012 LTIP and 2013 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle.We have estimated the value, as of December 31, 2013, of unvested RSUs by multiplying the number of RSUs by $21.00, the closing price of our common stock on December 31, 2013. We have determined the in-the-money/ intrinsic value of unvested NQSOs as of December 31, 2013, by deducting the respective exercise prices for the NQSOs from $21.00 and multiplying the result by the applicable number of NQSOs.
| (8) | | |
(1) | | Represents the sum of: |
| (a) | under the column headed “Annual Incentive for Year of (a)Termination,” the named executive officer’s target awardamount actually earned under our 2010 SMIP, based upon actual base salary2013 SMIP; |
| (b) | under the column headed “LTIP Cash”, the amount actually earned during 2010,under the performance cash component of our 2011 LTIP (for the 2011-2013 performance cycle) and (b) a pro rata sharean estimate of the named executive officer’s target awardprorated amount Mr. Reynolds would earn under the cash component of our 2010 LTIP. Because a change in control is assumed to occur on December 31, 2010,2012 LTIP (for the named executive officer’s target award under2012-2014 performance cycle) and our 2010 SMIP is not prorated2013 LTIP (for the 2013-2015 performance cycle); and the named executive officer’s target award |
| (c) | under the cash componentcolumn headed “Acceleration of our 2010 LTIP represents 1/3 of the target award for the3-year performance cycle. If a termination were to occur during a year, the target award under our 2010 SMIP also would be prorated, but in no event would the named executive officer receive less than 50% of the target award. |
|
(2) | | RepresentsUnvested Equity Awards,” the sum of (i) the value, as of performance shares paid at target under our 2008 LTIP for the performance cycle ending December 31, 2010. We have estimated the value of the performance shares on December 31, 2010 by multiplying the number of shares by $15.47, the closing price of our common stock on December 31, 2010. |
|
(3) | | Represents thein-the-money/intrinsic value of unvested NQSOs based on the closing price of our stock on December 31, 2010 ($15.47 per share). |
POTENTIAL PAYMENTS UPON TERMINATION
IN CONNECTION WITH CHANGE IN CONTROL(1)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Unvested
| | | | | | | | | | | | | |
| | | | | | | | | | | | Restricted
| | | | | | | | | | | | | |
| | | | | | | | | Equity-Based
| | | Stock and
| | | | | | | | | | | | | |
| | | | | | Annual
| | | Long-Term
| | | Cash
| | | | | | Pension
| | | | | | | |
| | | | | | Incentive
| | | Incentive
| | | Equivalent
| | | Misc.
| | | Plan
| | | Tax
| | | | |
| | | Base Salary
| | | Compensation
| | | Compensation
| | | Awards
| | | Benefits
| | | Benefits
| | | Gross-Up
| | | Total
| |
Named Executive Officer | | ($)(2) | | | ($)(3) | | | ($)(4) | | | ($)(5) | | | ($)(6) | | | ($)(7) | | | ($)(8) | | | ($) | |
| |
G. Geswein | | | 1,063,584 | | | | 1,143,306 | | | | 122,846 | | | | 789,306 | | | | 55,374 | | | | 250,000 | | | | 1,216,366 | | | | 4,640,782 | |
D. Ibele | | | 936,000 | | | | 636,126 | | | | 83,654 | | | | 546,330 | | | | 71,523 | | | | 258,049 | | | | 932,745 | | | | 3,464,427 | |
J. Meier | | | 2,173,536 | | | | 3,504,768 | | | | 463,907 | | | | 2,937,224 | | | | 52,575 | | | | 250,000 | | | | 2,986,105 | | | | 12,368,117 | |
R. Reynolds | | | 1,392,408 | | | | | | | | 231,217 | | | | 1,479,226 | | | | 52,480 | | | | 250,000 | | | | 1,638,418 | | | | 5,988,256 | |
R. Rubio | | | 1,332,504 | | | | 761,490 | | | | 141,077 | | | | 752,728 | | | | 68,874 | | | | 250,000 | | | | 1,345,159 | | | | 4,651,831 | |
| | |
(1) | | Represents amount payable if, within 2 years after the change in control, Libbey terminates the employment of the named executive officer without cause or the named executive officer terminates his employment for good reason. In certain circumstances, these amounts may be payable to the named executive officer if his employment is terminated prior to the change in control based upon an event that would meet the definition of “cause” or “good reason” if the event were to occur within two years after the change in control. If, for example, an acquirer, in an effort to reduce the amounts payable to our executives in connection with a change in control, were to induce our Board to terminate a named executive officer’s employment prior to theNovember 30, 2013 (the date on which Mr. Reynolds actually retired), of common stock underlying RSUs with respect to which vesting was accelerated to his retirement date and the acquirer actually acquires control, the amounts contemplated by this table nevertheless would be payablein-the-money/ intrinsic value, as of November 30, 2013, of NQSOs with respect to the named executive officer. |
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(2) | | Represents 3 times base salary in effect on December 31, 2010 and is payable in a lump sum on the first day of the seventh month following termination of employment. We have assumed that all 2010 base salary has been paid when due. |
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(3) | | For Mr. Rubio, represents 3 timeswhich vesting was accelerated to his target annual incentive award for 2010 performance, since that amount exceeded Mr. Rubio’s actual incentive award for 2009, which was prorated to reflect his hiring on July 1, 2009. For all other named executive officers, represents 3 times their respective annual incentive awards actually paid for 2009, since those amounts exceeded their respective target annual incentive awards for 2010. Target annual incentiveretirement date. |
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| | |
| | compensation is a percentage of base salary actually earned during the year, as reflected byW-2 wages. For information with respect to the target percentages of the respective named executive officers, see “Compensation Discussion and Analysis — What pay did Libbey’s executives receive for 2010? — Annual Incentive Compensation.” |
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(4) | | Represents the sum of (a) the estimated value, at December 31, 2010, of performance shares earned under our 2008 LTIP for the3-year performance cycle ending December 31, 2010 and (b) an award under the cash component of our 2010 LTIP, with the award being calculated as if earned at the targeted rate and prorated through December 31, 2010, the assumed date of the change in control. |
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(5) | | The change in control is assumed to have occurred concurrently with termination of employment on December 31, 2010. Pursuant to the change in control agreements, the cash value of unvested RSUs outstanding on the date of the change in control is determined based upon the closing price ($15.22) of Libbey’s common stock on the last trading day (December 30, 2010) immediately preceding the change in control. That value is frozen. Upon termination by Libbey without cause or by the named executive officer for good reason within 2 years after the change in control (and in certain circumstances prior to the change in control), that value is paid to the named executive officer in cash. Similarly, the earned cash component of the 2009 LTIP is paid in cash upon termination. |
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(6) | | Represents the sum of (a) the estimated cost of medical, prescription drug, dental and vision benefits for the named executive officer and his covered dependents for 36 months following the date of termination, at an assumed annual cost of $12,000 for Messrs. Geswein, Meier, Reynolds and $16,500 for Messrs. Ibele and Rubio; (b) the estimated cost of continued life insurance coverage, for a period of 36 months following the date of termination, under our group life insurance policy applicable to all salaried employees; (c) the estimated cost to provide outplacement services for 2 years following the date of termination, at a maximum cost to the Company of $15,000 per named executive; and (d) the estimated cost to provide 1 year of financial planning services of the nature and scope provided to the respective named executives during 2010. |
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(7) | | Represents a lump sum equal to the greater of (i) $250,000 or (ii) the additional benefits to which the named executive officer would have been entitled under the Company’s qualified pension plan if he had remained employed by the Company for an additional 3 years. Does not include any other qualified or nonqualified pension benefit or other deferred compensation to which the named executive officer otherwise may be entitled upon his retirement or other termination of employment. For further information regarding those benefits, see “Retirement Plans” and “Nonqualified Deferred Compensation” above. |
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(8) | | The “present value” of the “parachute payments” payable to each of the named executive officers exceeded 1.10 multiplied by 3 times the “base amount” of the respective named executives (with the terms “present value,” “parachute payments” and “base amount” being defined in Section 280G of the Internal Revenue Code). Accordingly, the Company would be obligated to fully gross up the amounts payable to the respective named executive officers to cover the excise taxes assessed against them. |
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We have estimated the value, as of November 30, 2013, of unvested RSUs by multiplying the number of RSUs by $23.00, the closing price of our common stock on November 29, 2013, the last trading day on which Mr. Reynolds was an active employee. We have determined the in-the-money/ intrinsic value of unvested NQSOs as of November 30, 2013, by deducting the respective exercise prices for the NQSOs from $23.00 and multiplying the result by the applicable number of NQSOs.Non-Management Directors’ Compensation in 20102013 Our management directors do not receive additional pay for service on the Board of Directors. In 2010,2013, we reviewed the pay of our non-management directors, by comparing their pay to general survey information provided by the National Association of Corporate Directors and to the peer group described in “How does Libbey determine the forms and amounts of executive pay? – Process for Setting 2013 Executive Pay.” Effective on May 1, 2013, we adjusted the pay of all non-management directors other than the Chairman of the Board; we adjusted the Chairman’s pay effective August 1, 2013. The following table shows the amounts payable, on an annualized basis, under our non-management director pay program as of January 1, 2013, May 1, 2013, and August 1, 2013, respectively:
| | | | | | |
Pay Type | | Effective January 1, 2013 | | Effective May 1, 2013 | | Effective August 1, 2013 |
| | | |
| Annual Cash Retainer | | $40,500 | | $47,500 | | No change |
| | | |
| Chairman of the Board Cash Retainer | | $60,000, with an additional
$25,000 being payable until July 31, 2013 | | $85,000 | | $80,000 |
| | | |
| Equity Award | | On the date of each annual meeting of shareholders, outright grant of shares of common stock valued at $52,500 on the date of grant | | On the date of each annual meeting of shareholders, outright grant of shares of common stock valued at $60,000 on the date of grant | | No change |
| | | |
| Audit Committee Chair Cash Retainer | �� | $10,000 per year, in addition to Audit Committee Member Retainer | | $12,500 per year, in addition to Audit Committee Member Retainer | | No change |
| | | |
| Compensation Committee Chair Cash Retainer | | $7,500 per year, in addition to Compensation Committee Member Retainer | | $12,500 per year, in addition to Compensation Committee Member Retainer | | No change |
| | | |
| Nominating and Governance Committee Chair Cash Retainer | | $5,000 per year, in addition to Nominating and Governance Committee Member Retainer | | $6,500 per year, in addition to Nominating and Governance Committee Member Retainer | | No change |
| | |
| | |
| | | | | | |
Pay Type | | Effective January 1, 2013 | | Effective May 1, 2013 | | Effective August 1, 2013 |
| Audit Committee Member Cash Retainer | | $6,500 | | $7,500 | | No change |
| | | |
| Compensation Committee Member Cash Retainer | | $6,000 | | $7,500 | | No change |
| | | |
| Nominating and Governance Committee Member Cash Retainer | | $5,000 | | $5,000 | | No change |
| | | |
| Other Fees | | $500 per half day of special Board or committee business performed at the request of the Board | | No change | | No change |
We also maintain stock ownership guidelines for non-management directors. For more information with respect to our stock ownership guidelines for non-management directors, see‘‘Stock Ownership — How much Libbey stock do our directors and officers own? — Stock Ownership Guidelines’’above.
Directors may elect, pursuant to the Director DCP, to defer cash and/or equity compensation into any of 13 measurement funds. The Director DCP, as well as the predecessor deferred compensation plans under which non-management directors were eligible to participate, are unfunded plans, and the Company does not guarantee an above-market return on amounts deferred under any of these plans. Amounts deferred under the Director DCP, as well as under a predecessor plan, are, at the election of the applicable director, 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 retirement from our Board or, if earlier, upon death of the director.
In addition to paying the compensation listed above, we reimburse our non-management directors for their travel expenses incurred in attending meetings of the Board or its committees, as well as for fees and expenses incurred in attending director education seminars and conferences. The directors do not receive any other personal benefits.
In 2013, our non-management directors received the following pay:
DIRECTOR COMPENSATION FOR YEAR ENDED DECEMBER 31, 20102013
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Change in Pension
| | | | | | | |
| | | | | | | | | Value and
| | | | | | | |
| | | | | | | | | Nonqualified
| | | | | | | |
| | | | | | | | | Deferred
| | | | | | | |
| | | Fees Earned or
| | | | | | Compensation
| | | All Other
| | | | |
| | | Paid in Cash
| | | Stock Awards
| | | Earnings
| | | Compensation
| | | Total
| |
Name | | ($)(1) | | | ($)(2) | | | ($)(3) | | | ($) | | | ($) | |
| |
| Carlos V. Duno | | | 60,625 | | | | 52,492 | | | | 0 | | | | 0 | | | | 113,117 | |
| William A. Foley | | | 56,875 | | | | 52,492 | | | | 0 | | | | 0 | | | | 109,367 | |
| Jean-René Gougelet | | | 46,250 | | | | 52,492 | | | | 0 | | | | 0 | | | | 98,742 | |
| Peter C. McC. Howell | | | 51,250 | | | | 52,492 | | | | 0 | | | | 0 | | | | 103,742 | |
| Deborah G. Miller | | | 61,875 | | | | 52,492 | | | | 0 | | | | 0 | | | | 114,367 | |
| Carol B. Moerdyk | | | 63,375 | | | | 52,492 | | | | 0 | | | | 0 | | | | 115,867 | |
| John C. Orr | | | 46,208 | | | | 52,492 | | | | 0 | | | | 0 | | | | 98,700 | |
| Terence P. Stewart(4) | | | 40,125 | | | | 52,492 | | | | 0 | | | | 0 | | | | 92,617 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
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 | | | | 71,375 | | | 59,993 | | 0 | | 0 | | | | 131,368 | |
William A. Foley | | | | 134,500 | | | 59,993 | | 0 | | 0 | | | | 194,493 | |
Peter C. McC. Howell | | | | 64,125 | | | 59,993 | | 0 | | 0 | | | | 124,118 | |
Ginger M. Jones | | | | 11,875 | | | 0 | | 0 | | 0 | | | | 11,875 | |
Deborah G. Miller | | | | 57,875 | | | 59,993 | | 0 | | 0 | | | | 117,868 | |
Carol B. Moerdyk | | | | 71,375 | | | 59,993 | | 0 | | 0 | | | | 131,368 | |
John C. Orr | | | | 58,000 | | | 59,993 | | 0 | | 0 | | | | 117,993 | |
Richard I. Reynolds(4) | | | | 3,958 | | | 0 | | 0 | | 17,738 | | | | 21,696 | |
Terence P. Stewart(5) | | | | 45,750 | | | 59,993 | | 0 | | 0 | | | | 105,743 | |
| (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 each non-management director on May 6, 2010.14, 2013. On that date, we awarded each non-management director stock having a grant date fair value of $52,249.$59,993. Messrs. Duno, Howell and Stewart elected to defer receipt of a portion or all of the stock pursuant to the Director DCP. |
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| (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 on10-year ten-year treasuries. Pay deferred into other measurement funds under our deferred compensation plans for non-managementnon- 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. |
|
| (4) | Mr. Reynolds has continued to serve as member of the Board following his November 30, 2013 retirement as Executive Vice President, Strategy Program. Accordingly, he was paid 1/12th of the annual cash retainer payable to non-management members of the Board. Additionally, Mr. Reynolds provided consulting services to us in December through the Blake Leath Group; fees paid by Libbey to the Blake Leath Group for Mr. Reynolds’s consulting services are included under the columns headed “Fees Earned or Paid in Cash” and “Total.” |
| (5) | For additional information with respect to compensation payable to Mr. Stewart’s law firm for services provided to Libbey, see“‘‘Corporate Governance — Certain Relationships and Related Transactions — What transactions involved directors or other related parties?”’’ |
80
Certain Legal ProceedingsCERTAIN LEGAL PROCEEDINGS
We are not a party to any litigation, the outcome of which, if decided adversely to us, reasonably could be expected to have a material adverse effect on Libbey.
OTHER BUSINESSOther Business
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.
GENERAL INFORMATIONGeneral Information
Availability of List of Shareholders:
A complete list of shareholders entitled to vote at the Annual Meeting will be maintained at the Company’s principal executive offices at 300 Madison Avenue, Toledo, Ohio for a period of at least 10 days prior to the Annual Meeting.
The Company has retained Georgeson Shareholder to solicit the submission of proxies authorizing the voting of shares in accordance with the Board of Directors’Board’s recommendations. The Company has agreed to pay a fee of $8,000, plus expenses forout-of-pocket costs, for Georgeson’s services. 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 telegram. Arrangements have been made with Corporate Investor Communications, Inc. to perform a broker-nominee search. Arrangements also 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 reasonableout-of-pocket 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.
The Company has mailed this proxy statement and a copy of its 20102013 Annual Report to each shareholder entitled to vote at the Annual Meeting. Included in the 20102013 Annual Report are the Company’s consolidated financial statements for the year ended December 31, 2010.
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2013.
A copy of the Company’s Annual Report onForm 10-K for the year ended December 31, 2010,2013, including the consolidated financial statement schedules,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, Kenneth A. Boerger, Vice President and Treasurer, 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio43699-0060.
By Order of the Board of Directors,
SUSAN ALLENEA. KOVACH,
Secretary
82
2014
ATTACHMENT 1
For purposes of determining the extent to which the corporate component performance measures were achieved, we calculated adjusted EBITDA as follows:
| | | | | |
| | 2013 |
Adjusted EBITDA | | | | | |
Reported net income | | | $ | 28,459 | |
Net (loss) income |
Add: Interest expense | | | | 32,006 | |
Add: Provision (benefit) for income taxes | | | | 13,241 | |
| | | | | |
Earnings (Loss) before interest and income taxes (EBIT) | | | | 73,706 | |
Add: Depreciation and amortization | | | | 43,969 | |
| | | | | |
Earnings before interest, taxes, depreciation and amortization (EBITDA) |
Plus or minus: The impact of unusual transactions such as gains or losses on asset sales, restructuring charges and asset impairment charges |
| | 117,675 | |
Adjusted EBITDAAdd: Special items before interest and taxes | | | | | |
We calculated free cash flow as follows:
Loss on redemption of debt | | | | 2,518 | |
Adjusted EBITDA (calculated as described above)Restructuring charges |
Plus or minus: Changes in working capital |
Minus: Capital expenditures |
Plus or minus: The amount by which expense for pension and postretirement benefits exceeds our cash pension and postretirement obligations |
Minus: Cash interest paid4,845 |
Plus or minus: Other(1) |
| |
FreeAbandoned property | | | | 1,781 | |
Furnace malfunction | | | | 4,594 | |
Pension settlement charge | | | | 2,252 | |
Executive retirement | | | | 736 | |
Other adjustment | | | | 572 | |
| | | | | |
Adjusted EBITDA | | | $ | 134,973 | |
| | | | | |
| |
Adjusted EBITDA margin | | | | | |
Adjusted EBITDA | | | $ | 134,973 | |
Net sales | | | | 818,811 | |
| | | | | |
Adjusted EBITDA margin | | | | 16.5% | |
| | | | | |
| |
Net Debt to Adjusted EBITDA | | | | | |
Debt | | | $ | 411,903 | |
Less: Carrying value adjustment on debt related to Interest Rate Agreement | | | | (1,324) | |
Gross debt | | | | 413,227 | |
Cash | | | | 42,208 | |
| | | | | |
Debt net of Cash | | | $ | 371,019 | |
Debt net of cash flowto adjusted EBITDA ratio | | | | 2.8 | |
| | | | | |
| |
Return on Invested Capital | | | | | |
Reported income from operations | | | | 72,499 | |
Add: Special items before interest and taxes | | | | | |
Restructuring charges(1) | | | | 6,544 | |
Abandoned property | | | | 1,781 | |
Furnace malfunction | | | | 8,350 | |
Pension Settlement | | | | 2,252 | |
Executive retirement | | | | 736 | |
| | | | | |
Adjusted income from operations | | | | 92,162 | |
Income tax @ 30% | | | | 27,649 | |
| | | | | |
Adjusted income from operations after tax | | | $ | 64,513 | |
| | |
| (1) | Other primarily includes special charges, changes in prepaid expenses, accrued liabilities and salary and wage accrual, as well as stock compensation expense and gain (loss) on foreign exchange |
For financial reporting purposes, we define free cash flow as net cash provided by (used in) operating activities, less capital expenditures, adjusted for payment of interest on the PIK Notes and proceeds of asset sales and other. Our consolidated financial statements filed onForm 10-K with the SEC on March 14, 2011, provide the following reconciliation of net cash provided by (used in) operating activities to free cash flow:
| | | | | |
Add: | | | | | |
Accounts receivable | | | $ | 94,549 | |
Net cash provided by (used in) operating activitiesInventories |
Less: Capital expenditures |
Plus: Payment of interest on New PIK Notes and proceeds from asset sales and other |
| 163,121 | |
FreeLess: Accounts payable | | | | 79,620 | |
Less: Receivable on furnace malfunction insurance claim | | | | 5,000 | |
| | | | | |
Working Capital | | | | 173,050 | |
Property, plant and equipment - net | | | | 265,662 | |
| | | | | |
Invested capital | | | $ | 438,712 | |
Return on invested capital | | | | 14.7% | |
| | | | | |
| |
(1) - Includes accelerated depreciation of $1.7 million. | | | | | |
| |
Adjusted Cash Earnings | | | | | |
Earnings before interest, taxes, depreciation and amortization (EBITDA) | | | $ | 117,675 | |
Change in working capital(2) | | | | (5,363) | |
| | | | | |
Cash earnings | | | | 112,312 | |
Add: Special items before interest and taxes | | | | | |
Loss on redemption of debt | | | | 2,518 | |
Restructuring charges | | | | 4,845 | |
Abandoned property | | | | 1,781 | |
Furnace malfunction | | | | 4,594 | |
Pension settlement charge | | | | 2,252 | |
Executive retirement | | | | 736 | |
Receivable on furnace malfunction insurance claim | | | | 5,000 | |
Other adjustment | | | | 572 | |
| | | | | |
Adjusted cash flowearnings | | | $ | 134,610 | |
| | | | | |
| |
(2) - Working capital equals net accounts receivable plus net inventories less accounts payable | | | | | |
The calculation that we use in order to determine free cash flow for incentive compensation purposes yields the same result as the reconciliation of net cash provided by (used in) operating activities to free cash flow described above.
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 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. 0 0 0 0 0 0 0 0 0 0 0 0 0 00000968571 R1.0.0.11699 For Withhold For All All All Except The Board of Directors recommends you vote FOR items 1, 2 and 4 and “3 YEARS” on item 3: 1. Election of Directors Nominees 01 William A. Foley 02 Deborah G. Miller 03 Terence P. Stewart | | | | |
LIBBEY INC. P.O. BOX 10060 TOLEDO, OH 43699-0060 | | VOTE BY INTERNET —- www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. 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 up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. 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. | | |
| | |
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 Against AbstainAll 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: | | | | | | | | | | | | |
| | 1. | | Election of Directors | | | | ¨ | | ¨ | | ¨ | | | | | | | | | |
| | | | Nominees | | | | | | | | | | | | | | | | | | |
| | | |
| | 01 | | William A. Foley 02 Theo Killion 03 Deborah G. Miller | | |
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| | The Board of Directors recommends you vote FOR proposals 2 and 3. | | For | | Against | | Abstain | | |
| | | | | | |
| | 2. | | Approve, by non-binding vote, 20102013 compensation paid to the company’s named executive officers. | | ¨ | | ¨ | | ¨ | | |
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| | 3 years 2 years 1 year Abstain 3 Recommend, by non-binding vote, the frequency of future advisory votes on executive compensation. For Against Abstain 4 . | | Ratification of the appointment of Ernst & Young LLP as Libbey’s independent auditors for the fiscal year ending December 31, 2011. NOTE:2014. | | ¨ | | ¨ | | ¨ | | |
| | | | |
 | | NOTE: The Directors up for election are Class III directors. SuchAt the meeting shareholders will transact such other business as properly may properly come before the meeting or any adjournment thereof. meeting. | | | | | | |
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| 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. | | | | | | | | | | |
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| | | | | | 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, Notice & Proxy Statement is/are available atwww.proxyvote.com.– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
00000968572 R1.0.0.11699 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com . | | | | | | |
| | | | LIBBEY INC. Annual Meeting of Shareholders May 19, 201113, 2014 2:00 PM This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) John F. MeierStephanie A. Streeter and Susan Allene Kovach, or either of them, as proxies, each with the power to appoint (his/her)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 shareholder(s) to be held at 02:00 PM, ESTEDT on May 19, 2011,13, 2014, at 335 N. St. Clair Street, Toledo, Ohio, 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 | | |
