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PROXY STATEMENT AND NOTICE OF |
NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | |||
Libbey Corporate Showroom | Wednesday, May 17, 2017 | ||
335 North St. Clair Street | 2:00 p.m. Eastern Daylight Saving Time | ||
Toledo, Ohio 43604 | |||
Record Date: Close of business on March 20, 2017 | |||
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
Tuesday, May 13, 2014
2 p.m., local time
P.O. Box 10060
300 Madison Avenue
Toledo, Ohio 43699-0060
The Annual Meeting of shareholders of Libbey Inc. (“Libbey” or the “Company”) will be held on Tuesday, May 13, 2014, at 2 p.m., eastern daylight savings time, at the Libbey Corporate Showroom located at 335 North St. Clair Street, Toledo, Ohio.
elect three directors, each for a term of three years;
vote, on an advisory and non-binding basis, to approve executive compensation;
vote to ratify the appointment of ErnstDeloitte & YoungTouche LLP as Libbey’sour independent auditors for ourthe 2017 fiscal year ending December 31, 2014;year; and
transact such other business as properly may come before the meeting.
March 31, 2014
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PROXY STATEMENT SUMMARY
Meeting Details
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| Libbey Corporate Showroom 335 North St. Clair Street Toledo, Ohio 43604 | |
Record Date: | Close of business on March 20, 2017 |
| Voting Options | Board Recommendation | ||
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Governance Highlights
Board Leadership.In 2011, we separated the roles of Chairman of the Board and Chief Executive Officer.
Director Independence. In August 2013, we increased the size of our Board from nine to ten, when our Board elected Ginger Jones to serve on the Board. In November 2013, Richard I. Reynolds retired as Executive Vice President, Strategy Program Management, and notified the Board that he will retire from the Board at our annual meeting of shareholders on May 13, 2014. In January 2014, Terence P. Stewart notified the Board that he will not seek reelection at the May 13, 2014 Annual Meeting of shareholders. Our Board has nominated Theo Killion to stand for election at the May 13, 2014 Annual Meeting of shareholders. Upon Mr. Killion’s election to the Board, eight of our nine directors will be independent, as defined in the NYSE MKT Company Guide.
2013 Executive Pay Aligns withLibbey 2015 and Shareholder Interests
Financial highlights. When we announced ourLibbey 2015strategy in mid-2012, we articulated four overarching financial goals:
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For definitions of the terms “adjusted EBITDA,” “adjusted EBITDA margin,” “net debt to adjusted EBITDA ratio” (which we also refer to as “debt, net of cash, to adjusted EBITDA”) and “return on invested capital,” see Appendix A.
During 2013, we achieved all but one of these goals:
In spite of a 0.8% decline in sales that was partially attributable to our decision to exit some unprofitable sales as we realigned our North American capacity, net income increased by more than 300%, from $7.0 million in 2012 to $28.5 million in 2013; earnings before interest and taxes (EBIT) increased by 46%, from $50.4 million in 2012 to $73.7 million in 2013; and adjusted earnings before interest, taxes, depreciation and amortization (which we refer to as adjusted EBITDA) for 2013 hit a record high of $134.4 million, compared to $132.4 million for 2012.
In addition, our adjusted EBITDA margin for 2013 grew to 16.4%, well within our target range of 15-18%, and our ratio of debt, net of cash, to adjusted EBITDA declined to 2.8x, positioning us well for future growth opportunities. Finally, we achieved return on invested capital of 14.7%, well north of our targeted range of 11-13%.
Executive pay highlights.In the fall of 2012, our Compensation Committee commissioned its first executive pay study since 2008. The analysis covered our top officers, comparing their pay to pay levels of a general industry peer group in terms of base pay, target annual bonus opportunity, target total cash, long-term incentives and target total direct compensation. For further information about the peer group and the market study methodology, see“Compensation-Related Matters – Compensation Discussion and Analysis – How does Libbey determine the forms and amounts of executive pay? – Process for Setting 2013 Executive Pay”.
The market study disclosed that base salaries for most executives were generally within a reasonable range of the median, but that annual and long-term incentive opportunities for most of the named executives were below median, driving their target total direct compensation opportunities below a reasonable range of the median. In order to ensure that we maintain market-competitive pay programs to motivate our executives to achieve ourLibbey 2015 strategy, in February 2013, our Compensation Committee made the following adjustments to base salaries and target annual and long-term incentive opportunities of the named executives:
(ii)
Named Executive | Increase in Annual Base Salary (%) | 2012 SMIP(1) Target Opportunity (%) | 2013 SMIP Target Opportunity (%) | 2012 LTIP(2) Target Opportunity (%) | 2013 LTIP Target Opportunity (%) | ||||||||||||||||||||
Stephanie A. Streeter Chief Executive Officer | 3.4 | 90 | 100 | 180 | 250 | ||||||||||||||||||||
Sherry Buck VP,Chief Financial Officer | 4.0 | 60 | 65 | 110 | 140 | ||||||||||||||||||||
Richard I. Reynolds EVP, Strategy Program | 0.0 | 75 | 75 | 140 | 140 | ||||||||||||||||||||
Daniel P. Ibele VP, GM, U.S. and Canada | 2.5 | 60 | 65 | 110 | 140 | ||||||||||||||||||||
Susan A. Kovach VP, General Counsel & | 7.4 | 45 | 50 | 80 | 95 | ||||||||||||||||||||
Timothy T. Paige VP, Human Resources | 2.0 | 45 | 50 | 80 | 95 |
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Throughout 2013, our non-management directors discussed the transformation that Libbey 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 sustained, profitable growth. Our non-management directors believe that Ms. Streeter is best able to lead us in this transformative period.
Accordingly, our 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 after consulting with the other non-management directors, the Compensation Committee approved a CEO Retention Award Agreement pursuant to which the Company issued to Ms. Streeter 240,829 stock appreciation rights (which we refer to as SARs) in December 2013 and issued to Ms. Streeter 115,687 restricted stock units (which we refer to as RSUs) in February 2014. These awards are subject to cliff vesting on December 31, 2018, in order to maximize the handcuffs on Ms. Streeter and ensure that no value is actually delivered to her unless she serves the entire desired period of retention. Although the value of the SAR and RSU awards at their respective grant dates was intended to be $2.5 million each, the value, if any, that Ms. Streeter will realize upon vesting will be entirely dependent on the value of Libbey stock on December 31, 2018. If and when vested, both the SARs and the RSUs will be settled in cash, with the amount to be paid to Ms. Streeter being equal to (a) in the case of the SARs, the product of the number of SARs and the amount by which the closing price of Libbey common stock on the date of exercise, which may be up to five years after December 31, 2018, exceeds $21.29, which was the closing price of Libbey common stock on the date of grant, and (b) in the case of the RSUs, the product of the number of RSUs and the closing price of Libbey common stock on December 31, 2018.
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.
Finally, in February 2014, our Compensation Committee assessed our performance under our 2013 SMIP. For all of the named executives other than Mr. Ibele, payouts under the 2013 SMIP were dependent on company-wide performance. For Mr. Ibele, half of his payout under the 2013 SMIP was dependent on company-wide performance, with the other half being dependent on the performance of his region (U.S. and Canada). As with the other named executives, the amount earned was subject to potential modification (up or down) by as much as 25% of the amount
(iii)
earned, depending on individual performance, as reflected in individual performance review scores for 2013. For example, an individual performance review score of 3 signifies successful achievement of expectations, as a result of which the executive’s payout typically should not be modified. An individual performance review score significantly below 3 typically would signify that the executive’s payout should be reduced by as much as 25%. Similarly, an individual performance review score significantly higher than 3 typically would signify that the executive’s payout should be increased by as much as 25%.
The applicable performance measures, the results and the resulting payout percentages (determined applying the payout scale described on page 31 below and unmodified for individual performance) for the named executives were as follows:
2013 SMIP.For the named executives other than Mr. Ibele, the extent to which we achieved targeted company-wide adjusted EBITDA represented 60% of their respective target SMIP opportunities, with the extent to which we achieved company-wide adjusted cash earnings representing the remaining 40% of their target opportunities. We achieved company-wide adjusted EBITDA in 2013 of $135.0 million, representing 95% of targeted adjusted EBITDA. Additionally, we achieved company-wide adjusted cash earnings equal to $134.6 million, or 97% of targeted cash earnings, resulting in an unmodified payout percentage equal to 92% of the target opportunity for that measure.
For Mr. Ibele, the extent to which we achieved the company-wide performance metrics represented a total of 50% of his target SMIP opportunity, while the extent to which his region (U.S. and Canada) achieved regional adjusted EBITDA and regional cash earnings targets represented the other 50% of his target opportunity. In that connection, his region achieved $88.2 million of adjusted EBITDA, or 93% of target, for an 83% unmodified payout percentage. The region also achieved $83.0 million of adjusted cash earnings, or 93% of target, for an 83% unmodified payout percentage.
Because the individual performance scores for each of the named executives fell within the 2.5 to 3.5 range, the Committee determined that adjustments to the payouts for individual performance were not warranted for any of the named executives, and, as a result, the average weighted payout percentages for the combined performance measures were as follows:
For named executives other than Mr. Ibele: Weighted Average Company-wide Performance as % of Target = 95.8% Combined Payout as % of Target = 89.0% For Mr. Ibele: Weighted Average Company-wide Performance as % of Target = 95.8% Combined Payout as % of Target = 89.0% x 50% = 44.5% 86.0% Weighted Average Regional Performance as % of Target = 93.0% Combined Payout as % of Target = 83.0% x 50% = 41.5%
2011 LTIP Performance Cash.In February 2014, our Compensation Committee also reviewed our performance under the performance cash component of the 2011 LTIP, which covered the three-year performance cycle ended December 31, 2013. Payouts for all of the named executives were determined based solely on company-wide performance over the performance cycle. Applying the payout scale described on page 33 below, the Committee determined that the Company achieved adjusted EBITDA over the performance cycle of $386.3 million, or 99.7% of target, resulting in payouts equal to 99.3% of the target opportunities for the respective named executives.
(iv)
Finally, in February 2013, our Compensation Committee adopted a new LTIP that includes a performance cash component using performance measures that are more closely aligned with ourLibbey 2015 strategy. Under the performance cash component of the 2013 LTIP, there are two new performance measures, each of which represents 50% of the named executives’ respective target opportunities under that component of the 2013 LTIP. The new performance measures are as follows:
A profitability metric – namely, our adjusted EBITDA margin, expressed as a percentage and calculated by dividing adjusted EBITDA by net sales; and
A financial leverage metric – namely, the ratio of debt, net of cash, to adjusted EBITDA.
The extent to which we achieve these metrics will be determined over the three-year performance cycle ending December 31, 2015.
Executive Pay Practices.The table below highlights our current executive pay practices, including practices we have implemented in order to drive performance and practices that we have not implemented because we do not believe they would serve our shareholders’ long-term interests:
What We Do
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What We Don’t Do
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(v)
(vi)
(vii)
LIBBEY INC.
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to Be Held on May 13, 2014.
We have elected to provide access to our proxy materials both by sending you this full set of proxy materials, including a notice of annual meeting, proxy card and 2013 Annual Report to Shareholders, and by notifying you of the availability of our proxy materials on the Internet. The notice of annual meeting, proxy statement and 2013 Annual Report to Shareholders are available athttps://www.proxyvote.com.
We have sent you this proxy statement because our Board of Directors is asking you to give your proxy (that is, the authority to vote your shares) to our proxy committee so that they may vote your shares on your behalf at our annual meeting of shareholders. The members of the proxy committee are Stephanie A. Streeter and Susan A. Kovach. They will vote your shares as you instruct.
We will hold the meeting in the Libbey Corporate Showroom located at 335 North St. Clair Street, Toledo, Ohio. The meeting will be held on May 13, 2014, at 2 p.m., eastern daylight savings time. This proxy statement contains information about the matters being voted on and other information that may be helpful to you.
We began the mailing to shareholders of this proxy statement and the enclosed proxy on or about March 31, 2014.
QUESTIONS AND ANSWERS ABOUT THE MEETING
You may vote if you were a holder of Libbey Inc. (which we refer to as we, our, Libbey or the Company) common stock at the close of business on March 14, 2014.
What may I vote on, what are my voting options and how does the Board recommend that I vote?
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| For, Withhold (as to any nominee) or Abstain |
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| For, Against or Abstain | FOR | ||
| 3 years, 2 years, 1 year or Abstain | 1 YEAR | ||
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Ratification of the appointment of | For, Against or Abstain | FOR |
◦ | Seven are independent as defined in the NYSE MKT Company Guide |
◦ | Three have tenures of less than five years |
◦ | Four are women |
◦ | Two are minorities |
◦ | In addition to strengthening our relationships with customers, we ramped up our new product development and conducted significant market research to ensure that we can bring to market the innovative products that our customers want; |
PROXY STATEMENT SUMMARY |
◦ | We launched two new foodservice stemware collections, Neo and Contour, using our state-of-the-art ClearFire® glass composition; |
◦ | We began development of our e-commerce strategy; |
◦ | We started our furnace consolidation effort to optimize our capacity footprint and better align our capacity with demand; and |
◦ | We streamlined our product portfolio and improved inventory control processes. |
◦ | 2016 net sales of $793.4 million reflected a decrease of 3.5% from prior year, primarily due to foreign currency fluctuation. |
◦ | Net income was $10.1 million in 2016, compared to $66.3 million in 2015, reflecting the non-repeating $43.8 million tax benefit included in 2015. |
◦ | Our Adjusted EBITDA (calculated as shown in Appendix A) for 2016 was $109.8 million, compared to $116.1 million in 2015. |
◦ | Our stock price decreased from $21.32 on December 31, 2015 to $19.46 on December 31, 2016, reflecting annual total shareholder return (TSR) of (6)%, as shown in the chart below. |
Company / Index | Base Period Dec 2011 | Indexed Returns Years Ending | ||||
Dec 2012 | Dec 2013 | Dec 2014 | Dec 2015 | Dec 2016 | ||
Libbey Inc. | 100 | 151.88 | 164.84 | 246.78 | 169.64 | 158.93 |
Russell 2000 Index | 100 | 116.35 | 161.52 | 169.43 | 161.95 | 196.45 |
Peer Group | 100 | 118.33 | 173.49 | 156.65 | 155.96 | 203.80 |
PROXY STATEMENT SUMMARY |
Peer Group | ||||
Actuant Corporation | Ethan Allen Interiors Inc. | Lifetime Brands, Inc. | ||
Barnes Group Inc. | Flexsteel Industries, Inc. | Lindsay Corporation | ||
Bassett Furniture Industries, Inc. | Graco, Inc. | Myers Industries, Inc. | ||
Callaway Golf Company | Helen of Troy Limited | Oxford Industries, Inc. | ||
Chart Industries, Inc. | Integra LifeSciences Holdings Corp. | Trex Company, Inc. | ||
Coherent, Inc. | iRobot Corporation | TriMas Corporation | ||
ESCO Technologies Inc. | La-Z-Boy Incorporated |
◦ | We fell short of target with respect to the financial performance measures under our 2016 Senior Management Incentive Plan ("SMIP") and our 2014 Long-Term Incentive Plan ("LTIP") |
◦ | We distributed $12.1 million of free cash flow through share repurchases and dividends; |
◦ | We repaid $24.4 million of debt; and |
◦ | We reduced trade working capital (defined as net inventory plus net accounts receivable less accounts payable) by $17.3 million. |
◦ | Initial base salary of $825,000; |
◦ | 2016 SMIP target opportunity equal to 100% of actual base earnings; |
◦ | 2016 LTIP target opportunity equal to 300% of annual base salary; and |
◦ | Prorated target opportunities under performance cash component of the 2014 LTIP and 2015 LTIP equal to $326,700 and $653,400, respectively. |
◦ | Severance equal to 2x base salary + 2x annual incentive target; |
◦ | Prorated annual incentive under the 2016 SMIP, based on forecasted Company performance; |
◦ | Prorated performance cash incentives under the 2014 LTIP, 2015 LTIP and 2016 LTIP, based on forecasted Company performance; |
◦ | Accelerated vesting of all cash-settled RSUs and cash-settled SARs; |
◦ | Accelerated vesting of all other unvested equity awards scheduled to vest by June 30, 2016; |
◦ | Outplacement services for 24 months, not to exceed $75,000 in total; and |
◦ | Continuation of health and life insurance benefits for 18 months. |
PROXY STATEMENT SUMMARY |
PROXY STATEMENT SUMMARY |
What We Do | What We Don't Do | |||
ü | We tie pay to performance by ensuring that a significant portion of executive pay is performance-based and at-risk. We set clear financial goals for corporate performance, and we differentiate based on individual performance against objectives determined early in the year. | x | We do not regularly provide tax gross-ups except on relocation assistance. | |
x | We do not maintain compensation programs that we believe create undue risks for our business. | |||
ü | Periodically, we review market data relative to our peer group of companies, and we utilize tally sheets to ensure compensation opportunities are consistent with the Compensation Committee's intent. | x | We do not provide significant additional benefits to executive officers that differ from those provided to all other U.S. employees. | |
x | We do not permit repricing of stock options or SARs, nor do we permit buyouts of underwater stock options or SARs. | |||
ü | We mitigate undue risk by emphasizing long-term incentives and using caps on potential payouts under both our annual and long-term incentive plans, clawback provisions in our Omnibus Incentive Plan, reasonable retention strategies, performance targets and appropriate Board and management processes to identify and manage risk. | |||
x | We do not permit hedging, pledging or engaging in transactions involving derivatives of our stock. | |||
x | Effective with Mr. Foley's hire on January 12, 2016, we do not have an employment agreement or change in control agreement with our CEO, nor is our CEO covered by our Executive Severance Compensation Policy. | |||
ü | We have modest post-employment and change in control arrangements that apply to our executive officers, with severance multiples of less than or equal to 2x. | |||
ü | We utilize "double-trigger" vesting of equity awards and non-equity incentives after a change in control. | |||
x | We do not have employment agreements with our non-CEO executive officers. | |||
ü | We provide only minimal perquisites that we believe have a sound benefit to our business. | |||
ü | We have stock ownership / retention requirements to enhance alignment of our executives’ interests with those of our shareholders. | |||
ü | Our Compensation Committee retains an external, independent compensation consultant and other external advisors as needed. |
TABLE OF CONTENTS |
Page | |
QUESTIONS AND ANSWERS ABOUT THE MEETING | |
Who may vote? | |
What may I vote on, what are my voting options, and how does the Board recommend that I vote? | |
How do I vote? | |
May I change my vote? | |
How many outstanding shares of Libbey common stock are there? | |
How big a vote do the proposals need in order to be adopted? | |
What constitutes a quorum? | |
How will votes be counted? | |
What are broker non-votes? | |
How will voting be conducted on other matters raised at the meeting? | |
When must shareholder proposals be submitted for the 2018 Annual Meeting? | |
LIBBEY CORPORATE GOVERNANCE | |
Proposal 1 - Election of Directors | |
Who are the members of our Board of Directors? | |
How is our Board leadership structured? | |
Does Libbey have Corporate Governance Guidelines? | |
What are the roles of the Board's committees? | |
How does our Board oversee risk? | |
How does our Board select nominees for the Board? | |
How does our Board determine which directors are independent? | |
How often did our Board meet during fiscal 2016? | |
Certain Relationships and Related Transactions | |
How do shareholders and other interested parties communicate with the Board? | |
Are Libbey's directors required to attend Libbey's annual meeting of shareholders? | |
COMPENSATION-RELATED MATTERS | |
Proposal 2 - Advisory Say-on-Pay | |
Proposal 3 - Say-on-Pay Frequency | |
Compensation Discussion and Analysis | |
Executive Summary | |
Compensation Philosophy | |
In what forms did Libbey deliver pay to its executives in 2016, and what purpose do the various forms of pay serve? | |
How does Libbey determine the forms and amounts of executive pay? | |
What pay did Libbey's executives receive for 2016? | |
What is the Compensation Committee's policy regarding deductibility of compensation? | |
Does Libbey assess compensation-related risks? | |
Potential payments upon termination or change in control | |
Compensation Committee Interlocks and Insider Participation | |
Compensation Committee Report |
TABLE OF CONTENTS |
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Tables | |
Summary Compensation Table | |
Grants of Plan-Based Awards Table | |
Outstanding Equity Awards at Fiscal Year-End Table | |
Option Exercises and Stock Vested for Fiscal 2016 Table | |
Pension Benefits in Fiscal 2016 Table | |
Nonqualified Deferred Compensation in Fiscal 2016 Table | |
Potential Payments Upon Termination of Employment Table | |
Non-Management Directors' Compensation in 2016 | |
Director Compensation for Year Ended December 31, 2016 Table | |
AUDIT-RELATED MATTERS | |
Proposal 4 - Ratification of Auditors | |
Who are Libbey's auditors? | |
What fees did Libbey pay to its auditors for Fiscal 2016 and Fiscal 2015? | |
Report of the Audit Committee | |
STOCK OWNERSHIP | |
Who are the largest owners of Libbey stock? | |
How much stock do our directors and officers own? | |
Section 16(a) Beneficial Ownership Reporting Compliance | |
GENERAL INFORMATION | |
Certain Legal Proceedings | |
Other Business | |
Solicitation Costs | |
Reports to Shareholders | |
APPENDIX A | |
APPENDIX B |
QUESTIONS AND ANSWERS ABOUT THE MEETING |
LIBBEY INC. | ||
PROXY STATEMENT |
Proposal | Voting Options | Board Recommendation | ||
Election of William A. Foley, Deborah G. Miller and Steve Nave to serve as Class III directors | For, Withhold (as to any nominee) or Abstain | FOR each of Mr. Foley, Ms. Miller and Mr. Nave | ||
RESOLVED, that the stockholders of the Company approve, on an advisory and non-binding basis, the compensation of the Company’s named executives, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, pursuant to Item 402 of Regulation S-K | For, Against or Abstain | FOR | ||
Recommend, on an advisory and non-binding basis, the frequency - every 3 years, every 2 years or 1 year - with respect to which shareholders should have future non-binding say-on-pay votes | 3 years, 2 years, 1 year or Abstain | 1 YEAR | ||
Ratification of the appointment of Deloitte & Touche LLP as Libbey’s independent auditors for the 2017 fiscal year | For, Against or Abstain | FOR |
QUESTIONS AND ANSWERS ABOUT THE MEETING |
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through 3.
sending us a proxy card dated later than your last vote;
notifying the Secretary of Libbey in writing; or
voting at the meeting.
outstanding?
Proposal | Required Vote | |
Proposal 1 — Election of William A. Foley, | 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 — | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. | |
Proposal 4 — Ratification of Independent Auditors | The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. |
Uponthe meeting. Instead, the Board has, based upon the recommendation of the Nominating and Governance Committee, of the Board, the Board has determined that Theo Killion possesses the desired knowledge and experiencenominated Steve Nave to serve on the Board. Accordingly, the Board has nominated Mr. Killion, as well as Mr. Foley and Ms. Miller,stand for election to Class III. Upon the retirements of Mr. ReynoldsIII along with William A. Foley 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, thoseDeborah G. Miller.
We are providing 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 executives, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, pursuant to Item 402 of Regulation S-K.
Our 2013 executive pay program, which is discussed below under‘‘Compensation-Related Matters — Compensation Discussion and Analysis’’and related tables and narrative, contemplates the delivery of executive pay that is performance-based and market-driven, as demonstrated in the table below:
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We believe that our 2013 executive pay program links directly to ourLibbey 2015 strategy. The quantitative performance metrics under both our 2013 SMIP and the performance cash component of our 2013 LTIP are directly tied to improving 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 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.
The Audit Committee has appointed Ernst & Young LLP to serve as our independent auditors for our 2014 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.
Who are the largest owners of Libbey stock?
The following table shows information with respect to the persons we know to be beneficial owners of more than 5% of our common stock as of December 31, 2013:
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% |
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How much Libbey stock do our directors and officers own?
Stock Ownership Guidelines
Non-Management Director Stock Ownership Guidelines. We have stock ownership guidelines that are applicable to non-management directors. For individuals who were non-management directors as of May 6, 2010, when we revised the guidelines, the deadline for compliance is May 6, 2015. For individuals subsequently becoming non-management directors, the deadline will be the fifth anniversary of the date on which they become non-management directors. We refer to the deadline as the Compliance Deadline.
Under the guidelines, a non-management director must, on or before the applicable Compliance Deadline, own Libbey common stock and/or its equivalents, as described below, in an amount at least equal to four 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.
In determining whether a non-management director has achieved his or her Ownership Threshold, 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.
If a non-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 shares subsequently declines as a result of a decline in the closing price of Libbey common stock. A non-management director who has achieved the Ownership Threshold subsequently may sell or dispose of shares as long as the non-management director retains at least the minimum number of shares that s/he was required to hold when s/he first achieved the Ownership Threshold. If the non-management director’s share ownership drops below that Ownership Threshold, his or her holdings will be re-valued based on the then-current market price of Libbey common stock, and s/he will be required to achieve the Ownership Threshold based on his or her re-valued holdings.
As of March 14, 2014, all of our existing non-management directors, other than Ms. Jones (who joined the Board in August 2013), comply with these stock ownership guidelines.
Executive Stock Ownership 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. 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 was 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 became subject to the guidelines.
The applicable multiples for the executive officers under the Original Guidelines were as follows:
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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.
Beneficial Ownership Table
The following table shows, as of March 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 by our directors (including Messrs. Reynolds and Stewart, who will not be standing for reelection at our 2014 Annual Meeting of stockholders), the named 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 set forth below. The shares owned by the named executives set forth below include the shares held in their accounts in our 401(k) plan. An asterisk indicates ownership of less than one percent of the outstanding stock.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||||
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% |
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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:
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For more information regarding our deferred compensation plans for non-management directors, see‘‘Compensation-Related Matters — Non-Management Directors’ Compensation in 2013’’below.
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In addition to outstanding shares of common stock that our named executives beneficially owned as of March 14, 2014, the named executives and all executive officers as a group have received the following grants of RSUs that have not yet vested:
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Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on our review of filings with the Securities 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, 2013, all officers, directors and 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.
Standing for Election – Class III
Standing for Election - Class III | |||||
William A. Foley Age
Chairman since 2011 Director since 1994 | Director Qualifications: • Consumer product marketing experience, particularly in the glass tableware industry • Significant organizational leadership and management skills • Public company board and corporate governance experience | ||||
Professional Experience: Mr. Foley has been Libbey's Chief Executive Officer since January 12, 2016. Since 2011, he also has served as Chairman of the Board,
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1994. Mr. Foley served as Chairman and Chief Executive Officer of Blonder Accents, LLC | ||||
Marketing of the Consumer and Industrial Products Group. Education:Mr. Foley holds a Public Company Boards: Mr. Foley is currently on the Board of Directors of Myers Industries,
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Deborah G. Miller Age 67 Director since 2003 |
Director Qualifications: • Global management experience • Sales and marketing ingenuity • Extensive information technology experience | |||||
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| From 2003 to the present, Ms. Miller has been the Chief Executive Officer Ms. Miller Ms. Miller has been a member of the Board of Directors of Sentinel Group Funds, Inc. (SENCX) since 1995. | ||||
LIBBEY CORPORATE GOVERNANCE |
Continuing Directors – Classes I and II
Steve Nave Age 47 Nominated in 2017 | Director Qualifications: • Extensive e-commerce experience • Deep knowledge of retail and consumer products industries • Significant executive leadership experience • Brand marketing expertise | ||
Professional Experience: Mr. Nave currently serves as President and Chief Executive Officer and a director of Bluestem Group Inc., a holding company whose businesses include Bluestem Brands, Inc., a multi-brand, online retailer of a broad selection of name-brand and private label general merchandise through 16 unique retail brands. Mr. Nave has held his current position since November 2014, when a subsidiary of Bluestem Group Inc. acquired Bluestem Brands, Inc. From December 2012 until assuming his current role, Mr. Nave served as President and Chief Executive Officer and a director of Bluestem Brands, Inc. Prior to Bluestem, Mr. Nave held several executive leadership positions with Walmart.com, from its launch in 2000 until 2011, including Chief Financial Officer, Chief Operating Officer, and most recently as its chief executive, as well as serving as a senior officer of Wal-Mart Stores, Inc. From 1995 to 2000 he served in both the Audit and Mergers & Acquisitions practices of Ernst & Young, LLP, serving clients in the Retail & Consumer Products and Technology industries. Mr. Nave previously served on the board of directors of Shopzilla, Inc., a leading source of sales and consumer feedback for online merchants and retail advertisers in the United States and Europe. Education: Mr. Nave has a bachelor’s degree in Accounting from Oklahoma State University. Public Company Boards: None. | |||
Continuing Directors - Classes I and II | |||
Carlos V. Duno
Class II Age 69 Director since 2003 |
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Professional Experience:Mr. Duno is the Owner and Chief Executive Officer of 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.
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Ginger M. Jones Class II Age 52 Director since 2013 |
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Professional Experience:
Education: She holds a bachelor’s degree in accounting from the University of Utah and an M.B.A. from The Ohio State University Fisher College of Business. Public Company Boards: None. | |||
Eileen A. Mallesch Class II Age 61 Director since 2016 | Director Qualifications: • Significant financial and enterprise risk management expertise • Public company board and corporate governance experience • Experience with mergers, acquisitions and divestitures • International business experience • Foodservice and consumer products industry knowledge | ||
Professional Experience: Ms. Mallesch served as Education: Ms. Mallesch holds a bachelor's degree in accounting from City University of
Public Company Boards: Ms. Mallesch currently serves on the boards of directors of Fifth Third Bancorp (NASDAQ:FITB) (since 2016), State Auto Financial Corp. (NASDAQ: STFC) (since 2010) and
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LIBBEY CORPORATE GOVERNANCE |
Carol B. Moerdyk
Class I Age 66 Director since 1998 |
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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 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.
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John C. Orr
Class I Age 66 Lead Director since 2016 Director since 2008 |
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Professional Experience:
Education: Mr. Orr holds a B.S. in communication from Ohio University and has additiona l training from Harvard Business School in business strategy, finance and operations.Public Company Boards: Mr. Orr
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When
LIBBEY CORPORATE GOVERNANCE |
CEO and Mr. Orr serving as Independent Lead Director promotes unified leadership while maintaining effective, independent oversight.
LIBBEY CORPORATE GOVERNANCE |
Standing Committee | Key Functions | Number of
2016 Meetings | |||
Audit Committee | |||||
Compensation Committee | • | Consider the potential impact of our executive pay program on our risk profile | 5 | ||
• | Review executive pay at comparable companies and recommend to the Board pay levels and incentive compensation plans for our executives | ||||
• | Review and approve goals and objectives relevant to the targets of the executive incentive compensation plans | ||||
• | Establish the CEO’s pay, and in determining the long-term incentive compensation component of the CEO’s pay, consider the Company’s performance, relative shareholder return, the value of similar awards to chief executive officers at comparable companies and the awards given to our CEO in prior years | ||||
• | Annually evaluate the Compensation Committee's performance and effectiveness | ||||
• | Produce an annual report on executive compensation for inclusion in the proxy statement or annual report on Form 10-K, as required by the SEC | ||||
• | Approve award grants | ||||
Nominating and Governance Committee | • | Develop and implement corporate governance policies and practices | 5 | ||
• | Establish a selection process for new directors to meet the needs of the Board, for evaluating and recommending candidates for Board membership, for assessing the Board's performance | ||||
• | Review director pay and recommend to the Board pay levels for our non-management directors | ||||
• | Review plans for both emergency and orderly succession of the CEO |
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.
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 |
Audit Committee | Compensation Committee | Nominating and Governance Committee | ||||||||||
Director | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | ||||||
Carlos V. Duno | Chair | Chair | Member | Member | ||||||||
William A. Foley(1) | ||||||||||||
Ginger Jones(2)(3) | Chair | Chair | Member | Member | ||||||||
Theo Killion(3)(4) | Member | Member | ||||||||||
Eileen A. Mallesch(2)(3) | Member | Member | Member | Member | ||||||||
Deborah G. Miller(3) | Member | Member | Member | Member | ||||||||
Carol B. Moerdyk | Member | Member | Member | Member | ||||||||
John C. Orr(2)(3) | Member | Member | Chair | Chair |
(1) |
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(2) | Determined by the Board to be qualified as an audit committee financial expert, as defined in SEC regulations. |
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(3) | Determined by the Board to be financially sophisticated and literate and to have accounting and related financial management expertise, as those qualifications are interpreted by the Board in its business judgment. |
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(4) |
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LIBBEY CORPORATE GOVERNANCE |
Requisite Characteristics for Board Candidates
Requisite Characteristics for Board Candidates | ||||
• | the highest professional and personal ethics and values, consistent with |
• | 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 |
• | serve on the boards of directors of no more than three other public companies and, if intending to serve on the Audit Committee of the Board, serve on the audit committees of no more than two other public companies |
LIBBEY CORPORATE GOVERNANCE |
African-American.
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 (who retired from Libbey on November 30, 2013)Foley is considered to be an inside director because of theirhis employment as senior executivesLibbey's CEO.
How often did our Board meet during fiscal 2013?
During 2013, the Board of Directors held eight meetings, five of which were regularly scheduled meetings and three of which were special meetings. During 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?
LIBBEY CORPORATE GOVERNANCE |
interests.
Committee.
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, Ohio 43699-0060.
COMPENSATION-RELATED MATTERS |
PROPOSAL 2 — ADVISORY SAY-ON-PAY VOTE |
Pay Objective | Supportive Components of 2016 Pay Program | ||
Support our business strategy; drive long-term performance and shareholder value | • | Annual and long-term incentive plan performance measures focused on growing our business profitably, improving our ability to generate cash and improving our return on invested capital (ROIC) | |
• | Individual objectives heavily focused on developing and executing our strategy | ||
Align interests of executives and shareholders | • | Performance-based annual and long-term incentive plans | |
• | 80% of our CEO's target pay opportunity is "at-risk" | ||
• | Growth in our stock price is required in order to deliver any value to named executives under NQSOs and SARs | ||
• | RSUs directly align interests of executives and shareholders | ||
• | Stock ownership / retention guidelines designed to require our executives to own meaningful amounts of our stock | ||
Attract and retain highly talented and experienced senior executives who are key to implementing our strategy and achieving future success | • | Market-driven total pay package | |
• | NQSO and RSU grants that vest ratably over four years, and special "new hire" awards to attract top talent | ||
Align executive pay program with corporate governance best practices | • | Limited perquisites (tax return preparation and financial planning, executive health screening program, limited ground transportation and airline club membership) | |
• | Limited severance pay arrangements | ||
• | No regular tax gross-ups except on relocation assistance | ||
• | Stock ownership / retention guidelines designed to require executives to own meaningful amounts of our stock | ||
• | Annual and long-term incentive awards and RSU, SAR and NQSO awards are subject to clawback |
COMPENSATION-RELATED MATTERS |
PROPOSAL 3 — SAY-ON-PAY FREQUENCY |
COMPENSATION-RELATED MATTERS |
Named Executive | Title | |
William A. Foley(1) | Chairman and Chief Executive Officer | |
Stephanie A. Streeter(2) | former Chief Executive Officer | |
Sherry Buck(3) | former Vice President, Chief Financial Officer | |
Annunciata (Nucci) Cerioli | Vice President, Chief Supply Chain Officer | |
Susan A. Kovach | Vice President, General Counsel and Secretary | |
Salvador Miñarro Villalobos | Vice President, General Manager, U.S. and Canada | |
James H. White(4) | former Vice President, Chief Operating Officer |
(1) | Effective January 12, 2016. |
(2) | Ms. Streeter's employment ended January 11, 2016. |
(3) | Ms. Buck's employment ended December 31, 2016. |
(4) | Mr. White's employment ended March 31, 2016. |
• | In that connection, we launched two new foodservice stemware collections, Neo and Contour, using our state-of-the-art ClearFire® glass composition; |
COMPENSATION-RELATED MATTERS |
• | Our Adjusted EBITDA (calculated as shown on Appendices A and B) for 2016 was $109.8 million, compared to $116.1 million in 2015. |
• | The Committee believed it appropriate to limit payouts under our SMIP to no more than 69.5% of target before application of any modifier for individual performance. After application of the modifier for individual performance, no named executive received a payout under the SMIP greater than 69.5%. Adjusted cash earnings is calculated as shown in Appendix B. |
• | Because our adjusted EBITDA margin and net debt to adjusted EBITDA ratio for the 2014-2016 performance cycle were below target, payouts under our 2014 LTIP were only 74.4% of target. Adjusted EBITDA and net debt are calculated as shown in Appendix A. |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
Foley Pay Opportunity at Target | Other Named Executives' Pay Opportunity at Target(1) | |
(1) | Excludes Ms. Streeter, our former CEO, whose employment ended January 11, 2016. |
Type of Pay | Element | Key Characteristics | Objectives | |||
Base salary | Base salary | Fixed component; reviewed annually | Talent attraction and retention | |||
Incentive-Based Pay | Annual cash incentive award under our 2016 SMIP | At-risk variable pay opportunity for short-term performance; no guaranteed minimum payout; maximum payout equal to 225% of target | Talent attraction and retention; motivation; alignment with key business and financial objectives and strategies; alignment with shareholder interests | |||
Long-term performance cash incentive awards under our 2016 LTIP | Formula-driven, at-risk cash award that comprises 40% of LTIP opportunity; no guaranteed minimum payout; maximum payout equal to 200% of target | Talent attraction and retention; motivation; alignment with key business and financial objectives and strategies; alignment with shareholder interests | ||||
Time-Based Pay | NQSOs granted under our 2016 LTIP | Comprise 20% of LTIP opportunity; exercise price equal to closing stock price on grant date; generally awarded annually; vest ratably over four years beginning on a date not earlier than the first anniversary of the date the award is approved; expire ten years from grant date | Talent attraction and retention; motivation; alignment with shareholder interests | |||
RSUs granted under our 2016 LTIP | Comprise 40% of LTIP opportunity; vest ratably over four years beginning on a date not earlier than the first anniversary of the date the award is approved; no dividends or voting rights with respect to unvested RSUs | Talent attraction and retention; motivation; alignment with shareholder interests |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
Annualized Salary Before Increase | Annualized Salary After Increase | |||
Named Executive | ($) | ($) | ||
S. Buck | 475,000 | 484,500 | ||
A. Cerioli | 400,002 | 408,002 | ||
S. Kovach | 336,520 | 343,250 | ||
S. Miñarro | 350,040 | 357,041 |
COMPENSATION-RELATED MATTERS |
Revenue Growth (Net Sales) | Adjusted Cash Earnings | |||||||
Full Year Net Sales (dollars in thousands) | Percent of Targeted Net Sales | Performance Level | Payout Percentage | Full Year Cash Earnings (dollars in thousands) | Percent of Targeted Cash Earnings | Performance Level | Payout Percentage | |
$880,000 | 104.9% | Maximum | 200% | $131,076 | 110.0% | Maximum | 200% | |
$839,138 | 100.0% | Target | 100% | $119,160 | 100.0% | Target | 100% | |
$800,000 | 95.3% | Threshold | 40% | $95,328 | 80.0% | Threshold | 50% | |
< $800,000 | < 95.3% | Below Threshold | 0% | < $95,328 | < 80.0% | Below Threshold | 0% |
Named Executive | Target Award as a Percentage of Full-Year Base Salary | |
W. Foley | 100% | |
S. Streeter | 100% | |
S. Buck | 70% | |
A. Cerioli | 60% | |
S. Kovach | 50% | |
S. Miñarro | 60% | |
J. White | 75% |
COMPENSATION-RELATED MATTERS |
Item | Amount of Adjustment to Company-Wide Cash Earnings | |||
Expense in connection with executive terminations | $ | 3,554,000 | ||
Income related to natural gas contract hedge ineffectiveness | (1,860,000 | ) | ||
2010 Mexican tax assessment | 1,085,000 | |||
Total | $ | 2,779,000 |
Preliminary Financial Performance Payout Score as % of Target | ||||
Revenue Growth | Adjusted Cash Earnings | Total | ||
47.5 | 99.0 | 73.25 |
Final Financial Performance Payout Score as % of Target | ||||
Revenue Growth | Adjusted Cash Earnings | Total | ||
40.0 | 99.0 | 69.5 |
COMPENSATION-RELATED MATTERS |
Named Executive | SMIP 2016 Payout ($) | ||
W. Foley | 556,000 | ||
S. Streeter | 24,057 | ||
S. Buck | 234,554 | ||
A. Cerioli | 141,670 | ||
S. Kovach | 118,695 | ||
S. Miñarro | 148,156 | ||
J. White | 68,414 |
Named Executive | 2016 Target Long-Term Award as a Percentage of Annualized Base Salary (%) | 2016 LTIP Performance Cash Target as Percentage of Annualized Base Salary (%) | ||
W. Foley | 300 | 120 | ||
S. Streeter | 300 | 120 | ||
S. Buck | 140 | 56 | ||
A. Cerioli | 120 | 48 | ||
S. Kovach | 95 | 38 | ||
S. Miñarro | 120 | 48 | ||
J. White | 150 | 60 |
COMPENSATION-RELATED MATTERS |
◦ | For any performance cycle of which 2015 is a part, our 2015 ROIC target was 12.9%. We achieved ROIC of 10.9% in 2015, resulting in a payout score for the 2015 calendar year of 0%, as determined according to the following scale: |
Basis Points Above or Below 2015 Targeted ROIC | Payout Score (%) | |||
+50 | 200 | |||
0 | 100 | |||
-70 | 50 | |||
Less than -70 | 0 |
◦ | For any performance cycle of which 2016 is a part, our 2016 ROIC target was 10.8%. In setting the target, the Committee considered the Company's prior year performance and alignment with the Company's annual operating plan and long-term strategic initiatives. The slowing global economy, decline in restaurant traffic, shift in retail sales toward e-commerce, and competitive pricing environment of 2015 were expected to continue in 2016. The realities of the business environment led the Company to shift its priorities from aggressive growth toward improving marketing and new product development capabilities and innovation, improving customer relationships, and simplifying the business - all of which would support future sustainable, profitable growth. The Committee believed that a 2016 ROIC target of 10.8% would prove sufficiently challenging to achieve. In February 2017, the Committee determined that we had achieved 2016 ROIC of 9.9%, resulting in a payout score for the 2016 calendar year of 55%, as determined according to the following scale: |
Basis Points Above or Below 2016 Targeted ROIC | Payout Score (%) | |||
+100 | 200 | |||
0 | 100 | |||
-150 | 25 | |||
Less than -150 | 0 |
Item | Amount of Adjustment to Company-Wide EBITDA | |||
Product portfolio optimization | $ | 5,693,000 | ||
Income related to natural gas contract hedge ineffectiveness | (1,860,000 | ) | ||
Toledo Plant work stoppage | 4,162,000 | |||
Executive terminations | 4,460,000 | |||
Pension settlements | 168,000 | |||
Total | $ | 12,623,000 |
COMPENSATION-RELATED MATTERS |
Adjusted EBITDA Margin | Net Debt to Adjusted EBITDA Ratio | |||||
Percent of Targeted Adjusted EBITDA Margin | Performance Level | Payout Percentage | Percent of Targeted Net Debt to Adjusted EBITDA Ratio | Performance Level | Payout Percentage | |
115% | Maximum | 200 | 115% | Maximum | 200 | |
100% | Target | 100 | 100% | Target | 100 | |
80% | Threshold | 50 | 80% | Threshold | 50 | |
<80% | Below Threshold | 0 | <80% | Below Threshold | 0 |
Final Payout Score as % of Target | ||||
Adjusted EBITDA Margin | Net Debt to Adjusted EBITDA Ratio | Total | ||
80.6% | 68.2% | 74.4% |
Named Executive | 2014 LTIP Cash Payout ($) | ||
W. Foley(1) | 245,520 | ||
S. Streeter(2) | 406,027 | ||
S. Buck | 151,657 | ||
A. Cerioli(1) | 72,342 | ||
S. Kovach | 90,559 | ||
S. Miñarro | 92,950 | ||
J. White(1) | 58,590 |
(1) | Prorated to reflect the portion of the performance cycle during which the named executive was employed. |
(2) | Ms. Streeter's payout amount was calculated at the time of her termination based on the most recent forecasts available. The payout amount was then prorated to reflect the portion of the performance cycle during which she was employed. This final payout amount was paid to her in March 2016. |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
(1) | Cause means (a) willful and continuous failure to substantially perform duties; (b) willful and continuous failure to substantially follow and comply with directives of the Board; (c) commission of an act of fraud or dishonesty that results in a material adverse effect on us or commission of an act in material violation of our Code of Business Ethics and Conduct; or (d) willful, illegal conduct or gross misconduct that is materially and demonstrably injurious to us. |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
Event | Benefits | Conditions to Payment of Benefits | Rationale | ||||||
Death or Permanent Disability | • | Accrued Benefits | None | • | To compensate for service to us | ||||
• | A prorated target award under the LTIP performance cash component for any performance cycle in effect on the date of death or permanent disability | ||||||||
• | Aids in attracting and retaining executives | ||||||||
• | Accelerated vesting of all unvested RSUs and NQSOs | • | Consistent with competitive market practice | ||||||
Quit for Good Reason (No Change in Control) | • | Accrued Benefits | None | • | To compensate for service to us | ||||
• | As to performance-based compensation under our LTIP, payment of the amount actually earned for each performance cycle in effect on the date of termination, prorated to the date of termination(1) | ||||||||
• | Aids in attracting and retaining executives | ||||||||
• | Consistent with competitive market practice |
COMPENSATION-RELATED MATTERS |
Event | Benefits | Conditions to Payment of Benefits | Rationale | ||||||
Termination without Cause (No Change in Control) | • | Accrued Benefits | • | Release of claims against Libbey | • | To compensate for service to us and bridge the gap between employment with us and the executive's next job | |||
• | For the year in which termination occurs, a prorated SMIP award based on actual performance(1) | ||||||||
• | Confidentiality obligations | ||||||||
• | Base salary continuation for 12 months | • | Obligation to assign intellectual property rights | ||||||
• | Lump sum payment equal to the executive's SMIP target award. Paid on the first payroll date after termination | ||||||||
• | Obligation to assist with litigation as to which the executive has knowledge | • | Aids in attracting and retaining executives | ||||||
• | As to LTIP performance-based cash compensation, payment of the amount actually earned for each performance cycle in effect on termination date, prorated to termination date(1) | ||||||||
• | To provide compensation in exchange for restrictive covenants that protect Libbey's future interests | ||||||||
• | Immediate vesting of all NQSOs and RSUs scheduled to vest within one year of termination | • | 12-month obligation not to interfere with customer accounts, compete, divert business opportunities, solicit our employees, or disparage us | ||||||
• | Continuation of medical, dental, prescription drug and life insurance coverage for 12 months, subject to payment by the executive of premiums at employee rates | ||||||||
• | Consistent with competitive market practice | ||||||||
• | For a period of one year from termination, executive level outplacement services at the rate for Shields Meneley Partners or equivalent | ||||||||
Termination without Cause or Quit for Good Reason in connection with a Change in Control | • | Accrued Benefits | • | Release of claims against Libbey | • | Aids in attracting and retaining executives | |||
• | For the year in which termination occurs, a prorated SMIP award based on actual performance(1) | ||||||||
• | Confidentiality obligations | ||||||||
• | To provide compensation in exchange for restrictive covenants that protect Libbey’s future interests | ||||||||
• | As to LTIP performance cash compensation under, payment of the amount actually earned for each performance cycle in effect on the date of termination(1) | • | Obligation to assign intellectual property rights | ||||||
• | Obligation to assist with litigation as to which the executive has knowledge | ||||||||
• | Accelerated vesting of all unvested equity awards | ||||||||
• | Consistent with competitive market practice | ||||||||
• | Lump-sum payment of two times the sum of the executive’s annual base salary in effect on the date notice of termination is given plus the executive’s target SMIP opportunity for the year in which the notice of termination is given(2) | ||||||||
• | 12-month obligation not to interfere with customer accounts, compete, divert business opportunities, solicit our employees, or disparage us | ||||||||
• | Executive level outplacement services by a provider approved by Libbey, with the cost being limited to 15% of the executive’s base salary at the time of termination | ||||||||
• | Financial planning services, with the cost to Libbey not to exceed $10,000 | ||||||||
• | Continuation of medical, prescription drug, dental and life insurance benefits for a period of 18 months or until the executive obtains medical or life insurance through a future employer, with the executive continuing to pay the employee’s portion of the cost of such insurance | ||||||||
COMPENSATION-RELATED MATTERS |
(1) | Amounts paid under our SMIP and the performance cash component of our LTIP will be paid between January 1 and March 15 of the year following the end of the relevant performance cycle. |
(2) | Lump-sum cash payments will be paid no later than five days after termination of employment except to the extent the payments are subject to a six-month delay under Internal Revenue Code Section 409A, in which case payment will be on the first day of the seventh month after the executive's termination of employment. |
COMPENSATION-RELATED MATTERS |
Upon the recommendation of the Audit Committee, the Board of Directors has appointed Ernst & Young LLP as Libbey’s independent auditorsReport on Form 10-K for the fiscal year endingended December 31, 2016.
Carlos V. Duno, Chair | |
Ginger M. Jones | |
Theo Killion | |
Eileen A. Mallesch | |
Carol B. Moerdyk |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Compensation ($)(5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | |||||||||||||||||
William A. Foley | 2016 | 804,185 | 0 | 1,037,687 | 532,688 | 801,520 | 0 | 110,050 | 3,286,130 | |||||||||||||||||
Chairman and Chief | ||||||||||||||||||||||||||
Executive Officer(8) | ||||||||||||||||||||||||||
Stephanie A. Streeter | 2016 | 21,166 | 0 | 0 | 0 | 653,666 | 0 | 3,301,516 | 3,976,348 | |||||||||||||||||
Chief Executive | 2015 | 792,438 | 0 | 960,406 | 517,050 | 728,386 | 0 | 73,677 | 3,071,957 | |||||||||||||||||
Officer(9) | 2014 | 768,750 | 0 | 4,436,131 | 413,043 | 941,390 | 0 | 44,259 | 6,603,573 | |||||||||||||||||
Sherry Buck | 2016 | 482,125 | 0 | 257,312 | 143,125 | 386,211 | 0 | 47,115 | 1,315,888 | |||||||||||||||||
Vice President, Chief | 2015 | 462,500 | 0 | 245,784 | 132,320 | 221,129 | 0 | 41,651 | 1,103,384 | |||||||||||||||||
Financial Officer(10) | 2014 | 386,907 | 0 | 217,148 | 112,263 | 311,530 | 0 | 35,988 | 1,063,836 | |||||||||||||||||
Annunciata Cerioli | 2016 | 424,670 | 0 | 185,728 | 103,312 | 214,012 | 0 | 60,679 | 988,401 | |||||||||||||||||
Vice President, Chief | 2015 | 377,646 | 0 | 244,588 | 77,851 | 86,713 | 0 | 27,435 | 814,233 | |||||||||||||||||
Supply Chain | 2014 | 29,170 | 252,289 | 246,591 | 70,866 | 13,714 | 0 | 0 | 612,630 | |||||||||||||||||
Officer(11) | ||||||||||||||||||||||||||
Susan A. Kovach | 2016 | 341,568 | 0 | 123,696 | 68,809 | 209,254 | 21,812 | 34,191 | 799,330 | |||||||||||||||||
Vice President, | 2015 | 334,070 | 0 | 128,214 | 69,025 | 123,403 | 0 | 24,320 | 679,032 | |||||||||||||||||
General Counsel & | 2014 | 325,117 | 25,000 | 129,672 | 67,034 | 189,097 | 29,532 | 19,442 | 784,894 | |||||||||||||||||
Secretary | ||||||||||||||||||||||||||
Salvador Miñarro | 2016 | 355,291 | 0 | 162,528 | 90,407 | 241,106 | 0 | 98,845 | 948,177 | |||||||||||||||||
Villalobos | 2015 | 373,902 | 0 | 617,047 | 93,409 | 143,209 | 0 | 71,138 | 1,298,705 | |||||||||||||||||
Vice President, | ||||||||||||||||||||||||||
General Manager | ||||||||||||||||||||||||||
U.S. & Canada(12) | ||||||||||||||||||||||||||
James H. White | 2016 | 131,250 | 0 | 304,720 | 169,491 | 127,004 | 0 | 1,041,734 | 1,774,199 | |||||||||||||||||
Vice President, Chief | 2015 | 246,591 | 0 | 1,561,933 | 148,879 | 80,949 | 0 | 13,980 | 2,052,332 | |||||||||||||||||
Operating Officer(13) |
(1) | As to Mr. Miñarro for 2015, represents base salary paid from January 1 through March 31, 2015, as well as other fixed components of pay that our Mexican subsidiary was required under Mexican law to pay Mr. Miñarro, totaling $111,372. These amounts were paid to Mr. Miñarro in Mexican pesos, and the amount included in this column was translated to U.S. currency using the interbank exchange rate in effect at the time of payment to Mr. Miñarro. The remaining $262,530 represents the base salary paid to Mr. Miñarro after he assumed his executive officer role on April 1, 2015. |
(2) | As to Ms. Cerioli for 2014, represents: (a) $70,000 signing bonus; and (b) $182,289 minimum guaranteed incentive under the 2014 SMIP. The balance of Ms. Cerioli's 2014 SMIP award is included in the "Non-Equity Incentive Compensation" column. As to Ms. Kovach for 2014, represents a special award made in April 2014 in recognition of leadership related to our 2014 refinancing. |
(3) | Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to RSUs granted in 2016, 2015 and 2014, respectively. As to Mr. Foley, also represents the grant date fair value, determined in accordance with FASB ASC Topic 718, of awards of stock made to non-management directors on May 10, 2016. On that date, we awarded certain non-management directors stock having a grant date fair value of $80,007, or $17.58 per share. Although Mr. Foley ceased to be a non-management director when he was appointed CEO on January 12, 2016, this stock award was attributable to service as a non-management director during the 2015 fiscal year. As to all RSU awards in 2016, 2015 and 2014 other than the special retention awards of 115,687 cash-settled RSUs made to Ms. Streeter in February 2014, the awards vest ratably over a four-year period from the date of grant. The special retention award of 115,687 cash-settled RSUs made to Ms. Streeter in February 2014 were scheduled to cliff vest on December 31, |
COMPENSATION-RELATED MATTERS |
(4) | Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to NQSOs granted in 2016, 2015 and 2014, respectively. The awards vest ratably over a four-year period from the date of grant. When Ms. Buck resigned effective December 31, 2016, all unvested NQSOs were forfeited. When Mr. White's employment ended on March 31, 2016, vesting was accelerated with respect to all NQSOs that otherwise would have vested by March 31, 2017, and all other unvested NQSOs were forfeited. For more information, see Footnote 12, ‘‘Employee Stock Benefit Plans,” to the consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 3, 2017. The actual values received by the respective named executives depend on the number of NQSOs that actually vest, the number of shares with respect to which NQSOs are exercised and the price of our common stock on the date on which the NQSOs are exercised. |
(5) | Represents (a) amounts earned by the named executives in 2016, 2015 and 2014 under our SMIP and (b) for 2016, 2015 and 2014, amounts earned by the named executives under the performance cash component of our 2014 LTIP, 2013 LTIP and 2012 LTIP, respectively. The awards under our SMIP were paid in March of 2017, 2016 and 2015, respectively, and the awards under the performance cash component of our 2014 LTIP, 2013 LTIP and 2012 LTIP were paid in March of 2017, March of 2016 and February of 2015, respectively. As to Ms. Streeter for 2016, also includes amounts earned by her under the performance cash component of our 2015 LTIP and 2016 LTIP. The awards to Ms. Streeter under our 2015 SMIP, 2016 SMIP and the performance cash component of our 2013 LTIP, 2014 LTIP, 2015 LTIP and 2016 LTIP were paid to her in March 2016 upon her termination. |
(6) | Represents the actuarial increase in pension value under our Salary Plan and our SERP. In 2015, the net pension value under our Salary Plan and our SERP declined for all named executives who are participants under those plans; as a result, for 2015 the amount of the actuarial increase is $0. We do not guarantee any particular rate of return on deferred compensation under our Executive Savings Plan ("ESP") or our EDCP. The rate of return depends upon the performance of the fund in which the participant's ESP or EDCP account is deemed invested. Accordingly, the amounts included in this column do not include above-market earnings on nonqualified deferred compensation. Ms. Kovach is the only named executive who is eligible to participate in the Salary Plan and SERP. |
(7) | For 2016, includes: (i) annual company matching contributions to our 401(k) savings plan (a broad-based plan open to all U.S. salaried employees); (ii) for Ms. Streeter and Mr. White, our expense associated with the compensation payable to them in connection with their terminations of employment; and (iii) the following perquisites: |
Named Executive | EDCP Matching Contribution ($)(a) | Tax Prep / Financial Planning ($)(b) | Housing Allowance or Relocation Assistance ($)(c) | Tax Gross-Up ($)(d) | Ground Transport ($)(e) | Airline Club Membership ($) | Annual Executive Physical Exam ($) | Legal Fees ($)(f) | Vacation ($)(g) | Total ($) | ||||||||||||||||||||
W. Foley | 30,938 | 11,699 | 49,416 | 2,185 | 1,365 | 495 | 2,739 | 0 | 0 | 98,837 | ||||||||||||||||||||
S. Streeter | 0 | 537 | 0 | 0 | 109 | 0 | 0 | 0 | 0 | 646 | ||||||||||||||||||||
S. Buck | 12,113 | 14,000 | 0 | 0 | 1,036 | 479 | 0 | 0 | 3,587 | 31,215 | ||||||||||||||||||||
A. Cerioli | 8,800 | 13,772 | 13,551 | 7,949 | 707 | 0 | 0 | 0 | 0 | 44,779 | ||||||||||||||||||||
S. Kovach | 4,291 | 14,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 18,291 | ||||||||||||||||||||
S. Miñarro | 0 | 3,255 | 51,192 | 10,195 | 342 | 0 | 0 | 23,126 | 0 | 88,110 | ||||||||||||||||||||
J. White | 0 | 0 | 0 | 0 | 1,569 | 0 | 0 | 0 | 0 | 1,569 |
(a) | Annual company matching contributions to our EDCP |
(b) | The cost we paid for tax return preparation and financial planning for the respective named executives |
(c) | As to Mr. Foley, represents an allowance for housing in the Toledo, Ohio area since Mr. Foley's primary home is in the Cleveland, Ohio metropolitan area. As to Ms. Cerioli, represents relocation assistance provided in connection with her hire. As to Mr. Miñarro, represents relocation assistance provided in connection with his promotion to his current role. |
(d) | As to Mr. Foley and Ms. Cerioli, represents tax gross-ups on a housing allowance and relocation assistance, respectively. As to Mr. Miñarro, represents tax gross-ups on relocation assistance ($7,093) and foreign tax return preparation ($3,102). |
(e) | Includes our incremental cost for ground transportation for personal and business trips from the Toledo, Ohio, area to the Detroit / Wayne County Metropolitan Airport. For personal trips, includes the entire cost that we incurred for such transportation. For business trips, includes the amount in excess of the amount to which the respective named executives would have been entitled as reimbursement for mileage and parking under our travel policy applicable to all employees. |
COMPENSATION-RELATED MATTERS |
(f) | Represents payment of legal expenses that Mr. Miñarro incurred in connection with immigration matters relating to his and his family's relocation to the U.S. from Mexico. |
(g) | Reimbursement of expenses Ms. Buck incurred for a vacation in 2016. |
(8) | Mr. Foley assumed his role as CEO effective January 12, 2016. |
(9) | Ms. Streeter's employment ended January 11, 2016. |
(10) | Ms. Buck's employment ended December 31, 2016. |
(11) | Ms. Cerioli was hired on December 1, 2014. |
(12) | Mr. Miñarro was named Vice President, General Manager, U.S. and Canada, on April 1, 2015. He previously served as Vice President, General Manager, Latin America. |
(13) | Mr. White was hired on July 13, 2015. His employment ended March 31, 2016. |
COMPENSATION-RELATED MATTERS |
Estimated Possible Payouts under Non-Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | |||||||||||||||||||||||
Named Executive | Plan Name | Award Date(1) | Grant Date(1) | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||||||
W. Foley | 2016 SMIP | 1/11/2016 | 165,000 | 825,000 | 1,856,250 | ||||||||||||||||||||||
2016 LTIP (cash) | 1/11/2016 | 247,500 | 990,000 | 1,980,000 | |||||||||||||||||||||||
2015 LTIP (cash) | 1/11/2016 | 326,700 | 653,400 | 1,306,800 | |||||||||||||||||||||||
2014 LTIP (cash) | 1/11/2016 | 81,675 | 326,700 | 653,400 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 1/11/2016 | 2/25/2016 | 59,855 | 957,680 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 1/11/2016 | 2/25/2016 | 126,598 | 17.13 | 532,688 | ||||||||||||||||||||||
2016 Omnibus Plan | 10/28/2014 | 5/10/2016 | 4,551 | 80,007 | |||||||||||||||||||||||
S. Streeter | 2016 SMIP | 1/11/2016 | 24,057 | ||||||||||||||||||||||||
2016 LTIP (cash) | 1/11/2016 | 9,623 | |||||||||||||||||||||||||
S. Buck | 2016 SMIP | 2/8/2016 | 67,498 | 337,488 | 759,348 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 66,500 | 266,000 | 532,000 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 16,082 | 257,312 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 34,015 | 17.13 | 143,125 | ||||||||||||||||||||||
A. Cerioli | 2016 SMIP | 2/8/2016 | 48,720 | 243,601 | 548,102 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 48,000 | 192,001 | 384,002 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 11,608 | 185,728 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 24,553 | 17.13 | 103,312 | ||||||||||||||||||||||
S. Kovach | 2016 SMIP | 2/8/2016 | 34,157 | 170,784 | 384,264 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 31,970 | 127,878 | 255,756 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 7,731 | 123,696 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 16,353 | 17.13 | 68,809 | ||||||||||||||||||||||
S. Miñarro | 2016 SMIP | 2/8/2016 | 42,635 | 213,175 | 479,644 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 42,005 | 168,019 | 336,038 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 10,158 | 162,528 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 21,486 | 17.13 | 90,407 | ||||||||||||||||||||||
J. White | 2016 SMIP | 2/8/2016 | 79,931 | 399,656 | 899,226 | ||||||||||||||||||||||
2016 LTIP (cash) | 2/8/2016 | 78,750 | 315,000 | 630,000 | |||||||||||||||||||||||
2016 LTIP (RSUs) | 2/8/2016 | 2/25/2016 | 19,045 | 304,720 | |||||||||||||||||||||||
2016 LTIP (NQSOs) | 2/8/2016 | 2/25/2016 | 40,281 | 17.13 | 169,491 |
COMPENSATION-RELATED MATTERS |
(1) | For Non-Equity Incentive Plan Awards made to all named executives other than Mr. Foley and Ms. Streeter, the Award Date and the Grant Date for awards made under the 2016 SMIP and the performance cash component of the 2016 LTIP are the date on which the Compensation Committee approved the 2016 SMIP and the performance cash component of our 2016 LTIP. For Non-Equity Incentive Plan Awards made to Mr. Foley, the Award Date and the Grant Date are the date on which the Board approved Mr. Foley's participation in, and target opportunities under, the 2016 SMIP and 2016 LTIP. For Non-Equity Incentive Plan Awards made to Ms. Streeter, the Award Date and the Grant Date are the date on which the Board approved the Mutual Separation Agreement and Release pursuant to which Ms. Streeter was awarded these exact amounts. For All Other Stock Awards and All Other Option Awards, the Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of NQSOs or RSUs, as the case may be, awarded. The number of NQSOs and RSUs awarded to the named executives in February 2016 under our 2016 LTIP was determined by dividing the target dollar value of the applicable component of equity to be awarded by (a) in the case of NQSOs, the Black-Scholes value of the options, determined using the average closing price of Libbey common stock over a period of 20 consecutive trading days ending on the grant date and capping the volatility at 50%, or (b) in the case of RSUs, the average closing price of Libbey common stock over the 20 consecutive trading-day period ending February 25, 2016. The number of shares of common stock granted to Mr. Foley on May 10, 2016 under our 2016 Omnibus Plan was determined by multiplying the number of shares times $17.58, the closing price of our common stock on the date of the grant. We inform grant recipients of their awards after we determine the number of RSUs and/or NQSOs to be granted. For awards made in February 2016, we determined the number of RSUs and NQSOs to be granted on the first business day after we announced our results of operations for the 2015 fiscal year. |
(2) | Represents the range of possible cash awards under (a) our 2016 SMIP and (b) the performance cash component of our 2016 LTIP. |
(a) | Under our SMIP, each named executive is eligible for an annual incentive award in an amount up to 225% of the executive officer’s target award, which in turn is a percentage of the executive’s anticipated full-year base salary, as set forth in the following table: |
Named Executive | Target Award as a Percentage of Anticipated Full-Year Base Salary (%) | |
W. Foley | 100 | |
S. Streeter | 100 | |
S. Buck | 70 | |
A. Cerioli | 60 | |
S. Kovach | 50 | |
S. Miñarro | 60 | |
J. White | 75 |
Revenue Growth (Net Sales) | Adjusted Cash Earnings | |||||||
Full Year Net Sales | Percent of Targeted Net Sales | Performance Level | Payout Percentage | Full Year Cash Earnings | Percent of Targeted Cash Earnings | Performance Level | Payout Percentage | |
$880,000 | 104.9% | Maximum | 200% | $131,076 | 110.0% | Maximum | 200% | |
$839,138 | 100.0% | Target | 100% | $119,160 | 100.0% | Target | 100% | |
$800,000 | 95.3% | Threshold | 40% | $95,328 | 80.0% | Threshold | 50% | |
< $800,000 | < 95.3% | Below Threshold | 0% | < $95,328 | < 80.0% | Below Threshold | 0% |
COMPENSATION-RELATED MATTERS |
(b) | Under the performance cash component of our 2016 LTIP, each named executive is eligible for a cash award in an amount up to 200% of the named executive’s target award. Each named executive’s target award under the performance cash component is 40% of the named executive’s target award under all components of the relevant LTIP. The target awards are based on the named executives' respective annualized base salaries as of January 1, 2016 (in the case of Mr. Foley, January 12, 2016). Each named executive’s target award under all components of the 2016 LTIP is set forth in the following table: |
Named Executive | 2016 Target Long-Term Award as a Percentage of Annualized Base Salary (%) | 2016 LTIP Performance Cash Target as Percentage of Annualized Base Salary (%) | ||
W. Foley | 300 | 120 | ||
S. Streeter | 300 | 120 | ||
S. Buck | 140 | 56 | ||
A. Cerioli | 120 | 48 | ||
S. Kovach | 95 | 38 | ||
S. Miñarro | 120 | 48 | ||
J. White | 150 | 60 |
Basis Points Above or Below 2016 Targeted ROIC | Payout Score (%) | |||
+100 | 200 | |||
0 | 100 | |||
-150 | 25 | |||
Less than -150 | 0 |
(3) | Represents grants of RSUs made under our 2016 LTIP and, as to Mr. Foley, an outright grant of common stock attributable to his service as a non-management director during 2015. |
(4) | Represents grants of NQSOs made under our 2016 LTIP. The grants vest 25% per year beginning on February 17, 2016. |
(5) | Represents the respective grant date fair values, determined in accordance with FASB ASC Topic 718, of the RSUs and NQSOs. |
COMPENSATION-RELATED MATTERS |
Option Awards | Stock Awards | ||||||||||||||||||||
Named Executive | Award Date(1) | Grant Date(1)(2) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(3) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | |||||||||||||
W. Foley | 1/11/2016 | 2/25/2016 | 0 | 126,598 | 17.13 | 2/25/2026 | 59,855 | 1,164,778 | |||||||||||||
S. Streeter(6) | 12/9/2013 | 12/16/2013 | 240,829 | 0 | 21.29 | 1/11/2017 | |||||||||||||||
S. Buck(7) | 7/6/2012 | 8/1/2012 | 33,389 | 0 | 13.96 | 3/31/2017 | 0 | 0 | |||||||||||||
2/11/2013 | 2/22/2013 | 8,953 | 0 | 19.02 | 2/22/2023 | 0 | 0 | ||||||||||||||
2/17/2014 | 2/24/2014 | 5,370 | 0 | 23.02 | 2/24/2024 | 0 | 0 | ||||||||||||||
2/16/2015 | 3/2/2015 | 2,246 | 0 | 38.06 | 3/31/2017 | 0 | 0 | ||||||||||||||
A. Cerioli | 10/27/2014 | 12/1/2014 | 2,746 | 2,745 | 29.50 | 12/1/2024 | 4,178 | 81,304 | |||||||||||||
2/16/2015 | 3/2/2015 | 1,321 | 3,963 | 38.06 | 3/2/2025 | 2,934 | 57,096 | ||||||||||||||
6/11/2015 | 6/12/2015 | 1,875 | 36,488 | ||||||||||||||||||
2/8/2016 | 2/25/2016 | 0 | 24,553 | 17.13 | 2/25/2026 | 11,608 | 225,892 | ||||||||||||||
S. Kovach | 2/4/2008 | 2/15/2008 | 3,621 | 0 | 15.35 | 2/15/2018 | |||||||||||||||
2/7/2011 | 2/10/2011 | 3,625 | 0 | 17.00 | 2/10/2021 | ||||||||||||||||
2/6/2012 | 2/17/2012 | 4,624 | 0 | 13.95 | 2/17/2022 | ||||||||||||||||
2/11/2013 | 2/22/2013 | 5,177 | 1,725 | 19.02 | 2/22/2023 | 1,513 | 29,443 | ||||||||||||||
2/17/2014 | 2/24/2014 | 3,207 | 3,206 | 23.02 | 2/24/2024 | 2,817 | 54,819 | ||||||||||||||
2/16/2015 | 3/2/2015 | 1,172 | 3,513 | 38.06 | 3/2/2025 | 2,601 | 50,615 | ||||||||||||||
2/8/2016 | 2/25/2016 | 0 | 16,353 | 17.13 | 2/25/2026 | 7,731 | 150,445 | ||||||||||||||
S. Miñarro | 2/4/2008 | 2/15/2008 | 3,200 | 0 | 15.35 | 2/15/2018 | |||||||||||||||
2/9/2009 | 2/27/2009 | 3,500 | 0 | 1.01 | 2/27/2019 | ||||||||||||||||
2/8/2010 | 2/11/2010 | 6,000 | 0 | 10.13 | 2/11/2020 | ||||||||||||||||
12/6/2010 | 12/31/2010 | 20,000 | 0 | 15.47 | 12/31/2020 | ||||||||||||||||
2/7/2011 | 2/10/2011 | 7,000 | 0 | 17.00 | 2/10/2021 | ||||||||||||||||
2/6/2012 | 2/17/2012 | 7,500 | 0 | 13.95 | 2/17/2022 | ||||||||||||||||
7/5/2012 | 8/1/2012 | 3,597 | 0 | 13.96 | 8/1/2022 | ||||||||||||||||
2/11/2013 | 2/22/2013 | 5,939 | 1,979 | 19.02 | 2/22/2023 | 1,734 | 33,744 | ||||||||||||||
2/17/2014 | 2/24/2014 | 3,291 | 3,291 | 23.02 | 2/24/2024 | 2,891 | 56,259 | ||||||||||||||
2/16/2015 | 3/2/2015 | 1,585 | 4,755 | 38.06 | 3/2/2025 | 12,521 | 243,659 | ||||||||||||||
2/8/2016 | 2/25/2016 | 0 | 21,486 | 17.13 | 2/25/2026 | 10,158 | 197,675 | ||||||||||||||
J. White(8) |
(1) | The Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of NQSOs or RSUs, as the case may be, awarded. |
(2) | See ‘‘Compensation Discussion and Analysis — How does Libbey determine the forms and amounts of executive pay? — Our Equity Grant Practices’’ for information as to how we determine the number of NQSOs and RSUs awarded to our named executives. We inform grant recipients of their awards after we determine the number of NQSOs and/or RSUs to be granted. For awards made in February 2016, the grant date was the first business day after we announced our results of operations for the 2015 fiscal year. |
(3) | Represents NQSOs awarded under our 2006 Omnibus Plan. NQSOs granted before 2015 vest 25% on each of the first four anniversaries of the grant date. NQSOs granted in 2015 and 2016 vest 25% per year for four years beginning on February 17th of the year after the grant. |
(4) | Represents RSUs awarded under our 2006 Omnibus Plan. One share of our common stock underlies each RSU. RSUs granted in 2013, 2014 and on June 12, 2015 vest 25% on each of the first four anniversaries of the grant date. All other RSUs vest 25% per year for four years beginning on February 17th of the year after the grant. |
(5) | Represents the market value, as of December 31, 2016, of unvested RSUs. We have estimated the market value by multiplying the number of shares of common stock underlying the RSUs by $19.46, the closing price of our common stock on December 30, 2016, the last trading day of 2016. |
COMPENSATION-RELATED MATTERS |
(6) | The special retention award of cash-settled SARs made to Ms. Streeter in December 2013 was scheduled to cliff vest on December 31, 2018; however, all 240,829 cash-settled SARs vested automatically upon Ms. Streeter's termination of employment on January 11, 2016. For additional information, see footnote (8) to the Potential Payments Upon Termination of Employment table below. |
(7) | Pursuant to the terms of the applicable NQSO and RSU award agreements, upon Ms. Buck's resignation on December 31, 2016, all unvested NQSOs and RSUs were forfeited. |
(8) | Mr. White had no outstanding equity awards as of December 31, 2016. When Mr. White's employment ended on March 31, 2016, vesting was accelerated as to all NQSOs and RSUs that otherwise would have vested within one year of his termination date. All other unvested NQSOs and RSUs were forfeited. Vested NQSOs expired on June 29, 2016. |
Option Awards | Stock Awards | |||||||||||
Named Executive | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting ($)(2) | Value Realized on Vesting ($)(3) | ||||||||
W. Foley | 0 | 0 | 4,551 | 80,007 | ||||||||
S. Streeter | 54,801 | 129,731 | 150,029 | 2,937,568 | ||||||||
S. Buck | 0 | 0 | 11,747 | 212,777 | ||||||||
A. Cerioli | 0 | 0 | 3,693 | 66,863 | ||||||||
S. Kovach | 0 | 0 | 5,586 | 96,832 | ||||||||
S. Miñarro | 2,882 | 21,846 | 8,584 | 149,804 | ||||||||
J. White | 10,071 | 9,265 | 15,564 | 289,490 |
(1) | Represents the sum of the differences between the market prices and the exercise prices for the respective awards of NQSOs exercised by the named executive officers during 2016. |
(2) | As to Mr. Foley, represents grant of unrestricted common stock in 2016. As to Ms. Streeter, represents 34,342 RSUs and 115,687 cash-settled RSUs that vested during 2016. As to all other named executives, represents the number of RSUs that vested during 2016. |
(3) | As to Mr. Foley, represents the value of unrestricted common stock granted in 2016, the value of which was determined by multiplying the number of shares by the closing price of our common stock on the grant date: $17.58. As to all other named executives, represents the value of RSUs, including cash-settled RSUs, that vested during 2016. The value was determined by multiplying the number of shares by the closing price of our common stock on the applicable vesting dates: |
Vesting Date | Closing Price ($) | |
January 11, 2016 | 19.58 | |
February 17, 2016 | 16.75 | |
February 22, 2016 | 17.56 | |
February 24, 2016 | 18.20 | |
March 31, 2016 | 18.60 | |
June 12, 2016 | 16.80 | |
August 1, 2016 | 18.80 | |
December 1, 2016 | 19.13 |
COMPENSATION-RELATED MATTERS |
Named Executive | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | |||||||
W. Foley | N/A | N/A | N/A | N/A | |||||||
S. Streeter | N/A | N/A | N/A | N/A | |||||||
S. Buck | N/A | N/A | N/A | N/A | |||||||
A. Cerioli | N/A | N/A | N/A | N/A | |||||||
S. Kovach | Salary Plan | 13.08 | 164,229 | 0 | |||||||
SERP | 13.08 | 125,254 | 0 | ||||||||
S. Miñarro | N/A | N/A | N/A | N/A | |||||||
J. White | N/A | N/A | N/A | N/A |
(1) | Represents actual years of service to Libbey. The plans were frozen at the end of 2012, after which additional pension service is not credited. |
(2) | Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31, 2016, except that all named executives who are eligible for pension benefits under the Salary Plan are assumed to receive benefits under the cash balance design at their normal retirement age of 65. |
COMPENSATION-RELATED MATTERS |
Executive Contributions in Last FY | Registrant Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate Withdrawals / Distributions in Last FY | Aggregate Balance at Last FYE(3) | ||||||||||||||||||||||
Named Executive | ($) | RSUs | ($)(1) | RSUs | ($)(2) | RSUs | ($) | RSUs | ($) | RSUs | ||||||||||||||||
W. Foley | 30,938 | 0 | 30,938 | 0 | 6 | 0 | 0 | 0 | 61,881 | 0 | ||||||||||||||||
S. Streeter | 2,117 | 0 | 0 | 0 | (24,001 | ) | 0 | (388,925 | ) | 0 | 0 | 0 | ||||||||||||||
S. Buck | 12,113 | 0 | 12,113 | 0 | 2,055 | 131 | 0 | 0 | 83,480 | 5,310 | ||||||||||||||||
A. Cerioli | 68,800 | 0 | 8,800 | 0 | 1,830 | 0 | 0 | 0 | 79,430 | 0 | ||||||||||||||||
S. Kovach | 4,291 | 0 | 4,291 | 0 | 1,011 | 407 | 0 | 0 | 69,922 | 16,530 | ||||||||||||||||
S. Miñarro | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
J. White | 6,563 | 0 | 0 | 0 | 839 | 0 | (40,696 | ) | 0 | 0 | 0 |
(1) | The following amounts are included in the column headed ‘‘All Other Compensation’’ in the Summary Compensation Table above: Mr. Foley — $30,938; Ms. Buck — $12,113; Ms. Cerioli — $8,800; Ms. Kovach— $4,291. |
(2) | Not included in the Summary Compensation Table because earnings are not at an above-market rate. |
(3) | Of the total amounts in this column, the following amounts are reported as ‘‘Salary’’ or ‘‘Stock Awards’’ in the Summary Compensation Table in this proxy statement for the 2016, 2015 and/or 2014 fiscal years: |
Named Executive | Salary ($) | Stock Awards ($) | ||||
W. Foley | 30,938 | 0 | ||||
S. Streeter | 381,251 | 0 | ||||
S. Buck | 35,288 | 0 | ||||
A. Cerioli | 68,800 | 0 | ||||
S. Kovach | 10,923 | 0 | ||||
S. Miñarro | 0 | 0 | ||||
J. White | 28,875 | 0 |
COMPENSATION-RELATED MATTERS |
COMPENSATION-RELATED MATTERS |
Named Executive | Cash Severance ($) | Annual Incentive for Year of Termination ($) | LTIP Cash ($)(2) | Acceleration of Unvested Equity Awards ($)(3) | Misc. Benefits ($) | Total ($) | ||||||||||||
William A. Foley | ||||||||||||||||||
Death or permanent disability(4) | 0 | 556,000 | 980,100 | 1,459,752 | 0 | 2,995,852 | ||||||||||||
Voluntary termination(5) | 0 | 556,000 | 759,550 | 0 | 0 | 1,315,550 | ||||||||||||
Involuntary termination without Cause - no change in control(6) | 0 | 556,000 | 759,550 | 364,944 | 0 | 1,680,494 | ||||||||||||
Involuntary termination without Cause in connection with a change in control(7) | 0 | 556,000 | 1,459,854 | 1,459,752 | 0 | 3,475,606 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Stephanie A. Streeter | ||||||||||||||||||
Involuntary termination without Cause - no change in control(8) | 3,193,000 | 24,057 | 629,609 | 2,978,115 | 106,618 | 6,931,399 | ||||||||||||
Sherry Buck | ||||||||||||||||||
Voluntary termination without Good Reason - no change in control(9) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Annunciata Cerioli | ||||||||||||||||||
Death or permanent disability(10) | 0 | 141,670 | 254,404 | 457,987 | 0 | 854,061 | ||||||||||||
Voluntary termination for Good Reason - no change in control(11) | 0 | 0 | 176,576 | 0 | 0 | 176,576 | ||||||||||||
Involuntary termination without Cause - no change in control(12) | 704,006 | 141,670 | 176,576 | 142,623 | 93,393 | 1,258,268 | ||||||||||||
Voluntary termination for Good Reason or involuntary termination without Cause - change in control(13) | 1,408,012 | 141,670 | 314,631 | 457,987 | 106,507 | 2,428,807 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Susan A. Kovach | ||||||||||||||||||
Death or permanent disability(10) | 0 | 118,695 | 247,101 | 324,184 | 0 | 689,980 | ||||||||||||
Retirement(14) | 0 | 118,695 | 0 | 0 | 289,483 | 408,178 | ||||||||||||
Voluntary termination for Good Reason - no change in control(11) | 0 | 0 | 170,540 | 0 | 0 | 170,540 | ||||||||||||
Involuntary termination without Cause - no change in control(12) | 514,875 | 118,695 | 170,540 | 121,617 | 88,454 | 1,014,181 | ||||||||||||
Voluntary termination for Good Reason or involuntary termination without Cause - change in control(13) | 1,029,750 | 118,695 | 267,688 | 324,184 | 84,585 | 1,824,902 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Salvador Miñarro Villalobos | ||||||||||||||||||
Death or permanent disability(10) | 0 | 148,156 | 292,952 | 582,269 | 0 | 1,023,377 | ||||||||||||
Voluntary termination for Good Reason – no change in control(11) | 0 | 0 | 199,709 | 0 | 0 | 199,709 | ||||||||||||
Involuntary termination without Cause -- no change in control(12) | 571,266 | 148,156 | 199,709 | 205,905 | 93,393 | 1,218,429 | ||||||||||||
Voluntary termination for Good Reason or involuntary termination without Cause - change in control(13) | 1,142,532 | 148,156 | 328,177 | 582,269 | 94,062 | 2,295,196 | ||||||||||||
Involuntary termination for Cause | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
James H. White | ||||||||||||||||||
Involuntary termination without Cause -- no change in control(11) | 918,750 | 68,414 | 93,209 | 324,295 | 93,808 | 1,498,476 |
COMPENSATION-RELATED MATTERS |
(1) | Represents potential payments pursuant to equity award agreements (including award agreements for cash-settled retention RSUs and cash-settled retention SARs), performance cash award agreements and (a) in the case of the named executives other than Ms. Streeter or Mr. Foley, our Executive Severance Compensation Policy or their respective change in control agreements, as applicable, (b) in the case of Mr. Foley, his Letter Agreement, and (c)in the case of Ms. Streeter, her Mutual Separation and Release Agreement. Only Ms. Kovach was retirement eligible as of December 31, 2016. |
(2) | As to those triggering events for which we estimated future payouts under the performance cash component of our 2015 LTIP and 2016 LTIP, we estimated the payout under the performance cash component of our 2015 LTIP assuming achievement at 51% of target performance and we estimated the payout under the performance cash component of our 2016 LTIP assuming achievement of 89% of target performance. |
(3) | For those triggering events that result in acceleration of unvested equity awards: (a) except as to RSUs (including cash-settled RSUs) granted to Ms. Streeter and Mr. White, we have estimated the value of common stock underlying RSUs by multiplying the applicable number of RSUs by $19.46, the closing price of our common stock on December 31, 2016; and (b) except as to RSUs (including cash-settled RSUs) granted to Ms. Streeter and Mr. White, we have determined the in-the-money / intrinsic value of the applicable NQSOs by deducting the respective exercise prices for the NQSOs from $19.46 and multiplying the result (if greater than zero) by the applicable number of NQSOs. As to Ms. Streeter, the values for the RSUs (including cash-settled RSUs), NQSOs and cash-settled SARs were calculated based on the closing price of our common stock on January 11, 2016, which was $19.58. As to Mr. White, the values of the RSUs and NQSOs were calculated based on the closing price of our common stock on March 31, 2016, which was $18.60. |
(4) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(b) | under "LTIP Cash," a target award (unprorated because the performance cycle was complete as of December 31, 2016) under the performance cash component of our 2014 LTIP and prorated target awards under the performance cash component of our 2015 LTIP and our 2016 LTIP; and |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying all RSUs that were not vested as of December 31, 2016, and (ii) the in-the-money/ intrinsic value, as of December 31, 2016, of all NQSOs that were not vested as of December 31, 2016. |
(5) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; and |
(b) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate of the prorated amount that actually would be earned under the performance cash component of each of our 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle. |
(6) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(b) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate of the prorated amount that actually would be earned under the performance cash component of each of our 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; and |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying RSUs that were not vested as of December 31, 2016 but were scheduled to vest by December 31, 2017, and (ii) the in-the-money/ intrinsic value, as of December 31, 2016, of NQSOs that were not vested as of December 31, 2016 but were scheduled to vest by December 31, 2017. |
(7) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; and |
(b) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate of the unprorated amount that actually would be earned under the performance cash component of each of our 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). The unprorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; and |
COMPENSATION-RELATED MATTERS |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying all RSUs that were not vested as of December 31, 2016, and (ii) the in-the-money/ intrinsic value, as of December 31, 2016, of all NQSOs that were not vested as of December 31, 2016. |
(8) | Represents the sum of: |
(a) | under "Cash Severance," two times the sum of (a) her annual base salary in effect on the date of termination; and (b) her target 2016 SMIP opportunity, with such amount being payable in equal monthly installments over a period of 24 months; |
(b) | under "Annual Incentive for Year of Termination," the amount earned under our 2016 SMIP based on Ms. Streeter's base salary earnings for 2016 and forecasted Company performance as of the end of January 2016. This amount was paid to Ms. Streeter in March 2016; |
(c) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP, 2015 LTIP and 2016 LTIP, based on forecasted Company performance as of the end of January 2016, and prorated to Ms. Streeter's termination date. This amount was paid to Ms. Streeter in March 2016; |
(d) | under "Acceleration of Unvested Equity Awards," the sum of (i) the value, as of January 11, 2016, of common stock underlying all cash-settled retention RSUs; (ii) the value, as of January 11, 2016, of common stock underlying stock-settled RSUs scheduled to vest on or before June 30, 2016; and (iii) the in-the-money / intrinsic value, as of January 11, 2016, of all NQSOs scheduled to vest on or before June 30, 2016. Ms. Streeter's cash-settled retention SARs were underwater as of January 11, 2016; and |
(e) | under "Misc. Benefits," the sum of the maximum cost ($75,000) to be incurred by Libbey to provide executive level outplacement services for two years following termination and the estimated cost (net of contributions by Ms. Streeter at the active employee rate) to provide medical, dental, prescription drug and life insurance coverage for 18 months following termination. |
(9) | Ms. Buck did not receive any severance payments or benefits in connection with her resignation. |
(10) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(b) | under "LTIP Cash," a target award (unprorated because the performance cycle was complete as of December 31, 2016) under the performance cash component of our 2014 LTIP and prorated target awards under the performance cash component of our 2015 LTIP and our 2016 LTIP; and |
(c) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying all RSUs that were not vested as of December 31, 2016, (iii) the in-the-money/ intrinsic value, as of December 31, 2016, of all NQSOs that were not vested as of December 31, 2016. |
(11) | Under "LTIP Cash," represents prorated actual awards under the performance cash component of our 2014 LTIP, 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). We have prorated the amounts through the assumed date of termination. The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle. |
(12) | Represents the sum of: |
(a) | under "Cash Severance," salary continuation for 12 months and a lump sum payment in an amount equal to the named executive's target annual incentive compensation, based on the annual base salary and target opportunity percentage in effect on the date of termination; |
(b) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(c) | under "LTIP Cash," prorated actual awards under the performance cash component of our 2014 LTIP, 2015 LTIP and 2016 LTIP (estimated as described in footnote (2) above). We have prorated the amounts through the assumed date of termination. The prorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; |
(d) | under "Acceleration of Unvested Equity Awards," the sum of (i) the estimated value, as of December 31, 2016, of common stock underlying RSUs that were not yet vested as of December 31, 2016, and were scheduled to vest by December 31, 2017; (ii) the in-the-money / intrinsic value, as of December 31, 2016, of NQSOs that were not yet vested as of December 31, 2016, and were scheduled to vest by December 31, 2017; and |
(e) | under "Misc. Benefits," the sum of (i) the estimated cost (net of contributions by the named executive, at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for a period of 12 months following termination, and (ii) executive outplacement services for a period of one year from termination at the rate of $75,000 per year. |
COMPENSATION-RELATED MATTERS |
(13) | Represents the sum of: |
(a) | under "Cash Severance," the sum of two times the named executive's annual base salary and two times the named executive’s target award under our 2016 SMIP, at the annual base salary and target incentive opportunity in effect on the date of termination; |
(b) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; |
(c) | under "LTIP Cash," the sum of the amount actually earned under the performance cash component of our 2014 LTIP and an estimate (without proration) of the amount the named executive would earn under the performance cash component of each of our 2015 LTIP and our 2016 LTIP (estimated as described in footnote (2) above). The unprorated amounts actually earned under the performance cash component of our 2015 LTIP and 2016 LTIP would be paid between January 1 and March 15 of the calendar year following conclusion of the applicable performance cycle; |
(d) | under "Acceleration of Unvested Equity Awards," the estimated value, as of December 31, 2016, of common stock underlying RSUs not yet vested as of that date and the in-the-money / intrinsic value, as of December 31, 2016, of NQSOs not yet vested as of that date; and |
(e) | under "Misc. Benefits," the sum of (i) the maximum cost (15% of base salary) to be incurred by Libbey to provide executive level outplacement services for two years after termination; (ii) the estimated cost (net of contributions by the named executive at the active employee rate) of continued medical, dental, prescription drug and life insurance coverage for 18 months following termination; and (iii) and the maximum cost ($10,000) to provide financial planning services to the named executive. |
(14) | Represents the sum of: |
(a) | under "Annual Incentive for Year of Termination," the amount actually earned under our 2016 SMIP; and |
(b) | under "Misc. Benefits," the present value of Ms. Kovach's accumulated benefit under our Salary Plan and SERP at December 31, 2016. |
COMPENSATION-RELATED MATTERS |
Element of Compensation | Annual Compensation Amount | |
Annual Cash Retainer | $47,500 | |
Lead Independent Director Cash Retainer | $20,000 | |
Equity Award | On the date of each annual meeting of shareholders, outright grant of shares of common stock valued at $80,000 on the date of grant | |
Committee Chair Cash Retainers (in addition to Committee Member Cash Retainers) | $12,500 (Audit Committee and Compensation Committee) | |
$6,500 (Nominating and Governance Committee) | ||
Committee Member Cash Retainers | $7,500 (Audit Committee and Compensation Committee) | |
$5,000 (Nominating and Governance Committee) | ||
Other Fees | $500 per one-half day of service |
COMPENSATION-RELATED MATTERS |
Director | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($) | Total ($) | ||||||||
Carlos V. Duno | 72,500 | 80,007 | 0 | 0 | 152,507 | ||||||||
Peter C. McC. Howell | 16,630 | 80,007 | 0 | 0 | 96,637 | ||||||||
Ginger M. Jones | 75,000 | 80,007 | 0 | 0 | 155,007 | ||||||||
Theo Killion | 60,421 | 80,007 | 0 | 0 | 140,428 | ||||||||
Eileen A. Mallesch | 42,079 | 0 | 0 | 0 | 42,079 | ||||||||
Deborah G. Miller | 60,693 | 80,007 | 0 | 0 | 140,700 | ||||||||
Carol B. Moerdyk | 60,000 | 80,007 | 0 | 0 | 140,007 | ||||||||
John C. Orr | 87,587 | 80,007 | 0 | 0 | 167,594 |
(1) | Includes pay deferred into the Libbey common stock measurement fund pursuant to the Director DCP. |
(2) | Represents the grant date fair value, determined in accordance with FASB ASC Topic 718, of awards of stock made to non-management directors on May 10, 2016. On that date, we awarded certain non-management directors stock having a grant date fair value of $17.58 per share. |
(3) | We do not maintain a pension plan for our non-management directors. We do not guarantee any particular rate of return on any pay deferred pursuant to our deferred compensation plans. Dividends on pay deferred into the Libbey Inc. phantom stock or measurement fund under our deferred compensation plans for non-management directors accrue only if and to the extent payable to holders of our common stock. Pay deferred into interest-bearing accounts under our deferred compensation plans for non-management directors does not earn an above-market return, as the applicable interest rate is the yield on ten-year treasuries. Pay deferred into other measurement funds under our deferred compensation plans for non-management directors does not earn an above-market return as that pay earns a return only if and to the extent that the net asset value of the measurement fund into which the pay is deemed invested actually increases. |
AUDIT- RELATED MATTERS |
PROPOSAL 4 — RATIFICATION OF AUDITORS |
A representativeDirectors recommends a vote FOR this proposal.
2015?
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 | ||||||||
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Total | $ | 1,289,578 | $ | 1,212,613 | ||||||
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Nature of Fees | 2016 Fees | 2015 Fees | ||||||
Audit Fees(1) | $ | 1,116,444 | $ | 1,112,248 | ||||
Audit-Related Fees(2) | 112,840 | 115,200 | ||||||
Tax Fees(3) | 0 | 33,900 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 1,229,284 | $ | 1,261,348 |
(1) | Audit Fees include fees associated with the annual audit of our internal controls, the annual audit of financial statements, the reviews of our quarterly reports on Form 10-Q and annual report on Form 10-K and statutory audit procedures. |
(2) | Audit-related fees include fees for audits of our employee benefit plans. The 2015 fees represent payments for the audits of our employee benefit plans for the year ended December 31, 2014, which were performed by Ernst & Young LLP. The 2016 fees represent payments for the audits of our employee benefit plans for the year ended December 31, 2015, which were performed by Deloitte & Touche LLP. |
(3) | Tax fees |
AUDIT- RELATED MATTERS |
confirming the independence of our independent auditors;
appointing, compensating and retaining our independent auditors;
reviewing the scope of the audit services to be provided by our independent auditors, including the adequacy of staffing and compensation;
approving non-audit services;
overseeing management’s relationship with our independent auditors;
overseeing management’s implementation and maintenance of effective systems of internal and disclosure controls;
reviewing our internal audit program; and
together with the Board and its other standing committees, overseeing our enterprise risk management program.
their independence.
Carlos V. Duno, Chair
William A. Foley(1)
Peter C. McC. Howell
Carol B. Moerdyk
John C. Orr
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Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides information regarding our 2013 executive pay program, particularly as it relates to the following individuals, who are our ‘‘named executives’’ for 2013:
| Ginger M. Jones, Chair | |
| Theo Killion | |
Eileen A. Mallesch | ||
Deborah G. Miller | ||
John C. Orr |
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Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||||
Frontier Capital Management Co., LLC.(1) | ||||||||||
99 Summer Street | ||||||||||
Boston, MA 02110 | 2,164,994 | 9.9% | ||||||||
RBC Global Asset Management (U.S.) Inc.(2) | ||||||||||
50 South Sixth Street, Suite 2350 | ||||||||||
Minneapolis, MN 55402 | 1,889,001 | 8.6% | ||||||||
BlackRock, Inc.(3) | ||||||||||
55 East 52nd Street | ||||||||||
New York, NY 10055 | 1,292,374 | 5.9% | ||||||||
Dimensional Fund Advisors LP(4) | ||||||||||
Building One | ||||||||||
6300 Bee Cave Road | ||||||||||
Austin, TX 78746 | 1,228,844 | 5.6% | ||||||||
Boston Partners(5) | ||||||||||
One Beacon Street | ||||||||||
Boston, MA 02108 | 1,195,143 | 5.5% | ||||||||
The Vanguard Group(6) | ||||||||||
100 Vanguard Boulevard | ||||||||||
Malvern, PA 19355 | 1,103,770 | 5.1% |
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(1) | Schedule 13G filed with the SEC on behalf of Frontier Capital Management Co., LLC. ("Frontier"), an investment adviser, indicates that, as of December 31, 2016, Frontier was the beneficial owner of 2,164,994 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power as to 758,964 common shares, and shared voting power with respect to no common shares. |
(2) | Amendment No. 4 to Schedule 13G filed with the SEC on behalf of RBC Global Asset Management (U.S.) Inc. (‘‘RBC’’), an investment adviser, indicates that, as of December 31, 2016, RBC was the beneficial owner of 1,889,001 common shares, with sole dispositive power as to none of such shares, shared dispositive power as to all of such shares, sole voting power with respect to no common shares, and shared voting power with respect to 1,650,102 common shares. |
(3) | Schedule 13G filed with the SEC on behalf of BlackRock, Inc. ("BlackRock"), a parent holding company, indicates that, as of December 31, 2016, BlackRock was the beneficial owner of 1,292,374 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power with respect to 1,241,664 common shares, and shared voting power with respect to no common shares. |
(4) | Amendment No. 1 to Schedule 13G filed with the SEC on behalf of Dimensional Fund Advisors LP ("Dimensional"), an investment adviser, indicates that, as of December 31, 2016, Dimensional was the beneficial owner of 1,228,884 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power with respect to 1,170,018 common shares, and shared voting power with respect to no common shares. |
(5) | Schedule 13G filed with the SEC on behalf of Boston Partners ("Boston"), an investment adviser, indicates that, as of December 31, 2016, Boston was the beneficial owner of 1,195,143 common shares, with sole dispositive power as to all of such shares, shared dispositive power as to none of such shares, sole voting power with respect to 704,280 common shares, and shared voting power with respect to no common shares. |
(6) | Schedule 13G filed with the SEC on behalf of The Vanguard Group ("Vanguard"), an investment adviser, indicates that, as of December 31, 2016, Vanguard was the beneficial owner of 1,103,770 common shares, with sole dispositive power as to 1,075,574 of such shares, shared dispositive power as to 28,196 of such shares, sole voting power with respect to 27,994 common shares and shared voting power with respect to 1,700 common shares. |
| STOCK OWNERSHIP |
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Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||
Sherry Buck(1)(2)(4) | 69,538 | * | ||||
Anunciata (Nucci) Cerioli(1)(2) | 18,116 | * | ||||
Carlos V. Duno(3) | 37,648 | * | ||||
William A. Foley(1)(2)(3) | 89,376 | * | ||||
Ginger M. Jones(3) | 10,599 | * | ||||
Theo Killion(3) | 6,381 | * | ||||
Susan A. Kovach(1)(2) | 50,788 | * | ||||
Eileen A. Mallesch(3) | 0 | * | ||||
Deborah G. Miller(3) | 25,492 | * | ||||
Salvador Miñarro Villalobos(1)(2) | 86,596 | * | ||||
Carol B. Moerdyk(3) | 38,095 | * | ||||
John C. Orr(3) | 29,423 | * | ||||
Stephanie A. Streeter(1)(2)(4) | 109,350 | * | ||||
James H. White(1)(2)(4) | 10,413 | * | ||||
Directors and Executive Officers as a Group(1)(2)(3)(4) | 600,344 | 2.74% |
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(1) | Does not include shares of our common stock that have vested but are deferred under our Executive Deferred Compensation Plan, which we refer to as our EDCP. As of March 20, 2017, each of our named executives, and all executive officers as a group, had the following number of shares of our common stock that are vested but deferred under our EDCP: |
Named Executive |
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S. Buck | 5,355 | ||
A. Cerioli | 0 | ||
W. Foley | 0 | ||
S. Kovach | 16,670 | ||
S. Miñarro | 0 | ||
S. Streeter | 0 | ||
J. White | 0 | ||
All executive officers as a group | 22,025 |
(2) | Includes the following number of NQSOs that have been granted to our named executives and |
Named Executive | Number of Outstanding Stock Options Exercisable Within 60 Days | ||
S. Buck | 49,958 | ||
A. Cerioli | 11,527 | ||
W. Foley | 31,650 | ||
S. Kovach | 30,014 | ||
S. Miñarro | 72,194 | ||
S. Streeter | 0 | ||
J. White | 0 | ||
All executive officers as a group | 210,693 |
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2013 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%.
In addition, we continued our trend of positive returns to our shareholders, as can be seen in the performance graph below:
See“How does Libbey determine the forms and amounts of pay?”below 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 our 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 future growth and expansion in our business in Mexico and Latin America.
In November 2013, we announced a $20 million investment that will bring to our operations in Shreveport, Louisiana, new, state-of-the-art technology capable of innovative, proprietary glass-making processes designed to keep us at the forefront of the glass tableware industry.
2013 Executive Compensation Highlights.At our 2013 Annual Meeting of shareholders, our say-on-pay proposal garnered the support of over 96% of the shares voted. Our Compensation Committee interpreted the results of the vote as an affirmation of our executive pay program and, as a result, the Committee generally retained the same structure for our 2013 executive pay program.
However, during 2013 the Committee did take the following notable actions regarding the pay of our named executives:
(3) | Includes the following number of shares of our common stock that are deferred by non-management directors under our 2009 Director Deferred Compensation Plan, which we refer to as our Director DCP, and that are payable as shares of our common stock: |
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Number of Deferred Shares | ||
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W. Foley(a) |
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T. Killion | 0 | ||
E. Mallesch | 0 | ||
D. Miller | 0 | ||
C. Moerdyk | 0 | ||
J. Orr | 0 | ||
All non-management directors as a group | 24,522 |
Name of Director | Number of Phantom Shares | ||
C. Duno | 0 | ||
W. Foley(a) | 12,348 | ||
G. Jones | 0 | ||
T. Killion | 0 | ||
E. Mallesch | 0 | ||
D. Miller | 2,298 | ||
C. Moerdyk | 19,347 | ||
J. Orr | 0 | ||
All non-management directors as a group | 33,993 |
(4) | Based on last known information as of date of separation from service. For Ms. |
Named Executive ($) ($) S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter Named Executive S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter All Named Executives Other than Mr. Ibele Mr. Ibele Weight Financial Performance Measure Weight Financial Performance Measure Company-wide adjusted EBITDA Company-wide adjusted EBITDA Company-wide adjusted cash earnings Regional adjusted EBITDA Company-wide adjusted cash earnings Regional adjusted cash earnings Performance Level (%) (%) Performance Level (%) (%) 2016. Name and Principal Position Sherry Buck Vice President, Chief Financial Officer(7) Daniel P. Ibele Vice President, General Manager, U.S. and Canada(8) Susan A. Kovach Vice President, General Counsel & Secretary Timothy T. Paige Vice President, Human Resources Richard I. Reynolds Executive Vice President, Strategy Program Management(9) Stephanie A. Streeter Chief Executive Officer Named S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter Named Executive Plan Name S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter Approximate Percent of Targeted EBITDA (%) Payout as a Named Executive (%) (%) S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter % of Targeted EBITDA Margin Achieved Payout % If Targeted Net Debt to Adjusted EBITDA is Reduced By: Payout % 115 200 115 200 Less than 80 0 Less than 80 0 Named Executive S. Buck D. Ibele S. Kovach T. Paige Named Executive R. Reynolds S. Streeter Named Executive S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter Named Executive Plan Name S. Buck N/A D. Ibele Salary Plan SERP S. Kovach Salary Plan SERP T. Paige Salary Plan SERP R. Reynolds Salary Plan SERP S. Streeter N/A Named Executive S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter Named Executive S. Buck D. Ibele S. Kovach T. Paige R. Reynolds S. Streeter Named Executive Sherry Buck Death or permanent disability(2) Voluntary termination for Good Reason – no change in control triggering event(3) Involuntary termination without Cause – no change in control triggering event(4) Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(5) Involuntary termination for Cause Daniel P. Ibele Death or permanent disability(2) Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) Involuntary termination for Cause Named Executive Susan A. Kovach Death or permanent disability(2) Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) Involuntary termination for Cause Timothy T. Paige Death or permanent disability(2) Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) Involuntary termination for Cause Richard I. Reynolds Retirement(8) Stephanie A. Streeter Death or permanent disability(2) Voluntary termination for Good Reason or involuntary termination without Cause – no change in control triggering event(6) Voluntary termination for Good Reason or involuntary termination without Cause – change in control triggering event(7) Involuntary termination for Cause Pay Type Effective January 1, 2013 Effective May 1, 2013 Effective August 1, 2013 Pay Type Effective January 1, 2013 Effective May 1, 2013 Effective August 1, 2013 Director Carlos V. Duno William A. Foley Peter C. McC. Howell Ginger M. Jones Deborah G. Miller Carol B. Moerdyk John C. Orr Richard I. Reynolds(4) Terence P. Stewart(5) Costs by: TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:What areobjectivesCompany as of Libbey’sthat date, as of their last date of employment, the named executives and all executive pay program?Our 2013 executive pay program was structured to achieveofficers as a group have received the following objectives:•Named Executive Talent Attraction and Retention Objective. The Compensation Committee and Board believe that attracting and retaining talented executives are critical to achieving ourLibbey 2015strategy and returning Libbey to consistent, profitable growth over the long term. Accordingly, our 2013 executive pay program made use market-competitive base salaries and incentive opportunities, limited perquisites such as financial and tax planning and executive physical examinations, and limited retention tools such as time-based NQSOs and SARs.(1)•S. Buck Motivational Objective.As noted elsewhere in this proxy statement, execution of ourLibbey 2015 strategy is critical to returning Libbey to consistent, profitable growth. Accordingly, we structured our 2013 executive pay program to provide market-competitive financial incentive opportunities, including cash awards under our 2013 SMIP and the cash component of our LTIP, to motivate our executives to execute ourLibbey 2015 strategy.•A. Cerioli Alignment Objective. Our executive pay program was structured to align the interests of our executives with those of our shareholders generally. Our 2013 SMIP and the performance cash component of our LTIP provide meaningful incentive opportunities to ensure that our executives 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:W. Foley (1)88,670SCT Pay is reflected in the “Total” column of the Summary Compensation Table.S. Kovach (2)14,709Realized 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.S. Miñarro 24,990 S. Streeter 0 J. White 0 All executive officers as a group 166,338 •(1) Of these amounts, a total of 2,855 RSUs with four-year vesting were awarded on February 24, 2014; a total of 4,178 RSUs with four-year vesting were awarded on December 1, 2014; a total of 12,956 RSUs with four-year vesting were awarded on February 16, 2015; a total of 1,674 RSUs with four-year vesting were awarded on May 18, 2015; a total of 1,875 RSUs with four-year vesting were awarded on June 11, 2015; a total of 4,125 RSUs with four-year vesting were awarded on December 11, 2015; a total of 72,457 RSUs with four-year vesting were awarded on February 8, STOCK OWNERSHIP Reasonableness Objective. We designed our pay program to balance the need to provide sufficient financial incentives to achieve the three 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.diddoes Libbey deliver pay to its executives, in 2013, and what purposes do the various forms of pay serve?Balanced Program’’ and the Outstanding Equity Awards at Fiscal Year-End table above.Significant Pay At Risk.For 2013, the pay opportunitiesSecurities 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, 2016, all officers, directors and greater-than-10% beneficial owners complied, on a timely basis, with the filing requirements applicable to them pursuant to Section 16 of our named executives were designed to provide a balance of stable and competitive pay in the form of base salary, fringe benefits and perquisites; equity-based compensation (NQSOs, RSUs and SARs) that aligns our executives’ interests with those of shareholders generally and also serves as a retention tool; and equity-based compensation and annual and long-term incentive awards that are designed to motivate our executives to execute our strategy, thereby driving our financial and operational performance. The charts below show the mix of these pay elements (excluding the special retention award of SARs made to Ms. Streeter in December 2013) and reflect the substantial portions of our named executives’ target pay opportunities that are at risk:The following table sets forth the forms of pay for which our executive officers were eligible in 2013 and the characteristics of those forms of pay: Applicable CompensationObjectiveForm of PayKey CharacteristicsTalent Attractionand RetentionMotivationalAlignment withShareholderInterestsAnnual cash compensationBase salaryFixed component; reviewed annuallyXAnnual incentive award (SMIP)At-risk variable pay opportunity for short-term performance; no guaranteed minimum payout; maximum payout equal to 225% of targetXXXLong-term incentives under our LTIPPerformance cash awardsFormula-driven, at-risk cash award that comprises 40% of LTIP opportunity; no guaranteed minimum payout; maximum payout equal to 200% of targetXXXNQSOsComprise 20% of LTIP opportunity; exercise price equal to closing stock price on date of grant; generally awarded annually; vest ratably at the end of the first four years of a ten-year termXXXRSUsComprise 40% of LTIP opportunity; vest ratably at the end of the first four years of a ten-year term; no dividends or voting rights with respect to unvested RSUsXXXFringe benefits and limited perquisitesMedical, dental and life insurance benefitsBenefits for U.S. executives on the same basis as for all U.S. salaried employeesXTax return preparation and financial planningDirect payment or reimbursement of fees incurred in connection with personal financial planning and tax return preparationXGENERAL INFORMATION Applicable CompensationObjectiveForm of PayKey CharacteristicsTalent Attractionand RetentionMotivationalAlignment withShareholderInterestsExecutive health screeningAnnual executive physical examination and related servicesXLimited ground transportationGround 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 flightsXAirline club membershipMembership in one airline club of the executive’s choice; maximizes time available for performing services to LibbeyXRelocation assistanceFor executives relocating at Libbey’s request, moving and related expenses associated with the move; when necessary to attract talent, also includes loss-on-sale protectionXLimited income protectionRetirement PlansQualified plan for all U.S. salaried employees hired before January 1, 2006; company contribution credit discontinued at end of 2012XSupplemental Retirement Benefit Plan, which we refer to as our SERPExcess, non-qualified plan designed to provide substantially identical retirement benefits as the Salary Plan to the extent the Salary Plan cannot provide those benefits due to IRS limitations; no enhanced credit has ever been provided; company contribution credit discontinued at end of 2012X401(k) savings planMatching contributions to our 401(k) savings plan on the same basis as for all U.S. salaried employeesXSeparation benefits under employment agreements, change in control agreements or our executive severance policyContingent component payable only if employment is terminated under specified circumstancesXHow does Libbey determine the forms and amounts of executive pay?Compensation Committee Independence. In determining whether the members of our Compensation Committeeindependent, 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 independentinvolved 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. The Compensation Committee of our Board of Directors is responsible for overseeing the design, development and implementation of our executive pay program. The Compensation Committee consults with its independent executive compensation consultant when determined to be appropriate by the Compensation Committee. A representative of Exequity attended the February 2013 meeting at which the Compensation Committee made decisions regarding our executive pay program for 2013 and also advised the Committee in connection with other pay decisions made during the year. Our CEO, our Vice President, Human 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 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, Human Resources and the Vice President, General Counsel and Secretary provide information to the Compensation Committee with respect to pay programs affecting all 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 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 senior leadership team, but does not consider the impact of, or wealth accumulated as a result of, equity awards made during prior years, since those awards represent pay for services rendered during prior-year periods.In connection with the preparation of our proxy statement each year, the Committee reviews ‘‘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 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 senior leadership team.Process for Setting 2013 Executive Pay. Generally the structure of our 2013 executive pay program remained the same as our 2012 executive pay program in that the components of pay, and the weight accorded each component, remained the same.With respect to base salary increases that were implemented in April 2013, the decisions were made by the Compensation Committee at its February 2013 meeting after receiving input from Ms. Streeter and Exequity. Ms. Streeter and a representative of Exequity also provided input into the decisions made by the Compensation Committee in October 2013 to accelerate the vesting of certain RSUs and NQSOs upon Mr. Reynolds’s retirement.As disclosed 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 companiessubmit 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 revenues and having businesses that are engaged in manufacturing or that otherwise are asset-intensive. Because we are a multinational manufacturer with asset-intensive operations, we eliminated from the peer 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 the products that they sell) and companies that merely have light assembly-type operations. As a result, we identified, and the Compensation Committee approved for use in developing our 2013 executive pay program, the following group of 18 companies:Barnes GroupIntegra LifeSciences HoldingsCallaway GolfNeenah PaperCoherentNordsonESCO TechnologiesPolypore International, Inc.EntegrisTecumseh ProductsFurniture Brands International Inc.Tempur Pedic InternationalH.B. FullerTriMasGracoWest Pharmaceutical ServicesInfineraZepAt 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 Equilar’s 2012 Top 25 Survey as reference points, Exequity compared the compensation of our top officer positions to the peer group in terms of base pay, target annual bonus 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 median, but that annual and long-term incentive opportunities for 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 ensure that we maintain market-competitive pay programs in order to achieve our retention, motivational and alignment objectives, in February 2013, our Compensation Committee approved adjustments to base salaries and target annual and long-term incentive opportunities of the named executives as set forth in the table appearing on page (iii) of the Proxy Statement Summary.In February 2014, the Compensation Committee, with input from Ms. Streeter and Exequity, or, in the case of Ms. Streeter’s pay, Exequity and the other independent directors, reviewed our 2013 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 on page (iv) of the Proxy Statement Summary. Specifically, the named executives were awarded the following payouts: 2011 LTIP 2013 SMIP Payout Performance Cash Payout 208,737 72,213 202,206 136,319 140,210 92,232 133,194 89,326 303,025 250,927 662,533 417,061 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:¡The total number of shares that may be granted as NQSOs, restricted stock or RSUs, as the case may be, was limited;¡The exercise price of any NQSOs that the Chairman was permitted to award could not be less than the closing price of our common stock on the date of grant;¡Grants of NQSOs were not permitted to be made during ‘‘quiet periods’’; and¡The Chairman was required to report periodically to the Compensation Committee with respect to the awards 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. The Omnibus Plan contains 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 prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the securities laws; andthe 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 in settlement of an award made under the Omnibus Plan and earned or accrued during the 12-month period following the first public issuance or filing with the SEC of the financial document embodying the financial reporting requirement in question.Share Ownership Guidelines. We obligate our non-management directors and our executive officers to achieve or retain ownership of meaningful amounts of equity in Libbey. For further information regarding our stock ownership or retention guidelines for non-management directors and executive officers, see‘‘Stock Ownership — How much Libbey stock do our directors and officers own? — Stock Ownership Guidelines’’above.What pay did Libbey’s executives receive for 2013?Base Salaries. In February 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 ($) ($) 350,000 364,000 354,000 362,850 298,242 320,312 294,624 300,516 494,796 494,796 725,004 750,000 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 these 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: 60% 30% 40% 30% 20% 20% 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 corporate and regional financial performance measures: Percent of Targeted EBITDA Payout Percentage or Cash Earnings Achieved 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 separate payout opportunity based on individual performance, we elected to use individual performance to differentiate payouts under our 2013 SMIP. Through application of an individual performance modifier, 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 the year. As a result, an executive who demonstrates exceptional performance in developing and/or implementing a process or tool that may not have impacted the current year’s financial results but is likely to favorably impact future success may be awarded a payout in excess of the payout that is based strictly on financial performance measures. Additionally, application of the 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 the execution of our strategy.While a number of the individual objectives were tied closely to leadership of a variety of initiatives contemplated by ourLibbey 2015strategy, examples of others are as follows:Named ExecutiveExamples of Individual ObjectiveS. 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 paidD. Ibele•Enhance safety programs within the U.S. and Canada region in order to reduce work- related injuriesS. Kovach•Ensure appropriate risk mitigation/ avoidance throughout the year relative to actions taken throughout the year to implement theLibbey 2015strategyT. Paige•Design and implement a new healthcare program for all U.S. salaried associatesR. Reynolds•Mentor “high-potential” associates around the worldS. Streeter•Enhance leadership development and change management capabilitiesOn February 17, 2014, the Committee met and reviewed our performance and the performance of our senior leadership team during 2013. The Committee reviewed both company-wide and regional adjusted EBITDA for 2013 and company-wide and regional adjusted cash earnings for 2013 relative to our company-wide and regional targeted EBITDA and our targeted cash earnings, respectively, for the year. In each case, the Committee 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 our 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 extent currency fluctuations impact actual results by more than 15%, the impact of the currency fluctuations would be excluded.A reconciliation of actual company-wide adjusted EBITDA and adjusted cash earnings to targeted company-wide EBITDA and cash earnings is attached as Appendix A.The Committee received input from Ms. Streeter regarding the other named executives’ individual performance review scores, including an evaluation of the extent to which they achieved their individual objectives, and reviewed the performance evaluation completed by our non-management directors with respect to Ms. Streeter’s performance in 2013, including her performance relative to her individual objectives. After meeting in executive session with Exequity, the Committee determined that the payout amount earned by each named executive with respect to the financial performance measures should not be modified either up or down because each named executive’s individual performance review score fell within a range that signified successful achievement. Accordingly, the Committee determined that the following amounts were earned by the named executives under our 2013 SMIP:Annual SMIP Payout Named Executive($)S. Buck208,737D. Ibele202,206S. Kovach140,210T. Paige133,194R. Reynolds303,025S. Streeter662,533Long-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 – namely, the extent to which we achieve our targeted EBITDA margin over the performance cycle; and¡A financial leverage measure – namely, the extent to which we achieve our targeted net debt to adjusted EBITDA ratio over the 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 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 Cash Payouts Named Executive($)S. Buck72,213 D. Ibele136,319 S. Kovach92,232 T. Paige89,326 R. Reynolds250,927 S. Streeter417,061 Stock Options and RSUs. In February 2013, the Compensation Committee awarded to participants in our 2013 LTIP NQSOs and RSUs (each subject to four-year vesting) having an economic value at the time of award equal to 20% and 40%, respectively, of their target long-term incentive 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.The 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.’’ The Committee believes that preserving the tax deductibility is an important, but not the sole, objective when designing executive compensation programs. 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 2013 executive pay program (base salary, RSUs and NQSOs) are not. Additionally, in certain circumstances the Committee may authorize compensation arrangements that are not tax deductible in whole or in part, but which promote other important objectives such as attracting and retaining key executive leaders who can drive financial and strategic objectives that maximize long-term shareholder value.Potential Payments Upon Termination or Change in ControlWe have employment agreements with each of our named 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 retiredvarious routine legal proceedings arising in the ordinary course pursuantof our business. In addition, the Company and its subsidiaries are subject to examination by various countries' tax authorities. These examinations may lead to proposed or assessed adjustments to our Salary Plan.Ms. Buck istaxes. For a partydetailed discussion on tax contingencies, see note 8, Income Taxes, to a changethe Consolidated Financial Statements included in control agreement that provides for payments under the circumstances described below in the event of termination of employment in connection with a change in control. In addition, under our Executive Severance Policy, Ms. Buck is entitled to certain separation benefits in the event of termination of employment without cause in the absence of a change in control. Finally, the terms of award agreements pursuant to which awards of some RSUs, NQSOs and SARs were made provide for acceleration of unvested equity in the event of termination of employment in connection with a change in control.The following tables summarize the trigger events under which payments may be made and/or other benefits provided under these agreements or 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 these payments and/ or benefits is appropriate under the circumstances described.Retirement – Mr. ReynoldsBenefitsConditions to Payment of BenefitsRationale• 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 NQSOsNone• To compensate for service to us• To recognize for significant accomplishments over 43 years of dedicated service to Libbey• Consistent with competitive market practice for an employee of Mr. Reynolds’s tenure(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. ReynoldsBenefitsConditions to Payment of BenefitsRationale• 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 death or permanent disability occurs• Accelerated vesting of a pro rata portion of unvested RSUs and NQSOs granted prior to 2013• In the case of death, 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. ReynoldsBenefitsConditions to Payment of BenefitsRationale• 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 2013None• 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. ReynoldsBenefitsConditions to Payment of BenefitsRationale• 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 practiceBenefitsConditions to Payment of BenefitsRationale• 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 (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 untilBenefitsConditions to Payment of BenefitsRationale 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 in the same or similar 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 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.(4)Amounts paid under our SMIP and the cash component of our LTIP will be paid between January 1 and March 15 of the year following the end of the relevant performance cycle.(5)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 morePart II, Item 8 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; orDuring 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-yearperiod referred to above and (ii) any individuals elected to the Board, after the beginning of the two-year period referred to above, by a vote of at least 2⁄3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously approved in accordance with this provision. However, an individual who is elected to the Board after the beginning of the two-year period referred to above will not be considered to be a Continuing Director if the individual was designated by a person who has entered into an agreement with us to effect a transaction that otherwise meets the definition of a change in control.A person typically is considered to be the ‘‘beneficial owner’’ of securities if the person has or shares the voting power associated with those securities.(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. ReynoldsBenefitsConditions to Payment of BenefitsRationale• 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. BuckBenefitsConditions to Payment of BenefitsRationale• 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’’ of securities if the person has or shares the voting power associated with those securities.(4)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.(5)Amounts paid under our SMIP and the cash component of our LTIP will be paid between January 1 and March 15 of the year following the end of the relevant performance cycle.(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.Compensation Committee Interlocks and Insider ParticipationCarlos V. Duno, Deborah G. Miller and Carol B. Moerdyk served on our Compensation Committee during 2013. None of Mr. Duno, Ms. Miller or Ms. Moerdyk has been an officer or employee of Libbey or its subsidiaries.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 approved the inclusion of the Compensation Discussion and Analysis in this proxy statement and has approved the incorporation by reference of the Compensation Discussion and Analysis in ourCompany's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.Carol B. Moerdyk, ChairCarlos V. DunoDeborah G. MillerSummary Compensation TableThe following narrative and tables describe the ‘‘total compensation’’ earned during 2013 and 2012 by Ms. Buck and during 2013, 2012 and 2011 by Ms. Streeter, Messrs. Ibele, Reynolds and Paige and Ms. Kovach.The total compensation presented below does not reflect the actual pay received by, or the target pay of, the named executives in 2013, 2012 or 2011. The actual value realized by our named executives in 2013 from NQSOs and RSUs is presented in the Option Exercises and Stock Vested Table below. Target annual and long-term incentive awards for 2013 are presented in the Grants of Plan-Based Awards Table below. 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
($) 2013 360,500 0 198,968 100,423 280,950 0 81,553 1,022,394 2012 145,833 87,500 285,398 205,748 79,557 0 17,405 821,441 2013 360,638 0 201,251 101,567 338,525 0 20,049 1,022,030 2012 340,691 0 147,744 70,396 450,984 197,685 15,437 1,222,937 2011 317,558 0 154,343 68,636 153,380 104,482 16,542 814,941 2013 314,795 0 115,052 58,065 232,442 0 18,685 739,039 2012 298,242 25,000 100,328 47,806 319,606 82,986 13,737 887,705 2011 296,246 0 104,431 46,436 98,816 42,463 14,370 602,762 2013 299,043 0 113,664 57,358 222,520 0 25,972 718,557 2012 293,180 0 97,162 46,297 309,874 115,155 17,904 879,572 2011 286,913 0 101,133 44,976 99,983 71,521 18,013 622,539 2013 453,563 0 281,287 141,964 553,952 0 37,883 1,468,649 2012 491,193 0 785,354 134,755 880,136 0 20,846 2,312,284 2011 476,322 0 292,230 129,957 310,354 40,984 21,541 1,271,388 2013 743,751 0 735,998 2,718,936 1,079,594 0 41,538 5,319,817 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.(2)Represents the grant date fair value, in accordance with FASB ASC Topic 718, with respect to RSUs granted in 2013, 2012 and 2011, respectively. With respect to all awards made in 2013, 2012 and 2011 other than the award made to Mr. Reynolds in August 2012, the awards vest ratably over a four-year period from the date of grant. With respect to the award made to Mr. Reynolds in August 2012, 100% of these shares vested upon his retirement. For more information, see Footnote 12, ‘‘Employee Stock Benefit Plans,’’ to the consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 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 2013, 2012 and 2011, respectively. With respect to all awards other than a ‘‘new hire’’ award of 15,750 NQSOs made to Ms. Buck in 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 on Form 10-K filed with the Securities and Exchange Commission on March 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 named 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 our 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 component of our 2011 LTIP were paid in February of 2014; and the awards under the cash component of our 2010 LTIP were paid in February of 2013. As to Ms. Buck in 2012, represents the amount by which the annual incentive award actually earned under our 2012 SMIP exceeds the minimum annual incentive that we committed to pay her when we hired her.(5)Represents the actuarial 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 Executive 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. Ms. Buck and Ms. Streeter are not eligible participants under our Salary Plan 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 EDCP; (c) the cost that we paid for tax return preparation and financial planning for the respective named executives; (d) our incremental cost for ground transportation for personal and business trips from the Toledo, Ohio area to the Detroit/ Wayne County Metropolitan airport; (e) the annual premiums that we paid to provide executives with supplement long-term disability coverage in 2012 (after which this perquisite was discontinued) and 2011; (f) for Mr. Ibele in 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 2013, and for Mr. Paige in 2013, the cost of an executive physical examination; (h) for Ms. Streeter in 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 Mr. Reynolds, the amounts under this heading exclude the value of RSUs and NQSOs as to which vesting was accelerated, because the cumulative 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 proxy statements filed in 2011 through 2013.The following table provides additional detail with respect to the perquisites that we provided to our named executives in 2013:
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
($) 6,370 11,000 44,670 6,093 948 0 450 69,531 0 3,138 0 0 1,261 0 350 4,749 3,230 0 0 0 182 0 0 3,385 2,522 4,638 0 0 397 3,116 0 10,673 11,133 11,450 0 0 0 0 0 22,583 0 25,000 0 0 1,529 1,808 450 28,787 (a)Includes (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 executives would have been entitled as reimbursement for mileage and parking under our travel policy applicable to all employees.(7)Ms. Buck joined us on August 1, 2012 as Vice President, Chief Financial Officer.(8)Mr. Ibele was named Vice President, General Manager, U.S. and Canada, on August 1, 2012. He previously served as Vice President, Global Sales and Marketing.(9)Mr. Reynolds was named Executive Vice President, Strategy Program Management, on August 1, 2012. In 2011 through July 2012, he served as Executive Vice President, Chief Financial Officer. He retired on November 30, 2013 after 43 years with Libbey.Grants of Plan-Based Awards TableDuring 2013, the Compensation Committee granted to our named executives RSUs and NQSOs under our Omnibus Plan and 2013 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 17, 2014, the Compensation Committee approved the payment of cash awards under our 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 2013 LTIP, and vesting schedules with respect to RSUs and NQSOs, is set forth, on a grant-by-grant basis, in the table and footnotes that follow.GRANTS OF PLAN-BASED AWARDS TABLE 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 Award Date(1) Grant Date(1) Threshold
($) Target
($) Maximum
($) Units
(#)(3) Options
(#)(4) Awards
($/Sh) Awards
($)(5) 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 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 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 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 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 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 2013 SMIP are the date on which the Compensation Committee approved the 2013 SMIP. The Award Date and the Grant Date for awards made under the cash component of the 2013 LTIP are the date on which the Compensation Committee approved the 2013 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 determined the number of NQSOs, RSUs or cash-settled SARs, as the case may be, awarded. The number of NQSOs and RSUs awarded to the named executives in February 2013 under our 2013 LTIP was determined by dividing the target dollar value of the applicable component of equity to be awarded by (a) in the case of NQSOs, the Black-Scholes value of the options, determined using the average closing price of Libbey common stock over a period of 20 consecutive trading days ending on the grant date and capping the volatility at 50%, as of February 22, 2013, or (b) in the case of RSUs, the average closing price of Libbey common stock over the 20 consecutive trading-day period ending February 22, 2013. The number of cash-settled SARs awarded to Ms. Streeter pursuant to the CEO Retention Award 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 SARs to be granted. For awards made in February 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 2012 fiscal year.(2)Represents the range of possible cash awards under (a) our SMIP for performance during 2013 and (b) the cash component of our 2013 LTIP.(a)Under our SMIP, each named executive is eligible for an annual incentive award in an amount up to 225% of the executive officer’s target award, which in turn is a percentage of the executive’s anticipated full-year base salary, as set forth in the following table:Target Award as aPercentage of Anticipated Full-Year Base SalaryNamed Executive(%)S. Buck65D. Ibele65S. Kovach50T. Paige50R. Reynolds75S. Streeter100Prior 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.For all of our named executives other than Mr. Ibele, 100% of their opportunity was based on company-wide performance, as reflected in company-wide adjusted EBITDA and adjusted cash earnings performance metrics. For Mr. Ibele, 50% of his opportunity was based on company-wide performance, and the other 50% of his opportunity was based on the performance of the U.S. and Canada region (including the U.S. Sourcing segment) of which Mr. Ibele is general manager. In each case, the payout scale with respect to the each of the adjusted EBITDA performance metric and the adjusted cash earnings metric was:
Percentage of Target
(%)80 50 100 100 115 200 (b)Under the cash component of our 2013 LTIP, each named executive is eligible for a cash award in an amount up to 200% of the named 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 relevant LTIP. Each named executive’s target award under all components of the 2013 LTIP is 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 140 56 140 56 95 38 95 38 140 17 250 100 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: 100 100 100 100 80 50 80 50 (3)Represents grants of RSUs made pursuant to our 2013 LTIP. The grants vest 25% per year beginning on February 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 2013 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 February 2013 grants vest 25% per year beginning on February 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.(5)Represents the respective grant date fair values, determined in accordance with FASB ASC Topic 718, of the RSUs, NQSOs and cash-settled SARs.Outstanding Equity Awards at Fiscal Year-End TableOur named executives had the following types of equity awards outstanding at the end of the 2013 fiscal year:NQSOs granted under our Omnibus Plan and predecessor plans;RSUs granted under our Omnibus Plan; andCash-settled SARs granted under our Omnibus Plan.The following table shows, for each of the named executives, (a) the number, exercise price and expiration date of NQSOs and cash-settled SARs that, as of December 31, 2013, were vested but not yet exercised and of NQSOs and cash-settled SARs that, as of December 31, 2013, were not vested; and (b) the number and market value of RSUs that were not vested as of December 31, 2013:OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END Option Awards Stock Awards 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
($)(4) 7/6/2012 8/1/2012 4,410 28,979 13.96 8/1/2022 15,333 321,993 2/11/2013 2/22/2013 0 11,937 19.02 2/22/2023 10,461 219,681 12/10/2004 11,000 0 20.39 12/11/2014 12/8/2005 11,000 0 11.79 12/8/2015 2/5/2007 2/16/2007 5,597 0 12.80 2/17/2017 5,294 0 12.80 2/17/2017 2/4/2008 2/15/2008 4,988 0 15.35 2/15/2018 2/9/2009 2/12/2009 11,361 0 1.07 2/12/2019 2/8/2010 2/11/2010 4,581 1,526 10.13 2/11/2020 2/8/2010 5/6/2010 2,894 60,774 2/7/2011 2/10/2011 2,679 2,679 17.00 2/10/2021 4,539 95,319 2/6/2012 2/17/2012 1,703 5,106 13.95 2/17/2022 7,943 166,803 2/11/2013 2/22/2013 0 12,073 19.02 2/22/2023 10,581 222,201 12/10/2004 9,500 0 20.39 12/11/2014 2/4/2008 2/15/2008 3,621 0 15.35 2/15/2018 2/8/2010 2/11/2010 3,278 1,092 10.23 2/11/2020 2/8/2010 5/6/2010 2,760 57,960 2/7/2011 2/10/2011 1,813 1,812 17.00 2/10/2021 3,071 64,491 2/6/2012 2/17/2012 1,156 3,468 13.95 2/17/2022 5,394 113,274 2/11/2013 2/22/2013 0 6,902 19.02 2/22/2023 6,049 127,029 12/10/2004 6,500 0 20.39 12/11/2014 12/8/2005 8,000 0 11.79 12/8/2015 2/5/2007 2/16/2007 4,504 0 12.80 2/17/2017 4,128 0 12.80 2/17/2017 2/4/2008 2/15/2008 3,995 0 15.35 2/15/2018 2/9/2009 2/12/2009 1,207 0 1.07 2/12/2019 Option Awards Stock Awards Award Date(1) Grant Date(1) Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable Option
Exercise
Price
($) 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 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 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 (1)The Award Date is the date on which the Compensation Committee took action, and the Grant Date is the date on which we determined the number of NQSOs, SARs or RSUs, as the case may be, awarded. Until 2006, the Award Date and the Grant 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’’for information as to how we determine the number of NQSOs, SARs and RSUs awarded to our named executives. We inform grant recipients of their awards after we have determined the number of NQSOs, cash-settled SARs and/or RSUs to be granted to them. For awards made in February 2013, the grant date was the first business day after we announced our results of operations for the 2012 fiscal year.(3)Represents RSUs awarded pursuant to our Omnibus Plan. One share of our common stock underlies each RSU.(4)Represents the market value, as of December 31, 2013, of unvested RSUs. We have estimated the market value by multiplying the number of shares of common stock underlying the RSUs by $21.00, the closing price of our common stock on December 31, 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, 2013:Option Awards (NQSOs and SARs) Vesting ScheduleStock Awards (RSU) Vesting Schedule Grant Date Vesting Schedule Grant Date Vesting Schedule2/11/2010 75% were vested as of February 11, 2013; an additional 25% are scheduled to vest on February 11, 20145/6/2010 75% were vested as of February 11, 2013; an additional 25% are scheduled to vest on February 11, 20142/10/2011 50% were vested as of February 10, 2013; an additional 25% are scheduled to vest on each of February 10, 2014 and February 10, 2015.2/10/2011 50% were vested as of February 10, 2013; an additional 25% are scheduled to vest on each of February 10, 2014 and February 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, 2015.2/17/2012 25% were vested on February 17, 2013; an additional 25% are scheduled to vest on each of February 17, 2014, February 17, 2015 and February 17, 2016.2/17/2012 25% were vested on February 17, 2013; an additional 25% are scheduled to vest on each of February 17, 2014, February 17, 2015 and February 17, 2016.8/1/2012 As to 17,639 NQSOs, 25% were vested on August 1, 2013; an additional 25% are scheduled to vest on each of August 1, 2014, August 1, 2015 and August 1, 2016. As to 15,750 NQSOs, 100% are scheduled to vest on August 1, 2016.8/1/2012 As to 17,639 NQSOs, 25% were vested on August 1, 2013; an additional 25% are scheduled to vest on each of August 1, 2014, August 1, 2015 and August 1, 2016. As to 15,750 NQSOs, 100% are scheduled to vest on August 1, 2016.2/22/2013 25% are scheduled to vest on each of February 22, 2014, February 22, 2015, February 22, 2016 and February 22, 2017.2/22/2013 25% are scheduled to vest on each of February 22, 2014, February 22, 2015, February 22, 2016 and February 22, 2017.12/16/2013 100% of the SARs cliff vest on December 31, 2018. All SARs will be settled in cash.Option Exercises and Stock Vested for Fiscal 2013 TableThe following table sets forth information concerning the exercise of stock options by the named executives in 2013 and the value of RSUs that vested in 2013.OPTION EXERCISES AND STOCK VESTED IN FISCAL 2013 Number of Shares
Acquired on Exercise
(#) Value Realized on
Exercise
($)(1) Number of Shares Acquired
on Vesting
($)(2) Value Realized on
Vesting
($)(3) 0 0 5,111 127,571 0 0 10,577 195,228 5,420 110,080 8,733 161,111 5,000 107,975 8,313 153,369 0 0 107,010 2,349,167 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 RSUs vested (even if deferred under the EDCP) during 2013. For RSUs that vested during 2013, the value was determined by multiplying the number of shares by the closing price of our common stock on the applicable vesting dates ($18.44 for RSUs vesting on February 10, 2013 and February 11, 2013; $18.37 for RSUs vesting on February 12, 2013; $18.90 for RSUs vesting on February 17, 2013; $24.19 for RSUs vesting on June 30, 3013; $24.96 for RSUs vesting on August 1, 2013; $23.00 for RSUs vesting on November 29, 2013; and $22.62 for RSUs vesting on November 30, 2013).Retirement PlansExecutives 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 three-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 three-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 two 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 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 the 30-year Treasury rate.The final average pay formula is as follows: [(A) × (B) × (C)] + [(D) × (E) × (C)] + [(F) × (A) × (G)]Where: (A) Monthly final average earnings for the three highest consecutive calendar years prior to 2008 (B) 1.212% (C) Years of credited service up to 35 years (D) Monthly final average earnings above Social Security Wage base at retirement (E) 0.176% (F) 0.5% (G) Years of credited service over 35 yearsOnly 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. Reynolds was an active employee, was at least age 45 and had more than 20 years of service as of December 31, 1997. Accordingly, Mr. Reynolds received a pension benefit under the Salary Plan and SERP based on the greater of the two benefit formulas described above. Mr. Ibele, Ms. Kovach and Mr. Paige are entitled to a benefit computed only in accordance with the cash balance formula. Neither Ms. Buck nor Ms. Streeter is eligible for a pension benefit under either the Salary Plan or the SERP, because their employment with Libbey did not begin before January 1, 2006.The following table sets forth information concerning the benefits provided to the named executives under the Salary Plan and the SERP as of December 31, 2013, the date that we use for pension plan measurement for financial statement reporting purposes.PENSION BENEFITS IN FISCAL 2013 TABLE Number of Years of
Credited Service
(#)(1) Present Value of
Accumulated Benefit
($)(2) Payments During Last
Fiscal Year
($)(3) N/A N/A N/A 30.58 416,743 0 30.58 249,571 0 10.08 133,105 0 10.08 105,579 0 18.58 282,628 0 18.58 142,918 0 43.75 N/A 1,646,246 43.75 2,638,263 0 N/A N/A N/A (1)Represents actual years of service to Libbey and Owens-Illinois, Inc., our former parent company. The plans were frozen at the end of 2012, after which additional pension service is not credited.(2)Amounts were determined based on the assumptions outlined in our audited financial statements for the year ended December 31, 2013, except that assumptions relating to expected retirement age are as follows: Mr. Reynolds is assumed to have retired immediately, since he retired on November 30, 2013. All others who are eligible for pension benefits under the Salary Plan are assumed to receive benefits under the cash balance design at their normal retirement age of 65. For Mr. Reynolds, payment of the amount set forth under this column with respect to the SERP is subject to a six-month delay pursuant to Internal Revenue Code Section 409A.(3)Includes the lump sum benefit paid to Mr. Reynolds, pursuant to the Salary Plan, upon his retirement.Nonqualified Deferred CompensationThe following table sets forth information with respect to our ESP and our EDCP. The ESP was the only nonqualified deferred compensation plan under which employees could defer pay earned prior to January 1, 2009. The EDCP was the only nonqualified deferred compensation plan under which employees could defer pay earned in 2013:NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2013 TABLE Executive Contributions
in Last FY Registrant Contributions
In Last FY Aggregate Earnings
In Last FY Aggregate Withdrawals/
Distributions
In Last FY Aggregate Balance
At Last FYE(3) ($) RSUs ($)(1) RSUs ($)(2) RSUs ($) RSUs ($) RSUs 7,432 0 6,370 0 (12) 0 0 0 13,789 5,111 0 0 0 0 3,009 0 0 0 12,413 0 3,203 0 3,203 0 4,375 0 0 0 44,047 15,910 17,522 0 2,522 0 7,745 0 0 0 45,112 3,280 11,133 0 11,133 0 147,472 0 (422,516) 0 255,382 82,390 0 0 0 0 0 0 0 0 0 0 (1)The following amounts are included in the column headed‘‘All Other Compensation’’in the Summary Compensation Table above: Ms. Kovach — $3,203; Mr. Paige — $2,522; Mr. Reynolds — $11,133.(2)Not included in column headed‘‘Change in Pension Value and Nonqualified Deferred Compensation Earnings’’in the Summary Compensation Table because earnings are not at an above-market rate.(3)Of the total amounts shown in this column, the following amounts have been reported as ‘‘Salary’’ or ‘‘Stock Awards’’ in the Summary Compensation Table in this proxy statement for the 2013, 2012 and/or 2011 fiscal years: Salary
($) Stock Awards
($) 7,432 71,350 0 0 8,422 0 22,475 0 38,619 1,250,118 0 0 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 RSUs, on a tax-deferred basis.Under the EDCP, our named executives and other members of senior management may elect to defer base pay, cash incentive and bonus compensation and RSUs into an account that is deemed invested in one of 13 measurement funds, including a Libbey common stock measurement fund. RSUs in all events 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.Participants can defer (a) up to 60% of the amount by which base salary exceeds required payroll obligations and 401(k) plan contributions; (b) up to 60% of the amount by which cash incentive or bonus compensation exceeds required payroll obligations; and (c) up to 100% of RSUs that are earned or vest during the year to which the deferral relates. We provide matching contributions on excess contributions of base salary in the same manner as we provide matching contributions under our 401(k) plan. The matching contributions are deemed invested in accordance with the participant’s election as to his or her own contributions.The balance credited to a participant’s account, including the matching contributions that we make, is 100% vested at all times. However, the EDCP is not funded and, as a result, EDCP account balances are subject to the claims of our creditors.We 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’’ 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’’ 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.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 ControlAs discussed under‘‘Compensation Discussion and Analysis — Potential Payments Upon Termination or Change in Control,’’we have agreements with named executives and an Executive Severance Policy pursuant to which our named executives may be entitled to severance payments and/or other benefits upon termination of their employment, including in connection with a change in control of Libbey.The following tables provide information with respect to the amounts payable to each of the named executives 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) Cash
Severance
($) Annual
Incentive for
Year of
Termination
($) LTIP Cash
($) Acceleration of
Unvested
Equity Awards
($) Misc. Benefits
($) Total
($) 0 208,737 72,213 769,321 0 1,050,271 0 208,737 72,213 0 0 280,950 364,000 208,737 72,213 199,203 19,869 864,022 1,021,200 208,737 220,226 769,321 94,404 2,313,888 0 0 0 0 0 0 0 234,414 297,034 542,138 0 1,073,586 598,703 202,206 296,073 259,921 49,869 1,406,772 1,197,405 202,206 296,073 632,302 94,232 2,422,218 0 0 0 0 0 0 Cash
Severance
($) Annual
Incentive for
Year of
Termination
($) LTIP Cash
($) Acceleration of
Unvested
Equity Awards
($) Misc. Benefits
($) Total
($) 0 157,397 194,278 361,872 0 713,547 480,468 140,210 193,628 190,744 44,727 1,049,777 960,936 140,210 193,628 437,135 80,137 1,812,046 0 0 0 0 0 0 0 149,522 188,889 351,317 0 689,728 450,774 133,194 188,259 183,442 49,862 1,005,530 901,548 133,194 188,259 411,350 84,870 1,719,221 0 0 0 0 0 0 0 303,025 524,713 2,134,001 0 2,961,739 0 743,751 997,596 1,609,202 0 3,350,549 3,000,000 662,533 994,656 628,942 104,804 5,390,935 3,750,000 662,533 994,656 1,950,326 104,804 7,462,319 0 0 0 0 0 0 (1)Represents potential payments pursuant to: (a) in the case of the named executives other than Ms. Buck, their respective employment agreements, and (b) in the case of Ms. Buck, our Executive Severance Policy or her change in control agreement, as applicable. No amounts would have been payable to Mr. Reynolds under any employment agreement, change in control agreement or severance policy, because Mr. Reynolds retired on November 30, 2013.(2)Represents the sum of:(a)under the column headed ‘‘Annual Incentive for Year of Termination,’’ (i) in the case of the named executives other than Ms. Buck, a target award under our 2013 SMIP; and (ii) in the case of Ms. 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 than Ms. Buck, a target award under the cash component of our 2011 LTIP (for the 2011 – 2013 performance cycle) and prorated target awards under the cash component of our 2012 LTIP (for the 2012 – 2014 performance cycle) and our 2013 LTIP (for the 2013 – 2015 performance cycle); and (ii) in the case of Ms. Buck, the amount actually earned under the cash component of our 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 the 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 earned under our 2013 SMIP; and (b) under the column headed ‘‘LTIP Cash,’’ the amount actually earned under the cash component of our 2011 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 column headed ‘‘Annual Incentive for Year of Termination,’’ the amount actually earned under our 2013 SMIP;(c)under the column headed ‘‘LTIP Cash,’’ the amount actually earned under the cash component of our 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, 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.(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 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,’’ (i) in the case of each of the applicable named executives other than Ms. Streeter, the sum of 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 contributions by the named executive at the active employee rate) to provide medical, dental, prescription drug and life insurance coverage for 18 months following termination, and the maximum cost ($10,000) to provide financial planning services to the named executive; 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.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)Represents the sum of:(a)under the column headed “Annual Incentive for Year of Termination,” the amount actually earned under our 2013 SMIP;(b)under the column headed “LTIP Cash”, the amount actually earned under the performance cash component of our 2011 LTIP (for the 2011-2013 performance cycle) and an estimate of the prorated amount Mr. Reynolds would earn under the cash component of our 2012 LTIP (for the 2012-2014 performance cycle) and our 2013 LTIP (for the 2013-2015 performance cycle); and(c)under the column headed “Acceleration of Unvested Equity Awards,” the sum of (i) the value, as of November 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 in-the-money/ intrinsic value, as of November 30, 2013, of NQSOs with respect to which vesting was accelerated to his retirement date.We have estimated the payouts under the performance 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 to the date of Mr. Reynolds’s retirement. The prorated amounts actually earned under the performance cash component of our 2012 LTIP and 2013 LTIP would be paid between January 1 and March 15 of the calendar following conclusion of the applicable performance cycle.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 2013Our management directors do not receive additional pay for service on the Board of Directors. In 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: 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 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 $500 per half day of special Board or committee business performed at the request of the Board No change No change We also maintain stock ownership guidelines for non-management directors. For more information with respect to our stock ownership guidelines for non-management directors, see‘‘Stock Ownership — How much Libbey stock do our directors and officers own? — Stock Ownership Guidelines’’above.Directors may elect, pursuant to the Director DCP, to defer cash and/or equity compensation into any of 13 measurement funds. The Director DCP, as well as the predecessor deferred compensation plans under which non-management directors were eligible to participate, are unfunded plans, and the Company does not guarantee an above-market return on amounts deferred under any of these plans. Amounts deferred under the Director DCP, as well as under a predecessor plan, are, at the election of the applicable director, payable either in a lump sum or in installments over a period of time selected by the director. Amounts deferred under our first deferred compensation plan for outside directors are payable in a lump sum upon retirement from our Board or, if earlier, upon death of the director.In addition to paying the compensation listed above, we reimburse our non-management directors for their travel expenses incurred in attending meetings of the Board or its committees, as well as for fees and expenses incurred in attending director education seminars and conferences. The directors do not receive any other personal benefits.In 2013, our non-management directors received the following pay:DIRECTOR COMPENSATION FOR YEAR ENDED DECEMBER 31, 2013 Fees Earned or
Paid in Cash
($)(1) Stock Awards
($)(2) Change in Pension Value and
Nonqualified Deferred
Compensation Earnings
($)(3) All Other Compensation
($) Total
($) 71,375 59,993 0 0 131,368 134,500 59,993 0 0 194,493 64,125 59,993 0 0 124,118 11,875 0 0 0 11,875 57,875 59,993 0 0 117,868 71,375 59,993 0 0 131,368 58,000 59,993 0 0 117,993 3,958 0 0 17,738 21,696 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 14, 2013. On that date, we awarded each non-management director stock having a grant date fair value of $59,993. Messrs. Duno, Howell and Stewart elected to defer receipt of a portion or all of the stock pursuant to the Director DCP.(3)We do not maintain a pension plan for our non-management directors. We do not guarantee any particular rate of return on any pay deferred pursuant to our deferred compensation plans. Dividends on pay deferred into the Libbey Inc. phantom stock or measurement fund under our deferred compensation plans for non-management directors accrue only if and to the extent payable to holders of our common stock. Pay deferred into interest-bearing accounts under our deferred compensation plans for non-management directors does not earn an above-market return, as the applicable interest rate is the yield on ten-year treasuries. Pay deferred into other measurement funds under our deferred compensation plans for non- management directors does not earn an above-market return as that pay earns a return only if and to the extent that the net asset value of the measurement fund into which the pay is deemed invested actually increases.(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?’’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.General InformationAvailability 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.Costs:out-of- pocketout-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.Shareholders:The Company has mailedShareholdersa copy of its 2013the 2016 Annual Report to each shareholder entitled to vote at the Annual Meeting. Included in the 2013 Annual Report are the Company’s consolidated financial statements for the year ended December 31, 2013.Internet www.proxyvote.com Telephone 1-800-579-1639 Email sendmaterial@proxyvote.com 2013,2016, including the consolidated financial statements, as filed with the Securities and Exchange Commission, may be obtained without charge by sending a written request to Libbey Inc., Attention: Investor Relations, Kenneth A. Boerger, Vice President and Treasurer, 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio 43699-0060.March 31, 2014 Year ended December 31, 2016 As Reported For LTIP Incentive Calculations Revenue Reported net sales $ 793,420 $ 793,420 Adjusted EBITDA Reported net income $ 10,073 $ 10,073 Add: Interest expense 20,888 20,888 Add: Provision for income taxes 17,711 17,711 Earnings before interest and income taxes (EBIT) 48,672 48,672 Add: Depreciation and amortization 48,486 48,486 Earnings before interest, taxes, depreciation and amortization (EBITDA) 97,158 97,158 Add: Special items before interest and taxes Pension settlement 168 168 Product portfolio optimization 5,693 5,693 Work Stoppage 4,162 4,162 Executive terminations 4,460 4,460 Derivatives (1,860 ) (1,860 ) Adjusted EBITDA $ 109,781 $ 109,781 Adjusted EBITDA margin Adjusted EBITDA $ 109,781 $ 109,781 Net sales $ 793,420 $ 793,420 Adjusted EBITDA margin 13.8 % 13.8 % Debt net of cash to Adjusted EBITDA ratio Debt $ 407,840 $ 407,840 Plus: Unamortized discount and finance fees 4,480 4,480 Gross debt 412,320 412,320 Cash 61,011 61,011 Less: Share repurchases below budgeted amount — 8,000 Debt net of Cash $ 351,309 $ 359,309 Adjusted EBITDA $ 109,781 $ 109,781 Debt net of cash to adjusted EBITDA ratio 3.2 3.3 APPENDIX A Year ended December 31, 2016 As Reported For LTIP Incentive Calculations Return on Invested Capital (ROIC) Defined as: After tax adjusted income from operations (using a 30% tax rate) over ending working capital (accounts receivable-net plus inventory-net, less accounts payable) plus net book value of property, plant and equipment Income from operations $ 45,310 $ 45,310 Add: Adjustments Product portfolio optimization charge 5,693 5,693 Work stoppage 4,162 4,162 Executive terminations 4,460 3,554 Pension settlement charges 168 — Mexico tax assessment — 1,085 Adjusted income from operations 59,793 59,804 Add: Impact of currency to reflect results at budgeted exchange rates — 4,574 Adjusted income from operations at budgeted exchange rates 59,793 64,378 Factor to apply for taxes 70 % 70 % After tax adjusted income from operations at budgeted exchange rates $ 41,855 $ 45,065 Invested capital Property, plant and equipment, net $ 256,392 $ 256,392 Add: Impact of currency to reflect results at budgeted exchange rates — 4,174 Property, plant and equipment, net at budgeted exchange rates 256,392 260,566 Accounts receivable - net 85,113 85,113 Inventories - net 170,009 170,009 Less: Accounts payable 71,582 71,582 Trade Working Capital 183,540 183,540 Add: Adjustments Inventory impact of work stoppage at Toledo, Ohio plant — 2,694 Inventory impact of product portfolio optimization — 5,693 Adjusted trade working capital 183,540 191,927 Add: Impact of currency — 4,616 Adjusted trade working capital at budgeted exchange rates 183,540 196,543 Total adjusted invested capital at budgeted exchange rates $ 439,932 $ 457,109 ROIC 9.5 % 9.9 % APPENDIX B Year ended December 31, 2016 As Reported For SMIP Incentive Calculations Revenue Reported net sales $ 793,420 $ 793,420 Add: Sales impact of work stoppage at Toledo, Ohio plant — 7,245 Adjusted net sales 793,420 800,665 Add: Impact of currency to reflect results at budgeted exchange rates — 6,263 Adjusted net sales at budgeted exchange rates $ 793,420 $ 806,928 Adjusted EBITDA Reported net income $ 10,073 $ 10,073 Add: Interest expense 20,888 20,888 Add: Provision for income taxes 17,711 17,711 Earnings before interest and income taxes (EBIT) 48,672 48,672 Add: Depreciation and amortization 48,486 48,486 Earnings before interest, taxes, depreciation and amortization (EBITDA) 97,158 97,158 Add: Special items before interest and taxes Pension settlement 168 — Product portfolio optimization 5,693 5,693 Work Stoppage 4,162 4,162 Executive terminations 4,460 3,554 Derivatives (1,860 ) (1,860 ) 2010 Mexican tax assessment — 1,085 Adjusted EBITDA 109,781 109,792 Add: Impact of currency to reflect results at budgeted exchange rates — 4,609 Adjusted EBITDA at budgeted exchange rates 109,781 114,401 Change in Trade Working Capital Change in accounts receivable - net $ 9,266 $ 9,266 Change in inventories - net 8,018 8,018 Change in accounts payable 22 22 Change in trade working capital 17,306 17,306 Add: Adjustments Inventory impact of work stoppage at Toledo, Ohio plant — (2,694 ) Inventory impact of product portfolio optimization — (5,693 ) Adjusted change in trade working capital 17,306 8,919 Add: Impact of currency — 4,616 Adjusted change in trade working capital at budgeted exchange rates $ 17,306 $ 4,303 Adjusted Cash Earnings Adjusted EBITDA at budgeted exchange rates $ 109,781 $ 114,401 Adjusted change in trade working capital at budgeted exchange rates 17,306 4,303 Adjusted cash earnings at budgeted exchange rates $ 127,087 $ 118,704 2013Adjusted EBITDA Reported net income $28,459 Add: Interest expense32,006 Add: Provision for income taxes13,241 Earnings before interest and income taxes (EBIT)73,706 Add: Depreciation and amortization43,969 Earnings before interest, taxes, depreciation and amortization (EBITDA)117,675 Add: Special items before interest and taxesLoss on redemption of debt2,518 Restructuring charges4,845 Abandoned property1,781 Furnace malfunction4,594 Pension settlement charge2,252 Executive retirement736 Other adjustment572 Adjusted EBITDA $134,973 Adjusted EBITDA marginAdjusted EBITDA $134,973 Net sales818,811 Adjusted EBITDA margin16.5% Net Debt to Adjusted EBITDADebt $411,903 Less: Carrying value adjustment on debt related to Interest Rate Agreement(1,324) Gross debt413,227 Cash42,208 Debt net of Cash $371,019 Debt net of cash to adjusted EBITDA ratio2.8 Return on Invested CapitalReported income from operations72,499 Add: Special items before interest and taxesRestructuring charges(1)6,544 Abandoned property1,781 Furnace malfunction8,350 Pension Settlement2,252 Executive retirement736 Adjusted income from operations92,162 Income tax @ 30%27,649 Adjusted income from operations after tax $ 64,513 Add:Accounts receivable $94,549 Inventories163,121 Less: Accounts payable79,620 Less: Receivable on furnace malfunction insurance claim5,000 Working Capital173,050 Property, plant and equipment - net265,662 Invested capital $438,712 Return on invested capital14.7% (1) - Includes accelerated depreciation of $1.7 million.Adjusted Cash EarningsEarnings before interest, taxes, depreciation and amortization (EBITDA) $117,675 Change in working capital(2)(5,363) Cash earnings112,312 Add: Special items before interest and taxesLoss on redemption of debt2,518 Restructuring charges4,845 Abandoned property1,781 Furnace malfunction4,594 Pension settlement charge2,252 Executive retirement736 Receivable on furnace malfunction insurance claim5,000 Other adjustment572 Adjusted cash earnings $ 134,610 (2) - Working capital equals net accounts receivable plus net inventories less accounts payableLIBBEY INC.P.O. BOX 10060TOLEDO, OH 43699-0060 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —DETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. ForAll WithholdAll For AllExcept To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR the following Class III Directors: 1. Election of Directors o o o The Board of Directors recommends you voteFOR the following:Nominees 1.01William A. Foley 02 Deborah G. Miller 03 Steve Nave Election of Directors ¨¨¨ Nominees 01William A. Foley 02 Theo Killion 03 Deborah G. Miller The Board of Directors recommends you vote FOR proposals 2 and 3.ForAgainstAbstain 2.Approve, by non-binding vote, 2013 compensation paid to the company’s named executive officers.¨NOTE:¨¨3.Ratification of the appointment of Ernst & Young LLP as Libbey’s independent auditors for the fiscal year ending December 31, 2014.¨¨¨ NOTE: The Directors up for election are Class III directors. At the meeting shareholders will transact such other business as properly may come before the meeting. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain Approve, on an advisory and non-binding basis, the 2016 compensation of the Company’s named executives. o o o The Board of Directors recommends you vote 1 YEAR on the following proposal: 1 year 2 years 3 years Abstain 3. Recommend, on an advisory and non-binding basis, the frequency of future advisory votes on executive compensation. o o o o The Board of Directors recommends you vote FOR the following proposal: For Against Abstain Ratification of the appointment of Deloitte & Touche LLP as Libbey’s independent auditors for the 2017 fiscal year. o o o Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Annual Report, Notice & Proxy Statement is/are available atwww.proxyvote.com.– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 13, 201417, 2017 2:00 PMStephanie A. StreeterVeronica (Ronni) L. Smith and Susan AlleneA. Kovach, or either of them, as proxies, each with the power to appoint her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of LIBBEY INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of shareholder(s)shareholders to be held at 02:00 PM, EDT on May 13, 2014,17, 2017, at the Libbey Corporate Showroom, 335 N. St. Clair Street, Toledo, Ohio, 43604, and any adjournment or postponement thereof.Continued and to be signed on reverse side