Exhibit 10.1

 

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May 31, 2020

 

Michael Bauer

[Address]

 

RE:     Amended and Restated Retention Bonus Letter Agreement

 

Dear Mike:

 

As mutually agreed by you and Libbey Inc. (the “Company” or “we,” and together
with its subsidiaries, collectively “Libbey”) this letter agreement amends and
restates our prior retention bonus letter agreement, dated May 19, 2020,
pursuant to which Libbey offered and paid to you on May 22, 2020 a retention
bonus in the gross amount of $900,000 (the “Retention Bonus”) (less required
withholdings) pursuant to which you agree to add additional conditions on your
ability to earn and retain the Retention Bonus.

 

You agree that you will not earn and you will repay the Retention Bonus (or a
portion thereof) to the Company in full if you resign without Good Reason (as
defined below) or are terminated by a Libbey entity for Cause as follows:

 

 

(i)

if such resignation or termination occurs on or prior to July 3, 2020, then you
will repay 100% of the Retention Bonus, and

 

 

(ii)

if such resignation or termination occurs after July 3, 2020 but prior to the
earlier of (x) October 2, 2020, and (y) the effective date of a Plan of
Reorganization (as will be defined in the Debtor-In-Possession Credit Agreement,
to be entered into by and among Libbey Glass Inc., Libbey Europe B.V., the
Company, JP Morgan Chase Bank, N.A, as Administrative Agent and J.P. Morgan
Securities LLC as Lead Arranger, and the other Loan Parties and Lender Parties
thereto) (the “DIP Agreement”), then you will repay 50% of the Retention Bonus.

 

Additionally, you agree that you will forfeit, repay and will not earn a portion
of the Retention Bonus as follows:

 

(i) you will forfeit, repay and not earn 50% of the Retention Bonus if Libbey
does not achieve at least Operating Cash Flow (calculated consistent with that
line item as set forth on the Initial Approved Budget, as will be defined in the
DIP Agreement) (“Operating Cash Flow”) of $(21,154,078) between May 30, 2020 and
July 3, 2020(the “First Testing Date”), and

 

 

 

 

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May 31, 2020
Page 2

 

(ii) you will forfeit, repay and not earn 50% of the Retention Bonus if, between
May 30, 2020 and the earlier of (x) October 2, 2020, and (y) the effective date
of a Plan of Reorganization (the “Second Testing Date”), Libbey does not achieve
at least the threshold amount of Operating Cash Flow as shown in the following
schedule:

 

Week Ending

 

Cumulative

Operating

Cash Flow

   

20% Cushion

   

Threshold for

Retention Agreement

 

6/5/2020

    $ (3,123,122 )   $ (624,624 )   $ (3,747,747 )

6/12/2020

    $ (7,509,705 )   $ (1,501,941 )   $ (9,011,646 )

6/19/2020

    $ (10,083,153 )   $ (2,016,631 )   $ (12,099,783 )

6/26/2020

    $ (13,381,559 )   $ (2,676,312 )   $ (16,057,871 )

7/3/2020

    $ (17,628,398 )   $ (3,525,680 )   $ (21,154,078 )

7/10/2020

    $ (19,273,075 )   $ (3,854,615 )   $ (23,127,690 )

7/17/2020

    $ (22,459,117 )   $ (4,491,823 )   $ (26,950,940 )

7/24/2020

    $ (24,125,964 )   $ (4,825,193 )   $ (28,951,157 )

7/31/2020

    $ (26,936,968 )   $ (5,387,394 )   $ (32,324,361 )

8/7/2020

    $ (28,864,697 )   $ (5,722,939 )   $ (34,637,637 )

8/14/2020

    $ (32,126,473 )   $ (6,425,295 )   $ (38,551,767 )

8/21/2020

    $ (32,823,744 )   $ (6,564,749 )   $ (39,388,493 )

8/28/2020

    $ (34,632,571 )   $ (6,926,514 )   $ (41,559,085 )

9/4/2020

    $ (34,058,108 )   $ (6,811,622 )   $ (40,869,729 )

9/11/2020

    $ (35,345,903 )   $ (7,069,181 )   $ (42,415,084 )

9/18/2020

    $ (32,600,729 )   $ (6,520,146 )   $ (39,120,875 )

9/25/2020

    $ (29,491,571 )   $ (5,898,314 )   $ (35,389,885 )

10/2/2020

    $ (29,166,976 )   $ (5,833,395 )   $ (35,000,371 )

 

In the event that Libbey does not achieve the foregoing required Operating Cash
Flow on either the First Testing Date or the Second Testing Date in accordance
with (i) and (ii) of the above, you will be required to repay the forfeited and
unearned portion of the Retention Bonus within fifteen (15) days following your
receipt of written notice of your obligation to repay due to failure to achieve
the required Operating Cash Flow.

 

However, if your employment is terminated by a Libbey entity without Cause or as
a result of your resignation for Good Reason or you die or become disabled prior
to the earlier of (x) October 2, 2020, and (y) the effective date of a Plan of
Reorganization, and you (or your estate in the case of death) sign and do not
revoke a general release of claims in a form satisfactory to the Company within
forty-five (45) days of your termination, you will be deemed to have earned 100%
of the Retention Bonus (regardless of whether the Operating Cash flow metrics
are met in clauses (i) or (ii) above are met); provided, that if you fail to
return the required release within forty-five (45) days of your termination or
revoke the release, then you will forfeit and will not have earned the Retention
Bonus and will be required to repay the full gross amount. Note, you will be
considered to have been terminated without Cause if your employment with all
Libbey entities is terminated in connection with a sale of assets, even if you
accept employment with and are immediately rehired by a buyer.

 

If you are required to repay the Retention Bonus (or any portion thereof) under
this letter agreement, then you agree to do so promptly, but in no event more
than fifteen (15) days following the date(s) you first become obligated to repay
the Retention Bonus (or any portion thereof). You acknowledge and agree that
Libbey may offset and reduce any other compensation owed to you (including, but
not limited to, any leave or paid time off required to be paid to you, earned
and unpaid wages, unreimbursed business expenses you may be entitled to, earned
and unpaid commissions, deferred compensation and/or any severance payments you
are or may become entitled to), by the amount of the Retention Bonus which is
not earned and subject to repayment under this agreement. However, no
compensation will be reduced if doing so would violate applicable law or would
result in penalty taxes under Section 409A of the Internal Revenue Code of 1986
and the rules and regulations thereunder. We reserve all other rights and
remedies available to recoup the full amount of the Retention Bonus advanced,
including the right to file a legal claim in court.

 

 

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May 31, 2020
Page 3

 

This letter does not confer upon you any right to continue in the employment of
Libbey for any period or interfere with or otherwise restrict in any way the
rights of your employer or you to terminate your employment at any time for any
reason whatsoever, with or without Cause.

 

For purposes of this agreement:

 

“Cause” means: (i) your willful and continuous failure (other than as a result
of your incapacity due to physical or mental illness) to substantially perform
your duties with Libbey after Libbey has delivered to you a written demand for
substantial performance that specifically identifies the manner in which Libbey
believes you have not substantially performed your duties; (ii) your willful and
continuous failure (other than as a result of your incapacity due to physical or
mental illness) to substantially follow and comply with the specific and lawful
directives of Libbey, after Libbey has delivered to you a written demand for
substantial performance that specifically identifies the manner in which Libbey
believes you have not substantially followed or complied with the directives of
the Company; (iii) your commission of an act of fraud or dishonesty that causes
harm to Libbey; (iv) your failure to comply with a material Libbey policy or
code of conduct; (v) your material breach of any material obligation under any
written agreement between you and Libbey; (vi) your illegal conduct or gross
misconduct that causes harm to Libbey; (vii) your conviction of a misdemeanor or
felony that (A) is directly related to the position that you occupy with Libbey
or (B) indicates that you are unsuitable for the position that you occupy with
Libbey. The Compensation Committee of the Board of Directors of the Company has
the sole authority and discretion to determine whether any termination is for
Cause and such determination will be final and binding on you and the Company.

 

“Good Reason” means the occurrence of any of the following circumstances without
your consent: (i) Libbey’s reduction of your annual base salary and the
reduction in not applied in the same or similar manner to similarly situated
employees; (ii) Libbey’s relocation of your principal place of employment by
more than 50 miles; or (iii) Libbey’s material breach of any written agreement
between Libbey and you and Libbey do not remedy it within sixty (60) days after
receiving from you written notice of the breach. If you do not deliver to
Libbey, within ninety (90) days after the date on which you knew or should have
known of the Good Reason event, written notice specifying in reasonable detail
the particulars giving rise to the Good Reason event, you will be deemed
conclusively to have waived that particular Good Reason event (but not any
subsequent Good Reason event) even if your failure to give timely notice of the
Good Reason event is a result of your incapacity due to physical or mental
illness. In all events, Libbey will be given a thirty (30)-day period to cure or
remedy the condition giving rise to your notice.

 

 

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May 31, 2020
Page 4

 

This agreement will in all respects be governed by, and construed in accordance
with, the laws of the State of Ohio, without reference to conflicts of law
principles thereunder. Any litigation arising out of this agreement shall be
brought exclusively in the federal or state courts sitting in Toledo, Ohio, to
which jurisdiction you and the Company hereby submit with respect to litigation
arising out of this agreement, and both you and the Company hereby knowingly and
willingly waive their rights to a jury trial in any such litigation.

 

You should be aware that in addition to your obligation to repay the Retention
Bonus under this letter agreement, the Retention Bonus could also be subject to
recoupment in the event the Company files for bankruptcy in the future.

 

Please indicate your acceptance of the provisions of the revised terms of your
Retention Bonus as set forth in this agreement by signing the enclosed copy of
this letter agreement and returning it to me by the end of the day on May 31,
2020.

 

 

Very truly yours,

 

LIBBEY INC.

 

 

 

Jennifer M. Jaffee

Senior Vice President, General Counsel & Secretary

 

 

Agreed and Accepted:

 

 

    Michael P. Bauer       Date