EXHIBIT 10

Libbey Inc.
2006 Omnibus Incentive Plan

Effective May 4, 2006

 

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Contents

         
Article 1. Establishment, Purpose, and Duration
    1  
Article 2. Definitions
    1  
Article 3. Administration
    7  
Article 4. Shares Subject to this Plan and Maximum Awards
    8  
Article 5. Eligibility and Participation
    10  
Article 6. Stock Options
    10  
Article 7. Stock Appreciation Rights
    12  
Article 8. Restricted Stock and Restricted Stock Units
    14  
Article 9. Performance Units/Performance Shares
    15  
Article 10. Cash-Based Awards and Other Stock-Based Awards
    16  
Article 11. Transferability of Awards
    17  
Article 12. Performance Measures
    17  
Article 13. Nonemployee Director Awards
    18  
Article 14. Dividend Equivalents
    19  
Article 15. Beneficiary Designation
    19  
Article 16. Rights of Participants
    19  
Article 17. Change of Control
    19  
Article 18. Amendment, Modification, Suspension, and Termination
       
Article 19. Withholding
    21  
Article 20. Successors
    21  
Article 21. General Provisions
    21  

 

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Libbey Inc. 2006 Omnibus Incentive Plan
Article 1. Establishment, Purpose, and Duration
     1.1      Establishment. Libbey Inc., a Delaware corporation (the
“Company”), establishes an incentive compensation plan to be known as the Libbey
Inc. 2006 Omnibus Incentive Plan (the “Plan”), as set forth in this document.
     This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based
Awards.
     This Plan shall become effective upon shareholder approval (the “Effective
Date”) and shall remain in effect as provided in Section 1.3 hereof.
     1.2      Purpose of this Plan. The purpose of this Plan is to enable the
Company to obtain and retain the services of Employees and Non-employee
Directors considered essential to the long-range success of the Company, to
provide a means whereby Employees and Non-employee Directors develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to devote their best efforts to the
business of the Company, thereby advancing the interests of the Company and its
shareholders.
     1.3      Duration of this Plan. Unless sooner terminated as provided in
this Plan, this Plan shall terminate ten (10) years from the Effective Date.
After this Plan is terminated, no Awards may be granted, but Awards previously
granted shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions. Notwithstanding the foregoing,
no Incentive Stock Options may be granted more than ten (10) years after the
earlier of (a) adoption of this Plan by the Board, or (b) the Effective Date.
Article 2. Definitions
     Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.

  2.1   “Affiliate” means any corporation or other entity (including, but not
limited to, a partnership or a limited liability company) that is affiliated
with the Company through stock or equity ownership, or otherwise, and is
designated as an Affiliate for purposes of this Plan by the Committee. For
purposes of granting Options or Stock Appreciation Rights, an entity may not be
considered an Affiliate if it results in noncompliance with Code Section 409A.  
  2.2   “Annual Award Limit” or “Annual Award Limits” has the meaning set forth
in Section 4.3.     2.3   “Award” means, individually or collectively, a grant
under this Plan of Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Cash-Based Awards or Other Stock-Based Awards, in each case subject to the terms
of this Plan.

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  2.4   “Award Agreement” or “Agreement” means either (i) a written agreement
entered into by the Company and a Participant setting forth the terms and
provisions applicable to an Award granted under this Plan or (ii) a written
statement issued by the Company to a Participant describing the terms and
provisions of the Award, including any amendment or modification thereof. The
Committee may provide for the use of electronic, internet or other non-paper
Award Agreements and the use of electronic, internet or other non-paper means
for the acceptance of the Award Agreements and actions under them by a
Participant.     2.5   “Beneficial Owner” or “Beneficial Ownership” has the
meaning ascribed to that term in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.     2.6   “Board” or “Board of Directors” means the
Board of Directors of the Company.     2.7   “Cash-Based Award” means an Award,
denominated in cash, granted to a Participant as described in Article 10.    
2.8   “Change in Control” means any of the following events:

  (a)   Any Person (as defined below) is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing twenty percent
(20%) or more of the combined voting power of the Company’s then-outstanding
securities. For purposes of this Plan, the term “Person” is used as that term is
used in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that
the term shall not include (i) the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or (ii) any
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
and provided further that this subsection (a) shall not apply to any Person who
is the Beneficial Owner, directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
Company’s then-outstanding securities as of the Effective Date of this Plan if
and for so long as that Person does not beneficially own, or increase its
beneficial ownership to, twenty-five percent (25%) or more of the combined
voting power of the Company’s then-outstanding securities;     (b)   During any
period of two (2) consecutive years beginning after the Effective Date of this
Plan, Continuing Directors (excluding any Directors designated by a Person who
has entered into an agreement with the Company to effect a transaction described
in Sections 2.8(a), (c) or (d)) cease for any reason to constitute at least a
majority of the Board;     (c)   The consummation of a merger or consolidation
of the Company with any other corporation or other entity, unless, after giving
effect to the merger or consolidation, the voting securities of the Company
outstanding immediately prior to the merger or consolidation continue to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than sixty-six and two-thirds percent
(66 2/3%) of the combined voting power of the voting securities of the Company
or the surviving entity outstanding immediately after the merger or
consolidation;

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  (d)   The shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets; or     (e)   Any Person 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 Company’s then-outstanding securities (a “10% Owner”) and (i) the identity
of the Chief Executive Officer of the Company is changed during the period
beginning sixty (60) days before the attainment of the ten percent (10%)
Beneficial Ownership and ending two (2) years thereafter or (ii) individuals
constituting at least one-third (1/3) of the Directors at the beginning of the
period cease for any reason to serve as Directors during the period beginning
sixty (60) days before the attainment of the ten percent (10%) Beneficial
Ownership and ending two (2) years thereafter; provided, however, that this
subsection (e) shall not apply to any Person who is a ten percent (10%) Owner as
of the Effective Date of this Plan so long as that Person does not increase its
Beneficial Ownership by five percent (5%) or more over the percentage owned by
that Person as of the Effective Date of the Plan.

  2.9   “Code” means the U.S. Internal Revenue Code of 1986, as amended from
time to time. For purposes of this Plan, references to sections of the Code
shall be deemed to include references to any applicable regulations under the
Code and any successor or similar provision.     2.10   “Committee” means the
Compensation Committee of the Board or a subcommittee thereof, or any other
committee designated by the Board to administer this Plan. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board. If the Committee does not exist or cannot function for
any reason, the Board may take any action under the Plan that otherwise would be
the responsibility of the Committee.     2.11   “Company” means Libbey Inc., a
Delaware corporation, and any successor to as provided in Article 20.     2.12  
“Continuing Directors” means individuals who both (a) as of the end of the
period in question are Directors of the Company or whose election or nomination
for election by the Company’s shareholders has been approved by a vote of at
least two-thirds (2/3) of the Directors of the Company then in office and
(b) either (i) at the beginning of the period in question or (ii) after the
beginning but prior to the end of the period in question were Directors of the
Company or whose election or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
Directors of the Company in office at the beginning of the period.     2.13  
“Covered Employee” means any Employee who is or may become a “Covered Employee,”
as defined in Code Section 162(m), and who is designated, either as an
individual Employee or class of Employees, by the Committee within the shorter
of (i) ninety (90) days after the beginning of the Performance Period or
(ii) twenty-five percent (25%) of the Performance Period has elapsed, as a
“Covered Employee” under this Plan for the applicable Performance Period.

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  2.14   “Director” means any individual who is a member of the Board of
Directors of the Company.     2.15   “Dividend Equivalent” means a right to
receive the equivalent value (in cash or Shares) of dividends paid on common
stock, awarded under Article 14.     2.16   “DRO” means a domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules under such statute.     2.17  
“Effective Date” has the meaning set forth in Section 1.1.     2.18   “Employee”
means any individual designated as an employee of the Company, its Affiliates
and/or its Subsidiaries on the payroll records thereof.     2.19   “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time, or
any successor act thereto.     2.20   “Extraordinary Items” means
(i) extraordinary, unusual and/or nonrecurring items of gain or loss; (ii) gains
or losses on the disposition of a business; (iii) changes in tax or accounting
regulations or laws; or (iv) the effect of a merger or acquisition.
Extraordinary Items must be identified in the audited financial statements,
including footnotes, or Management Discussion and Analysis section of the
Company’s annual report.     2.21   “Fair Market Value” or “FMV” means a price
that is based on the opening, closing, actual, high, low or average selling
prices of a Share reported on the New York Stock Exchange (“NYSE”) or other
established stock exchange (or exchanges) on the applicable date, the preceding
trading day, the next preceding trading day, the next succeeding trading day or
an average of trading days, as determined by the Committee in its discretion.
Unless the Committee determines otherwise, Fair Market Value shall be deemed to
be equal to the closing price of a Share on the trading day previous to the
applicable date, or if shares were not traded on the trading day previous to the
applicable date, then on the next preceding trading day. If Shares are not
publicly traded at the time a determination of their value is required to be
made under this Plan, then the determination of their Fair Market Value shall be
made by the Committee in such manner as it deems appropriate, provided that, in
the case of Options and Stock Appreciation Rights, the determination shall be
made in compliance with Code Section 409A. The definition(s) of FMV shall be
specified in each Award Agreement and may differ depending on whether FMV is in
reference to the grant, exercise, vesting, settlement or payout of an Award.    
2.22   “Full Value Award” means an Award other than in the form of an ISO, NQSO
or SAR.     2.23   “Grant Price” means the price established at the time of
grant of an SAR pursuant to Article 7.

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  2.24   “Incentive Stock Option” or “ISO” means an Option that is granted under
Article 6 to an Employee, that is designated as an Incentive Stock Option and
that is intended to meet the requirements of Code Section 422 or any successor
provision.     2.25   “Insider” means an individual who is, on the relevant
date, an officer or Director of the Company, or the Beneficial Owner of more
than ten percent (10%) of any class of the Company’s equity securities that are
registered pursuant to Section 12 of the Exchange Act, as determined by the
Board in accordance with Section 16 of the Exchange Act.     2.26   “Nominating
and Governance Committee” means the Nominating and Governance Committee of the
Board or a subcommittee thereof, or any other committee designated by the Board
to administer the pay of Non-employee Directors pursuant to this Plan. The
members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board. If the Nominating and Governance
Committee does not exist or cannot function for any reason, the Board may take
any action under the Plan that otherwise would be the responsibility of the
Nominating and Governance Committee.     2.27   “Non-employee Director” means a
Director who is not an Employee.     2.28   “Nonemployee Director Award” means
any NQSO, SAR or Full Value Award granted, whether singly, in combination, or in
tandem, to a Non-employee Director.     2.29   “Nonqualified Stock Option” or
“NQSO” means an Option that is not intended to meet the requirements of Code
Section 422 or that otherwise does not meet those requirements.     2.30  
“Option” means an option granted to a Participant to purchase the Company’s
Shares, including an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6.     2.31   “Option Price” means the price at which a
Participant may purchase a Share pursuant to an Option.     2.32   “Other
Stock-Based Award” means an equity-based or equity-related Award that is not
otherwise described by the terms of this Plan and that is granted pursuant to
Article 10.     2.33   “Participant” means any eligible individual, as
determined in accordance with Article 5, to whom an Award is granted.     2.34  
“Performance-Based Compensation” means compensation under an Award that is
intended to satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered Employees. However, nothing in
this Plan shall be construed to mean that an Award that does not satisfy the
requirements for performance-based compensation under Code Section 162(m) does
not constitute performance-based compensation for other purposes, including Code
Section 409A.

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  2.35   “Performance Measures” means the measures, as described in Article 12,
on which the performance goals are based. Performance Measures must be approved
by the Company’s shareholders pursuant to this Plan in order to qualify Awards
as Performance-Based Compensation.     2.36   “Performance Period” means the
period of time during which the performance goals must be met in order to
determine the degree of payout and/or vesting with respect to an Award.     2.37
  “Performance Share” means an Award that is granted pursuant to Article 9, is
subject to the terms of this Plan and is denominated in Shares, the value of
which at the time it is payable is determined as a function of the extent to
which the corresponding performance criteria have been achieved.     2.38  
“Performance Unit” means an Award that is granted pursuant to Article 9, is
subject to the terms of this Plan and is denominated in units, the value of
which at the time it is payable is determined as a function of the extent to
which corresponding performance criteria have been achieved.     2.39   “Period
of Restriction” means the period during which Restricted Stock or Restricted
Stock Units are subject to a substantial risk of forfeiture based on the passage
of time, the achievement of performance goals or the occurrence of other events
as determined by the Committee, in its discretion, as provided in Article 8.    
2.40   “Plan” means the Libbey Inc. 2006 Omnibus Incentive Plan.     2.41  
“Plan Year” means the calendar year.     2.42   “Prior Plans” means the Libbey
Inc. Amended and Restated Stock Option Plan for Key Employees and the Amended
and Restated 1999 Equity Participation Plan of Libbey Inc.     2.43  
“Restricted Stock” means an Award granted to a Participant pursuant to
Article 8.     2.44   “Restricted Stock Unit” means an Award that is granted to
a Participant pursuant to Article 8 but as to which no Shares actually are
awarded to the Participant on the date of grant.     2.45   “Share” means a
share of common stock of the Company, $.01 par value per share.     2.46  
“Stock Appreciation Right” or “SAR” means an Award, designated as a SAR,
pursuant to the terms of Article 7.     2.47   “Subsidiary” means any
corporation or other entity, whether domestic or foreign, in which the Company
directly or indirectly owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock.     2.48   “Substitute
Award” means an Award granted under this Plan upon the assumption of, or in
substitution for, outstanding equity awards previously granted by a company or
other entity in connection with a corporate transaction, such as a merger,

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      combination, consolidation or acquisition of property or stock; provided,
however, that in no event shall the term “Substitute Award” be construed to
refer to an Award made in connection with the cancellation and repricing of an
Option or SAR.     2.49   “Termination of Employment” means the time when the
Employee-employer relationship between a Participant and the Company or any
Subsidiary is terminated for any reason, with or without cause. Termination of
Employment includes, but is not limited to, termination by resignation,
discharge, death, disability or retirement, but excludes, at the discretion of
the Committee, (a) termination where there is a simultaneous reemployment or
continuing employment of a Participant by the Company or any Subsidiary,
(b) termination that results in temporary severance of the Employee-employer
relationship, and (c) termination where there is simultaneous establishment of a
consulting relationship by the Company or a Subsidiary with a former Employee.
The Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including, without
limitation, the question of whether a Termination of Employment resulted from a
discharge for good cause, and all questions of whether a particular leave of
absence constitutes a Termination of Employment; provided, however, that, with
respect to Incentive Stock Options, unless otherwise determined by the Committee
in its discretion, a leave of absence, change in status from an Employee to an
independent contractor, or other change in the Employee-employer relationship
shall constitute a Termination of Employment if and to the extent that the leave
of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under that Section of the Code.

Article 3. Administration
     3.1      General. The Committee shall be responsible for administering this
Plan, subject to this Article 3 and the other provisions of this Plan. The
Committee may employ attorneys, consultants, accountants, agents and other
individuals, any of whom may be an Employee, and the Committee, the Company and
its officers and Directors shall be entitled to rely upon the advice, opinions,
or valuations of any such individuals. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.
     3.2      Authority of the Committee. The Committee shall have full and
exclusive discretionary power to interpret the terms and the intent of this Plan
and any Award Agreement or other agreement or document ancillary to or in
connection with this Plan, to determine eligibility of Employees for Awards and
to adopt such rules, regulations, forms, instruments and guidelines for
administering this Plan as the Committee may deem necessary or proper. That
authority shall include, but not be limited to, selecting which Employees are
Award recipients, establishing all Award terms and conditions, including the
terms and conditions set forth in Award Agreements, granting Awards as an
alternative to or as the form of payment for grants or rights earned or due
under compensation plans or arrangements of the Company, construing any
ambiguous provision of the Plan or any Award Agreement, and, subject to
Article 18, adopting modifications and amendments to this Plan or any Award
Agreement, including without limitation, any that are necessary to comply with
the laws of the countries and other jurisdictions in which the Company, its
Affiliates and/or its Subsidiaries operate.

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     3.3      Delegation. The Committee may delegate to one or more of its
members or to one or more officers of the Company, and/or its Subsidiaries and
Affiliates, or to one or more agents or advisors, such administrative duties or
powers as the Committee may deem advisable, and the Committee or any individuals
to whom it has delegated duties or powers may employ one or more individuals to
render advice with respect to any responsibility the Committee or those
individuals may have under this Plan. The Committee may, by resolution,
authorize one or more officers of the Company to do one or both of the following
on the same basis as can the Committee: (a) designate Employees to be recipients
of Awards; and (b) determine the size of any such Awards; provided, however,
that (i) in the case of Awards to be granted to Employees who are considered
Insiders, the Committee shall not delegate these responsibilities to any
officer; (ii) the resolution providing the authorization sets forth the total
number of Awards the officer(s) may grant; and (iii) the officer(s) shall report
periodically to the Committee regarding the nature and scope of the Awards
granted pursuant to the delegated authority.
Article 4. Shares Subject to this Plan and Maximum Awards

  4.1   Number of Shares Available for Awards.

  (a)   There is hereby reserved for issuance under the Plan an aggregate of
seven hundred fifty thousand one hundred forty (750,140) Shares of Libbey Inc.
common stock. The Shares authorized under this Plan are in addition to the
number of Shares previously reserved and available for issuance under the Prior
Plans. In connection with approving this Plan, and contingent upon receipt of
shareholder approval of this Plan, the Board of Directors has approved a merger
of the Prior Plans into this Plan, so that on and after the date this Plan is
approved by shareholders, the maximum number of Shares reserved for issuance
under this Plan shall not exceed the total number of Shares approved under this
Plan and the Shares previously approved and available for issuance under the
Prior Plans, reduced by any awards made from the Prior Plans during the period
beginning January 1, 2006.     (b)   The maximum number of Shares that may be
issued pursuant to ISOs under this Plan shall be one million five hundred
thousand (1,500,000) Shares.     (c)   The maximum number of Shares that may be
granted to Non-employee Directors shall be 150,000 Shares, and no Non-employee
Director may receive Awards subject to more than 7,500 Shares in any Plan Year.
    (d)   Except with respect to a maximum of five percent (5%) of the shares
authorized for issuance under this Plan, any Full Value Awards that vest on the
basis of the Participant’s continued employment with or service to the Company
shall not provide for vesting that is any more rapid than annual pro rata
vesting over a three- (3-) year period, and any Full Value Awards that vest upon
the attainment of performance goals shall provide for a performance period of at
least twelve (12) months. Notwithstanding the foregoing, the Committee may
permit the acceleration of vesting of Full Value Awards in the event of the
Participant’s death, disability or retirement, or in the event of a Change in
Control.

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     4.2      Share Usage. Shares covered by an Award shall be counted as used
only to the extent they are actually issued. Any Shares related to Awards under
this Plan or under Prior Plans that terminate by expiration, forfeiture,
cancellation or otherwise without the issuance of the Shares, or are settled in
cash in lieu of Shares, or are exchanged with the Committee’s permission, prior
to the issuance of Shares, for Awards not involving Shares, shall be available
again for grant under this Plan. Moreover, if the Option Price of any Option
granted under this Plan or the tax withholding requirements with respect to any
Award granted under this Plan are satisfied by tendering Shares to the Company
(by either actual delivery or by attestation), the tendered Shares shall again
be available for grant under this Plan. Furthermore, if a SAR is exercised and
settled in Shares, the difference between the total Shares exercised and the net
Shares delivered shall again be available for grant under this Plan, with the
result being that only the number of Shares issued upon exercise of a SAR are
counted against the Shares available. The Shares available for issuance under
this Plan may be authorized and unissued Shares or treasury Shares.
     4.3      Annual Award Limits. Unless and until the Committee determines
that an Award to a Covered Employee shall not be designed to qualify as
Performance-Based Compensation, the following limits (each an “Annual Award
Limit” and, collectively, “Annual Award Limits”) shall apply to grants of Awards
under this Plan:

  (a)   Options: The maximum aggregate number of Shares subject to Options
granted in any one Plan Year to any one Participant shall be three hundred
thousand (300,000).     (b)   SARs: The maximum number of Shares subject to
Stock Appreciation Rights granted in any one Plan Year to any one Participant
shall be three hundred thousand (300,000).     (c)   Restricted Stock or
Restricted Stock Units: The maximum aggregate grant with respect to Awards of
Restricted Stock or Restricted Stock Units in any one Plan Year to any one
Participant shall be two hundred thousand (200,000) Shares.     (d)  
Performance Units or Performance Shares: The maximum aggregate Award of
Performance Units or Performance Shares that a Participant may receive in any
one Plan Year shall be two hundred thousand (200,000) Shares, or equal to the
value of two hundred thousand (200,000) Shares determined as of the date of
payout.     (e)   Cash-Based Awards and Other Stock-Based Awards: The maximum
aggregate amount awarded or credited with respect to Cash-Based or Other
Stock-Based Awards to any one Participant in any one Plan Year may not exceed
the value of three million dollars ($3,000,000) or two hundred thousand
(200,000) Shares determined as of the date of payout.

     4.4      Adjustments in Authorized Shares. In the event of any corporate
event or transaction (including, but not limited to, a change in the Shares or
the capitalization of the Company), such as a merger, consolidation,
reorganization, recapitalization, separation, partial or complete liquidation,
stock dividend, stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of the Company, combination of Shares,
exchange of Shares,

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dividend in kind, or other like change in capital structure, number of
outstanding Shares or distribution (other than normal cash dividends) to
shareholders of the Company, or any similar corporate event or transaction, the
Committee, in its sole discretion, in order to prevent dilution or enlargement
of Participants’ rights under this Plan, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Plan or
under particular forms of Awards, the number and kind of Shares subject to
outstanding Awards, the Option Price or Grant Price applicable to outstanding
Awards, the Annual Award Limits, and other value determinations applicable to
outstanding Awards.
     The Committee, in its sole discretion, also may make appropriate
adjustments in the terms of any Awards under this Plan to reflect or relate to
the changes or distributions and to modify any other terms of outstanding
Awards, including modifications of performance goals and changes in the length
of Performance Periods. Notwithstanding anything in this Plan to the contrary,
the Committee may not take any action described in this Section 4.4 if the
action would result in a violation of the requirements of Code Section 409A. The
determination of the Committee as to the foregoing adjustments, if any, shall be
conclusive and binding on Participants under this Plan.
     Subject to the provisions of Article 18 and notwithstanding anything else
in this Plan to the contrary, the Board or the Committee may authorize the
issuance of Awards under this Plan in connection with the assumption of, or
substitution for, outstanding benefits previously granted to individuals who
become Employees of Libbey Inc. or any Subsidiary as a result of any merger,
consolidation, acquisition of property or stock, or reorganization, upon such
terms and conditions as the Committee may deem appropriate, subject to
compliance with the rules under Code Sections 409A, 422, and 424, as and where
applicable. Any Substitute Awards granted under the Plan shall not count against
the share limitations set forth in Section 4.3 hereof, to the extent permitted
by Section 303A.08 of the Corporate Governance Standards of the New York Stock
Exchange.
Article 5. Eligibility and Participation
     5.1      Eligibility. Individuals eligible to participate in this Plan
include all Employees and Non-employee Directors.
     5.2      Actual Participation. Subject to the provisions of this Plan, the
Committee from time to time may select from all eligible individuals those
individuals to whom Awards shall be granted and shall determine, in its sole
discretion, the nature of, any and all terms permissible by law with respect to,
and the amount of each Award.
Article 6. Stock Options
     6.1      Grant of Options. Subject to the terms and provisions of this
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee in its sole discretion, provided that ISOs may be granted only to
eligible Employees of the Company or of any parent or Subsidiary (as permitted
under Code Sections 422 and 424). However, an Employee who is employed by an
Affiliate and/or Subsidiary may be granted Options only to the extent the
Affiliate and/or Subsidiary is part of: (i) the Company’s controlled group of
corporations or (ii) a trade or business under common control, as of the date of
grant, as determined within the meaning of Code Section 414(b) or 414(c) and
substituting for this purpose ownership of at least fifty percent (50%) of the

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Affiliate and/or Subsidiary to determine the members of the controlled group of
corporations and the entities under common control.
     6.2      Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration of the
Option, the number of Shares to which the Option pertains, the conditions upon
which an Option shall become vested and exercisable, and such other provisions
as the Committee shall determine and as are not inconsistent with the terms of
this Plan. The Award Agreement also shall specify whether the Option is intended
to be an ISO or a NQSO.
     6.3      Option Price. The Option Price for each grant of an Option under
this Plan shall be determined by the Committee in its sole discretion and shall
be specified in the Award Agreement; provided, however, the Option Price must be
at least equal to one hundred percent (100%) of the FMV of the Shares as
determined on the date of grant.
     Notwithstanding this Section 6.3 to the contrary, in the case of an Option
that is a Substitute Award, the price per share of the Shares subject to the
Option may be less than the Fair Market Value per Share on the date of grant;
provided, however, that X shall not exceed Y, where X is the amount, if any, by
which the aggregate Fair Market Value (as of the date the Substitute Award is
granted) of the Shares subject to the Substitute Award exceeds the aggregate
option price thereof, and Y is the amount, if any, by which the aggregate Fair
Market Value (determined by the Committee as of the time immediately preceding
the transaction giving rise to the Substitute Awards) of the Shares of the
predecessor entity that were subject to the grant assumed or substituted for the
Company exceeds the aggregate option price of such Shares.
     6.4      Term of Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, no Option shall be exercisable later than the tenth (10th) anniversary
date of its grant. Notwithstanding the foregoing, the Committee has the
authority to grant to Participants who are not residents of the United States
Nonqualified Stock Options that have a term greater than ten (10) years.
     6.5      Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve. The terms and restrictions
applicable to Options need not be the same for each grant or for each
Participant.
     6.6      Payment. Options granted under this Article 6 shall be exercised
by the delivery to the Company or an agent designated by the Company of a notice
of exercise in a form specified or accepted by the Committee, or by complying
with any alternative procedures authorized by the Committee,. The notice of
exercise shall set forth the number of Shares with respect to which the Option
is to be exercised and be accompanied by full payment for the Shares.
     Payment of the Option Price shall be a condition to the issuance of the
Shares as to which an Option shall be exercised. The Option Price of any Option
shall be payable to the Company in full either: (a) in cash or its equivalent;
(b) by tendering (either by actual delivery or attestation) previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the Option Price; (c) by a cashless (broker-assisted) exercise; (d) by a
combination of (a), (b) and/or (c); or (e) any other method approved or accepted
by the Committee, in its sole discretion.

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     Subject to any governing rules or regulations, as soon as practicable after
receipt of written notification of exercise and full payment (including
satisfaction of any applicable tax withholding), the Company shall deliver to
the Participant evidence of book entry Shares or, upon the Participant’s
request, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).
     Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.
     6.7      Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, minimum holding period requirements or restrictions under applicable
federal securities laws, under the requirements of any stock exchange or market
upon which the Shares are then listed and/or traded, or under any blue sky or
state securities laws applicable to the Shares.
     6.8      Termination of Employment. Each Participant’s Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the Option following Termination of Employment or termination of
services to the Company, its Affiliates and/or its Subsidiaries, as the case may
be. These provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for termination.
     6.9      Notification of Disqualifying Disposition. If any Participant
shall make any disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Code Section 421(b) (relating to certain
disqualifying dispositions), the Participant shall notify the Company of such
disposition within ten (10) days thereof.
     6.10      No Other Feature of Deferral. No Option granted pursuant to this
Plan shall provide for any feature for the deferral of compensation other than
the deferral of recognition of income until the exercise of the Option.
Article 7. Stock Appreciation Rights
     7.1      Grant of SARs. Subject to the terms and conditions of this Plan,
SARs may be granted to Participants at any time and from time to time as shall
be determined by the Committee. However, an Employee who is employed by an
Affiliate and/or Subsidiary may be granted SARs only to the extent the Affiliate
and/or Subsidiary is: (i) part of the Company’s controlled group of corporations
or (ii) a trade or business under common control, as of the date of grant, as
determined within the meaning of Code Section 414(b) or 414(c) and substituting
for this purpose ownership of at least fifty percent (50%) of the Affiliate
and/or Subsidiary to determine the members of the controlled group of
corporations and the entities under common control.
     Subject to the terms and conditions of this Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each
Participant and, consistent with the provisions of this Plan, in determining the
terms and conditions pertaining to the SARs.

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     The Grant Price for each grant of a SAR shall be determined by the
Committee and shall be specified in the Award Agreement; provided, however, the
Grant Price on the date of grant must be at least equal to one hundred percent
(100%) of the FMV of the Shares as determined on the date of grant.
     Notwithstanding this Section 7.1 to the contrary, in the case of a SAR that
is a Substitute Award, the Grant Price of the Shares subject to the SAR may be
less than the Fair Market Value per Share on the date of grant; provided,
however, that the X shall not exceed Y, where X is the amount, if any, by which
the aggregate Fair Market Value (as of the date on which the Substitute Award is
granted) of the Shares subject to the Substitute Award exceeds the aggregate
Grant Price with respect to the Shares subject to the Substitute Award and Y is
the amount, if any, by which the aggregate Fair Market Value (determined by the
Committee as of the time immediately preceding the transaction giving rise to
the Substitute Awards), of the Shares of the predecessor entity that were
subject to the grant assumed or substituted for the Company exceeds the
aggregate Grant Price of the Shares.
     7.2      SAR Agreement. Each SAR Award shall be evidenced by an Award
Agreement that shall specify the Grant Price, the term of the SAR and such other
provisions as the Committee shall determine.
     7.3      Term of SAR. The term of a SAR granted under this Plan shall be
determined by the Committee, in its sole discretion, and, except as determined
otherwise by the Committee and specified in the SAR Award Agreement, no SAR
shall be exercisable later than the tenth (10th) anniversary date of its grant.
Notwithstanding the foregoing, the Committee has the authority to grant to
Participants who are not residents of the United States SARs that have a term
greater than ten (10) years.
     7.4      Exercise of SARs. SARs may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes.
     7.5      Settlement of SARs. Upon the exercise of a SAR, a Participant
shall be entitled to receive payment from the Company in an amount equal to the
product of the excess of the Fair Market Value of a Share on the date of
exercise over the Grant Price and the number of Shares with respect to which the
SAR is exercised.
     At the discretion of the Committee, the payment upon SAR exercise may be in
cash, Shares or any combination of cash and Shares, or in any other manner
approved by the Committee in its sole discretion. The Committee’s determination
regarding the form of SAR payout shall be set forth in the Award Agreement
pertaining to the grant of the SAR.
     7.6      Termination of Employment. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following Termination of Employment with, or provision of services to, the
Company, its Affiliates and/or its Subsidiaries, as the case may be. These
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination.
     7.7      Other Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares received upon exercise of a SAR
granted pursuant to this Plan as it

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may deem advisable or desirable. These restrictions may include, but shall not
be limited to, a requirement that the Participant hold the Shares received upon
exercise of a SAR for a specified period of time.
     7.8      No Other Feature of Deferral. No SAR granted pursuant to this Plan
shall provide for any feature for the deferral of compensation other than the
deferral of recognition of income until the exercise of the SAR.
Article 8. Restricted Stock and Restricted Stock Units
     8.1      Grant of Restricted Stock or Restricted Stock Units. Subject to
the terms and provisions of this Plan, the Committee, at any time and from time
to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts as the Committee shall determine.
     8.2      Restricted Stock or Restricted Stock Unit Agreement. Each grant of
Restricted Stock and/or Restricted Stock Units shall be evidenced by an Award
Agreement that shall specify the Period(s) of Restriction, the number of Shares
of Restricted Stock or the number of Restricted Stock Units granted, and such
other provisions as the Committee shall determine.
     8.3      Other Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock or Restricted
Stock Units granted pursuant to this Plan as it may deem advisable, including,
without limitation, a requirement that Participants pay a stipulated purchase
price for each Share of Restricted Stock or each Restricted Stock Unit,
restrictions based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of the performance
goals, time-based restrictions, restrictions under applicable laws or under the
requirements of any stock exchange or market upon which the Shares are listed or
traded, or holding requirements or sale restrictions placed on the Shares by the
Company upon vesting of the Restricted Stock or Restricted Stock Units.
     To the extent deemed appropriate by the Committee, the Company may retain
the certificates representing Shares of Restricted Stock in the Company’s
possession until such time as all conditions and/or restrictions applicable to
the Shares have been satisfied or have lapsed.
     Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to the Shares have
been satisfied or have lapsed (including satisfaction of any applicable tax
withholding obligations), and Restricted Stock Units shall be paid in cash,
Shares or a combination of cash and Shares as the Committee, in its sole
discretion, shall determine.
     8.4      Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.3, each certificate representing Shares of
Restricted Stock granted pursuant to this Plan may bear a legend such as the
following or as otherwise determined by the Committee in its sole discretion:
     
The sale or transfer of Shares of stock represented by this certificate, whether
voluntary, involuntary or by operation of law, is subject to certain
restrictions on transfer as set forth in the Libbey

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Inc. 2006 Omnibus Incentive Plan, and in the associated Award Agreement. A copy
of this Plan and the Award Agreement may be obtained from Libbey Inc.
     8.5      Voting Rights. Unless otherwise determined by the Committee and
set forth in a Participant’s Award Agreement, to the extent permitted or
required by law, Participants holding Shares of Restricted Stock granted
pursuant to this Plan may be granted the right to exercise full voting rights
with respect to those Shares during the Period of Restriction. A Participant
shall have no voting rights with respect to any Restricted Stock Units granted
pursuant to this Plan.
     8.6      Termination of Employment. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain Restricted
Stock and/or Restricted Stock Units following Termination of Employment with, or
provision of services to, the Company, its Affiliates and/or its Subsidiaries,
as the case may be. These provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Shares of Restricted Stock or
Restricted Stock Units issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination.
     8.7      Section 83(b) Election. The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon the Participant
making or refraining from making an election with respect to the Award under
Code Section 83(b). If a Participant makes an election pursuant to Code Section
83(b) concerning a Restricted Stock Award, the Participant shall be required to
file promptly a copy of the election with the Company.
Article 9. Performance Units/Performance Shares
     9.1      Grant of Performance Units/Performance Shares. Subject to the
terms and provisions of this Plan, the Committee, at any time and from time to
time, may grant Performance Units and/or Performance Shares to Participants in
such amounts and upon such terms as the Committee shall determine.
     9.2      Value of Performance Units/Performance Shares. Each Performance
Unit shall have an initial value that is established by the Committee at the
time of grant. Each Performance Share shall have an initial value equal to the
Fair Market Value of a Share on the date of grant. The Committee shall set
performance goals in its discretion which, depending on the extent to which they
are met, will determine the value and/or number of Performance Units/Performance
Shares that will be paid out to the Participant.
     9.3      Earning of Performance Units/Performance Shares. Subject to the
terms of this Plan, after the applicable Performance Period has ended, the
holder of Performance Units/Performance Shares shall be entitled to receive
payout on the value and number of Performance Units/Performance Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance goals have been achieved.
     9.4      Form and Timing of Payment of Performance Units/Performance
Shares. Payment of earned Performance Units/Performance Shares shall be as
determined by the Committee and as evidenced in the Award Agreement. Subject to
the terms of this Plan, the Committee, in its sole discretion, may pay earned
Performance Units/Performance Shares in

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the form of cash or in Shares (or in a combination thereof) equal to the value
of the earned Performance Units/Performance Shares at the close of the
applicable Performance Period, or as soon as practicable after the end of the
Performance Period. Any Shares may be granted subject to any restrictions deemed
appropriate by the Committee. The determination of the Committee with respect to
the form of payout of the Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.
     9.5      Termination of Employment. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain Performance
Units and/or Performance Shares following Termination of Employment with, or
provision of services to, the Company, its Affiliates and/or its Subsidiaries,
as the case may be. These provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Awards of Performance Units or
Performance Shares issued pursuant to this Plan, and may reflect distinctions
based on the reasons for termination.
Article 10. Cash-Based Awards and Other Stock-Based Awards
     10.1      Grant of Cash-Based Awards. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
Cash-Based Awards to Participants in such amounts and upon such terms as the
Committee may determine.
     10.2      Other Stock-Based Awards. The Committee may grant other types of
equity-based or equity-related Awards not otherwise described by the terms of
this Plan (including the grant or promise to deliver or offer for sale of
unrestricted Shares) in such amounts and subject to such terms and conditions as
the Committee shall determine. Other Stock-Based Awards may involve the transfer
of actual Shares to Participants, or payment in cash or otherwise of amounts
based on the value of Shares, and may include, without limitation, Awards
designed to comply with or take advantage of the applicable local laws of
jurisdictions other than the United States.
     10.3      Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based
Award shall specify a payment amount or payment range as determined by the
Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or
units based on Shares, as determined by the Committee. The Committee may
establish performance goals in its discretion. If the Committee exercises its
discretion to establish performance goals, the number and/or value of Cash-Based
Awards or Other Stock-Based Awards that will be paid out to the Participant will
depend on the extent to which the performance goals are met.
     10.4      Payment of Cash-Based Awards and Other Stock-Based Awards.
Payment, if any, with respect to a Cash-Based Award or an Other Stock-Based
Award shall be made, in accordance with the terms of the Award, in cash or
Shares as the Committee determines.
     10.5      Termination of Employment. The Committee shall determine the
extent to which the Participant shall have the right to receive Cash-Based
Awards or Other Stock-Based Awards following Termination of Employment with, or
provision of services to, the Company, its Affiliates and/or its Subsidiaries,
as the case may be. These provisions shall be determined in the sole discretion
of the Committee, may be included in an agreement entered into with each
Participant, need not be uniform among all Awards of Cash-Based Awards or Other
Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination.

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Article 11. Transferability of Awards
     11.1      Transferability. Except as provided in Section 11.2 below, during
a Participant’s lifetime, his or her Awards shall be exercisable only by the
Participant. Awards shall not be transferable other than by will or the laws of
descent and distribution or, subject to the consent of the Committee, pursuant
to a DRO; no Awards shall be subject, in whole or in part, to attachment,
execution or levy of any kind; and any purported transfer in violation of this
Section 11.1 shall be null and void. The Committee may establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable or Shares deliverable in the event of, or following, the
Participant’s death may be provided.
     11.2      Committee Action. The Committee may, in its discretion, determine
that notwithstanding Section 11.1, any or all Awards (other than ISOs) shall be
transferable to and exercisable by such transferees, and subject to such terms
and conditions, as the Committee may deem appropriate; provided, however, no
Award may be transferred for value (as defined in the General Instructions to
Form S-8).
Article 12. Performance Measures
     12.1      Performance Measures. The performance goals upon which the
payment or vesting of an Award to a Covered Employee that is intended to qualify
as Performance-Based Compensation shall be limited to the following Performance
Measures:

  (a)   Net earnings or net income (before or after taxes);     (b)   Earnings
per share;     (c)   Net sales or revenue growth;     (d)   Net operating
profit;     (e)   Return measures (including, but not limited to, return on
assets, capital, invested capital, equity, sales or revenue);     (f)   Cash
flow (including, but not limited to, operating cash flow, free cash flow, cash
flow return on equity and cash flow return on investment);     (g)   Earnings
before or after taxes, interest, depreciation and/or amortization;     (h)  
Gross or operating margins;     (i)   Productivity ratios;     (j)   Share price
(including, but not limited to, growth measures and total shareholder return);  
  (k)   Expense targets;     (l)   Cost reductions or savings;     (m)  
Performance against operating budget goals;     (n)   Margins;     (o)  
Operating efficiency;     (p)   Funds from operations;     (q)   Market share;  
  (r)   Customer satisfaction;     (s)   Working capital targets; and     (t)  
Economic value added or EVA® (net operating profit after tax minus the sum of
capital multiplied by the cost of capital).

     Any Performance Measure(s) may be used to measure the performance of the
Company, Subsidiary and/or Affiliate as a whole or any business unit of the
Company, Subsidiary and/or Affiliate, or any combination thereof, as the
Committee may deem appropriate, or any of the

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above Performance Measures as compared to the performance of a group of
comparator companies, or published or special index that the Committee, in its
sole discretion, deems appropriate, or the Company may select Performance
Measure (j) above as compared to various stock market indices. The Committee
also has the authority to provide for accelerated vesting of any Award based on
the achievement of performance goals pursuant to the Performance Measures
specified in this Article 12.
     12.2      Evaluation of Performance. The Committee may provide in any such
Award that any evaluation of performance may include or exclude any of the
following events that occurs during a Performance Period: (a) asset write-downs,
(b) litigation or claim judgments or settlements, (c) the effect of changes in
tax laws, accounting principles or other laws or provisions affecting reported
results, (d) any reorganization and restructuring programs, (e) Extraordinary
Items, (f) acquisitions or divestitures, and (g) foreign exchange gains and
losses. To the extent the inclusions or exclusions affect Awards to Covered
Employees, they shall be prescribed in a form that meets the requirements of
Code Section 162(m) for deductibility.
     12.3      Adjustment of Performance-Based Compensation. Awards that are
intended to qualify as Performance-Based Compensation may not be adjusted
upward. The Committee shall retain the discretion to adjust the Awards downward,
either on a formula or discretionary basis or any combination, as the Committee
determines.
     12.4      Committee Discretion. If applicable tax and/or securities laws
change to permit Committee discretion to alter the governing Performance
Measures without obtaining shareholder approval of the changes, the Committee
shall have sole discretion to make the changes without obtaining shareholder
approval provided the exercise of such discretion does not violate Code
Section 409A. In addition, if the Committee determines that it is advisable to
grant Awards that shall not qualify as Performance-Based Compensation, the
Committee may make the grants without satisfying the requirements of Code
Section 162(m) and base vesting on Performance Measures other than those set
forth in Section 12.1.
Article 13. Non-employee Director Awards
     Non-employee Directors may be granted Awards pursuant to this Plan only in
accordance with this Article 13. Awards granted to Non-employee Directors
pursuant to this Plan shall not be subject to management’s discretion. From time
to time, the Nominating and Governance Committee shall set the amount(s) and
type(s) of Awards that shall be granted to all Non-employee Directors on a
periodic, nondiscriminatory basis pursuant to the Plan, as well as any
additional amount(s), if any, to be awarded, also on a periodic,
nondiscriminatory basis, based on each of the following: (a) the number of
committees of the Board on which a Non-employee Director serves, (b) service of
a Non-employee Director as the chair of a committee of the Board, (c) service of
a Non-employee Director as Chairman of the Board, or (d) the first selection or
appointment of an individual to the Board as a Non-employee Director. Subject to
the limits set forth in Section 4.1(c) and the foregoing, the Nominating and
Governance Committee shall grant these Awards to Non-employee Directors and any
Non-employee Chairman of the Board, and grant new Non-employee Director Awards,
as it shall from time to time determine. The terms and conditions of any grant
to any Non-employee Director shall be set forth in an Award Agreement.

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Article 14. Dividend Equivalents
     Any Participant selected by the Committee may be granted Dividend
Equivalents on Shares that are subject to any Award, to be credited as of
dividend payment dates, during the period between the date the Award is granted
and the date the Award is exercised, vests or expires, as determined by the
Committee. However, no Dividend Equivalents may be granted on any Award of
Options or SARs.
Article 15. Beneficiary Designation
     Each Participant under this Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under this Plan is to be paid in case of his death before he
receives any or all of the benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and shall be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s executor, administrator or legal representative.
Article 16. Rights of Participants
     16.1      Employment. Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company, its Affiliates
and/or its Subsidiaries to terminate any Participant’s employment or service on
the Board or to the Company at any time or for any reason not prohibited by law,
nor confer upon any Participant any right to continue his employment or service
as a Director for any specified period of time.
     Neither an Award nor any benefits arising under this Plan shall constitute
an employment contract with the Company, its Affiliates and/or its Subsidiaries.
Accordingly, subject to Articles 3 and 18, this Plan and the benefits under it
may be terminated at any time in the sole and exclusive discretion of the
Committee without giving rise to any liability on the part of the Company, its
Affiliates and/or its Subsidiaries.
     16.2      Participation. No individual shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.
     16.3      Rights as a Shareholder. Except as otherwise provided in this
Plan, a Participant shall have none of the rights of a shareholder with respect
to Shares covered by any Award until the Participant becomes the record holder
of the Shares.
Article 17. Change in Control
     17.1      Change of Control of the Company. Notwithstanding any other
provision of this Plan to the contrary, the provisions of this Article 17 shall
apply in the event of a Change of Control, unless otherwise determined by the
Committee in connection with the grant of an Award as reflected in the
applicable Award Agreement.
     Upon a Change of Control, all then-outstanding Options and SARs shall
become fully vested and exercisable immediately, and all other Awards that are
not then vested and as to which vesting depends upon only the satisfaction of a
service obligation by a Participant to the Company, Subsidiary or Affiliate
shall vest in full and be free of restrictions related to the vesting of the
Awards, except to the extent that another Award meeting the requirements of
Section

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     17.2 (a “Replacement Award”) is provided to the Participant to replace the
Award in question (the “Replaced Award”). The treatment of any other Awards
shall be as determined by the Committee in connection with the grant thereof, as
reflected in the applicable Award Agreement.
     Except to the extent that a Replacement Award is provided to the
Participant, the Committee may, in its sole discretion: (i) determine that any
or all outstanding Awards granted under the Plan, whether or not exercisable,
will be canceled and terminated and that in connection with the cancellation and
termination the holder of the Award may receive for each Share of Common Stock
subject to the Awards a cash payment (or the delivery of shares of stock, other
securities or a combination of cash, stock and securities equivalent to the cash
payment) equal to the difference, if any, between the consideration received by
shareholders of the Company in respect of a Share of Common Stock in connection
with the transaction and the product of the purchase price, if any, per share
under the Award and the number of Shares of Common Stock subject to the Award;
provided, however, that if the product is zero or less, or to the extent that
the Award is not then exercisable, the Awards will be canceled and terminated
without payment therefor; or (ii) provide that the period to exercise Options or
SARs granted under the Plan shall be extended (but not beyond the expiration of
the Option or SAR).
     17.2      Replacement Awards. An Award shall meet the conditions of this
Section 17.2 (and hence qualify as a Replacement Award) if: (i) it has a value
at least equal to the value of the Replaced Award as determined by the Committee
in its sole discretion; (ii) it relates to publicly traded equity securities of
the Company or its successor pursuant to the Change in Control or another entity
that is affiliated with the Company or its successor following the Change in
Control; and (iii) its other terms and conditions are not less favorable to the
Participant than the terms and conditions of the Replaced Award (including the
provisions that would apply in the event of a subsequent Change of Control).
Without limiting the generality of the foregoing, the Replacement Award may take
the form of a continuation of the Replaced Award if the requirements of the
preceding sentence are satisfied. The determination as to whether the conditions
of this Section 17.2 are satisfied shall be made by the Committee, as
constituted immediately before the Change of Control, in its sole discretion.
     17.3      Termination of Employment. Upon a Termination of Employment or,
in the case of Directors, a termination of service as a Director, of a
Participant occurring in connection with or during the period of two (2) years
after the Change in Control, other than for Cause, (i) all Replacement Awards
held by the Participant shall become fully vested and (if applicable)
exercisable and free of restrictions, and (ii) all Options and SARs held by the
Participant immediately before the termination of employment or termination of
service as a Director that the Participant held as of the date of the Change in
Control or that constitute Replacement Awards shall remain exercisable for not
less than one (1) year following the termination or until the expiration of the
stated term of the Option or SAR, whichever period is shorter; provided that, if
the applicable Award Agreement provides for a longer period of exercisability,
that provision shall control.
Article 18. Amendment, Modification, Suspension, and Termination
     18.1      Amendment, Modification, Suspension, and Termination. Subject to
Section 18.3, the Committee may, at any time and from time to time, alter,
amend, modify, suspend or terminate this Plan and any Award Agreement in whole
or in part; provided, however, that, without the prior approval of the Company’s
shareholders and except as provided in Section 4.4, Options or SARs issued under
this Plan will not be repriced, replaced or regranted through

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cancellation and substitution of another Award, or by lowering the Option Price
of a previously granted Option or the Grant Price of a previously granted SAR,
and no amendment of this Plan shall be made without shareholder approval if
shareholder approval is required by law, regulation or stock exchange rule.
     18.2      Awards Previously Granted. Notwithstanding any other provision of
this Plan to the contrary (other than Section 18.3), no termination, amendment,
suspension or modification of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding the Award.
     18.3      Amendment to Conform to Law. Notwithstanding any other provision
of this Plan to the contrary, the Board of Directors may amend the Plan or an
Award Agreement, to take effect retroactively or otherwise, as deemed necessary
or advisable for the purpose of conforming the Plan or an Award Agreement to any
present or future law relating to plans of this or similar nature (including,
but not limited to, Code Section 409A), and to the administrative regulations
and rulings promulgated under the present or future law.
Article 19. Withholding
     19.1      Tax Withholding. The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, the
minimum statutory amount to satisfy federal, state and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.
     19.2      Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock
and Restricted Stock Units, or upon the achievement of performance goals related
to Performance Shares, or any other taxable event arising as a result of an
Award granted pursuant to this Plan, Participants may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in whole or
in part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum statutory total tax that
could be imposed on the transaction. All such elections shall be irrevocable,
made in writing and signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion, deems
appropriate.
Article 20. Successors
     All obligations of the Company under this Plan with respect to Awards
granted pursuant to this Plan shall be binding on any successor to the Company,
whether the existence of the successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
Article 21. General Provisions
     21.1     Forfeiture Events.

  (a)   The Committee may specify in an Award Agreement that the Participant’s
rights, payments and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable vesting or performance
conditions of an Award. These events may include, but shall not

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      be limited to, termination of employment for cause, termination of the
Participant’s provision of services to the Company, Affiliate and/or Subsidiary,
violation of material Company, Affiliate and/or Subsidiary policies, breach of
noncompetition, confidentiality or other restrictive covenants that may apply to
the Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company, its Affiliates and/or its Subsidiaries.  
  (b)   If the Company is required to prepare an accounting restatement due to
the material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, and if the
Participant knowingly or grossly negligently engaged in the misconduct, or
knowingly or grossly negligently failed to prevent the misconduct, or if the
Participant is one of the individuals subject to automatic forfeiture under
Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse
the Company the amount of any payment in settlement of an Award earned or
accrued during the twelve (12) month period following the first public issuance
or filing with the United States Securities and Exchange Commission (whichever
just occurred) of the financial document embodying the financial reporting
requirement.

     21.2      Legend. The certificates for Shares may include any legend that
the Committee deems appropriate to reflect any restrictions on transfer of the
Shares.
     21.3      Gender and Number. Except where otherwise indicated by the
context, any masculine term used in this Plan also shall include the feminine,
the plural shall include the singular, and the singular shall include the
plural.
     21.4      Severability. In the event any provision of this Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Plan, and this Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
     21.5      Requirements of Law. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
     21.6      Delivery of Title. The Company shall have no obligation to issue
or deliver evidence of title for Shares issued under this Plan prior to:

  (a)   Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and     (b)   Completion of any
registration or other qualification of the Shares under any applicable national
or foreign law or ruling of any governmental body that the Company determines to
be necessary or advisable.

     21.7      Inability to Obtain Authority. The inability of the Company to
obtain from any regulatory body having jurisdiction such authority as the
Company’s counsel deems to be necessary to the lawful issuance and sale of any
Shares under this Plan, shall relieve the Company of any liability in respect of
the failure to issue or sell the Shares as to which requisite authority shall
not have been obtained.

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     21.8      Investment Representations. The Committee may require any
individual receiving Shares pursuant to an Award under this Plan to represent
and warrant in writing that the individual is acquiring the Shares for
investment and without any present intention to sell or distribute the Shares.
     21.9      Employees Based Outside of the United States. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company, its Affiliates and/or its Subsidiaries
operate or in which Employees or Directors of the Company, its Affiliates and/or
its Subsidiaries are located, the Committee, in its sole discretion, shall have
the power and authority to:

  (a)   Determine which Affiliates and Subsidiaries shall be covered by this
Plan;     (b)   Determine which Employees and/or Directors outside the United
States are eligible to participate in this Plan;     (c)   Modify the terms and
conditions of any Award granted to Employees and/or Directors outside the United
States to comply with applicable foreign laws;     (d)   Establish subplans and
modify exercise procedures and other terms and procedures, to the extent the
actions may be necessary or advisable. Any sub-plans and modifications to Plan
terms and procedures established under this Section 21.9 by the Committee shall
be attached to this Plan document as appendices; and     (e)   Take any action,
before or after an Award is made, that it deems advisable to obtain approval or
comply with any necessary local government regulatory exemptions or approvals.

     Notwithstanding the above, the Committee may not take any actions under
this Section 21.9, and no Awards shall be granted, that would violate applicable
law.
     21.10      Uncertificated Shares. To the extent that this Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of the
Shares may be effected on a noncertificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.
     21.11      Unfunded Plan. Participants shall have no right, title or
interest in or to any investments that the Company and/or its Subsidiaries
and/or its Affiliates may make to aid it in meeting its obligations under this
Plan. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary,
legal representative or any other individual. To the extent that any individual
acquires a right to receive payments from the Company, its Subsidiaries and/or
its Affiliates under this Plan, the right shall be no greater than the right of
an unsecured general creditor of the Company, a Subsidiary or an Affiliate, as
the case may be. All payments to be made under this Plan shall be paid from the
general funds of the Company, a Subsidiary or an Affiliate, as the case may be,
and no special or separate fund shall be established and no segregation of
assets shall be made to assure payment of the amounts except as expressly set
forth in this Plan.

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     21.12      No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall determine
whether cash, Awards or other property shall be issued or paid in lieu of
fractional Shares or whether fractional Shares or any rights to fractional
Shares shall be forfeited or otherwise eliminated.
     21.13      Retirement and Welfare Plans. Neither Awards made under this
Plan nor Shares or cash paid pursuant to Awards may be included as
“compensation” for purposes of computing the benefits payable to any Participant
under the Company’s or any Subsidiary’s or Affiliate’s retirement plans (both
qualified and non-qualified) or welfare benefit plans unless the other plan
expressly provides that the compensation shall be taken into account in
computing a Participant’s benefit.
     21.14      Deferred Compensation. It is intended that any Award made under
this Plan that results in the deferral of compensation (as defined under Code
Section 409A) complies with the requirements of Code Section 409A.
     21.15      Nonexclusivity of this Plan. The adoption of this Plan shall not
be construed as creating any limitations on the power of the Board or Committee
to adopt the other compensation arrangements as it may deem desirable for any
Participant.
     21.16      No Constraint on Corporate Action. Nothing in this Plan shall be
construed to: (i) limit, impair or otherwise affect the Company’s or a
Subsidiary’s or an Affiliate’s right or power to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell or transfer
all or any part of its business or assets; or (ii) limit the right or power of
the Company or a Subsidiary or an Affiliate to take any action that the entity
deems to be necessary or appropriate.
     21.17      Governing Law. The Plan and each Award Agreement shall be
governed by the laws of the State of Delaware, excluding any conflicts or choice
of law rule or principle that might otherwise refer construction or
interpretation of this Plan to the substantive law of another jurisdiction.
Unless otherwise provided in the Award Agreement, recipients of an Award under
this Plan are deemed to submit to the exclusive jurisdiction and venue of the
federal or state courts of Delaware, to resolve any and all issues that may
arise out of or relate to this Plan or any related Award Agreement.
     21.18      Indemnification. Subject to requirements of Delaware law, each
individual who is or shall have been a member of the Board, or a Committee
appointed by the Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken or
failure to act under this Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such action, suit or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his/her own behalf, unless the loss, cost, liability or
expense is a result of his/her own willful misconduct or except as expressly
provided by statute.

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     The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which the individuals may be entitled under the
Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
     21.19     No Guarantee of Favorable Tax Treatment. Although the Company
intends to administer the Plan so that Awards will be exempt from, or will
comply with, the requirements of Code Section 409A, the Company does not warrant
that any Award under the Plan will qualify for favorable tax treatment under
Code Section 409A or any other provision of federal, state, local or foreign
law. The Company shall not be liable to any Participant for any tax the
Participant might owe as a result of the grant, holding, vesting, exercise or
payment of any Award under the Plan.

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