Attached files
file | filename |
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EX-10.39 - EX-10.39 - LIBBEY INC | l39115exv10w39.htm |
10-K - FORM 10-K - LIBBEY INC | l39115e10vk.htm |
EX-23 - EX-23 - LIBBEY INC | l39115exv23.htm |
EX-24 - EX-24 - LIBBEY INC | l39115exv24.htm |
EX-21 - EX-21 - LIBBEY INC | l39115exv21.htm |
EX-32.1 - EX-32.1 - LIBBEY INC | l39115exv32w1.htm |
EX-13.1 - EX-13.1 - LIBBEY INC | l39115exv13w1.htm |
EX-32.2 - EX-32.2 - LIBBEY INC | l39115exv32w2.htm |
EX-31.1 - EX-31.1 - LIBBEY INC | l39115exv31w1.htm |
EX-31.2 - EX-31.2 - LIBBEY INC | l39115exv31w2.htm |
Exhibit 10.40
John F. Meier
Chairman and Chief Executive Officer
Direct: (419) 325-2501
Fax: (419) 325-2585
MEIERJF@libbey.com
Direct: (419) 325-2501
Fax: (419) 325-2585
MEIERJF@libbey.com
January 1, 2010
Roberto Rubio Barnes
Versalles 104
Valle de San Angel
San Pedro Garza García
Nuevo León
México
Versalles 104
Valle de San Angel
San Pedro Garza García
Nuevo León
México
Dear Roberto,
Libbey Inc. (the Company) considers it essential to the best interests of its shareholders to
foster the continuous employment of key management personnel. In that connection, the Companys
Board of Directors (the Board) recognizes that, as is the case with many publicly held
companies, the possibility of a change in control of the Company may exist and that the
uncertainty and questions that it may raise among management could result in the departure or
distraction of management personnel to the detriment of the Company and its shareholders.
The Board has decided to reinforce and encourage the continued attention and dedication of members
of the Companys management, including yourself, to their assigned duties without the distraction
arising from the possibility of a change in control of the Company.
In order to induce you to remain in its employ, the Company hereby agrees that after this letter
agreement (this Agreement) has been fully executed, you shall receive the severance benefits set
forth in this Agreement if your employment with the Company is terminated under the circumstances
described below subsequent to a Change in Control (as defined in Section 2), and you shall receive
the compensation set forth in Section 5(a) through (c) below upon the occurrence of a Change in
Control even if your employment is not terminated in connection with, or subsequent to, the Change
in Control.
1. Term of Agreement. The term of this Agreement shall commence on January 1, 2010,
and shall continue in effect through December 31, 2010. Commencing on January 1, 2011 and on each
January 1 thereafter, the term of this Agreement shall be extended
300 Madison Avenue, Toledo, Ohio 43604
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January 1, 2010
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automatically for one year
unless the Company gives you written notice, not later than September 30 of the preceding calendar
year, that the Company does not wish to extend this Agreement for the subsequent year. For
example, if the Company does not desire to renew this Agreement for the 2011 calendar year, the
Company must, on or before September 30, 2010, give you written notice that the term of this
Agreement will not be renewed for the 2011 calendar year. If a Change in Control occurs during
the original or any extended term of this
Agreement, the term of this Agreement shall continue in effect for a period of not less than
thirty-six (36) months beyond the month in which such Change in Control occurred.
2. Change in Control. For purposes of this Agreement, a Change in Control shall be
deemed to occur if:
(a) any Person (as defined below) is or becomes the Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company representing thirty percent (30%) or more of
the combined voting power of the Companys then outstanding securities. For purposes of this
Agreement, the term Person is used as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the Exchange Act). However, the term Person shall
not include the Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their ownership of stock of the Company.
For purposes of this Agreement, the term Beneficial Owner shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act;
(b) during any period of two (2) consecutive years (not including any period prior to the
execution of this Agreement), Continuing Directors (as defined below) cease for any reason to
constitute at least a majority of the Board. The term Continuing Directors means (i)
individuals who were members of the Board at the beginning of the two (2) year period referred to
above and (ii) any individuals elected to the Board, after the beginning of the two (2) year
period referred to above, by a vote of at least two-thirds (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. Notwithstanding the
immediately preceding sentence, an individual who is elected to the Board after the beginning of
the two (2) year period shall not be deemed a Continuing Director if the individual was designated
by a person who has entered into an agreement with the Company to effect a transaction described
in Sections 2(a), (c) or (d);
(c) the consummation of a merger or consolidation of the Company with any other corporation
(or other entity), other than a merger or consolidation that would result in the voting securities
of the Company outstanding immediately prior thereto continuing 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 the voting securities of the Company or such surviving entity
outstanding immediately after the merger or consolidation; or
(d) the consummation of a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Companys assets.
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3. Termination Following Change in Control.
(a) General. If, during the term of this Agreement, a Change in Control occurs and
the Company terminates your employment without Cause (as defined below), or you terminate your
employment for Good Reason (as defined below), within the two (2) year period immediately
following the date on which the Change in Control occurs, then you shall be entitled to the
benefits provided in Section 4(c) of this Agreement, and those benefits shall be paid
notwithstanding the subsequent expiration of the term of this Agreement. In addition, you shall be
entitled to the benefits provided in Section 4(c) if:
(i) After the occurrence of a Potential Change in Control (as defined in Section 9
below) and prior to the date on which the Change in Control actually occurs, the Company
terminates your employment without Cause (other than as a result of your Permanent
Disability, as defined below) or you terminate your employment upon an event that would be
considered Good Reason if it were to occur after a Change in Control; or
(ii) Prior to the occurrence of a Potential Change in Control, the Company terminates
your employment without Cause (other than as a result of Permanent Disability) or you
terminate your employment upon an event that would be considered Good Reason if it were to
occur after a Change in Control and you reasonably demonstrate that the Companys
termination of your employment or the events giving rise to Good Reason (A) was or were at
the request of, or was or were induced by, a third party who has taken steps reasonably
calculated to effect a Change of Control, or (B) otherwise arose in connection with or in
anticipation of a Change in Control.
Notwithstanding anything to the contrary in this Agreement, you shall not be entitled to any
payment under Section 4 of this Agreement if your employment is terminated as a result of your
death or Permanent Disability. Permanent Disability means any incapacity due to physical or
mental illness as a result of which you are absent from the full-time performance of your duties
with the Company for six (6) consecutive months and do not return to the full-time performance of
your duties within thirty (30) days after the Company gives Notice of Termination (as defined in
Section 3(d) below) to you.
(b) Cause. Cause means the occurrence of any of the following events: (i) your
willful and continued failure (other than as a result of your incapacity due to physical or mental
illness or after your issuance of a Notice of Termination for Good Reason to substantially perform
your duties with the Company after the Board has delivered to you a written demand for substantial
performance that specifically identifies the manner in which the Board believes that you have not
substantially performed your duties; (ii) your willful and continued failure (other than as a
result of your incapacity due to physical or mental illness or after your issuance of a Notice of
Termination for Good Reason) to substantially follow and comply with the specific and lawful
directives of the Board, as reasonably determined by the Board, after the Board has delivered to
you a written demand for substantial performance that specifically identifies the manner in which
the Board believes that you have not substantially performed your duties; (iii) your willful
commission of an act of fraud or dishonesty resulting in material economic or financial injury to
the Company; or (iv) your willful engagement in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company. For purposes of this Section 3(b), no act,
or failure to act, on your part shall be deemed willful
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January 1, 2010
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unless your commission of the act or
failure to act is not in good faith. In any event, the Company may not terminate your employment
for Cause pursuant to Sections 3(b)(i), (ii) or (iv)
hereof unless and until the Company has delivered to you a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the
Board at a meeting of the Board (after reasonable notice to you, an opportunity for you, together
with your counsel, to be heard before the Board and a reasonable opportunity to cure), finding, in
the Boards good faith opinion, that you engaged in any of the conduct set forth in the definition
of Cause above and specifying in reasonable detail the particulars of the conduct at issue.
(c) Good Reason. Good Reason means the occurrence, after a Change in Control, of
any of the following circumstances unless, in the case of Sections 3(c)(i), (v), (vi), (vii) or
(viii), such circumstances are fully corrected (provided such circumstances are capable of
correction) prior to the Date of Termination (as defined in Section 3(e)) specified in the
applicable Notice of Termination:
(i) the assignment to you of any duties inconsistent with the position in the Company
that you held immediately prior to the Change in Control, a significant adverse alteration
in the nature or status of your responsibilities or the conditions of your employment from
those in effect immediately prior to the Change in Control, including by virtue of the
Company ceasing to be a publicly-held corporation, or any other action by the Company that
results in a material diminution in your position, authority, duties or responsibilities;
(ii) the Companys reduction of your annual base salary as in effect on the date of
this Agreement or as the same may be increased from time to time after the date of this
Agreement;
(iii) the relocation of the Companys offices at which you are principally employed
immediately prior to the date of the Change in Control (your Principal Location) to a
location more than thirty (30) miles from that location, or the Companys requiring you,
without your written consent, to be based anywhere other than your Principal Location,
except for required travel on the Companys business to an extent substantially consistent
with your business travel obligations prior to the Change in Control;
(iv) the Companys failure to pay to you any portion of your current compensation or
to pay to you any portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven (7) business days of the date on which the
compensation is due;
(v) the Companys failure to continue in effect any material compensation or benefit
plan or practice in which you participate immediately prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has
been made with respect to such plan, or the Companys failure to continue your
participation therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level of your
participation relative to other participants, as existed at the time of the Change in
Control;
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(vi) the Companys failure to continue to provide you with benefits substantially
similar in the aggregate to those enjoyed by you under any of the Companys life insurance,
medical, health and accident, disability, pension, retirement,
or other benefit plans or practices in which you and your eligible family members were
participating at the time of the Change in Control, the taking of any action by the Company
that would directly or indirectly materially reduce any of those benefits, or the failure
by the Company to provide you with the number of paid vacation days to which you are
entitled on the basis of years of service with the Company in accordance with the Companys
normal vacation policy in effect at the time of the Change in Control (or, if more
favorable to you, on the basis of the terms of your initial employment with the Company);
(vii) the Companys failure to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in Section 6 hereof; or
(viii) any purported termination of your employment that is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 3(d) hereof (and, if
applicable, the requirements of Section 3(b) hereof), which purported termination shall not
be effective for purposes of this Agreement.
Your continued employment shall not constitute consent to, or a waiver of rights with respect to,
any circumstance constituting Good Reason hereunder.
(d) Notice of Termination. Any purported termination of your employment by the
Company or by you (other than termination as a result of your death, in which case your employment
shall terminate automatically) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 7. Notice of Termination means a written notice that
indicates the specific termination provision in this Agreement relied upon and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(e) Date of Termination, Etc. Date of Termination means the date on which you incur
a separation from service within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the Code).
4. Compensation Upon Termination. Upon termination of your employment pursuant to
Section 3 above, the benefits to which you are entitled, subject to the terms and conditions of
this Agreement, are:
(a) If the Company terminates your employment for Cause or you terminate your employment
other than for Good Reason, then the Company shall pay you, in accordance with the Companys
normal pay practices, your base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which you are entitled under
any compensation plan or practice of the Company in effect at the time such payments are due, and
the Company shall have no further obligations to you under this Agreement.
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(b) If your employment with the Company is terminated by reason of your death or Permanent
Disability, you or your estate and dependents, if any, will be entitled to the benefits to which
you are entitled, under the Employment Agreement dated as of June 16, 2009, between you and the
Company, by reason of your death or Permanent Disability, as the case may be.
(c) If you terminate your employment for Good Reason or the Company terminates your
employment without Cause (other than as a result of your death or Permanent Disability), in each
case in accordance with the terms of Section 3 above, then you shall be entitled to the benefits
provided below:
(i) The Company shall pay to you your base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given, plus all other amounts to
which you are entitled under any compensation plan or practice of the Company in effect at
the time the payments are due;
(ii) In lieu of any further salary payments to you for periods subsequent to the Date
of Termination, the Company shall pay to you, at the time specified in Section 4(d), a
lump-sum severance payment equal to the sum of the following:
(A) | three (3) times the greater of your annual base salary at the rate in effect as of the Date of Termination or your annual base salary at the rate in effect immediately prior to the Change in Control; and | ||
(B) | three (3) times the greater of (1) your target annual incentive compensation as in effect as of the Date of Termination or immediately prior to the Change in Control, whichever is greater, or (2) your annual bonus for the year immediately preceding the Date of Termination; |
(iii) For a period of one (1) year following the Date of Termination, the Company
shall, at its sole expense as incurred, provide you with financial planning services of
substantially the same type and scope as those with which the Company was providing you
immediately prior to the Date of Termination, or, if more favorable to you, the date of the
Change in Control, provided that in no event will the amount of financial planning services
provided by the Company in one year affect the amount of expenses eligible for
reimbursement, or in-kind benefits to be provided to you, in any other taxable year;
(iv) For a period of two (2) years following the Date of Termination, the Company
shall, at its sole expense as incurred, provide you with outplacement services, the scope
and provider of which shall be selected by you in your sole discretion, provided that the
Companys out-of-pocket cost under this Section 4(c)(iv) shall not exceed fifteen thousand
dollars ($15,000);
(v) For a period of thirty-six (36) months after the Date of Termination, the Company
shall continue to provide you and your eligible family members, on the terms set forth in
the remaining provisions of this Section 4(c)(v), with medical and dental
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health benefits
at least equal to those that would have been provided to you and them if your employment
had not been terminated or, if more favorable to you, as in effect generally at any time
thereafter; provided, however, that if you become employed by another employer and are
eligible to receive medical and dental health benefits under that employers plans, the
Companys obligations under this Section 4(c)(v) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six (36) month period following
your termination, and any such benefits actually received by you shall be reported to the
Company. If under the terms of the Companys
benefit plans or programs you are ineligible to continue to be so covered, the Company
shall provide you with substantially equivalent coverage through other sources. You agree
to pay the cost, on an after-tax basis, for the continued medical and dental coverage,
subject to Section 4(d), on or about January 31 of the year following the year in which the
Date of Termination occurs and continuing on or about each January 31 until the year
following the last year of your coverage pursuant to this Section 4(c)(v), and concurrently
therewith the Company will make a payment to you such that, after payment of all taxes
incurred by you as a result of your receipt of the continued medical and dental coverage
and payment by the Company, you retain an amount equal to the amount you paid during the
immediately preceding calendar year for the medical and dental benefit plan coverage
described in this Section. At the termination of the benefits coverage under this Section
4(c)(v), you, your spouse and your dependents shall be entitled to continuation coverage
pursuant to section 4980B of the Code, sections 601-608 of the Employee Retirement Income
Security Act of 1974, as amended, and under any other applicable law, to the extent
required by such laws, as if you had terminated employment with the Company on the date
such benefits coverage terminates.
(vi) (A) Anything in this Agreement to the contrary notwithstanding, but subject to
Section 4(c)(vi)(B), if it shall be determined that any payment or distribution to you or
for your benefit (whether paid or payable or distributed or distributable) pursuant to the
terms of this Agreement or otherwise (the Payment) would be subject to the excise tax
imposed by section 4999 of the Code (the Excise Tax), then you shall be entitled to
receive from the Company an additional payment (the Gross-Up Payment) in an amount such
that the net amount of the Gross-Up Payment retained by you after the calculation and
deduction of any and all federal, state and local income tax, employment tax and Excise Tax
(including any interest or penalties imposed with respect to such taxes) on the Gross-Up
Payment provided for in this Section 4(c)(vi), and taking into account any lost or reduced
tax deductions on account of the Gross-Up Payment, shall be equal to the Excise Tax;
(B) Notwithstanding any provision of this Agreement to the contrary, but giving effect
to any redetermination of the amount of Gross-Up payments otherwise required by this
Section 4(c)(vi), if but for this sentence, the Company would be obligated to make a
Gross-Up Payment to the Executive, and the aggregate present value of the parachute
payments to be paid or provided to you under this Agreement or otherwise does not exceed
1.10 multiplied by three times your base amount, then the payments and benefits to be
paid or provided under this Agreement will be reduced (or repaid to the Company, if
previously paid or provided) to the minimum extent necessary so that no portion of any
payment or benefit to you, as so reduced or repaid, constitutes an excess parachute
payment. For purposes of this Section 4(c)(vi)(B), the terms excess parachute payment,
present value, parachute payment, and
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base amount will have the meanings assigned to
them by Section 280G of the Code. The determination of whether any reduction in or
repayment of such payments or benefits to be provided under this Agreement is required
pursuant to this Section 4(c)(vi)(B) will be made at the expense of the Company, if
requested by you or the Company, by the Accountants (as defined in Section 4(c)(vi)(C)).
Appropriate adjustments will be made to amounts previously paid to you, or to amounts not
paid pursuant to this Section 4(c)(vi)(B), as the case may be, to reflect properly a
subsequent determination that you owe more or less Excise Tax than the amount previously
determined to be due. If a Payment intended to be provided under the Agreement is required
to be reduced pursuant to this Section 4(c)(vi)(B), the payments
shall be reduced in the following order of priority: payments pursuant to Section
4(c)(ii), payments pursuant to Section 4(c)(v), payments pursuant to Section 4(c)(iii) and
payments pursuant to Section 4(c)(iv).
(C) All determinations required to be made under this Section 4(c)(vi), including
whether and when the Gross-Up Payment is required and the amount of such Gross-Up Payment,
and the assumptions to be utilized in arriving at such determinations, shall be made by the
Accountants (as defined below), which shall provide you and the Company with detailed
supporting calculations with respect to such Gross-Up Payment within fifteen (15) business
days of the receipt of notice from you or the Company that you have received or will
receive a Payment. For the purposes of this Section 4(c)(vi), the Accountants shall mean
the Companys independent certified public accountants serving immediately prior to the
Change in Control. If the Accountants are also serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, you shall appoint another
nationally recognized public accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accountants hereunder). All fees
and expenses of the Accountants shall be borne solely by the Company.
For the purposes of determining whether any of the Payments will be subject to the Excise
Tax and the amount of such Excise Tax, such Payments will be treated as parachute
payments within the meaning of section 280G of the Code, and all parachute payments in
excess of the base amount (as defined under section 280G(b)(3) of the Code) shall be
treated as subject to the Excise Tax, unless and except to the extent that in the opinion
of the Accountants such Payments (in whole or in part) either do not constitute parachute
payments or represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4) of the Code) in excess of the base amount, or such
parachute payments are otherwise not subject to such Excise Tax. For purposes of
determining the amount of the Gross-Up Payment, you shall be deemed to pay Federal income
taxes at the highest applicable marginal rate of Federal income taxation for the calendar
year in which the Gross-Up Payment is to be made and to pay any applicable state and local
income taxes at the highest applicable marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in Federal income
taxes which could be obtained from the deduction of such state or local taxes if paid in
such year (determined without regard to limitations on deductions based upon the amount of
your adjusted gross income), and to have otherwise allowable deductions for Federal, state
and local income tax purposes at least equal to those disallowed because of the inclusion
of the Gross-Up Payment in your adjusted gross income. To
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the extent practicable, but
subject to Section 4(c)(vi)(D), any Gross-Up Payment with respect to any Payment shall be
paid by the Corporation at the time you are entitled to receive the Payment and in no event
will any Gross-Up Payment be paid later than five days after the receipt by you of the
Accountants determination. Any determination by the Accountants shall be binding upon the
Company and you. As a result of uncertainty in the application of section 4999 of the Code
at the time of the initial determination by the Accountants hereunder, it is possible that
the Gross-Up Payment made will have been an amount less than the Company should have paid
pursuant to this Section 4(c)(vi) (the Underpayment). In the event that the Company
exhausts its remedies pursuant to Section 4(c)(vi)(C) and you are required to make a
payment of any Excise Tax, the Underpayment shall be promptly paid by the Company to or for
your benefit; and
(D) You shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable after you are informed in
writing of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. You shall not pay such claim prior to the
expiration of the 30-day period following the date on which you give such notice to the
Company (or such shorter period ending on the date that any payment of taxes, interest
and/or penalties with respect to such claim is due). If the Company notifies you in writing
prior to the expiration of such period that it desires to contest such claim, you shall:
(1) | give the Company any information reasonably requested by the Company relating to such claim; | ||
(2) | take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; | ||
(3) | cooperate with the Company in good faith in order to effectively contest such claim; and | ||
(4) | permit the Company to participate in any proceedings relating to such claims; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify you for and hold you harmless from, on an after-tax basis, any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of all related costs and expenses. Without limiting the foregoing provisions of this Section 4(c)(vi), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and |
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may, at its sole option, either direct you to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs you to pay such claim and sue for a refund, the Company shall advance the amount of such payment to you, on an interest-free basis, and shall indemnify you for and hold you harmless from, on an after-tax basis, any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance (including as a result of any forgiveness by the Company of such advance); provided, further, that any extension of the statute of limitations relating to the payment of taxes for the taxable year of you with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Companys control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and you shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority; |
(E) Notwithstanding any other provision of this Section 4(c)(vi) to the contrary and
subject to Section 4(d), all taxes and expenses described in this Section 4(c)(vi) shall be
paid or reimbursed within five (5) business days after you submit evidence of incurrence of
such taxes and/or expenses, provided that in all events such reimbursement will be made no
later than the end of the year following the year in which the applicable taxes are
remitted or, in the case of reimbursement of expenses incurred due to a tax audit or
litigation to which there is no remittance of taxes, no later than the end of the year
following the year in which the audit is completed or there is a final and nonappealable
settlement or other resolution of the litigation in accordance with Treasury Regulation
Section 1.409A-3(i)(1)(v). Each provision of reimbursements pursuant to this Section
4(c)(vi) shall be considered a separate payment and not one of a series of payments for
purposes of Section 409A. Any expense reimbursed by the Company in one taxable year in no
event will affect the amount of expenses required to be reimbursed or in-kind benefits
required to be provided by the Company in any other taxable year.
(vii) In any situation where under applicable law the Company has the power to
indemnify (or advance expenses to) you in respect of any judgments, fines, settlements,
loss, cost or expense (including attorneys fees) of any nature related to or arising out
of your activities as an agent, employee, officer or director of the Company or in any
other capacity on behalf of or at the request of the Company, the Company shall promptly on
written request, indemnify (and advance expenses to) you to the fullest extent permitted by
applicable law, including but not limited to making such findings and determinations and
taking any and all such actions as the Company may, under applicable law, be permitted to
have the discretion to take so as to effectuate
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such indemnification or advancement. Such
agreement by the Company shall not be deemed to impair any other obligation of the Company
respecting your indemnification otherwise arising out of this or any other agreement or
promise of the Company or under any statute;
(viii) The Company shall pay you, at the time specified in Section 4(d), a lump-sum
payment in an amount equal to the additional benefits that you would have accrued under
each qualified or nonqualified pension, profit sharing, deferred compensation or
supplemental plan maintained by the Company for your benefit had you continued your
employment with the Company for three (3) additional years following your Date of
Termination, assuming you were fully vested under such plans, or $250,000, whichever is
greater; provided that if you are eligible to receive grandfathered benefits under the
Companys pension plan, the provisions of this Section 4(c)(viii) shall apply to such
grandfathered benefits, without reduction for age, in addition to any other benefits to
which you are entitled under this Section 4(c)(viii).
(d) The payments provided for in Sections 4(c)(i) shall be made not later than the fifth
business day following the Date of Termination. Notwithstanding any provisions of this Section 4
to the contrary, if you are a specified employee (within the meaning of Section 409A of the
Code, the amounts that otherwise would be payable pursuant to Sections 4(c)(ii), (iii), (v), (vi)
and (viii) and Section 5(d) of this Agreement (as well as any other payment or benefit that you
are entitled to receive upon your separation from service and that would be considered to be
deferred compensation under Section 409A of the Code) during the six-month period immediately
following the Date of Termination (the Delayed Payments) will instead be paid or made available
on the earlier of (i) the first day of the seventh month following your Date of Termination and
(ii) your death. Each payment to be made to you under the provisions of this Agreement will be
considered to be a separate payment and not one of a series of payments for purposes of Section
409A of the Code. Further, coverages provided during one taxable year will not affect the degree
to which coverages will be provided in any other taxable year.
(e) You shall not be required to mitigate the amount of any payment provided for in this
Section 4 by seeking other employment or otherwise nor, except as provided in Section 4(c)(v),
shall the amount of any payment or benefit provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer or self-employment, by
retirement benefits, by offset against any amount claimed to be owed by you to the Company, or
otherwise.
5. Performance-based Equity Compensation; Other Equity-Based Awards; Annual Incentive
Compensation.
(a) Notwithstanding anything contained herein, in the event of a Change in Control during the
term of this Agreement, all outstanding stock options and stock appreciation rights, if any,
granted to you under any of the Companys stock option plans, incentive plans or other similar
plans (or options substituted therefor covering the stock of a successor corporation) shall,
effective immediately prior to such Change in Control, become fully vested and exercisable as to
all shares of stock covered thereby.
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(b) Upon the occurrence of a Change in Control, the Company shall pay to you, in cash, an
amount equal to the value of any Equity Compensation (as defined below) that is
performance-based (as defined below) and that is earned, accrued, allocated or awarded with
respect to your service during any performance period or periods that include the date on which
the Change in Control occurred. The amount payable to you will be calculated as if the
performance-based Equity Compensation were earned at the targeted rate and shall be prorated
through the date on which the Change in Control occurs based upon the number of days on which you
were employed by the Company during the applicable performance period(s). For purposes of this
Agreement, Equity Compensation means restricted stock units, performance shares, performance
units and restricted shares, and the shares that the Company is obligated to issue at the time
restricted stock units, performance shares or performance units are earned, or deemed earned, by
you. Compensation is performance-based if the compensation may be earned pursuant to a plan
that provides that the amount of, or the entitlement to, the compensation is contingent on the
satisfaction of pre-established organizational or individual performance criteria relating to a
performance period of at least twelve (12) consecutive months. Organization or individual
performance criteria are considered pre-established if established in writing by the date not
later than ninety (90) days after the commencement of the performance period, provided that the
outcome is substantially uncertain
at the time the criteria are established. Compensation also is performance-based if the
plan provides for payments based upon subjective performance criteria, provided that
(i) The subjective performance criteria are bona fide and relate to your performance
or the performance of a group of employees that includes you, or a business unit for which
you provide services (which may include the entire Company); and
(ii) The determination that any subjective performance criteria have been met is not
made by you or a member of your family or a person under the effective control of you or a
member of your family, and no amount of the compensation of the person making the
determination is effectively controlled in whole or in part by the you or a member of your
family.
(c) If a Change in Control occurs during the term of the Agreement, then the Company shall
pay to you, within five (5) business days after the Change in Control, an amount, calculated as if
all objectives under the Companys annual incentive compensation plan for the year in which the
Change in Control occurs were achieved at targeted levels, equal to your target (as in effect on
the date of the Change in Control) annual incentive compensation opportunity for the year in which
the Change in Control occurs, prorated through the date of the Change in Control; provided,
however, that in no event shall the amount payable to you pursuant to this Section 5(c) be less
than fifty percent (50%) of your target annual incentive compensation opportunity for the year in
which the Change in Control occurs.
(d) If a Change in Control occurs during the term of this Agreement, then each outstanding
share of restricted stock and each outstanding restricted share unit (other than a
performance-based share of restricted stock or restricted share unit) granted to you under any of
the Companys incentive plans or other similar plans (an Equity-Based Award) shall, immediately
prior to the Change in Control, be converted into a right to receive an amount equal to the value
of one share of the Companys common stock based on the closing stock price on the last trading
day immediately preceding the Change in Control (a Cash Equivalent
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Unit). Subject to the
following sentence and any deferral election you may have made pursuant to the Executive Savings
Plan, the Executive Deferred Compensation Plan or any other non-qualified deferred compensation
plan, the Cash Equivalent Units shall vest and be paid to you at the same time and upon the same
conditions as the Equity-Based Awards from which the Cash Equivalent Units were converted. If,
prior to the vesting and payment of all of the Cash Equivalent Units and within the two-year
period following the Change in Control, you terminate your employment for Good Reason or the
Company terminates your employment without Cause or for Permanent Disability, subject to Section
4(d), the remaining Cash Equivalent Units shall vest and the Company shall pay to you within five
(5) business days after the Date of Termination, an amount equal to the value of your remaining
Cash Equivalent Units.
6. Successors; Binding Agreement.
(a) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any
such succession shall be a breach of this Agreement and shall
entitle you to terminate your employment and receive compensation from the Company in the
same amount and on the same terms to which you would be entitled hereunder if you terminate your
employment for Good Reason following a Change in Control. Unless expressly provided otherwise,
Company as used herein shall mean the Company as defined in this Agreement and any successor to
its business and/or assets as aforesaid.
(b) This Agreement shall inure to the benefit of and be enforceable by you and your personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you hereunder had you
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or, if there is no
such designee, to your estate.
7. Notice. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the attention of the
Board with a copy to the Secretary of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
8. Non-Compete, Confidentiality and Non-Solicitation Covenants.
(a) Non-Compete. In consideration of and in connection with the benefits provided to
you under this Agreement, and in order to protect the goodwill of the Company, you hereby agree
that, if your employment is terminated under circumstances that entitle you to benefits under
Section 4(c), then, for a period of twelve (12) months commencing on the Date of Termination, you
shall not, directly or indirectly, own, manage, operate, join, control or
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participate in the
ownership, management, operation or control of, or be connected as a director, officer, employee,
partner, consultant or otherwise with any of the following entities (or any subsidiary of any such
entity) other than as a shareholder or beneficial owner owning 5% or less of the outstanding
securities of a public company: Anchor Hocking; Arc International or its affiliate Cardinal
International, Inc.; Oneida LTD; or any glass tableware manufacturer, seller or importer for
Bormioli Rocco Casa SpA, for the Kedaung group of companies of Indonesia or for the Sisecam group
of companies of Turkey including Pasabahce.
(b) Confidentiality. You hereby agree that, for the period commencing on the Date of
Termination and terminating on the second anniversary thereof, you shall not, directly or
indirectly, disclose or make available to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, any Confidential Information (as defined below). You
agree that, upon termination of your employment with the Company, all Confidential Information in
your possession that is in written or other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the Company and shall not be retained by
you or furnished to any third party in any form except as provided herein; provided, however, that
you shall not be obligated to treat as confidential, or return to the Company copies of, any
Confidential Information that (i) was publicly known at the time of disclosure to you, (ii)
becomes publicly known or available thereafter other than by any means in violation of this
Agreement or any other duty owed to the Company by any person or entity, or (iii) is lawfully
disclosed to you by a third party. As used in this Agreement, the term Confidential Information
means: information disclosed to you or known by you as a
consequence of or through your relationship with the Company, about the customers, employees,
business methods, public relations methods, organization, procedures or finances, including,
without limitation, information of or relating to customer lists, of the Company and its
affiliates.
(c) Non-Solicitation. You hereby agree that, for the period commencing on the Date of
Termination and terminating on the second anniversary thereof, you shall not, either on your own
account or jointly with or as a manager, agent, officer, employee, consultant, partner, joint
venturer, owner or shareholder or otherwise on behalf of any other person, firm or corporation,
directly or indirectly solicit or attempt to solicit away from the Company any of its officers or
employees or offer employment to any person who, on or during the six (6) months immediately
preceding the date of such solicitation or offer, is or was an officer or employee of the Company;
provided, however, that a general advertisement to which an employee of the Company responds shall
in no event be deemed to result in a breach of this Section 8(c).
9. Funding of Obligations. In order to partially fund its obligations to provide
benefits under this Agreement (including, without limitation, its obligations under Section
4(c)(vi)) the Company shall establish and fund a trust for your benefit and the benefit of other
executives of the Company with whom the Company has entered into agreements similar to this
Agreement. The trust shall be a grantor trust described in section 671 of the Code. If the Company
has not, prior to the occurrence of a Potential Change in Control (as defined below), fully funded
its obligations to provide benefits under this Agreement, then upon the occurrence of a Potential
Change in Control, the Company shall, to the extent the amount contributed would not be treated as
property transferred in connection with the performance of services for purposes of Code Section
83, as provided in Section 409A(b)(3) of the Code, fully fund its obligations to provide benefits
hereunder (including, without limitation, its obligations under
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Section 4(c)(vi)) by irrevocably
contributing funds to such trust on your behalf. The amount to be contributed by the Company to
the trust shall not be less than the then present value of the Companys obligations under Section
4 hereof, as determined by the firms serving as the Companys actuaries and accountants
immediately prior to the Change in Control. Such actuaries and accountants shall be paid by the
Company. The establishment and funding of such trust shall not affect the obligation of the
Company to provide benefits under the terms of this Agreement. For purposes of this Agreement a
Potential Change in Control shall be deemed to occur if:
(a) the Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;
(b) any Person (including the Company) publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control;
(c) any Person who is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing ten percent (10%) or more of the combined voting power of the
Companys then outstanding securities, increases such Persons beneficial ownership of such
securities by five percent (5%) or more of the Companys then outstanding securities over the
percentage so owned by such Person on the date hereof; provided however, that this subsection (c)
shall not apply to Zesiger Capital (Zesiger) by virtue of its individual or collective
beneficial ownership of securities of the Companys outstanding securities as of the date of this
Agreement so long as Zesiger does not, individually
or collectively, beneficially own, or increase its beneficial ownership to, twenty-five
percent (25%) or more of the combined voting power of the Companys then outstanding securities;
or
(d) the Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
10. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by you
and such officer as may be specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement shall be governed by
the laws of the State of Ohio without regard to its conflicts of law principles. All references to
sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions
to such sections. Except as provided in Section 4(c)(vi) hereunder, any payments provided for
hereunder shall be paid net of any applicable withholding required under federal, state or local
law. The obligations of the Company under Section 4 shall survive the expiration of the term of
this Agreement. The section headings contained in this Agreement are for convenience only, and
shall not affect the interpretation of this Agreement.
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11. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
12. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the
same instrument.
13. Suits, Actions, Proceedings, Etc..
(a) Jurisdiction and Venue. No suit, action or proceeding with respect to this
Agreement, nor any judgment entered by any court in respect thereof, may be brought in any court,
domestic or foreign, or before any similar domestic or foreign authority, other than in a court of
competent jurisdiction in the State of Ohio, and you and the Company hereby irrevocably waive any
right which you or the Company, as applicable, may otherwise have had to bring such a suit,
action, proceeding or judgment in any other court, domestic or foreign, or before any similar
domestic or foreign authority. You and the Company hereby submit to the exclusive jurisdictions of
such courts for the purpose of any such suit, action, proceeding or judgment. By your execution
and delivery of this Agreement, you appoint the Secretary of the Company, at the Companys office
in Toledo, Ohio, as your agent upon which process may be served in any such suit, action or
proceeding; and by its execution and delivery of this Agreement, the Company appoints the
Secretary of the Company, at its office in Toledo, Ohio, as its agent upon which process may be
served in any such suit, action or proceeding. Service of process upon such applicable agent,
together with actual notice of such service given to you or the Company, as applicable, in the
manner provided in Section 7 hereof, shall be deemed in every respect effective service of process
upon the applicable party in any suit, action, proceeding or judgment. Nothing herein shall be
deemed to limit the ability of you or the Company to serve any such writs, process or summonses in
any other manner permitted by
applicable law. You and the Company hereby irrevocably waive any objections which you or the
Company, as applicable, may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the State of Ohio, and hereby further irrevocably waive any claim that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
Notwithstanding the foregoing, in the event that no court of competent jurisdiction in the State
of Ohio will accept such jurisdiction and venue, then any suit, action or proceeding with respect
to this Agreement, or any judgment entered by any court in respect thereof, may be brought in any
court of competent jurisdiction in the continental United States which has jurisdiction over such
suit, proceeding or action and the parties thereto.
(b) Compensation During Dispute, Etc.. Your compensation during any disagreement,
dispute, controversy, claim, suit, action or proceeding (collectively, a Dispute) arising out of
or relating to this Agreement or the interpretation of this Agreement shall be as follows: If
there is a termination by you or the Company followed by a Dispute as to whether you are entitled
to the payments and other benefits provided under this Agreement, then, during the period of that
Dispute the Company shall pay you one hundred percent (100%) of the amount specified in Section
4(c), if, but only if, you agree in writing that if the Dispute is resolved against you, you shall
promptly refund to the Company all payments you receive under Sections 4(c)(i) and 4(c)(ii) of
this Agreement plus interest at the rate provided in Section 1274(d) of the Code, compounded
quarterly.
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(c) Legal Fees. The Company shall pay to you all reasonable legal fees and expenses
incurred by you in connection with any Dispute arising out of or relating to this Agreement or the
interpretation thereof (including, without limitation, all such fees and expenses, if any,
incurred in contesting or disputing any termination of your employment or in seeking to obtain or
enforce any right or benefit provided by this Agreement, or in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder) ), provided any such reimbursement of reasonable attorneys
fees and other cost shall be made not later than December 31 of the year following the year in
which you incurred the expense. In no event will the amount of expenses so reimbursed by the
Company in one year affect the amount of expenses eligible for reimbursement, or in-kind benefits
to be provided, in any other taxable year.
14. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein, including, without
limitation, any prior severance agreements, is hereby terminated and cancelled; provided, however,
that the Employment Agreement dated June 16, 2009, between you and the Company, shall remain in
full force and effect and shall, pursuant to the terms and conditions thereof, provide certain
severance benefits to you upon certain terminations of employment. Any of your rights hereunder
shall be in addition to any rights you may otherwise have under benefit plans or agreements of the
Company to which you are a party or in which you are a participant, including, but not limited to,
any Company sponsored employee benefit plans and stock options plans. Provisions of this Agreement
shall not in any way abrogate your rights under such other plans and agreements.
15. Coordination with Deferred Compensation Plans; Compliance with Section 409A of the
Code.
(a) If and to the extent that you have elected, pursuant to the Executive Savings Plan
(ESP), the Executive Deferred Compensation Plan (DCP) or any other non-qualified deferred
compensation plan (such plans being referred to as deferred compensation plans), to defer
receipt of any of your compensation, including without limitation any performance-based Equity
Compensation or other Equity-Based Compensation (as defined in the DCP), the terms of the
applicable deferred compensation plan shall govern as to the events upon which compensation that
is subject to a deferral election is distributed to you and the timing of any such distribution.
However, the terms of this Agreement or, in the absence of a Change in Control as defined in this
Agreement, any employment agreement to which you and the Company are party (or, if you are not
party to an employment agreement with the Company, any Company-sponsored severance policy
providing benefits to you in the event of a termination of your employment) shall govern as to
whether (and, if so, the extent to which) amounts, including without limitation annual incentive
compensation, performance-based Equity Compensation and other Equity-Based Compensation, that are
subject to deferral elections have been earned or deemed earned at the time of any distribution
event contemplated by the relevant deferred compensation plan.
(b) To the extent applicable, it is intended that this Agreement comply with the provisions
of Section 409A of the Code. This Agreement will be administered in a manner
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consistent with this
intent. References to Section 409A of the Code will include any proposed, temporary or final
regulation, or any other formal guidance, promulgated with respect to such section by the U.S.
Department of Treasury or the Internal Revenue Service.
If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to
the Company the enclosed copy of this letter, which shall then constitute our agreement on this
subject.
Sincerely, LIBBEY INC. |
||||
By: | ||||
John F. Meier | ||||
Chairman and Chief Executive Officer | ||||
Agreed and Accepted as of the
1st day of January, 2010
1st day of January, 2010
Roberto Rubio Barnes