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Exhibit 10.22
LIBBEY INC.
SENIOR MANAGEMENT INCENTIVE PLAN
AMENDED AS OF JANUARY 1, 1996
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LIBBEY INC.
SENIOR MANAGEMENT INCENTIVE PLAN
TABLE OF CONTENTS
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1. Purpose 1
2. Definitions 1
3. Administration 2
4. Eligibility and Participation 3
5. Target Bonuses 3
6. Performance Objectives 4
7. Operating Results 4
8. Determination of Annual Bonuses 4
9. Payment of Annual Bonuses 5
10. Amendment or Termination of the Plan 5
11. Miscellaneous 5
12. Effective Date 5
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LIBBEY INC.
SENIOR MANAGEMENT INCENTIVE PLAN
AS AMENDED EFFECTIVE AS OF JANUARY 1, 1996
1. PURPOSE
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The purposes of this Libbey Inc. Senior Management Incentive Plan are to
reward officers and other management employees who contribute to the
success of the Company, by making the amount of their compensation
significantly contingent upon the Company's financial performance, and to
attract and retain officers and other management employees of exceptional
ability.
2. DEFINITIONS (as used herein):
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"Annual Bonus" means the compensation payable to an Executive under this
Plan and will consist of the Performance Component and, except for the
Chief Executive Officer, a Discretionary Component, as described in
paragraph 5.1 hereof;
"Board" means the Board of Directors of Libbey Inc.;
"Bonus Pool" means, for each year, the sum of all Target Bonuses for such
year and will consist of the Performance Components and Discretionary
Components, as described in paragraph 5.1 hereof;
"CEO" means the Chief Executive Officer of Libbey Inc.;
"Committee" means the Compensation Committee of the Board or any other
committee of the Board to which administrative authority with respect to
the Plan may be delegated by the Board;
"Company" means Libbey Inc., a Delaware corporation, together with any
corporation (or unincorporated business entity) 50 percent or more of the
voting shares (or other ownership interests) of which are owned, directly
or indirectly, by Libbey Inc.;
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"Deferred Compensation Plan" means any plan or arrangement adopted by the
Company whereby an Executive may be permitted, at his option, to defer
the actual receipt of an Annual Bonus otherwise payable to him under this
Plan;
"Discretionary Component" means the component of a Target Bonus Pool
payable in the discretion of the Board or the CEO in accordance with
paragraph 8 hereof;
"Executive" means an officer or other management employee of the Company
who is eligible to participate in this Plan in accordance with paragraph
4 hereof;
"Operating Results" means the Company's annual results from operations
for any year, determined in accordance with paragraph 7 hereof and
expressed as a percentage of the year's Performance Objective;
"Performance Component" means the components of a Target Bonus, Annual
Bonus, or Bonus Pool measured by the Company's attainment of its
Performance Objective for a year in accordance with paragraph 7 hereof;
"Performance Objective" means the annual objective established in
accordance with paragraph 6 hereof for the operating performance of the
Company;
"Plan" means this Libbey Inc. Senior Management Incentive Plan as set
forth herein or as from time to time amended;
"Target Bonus" means an amount established each year in accordance with
paragraph 5 hereof equal to a stated percentage of an Executive's annual
base salary and will consist of the Performance Component and the
Discretionary Component, as described in paragraph 5.1 hereof;
Words of the masculine gender include correlative words of the feminine
and neuter genders and vice versa, and words denoting the singular
include the plural and vice versa.
3. ADMINISTRATION
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3.1 Subject to the overall responsibility of the Committee, the Plan will
be administered by the CEO, whose administrative powers hereunder shall
include the powers to interpret the Plan and to exercise full and
complete discretion to adopt, modify, and/or rescind (or to authorize one
or more other
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appropriate officers of the Company to adopt, modify, and/or rescind) any
rulings, determinations, policies, and/or procedures deemed necessary or
appropriate for the maintenance and administration of the Plan. All such
interpretations, rulings, determinations, policies, and procedures shall
be final, conclusive, and binding upon all interested persons.
3.2 The Committee, in its discretion on recommendation of the CEO, shall
be authorized at any time and from time to time to modify any Performance
Objective, and the Committee, in its discretion or recommendation of the
CEO, shall be authorized at any time and from time to time to adjust the
amount of any Target Bonus, the size of the Bonus Pool, and/or the
relative proportions of the Performance and Discretionary Components and
to accelerate or defer the payment of Annual Bonuses.
4. ELIGIBILITY AND PARTICIPATION
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4.1 Each person who, as of the beginning of the initial Plan year or any
subsequent calendar year, is an elected corporate officer of the Company,
shall be an Executive eligible to participate in the Plan for such
initial Plan year or subsequent calendar year. Each person who first
becomes an elected corporate officer of the Company during the initial
Plan year or during a subsequent calendar year shall be an Executive
eligible to participate in the Plan for at least the balance of such
initial Plan year or subsequent calendar year or, if approved by the
Committee on recommendation of the CEO, for the entire year.
4.2 Any other officer or management employee of the Company shall be an
Executive eligible to participate in the Plan for all or any part of any
year during or before which such participation has been approved by the
CEO. The CEO may prospectively or retroactively suspend or withdraw such
approval with respect to any such Executive for all or any part of any
year.
5. TARGET BONUSES
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5.1 A Target Bonus shall be established each year for each Executive,
equal in amount to a stated percentage, not to exceed 100 percent, of the
Executive's base salary for such year. Each Target Bonus shall consist of
the Performance Component and a Discretionary Component.
5.2 The Committee shall establish the CEO's Target Bonus, and the CEO
shall establish the Target Bonuses of all other Executives. Target
Bonuses shall be established based on an evaluation of the
responsibilities of each Executive and of each Executive's potential to
contribute to the Company's attainment of its Performance Objective for
such year. Target Bonuses shall
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be established before or as soon as practicable after the beginning of
each year, and each Executive shall thereupon be notified of his Target
Bonus.
5.3 If the rate of an Executive's base salary is changed during a year
after the Executive's Target Bonus has been established, the amount of
the Executive's Target Bonus shall be adjusted to equal the stated
percentage of the Executive's actual base salary before and after the
change.
6. PERFORMANCE OBJECTIVES
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The Board, on recommendation of the CEO, shall establish a Performance
Objective for the Company for each year for payment of one hundred
percent of each target bonus, which Performance Objective shall include
the range over which greater or lesser amounts of bonus shall be paid,
provided however, payment of any bonus in excess of 200% of the target
bonus shall be at the discretion of the Committee. Each year's
Performance Objective shall be established before or as soon as
practicable after the beginning of such year, and each Executive shall
thereupon be notified thereof. The Performance Objective for such year
shall be based on one or more key financial indicators such as earnings
per share, income from operations, economic value added, cash flow,
return on equity, return on assets or any other financial measure deemed
appropriate for the situation of the Company.
7. OPERATING RESULTS
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As soon as practicable after the end of each year, the operating
performance for such year for the Company shall be determined and
reported to the Board and the CEO. The Company's Operating Results for
each year for the purposes of the Plan, shall be the percentage which the
financial performance achieved for the selected financial measures for
such year, as so reported, is of the Company's financial Performance
Objectives for such year.
8. DETERMINATION OF ANNUAL BONUSES
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8.1 The Operating Results shall determine the extent to which the
Discretionary and Performance Components of the Bonus Pool are payable as
Annual Bonuses. However, the CEO, in his discretion, may reduce or
eliminate the Annual Bonus of any Executive for any year to the extent
the CEO determines that such Executive's performance for such year did
not materially contribute to the Operating Results for such year or that
any act or omission by such Executive has adversely affected (or can be
reasonably expected to adversely affect) the Company.
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8.2 A Discretionary Component of the Bonus Pool shall be paid to
Executives as Annual Bonuses in the discretion of the CEO taking into
consideration, in addition to the Company's Operating Results as defined
for purposes of this Plan, an Executive's contributions to the Company's
other financial and non-financial objectives, such as quality of service
and products, customer satisfaction, adherence to or furtherance of the
Company's legal and ethical policies, product development, market share,
improvement in financial indicators of the Company's success other than
the Performance Objective, and effective response to adverse economic
conditions or to unforeseen adverse events beyond the control of the
Company.
9. PAYMENT OF ANNUAL BONUSES
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9.1 Except to the extent deferred at the option of an Executive in
accordance with a Deferred Compensation Plan, each Executive's Annual
Bonus for each year, determined in accordance with paragraph 8 hereof,
shall be paid in cash no later than March 15 of the following year.
9.2 In the event of an Executive's death after the end of a year but
before payment of the Annual Bonus, if any, for such year has been paid
to the Executive, it shall be paid to the beneficiary or beneficiaries
designated by the Executive in writing filed with the Company or, in the
absence of any such designation or if no such designated beneficiary
survives the Executive, to the beneficiary or beneficiaries of the
Executive's life insurance under the Company's Life Insurance Plan. If
there is no such designated beneficiary or life insurance beneficiary,
such Executive's Annual Bonus shall be paid to the Executive's estate.
9.3 If an Executive's employment with the Company is terminated for any
reason during the course of a year, or if the Executive is transferred to
a position with the Company which the CEO determines no longer qualifies
to participate in this Plan, the extent, if any, to which the Annual
Bonus for such year will be paid to the Executive will be determined by
the CEO, in the CEO's discretion.
10. AMENDMENT OR TERMINATION OF THE PLAN
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The Board, in its sole discretion, may amend, suspend, or terminate the
Plan at any time, except that no such action shall adversely affect the
rights of any person with respect to an Annual Bonus that has become
payable in accordance with paragraph 8 hereof without such person's
consent.
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11. MISCELLANEOUS
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11.1 Nothing in the Plan shall confer on any Executive or other employee
of the Company any right to continue in the employ of the Company or
limit in any way the right of the Company to terminate any such person's
employment at any time.
11.2 No rights under this Plan shall be assignable or transferable, or
subject to encumbrance of any nature, except to the extent that an
Executive may designate a beneficiary to receive any payment to be made
following his death. If any Executive or beneficiary shall attempt to
assign, transfer, encumber or charge any such right, or should such right
be subjected to attachment, execution, garnishment, sequestration or
other legal, equitable or other process, it shall thereupon pass to such
one or more persons as may be designated by the Committee from among the
Executive, any beneficiary theretofore designated by the Executive, and
any spouse, parent, or child of such Executive or beneficiary.
11.3 With respect to the rights of Executives under the Plan, the
obligations of the Company under the Plan shall be wholly unsecured. The
Company shall be under no obligation to reserve, segregate or earmark any
cash or other property for the payment of any amounts under the Plan.
12. EFFECTIVE DATE
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This Plan, when duly executed, shall become effective as amended as of
January 1, 1996.
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IN WITNESS WHEREOF, the Board of Directors of Libbey Inc. has caused this
Libbey Inc. Senior Management Incentive Plan to be executed by a duly authorized
officer of the corporation this _____ day of ______________, 1996.
LIBBEY INC.
By:____________________________________________________
John F. Meier
Chairman of the Board and Chief Executive Officer
Attest:
By:______________________________
Arthur H. Smith
Secretary