Exhibit 10.1

 

LIBBEY INC.   Executive Severance Compensation Policy

 

 

I.

STATEMENT

 

 

(a)

Except as otherwise defined in this Policy, capitalized terms are defined in
Part II below.

 

 

(b)

Under certain circumstances it is appropriate for the Company to pay severance
compensation to a salaried employee whose employment with the Company is
terminated. A U.S. salaried employee who satisfies the following criteria is
covered by this Executive Severance Compensation Policy (“Policy”) and is
referred to as a “Covered Employee”:

 

 

1.

The employee is an exempt employee under the FLSA;

 

 

2.

The employee is not a party to a written agreement with Libbey that provides for
payment of separation benefits to the employee except under certain
circumstances in connection with a change in control of Libbey; and

 

 

3.

The employee’s classification level is Exempt Salary Level 99.

 

   

Any U.S. salaried employee who is not a Covered Employee is covered by the
Non-Executive Severance Policy.

 

 

(c)

A Covered Employee will be entitled to severance compensation pursuant to this
Policy if the Covered Employee’s employment with the Company is terminated
without Cause and the Covered Employee executes and delivers to the Company a
General Release.

 

II.

DEFINITIONS

 

 

(a)

“Board” means the Board of Directors of Libbey Inc.

 

 

(b)

“Cause” means:

 

 

1.

The Covered Employee willfully and continuously fails (other than as a result of
his/her incapacity due to physical or mental illness) to substantially perform
his/her duties with the Company after the Board has delivered to him/her a
written demand for substantial performance that specifically identifies the
manner in which the Board believes that he/she has not substantially performed
his/her duties;

 

 

2.

The Covered Employee willfully and continuously fails (other than as a result of
his/her incapacity due to physical or mental illness) to substantially follow
and comply with the specific and lawful directives of the Board, after the Board
has delivered to him/her a written demand for substantial performance that
specifically identifies the manner in which the Board believes that he/she has
not substantially followed or complied with the directives of the Board;

 

 

3.

The Covered Employee commits an act of fraud or dishonesty that causes harm to
the Company;

 

 

--------------------------------------------------------------------------------

 

 

LIBBEY INC.   Executive Severance Compensation Policy

 

 

4.

The Covered Employee fails to comply with a material Company policy or code of
conduct;

 

 

5.

The Covered Employee materially breaches any material obligation under any
written agreement between him/her and the Company;

 

 

6.

The Covered Employee engages in illegal conduct or gross misconduct that causes
harm to the Company; or

 

 

7.

The Covered Employee has been convicted of a misdemeanor or felony that (A) is
directly related to the position that the Covered Employee occupies with the
Company or (B) indicates that the Covered Employee is unsuitable for the
position that he or she occupies with the Company.

 

 

(c)

“Company” means Libbey Inc. or any of its direct or indirect wholly-owned
subsidiaries.

 

 

(d)

“Compensation Committee” means the Compensation Committee of the Board.

 

 

(e)

“Covered Employee” means any salaried employee who is covered by this Policy, as
set forth in Part I.A above.

 

 

(f)

“Date of Termination” means the date on which the Covered Employee incurs a
Separation from Service.

 

 

(g)

“FLSA” means the United States Fair Labor Standards Act, as in effect from time
to time.

 

 

(h)

“General Release” means a general release of liability in substantially the form
of attached Appendix A. The General Release will include covenants against
non-disparagement and solicitation of employees and, if required by the
Compensation Committee, a covenant not to compete with the Company, and will
provide that, in the event of a breach by the Covered Employee of his or her
obligations under the General Release, the Company will be entitled to exercise
all remedies available to it at law or in equity, including seeking injunctive
relief and monetary damages.

 

 

(i)

“Non-Executive Severance Policy” means the Severance Compensation Policy –
Non-Executives of the Company.

 

 

(j)

Nonqualified Deferred Compensation” has the meaning set forth in §409A.
Generally speaking, Nonqualified Deferred Compensation means compensation that
is earned in one year but is paid in a subsequent year.

 

 

(k)

“Notice of Termination” means written notice that indicates that the Covered
Employee’s employment with the Company is being terminated. If termination is by
the Company with Cause, the Notice of Termination must set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Covered Employee’s employment.

 

2

--------------------------------------------------------------------------------

 

 

LIBBEY INC.   Executive Severance Compensation Policy

 

 

(l)

“§409A” means Section 409A of the Internal Revenue Code of 1986, as the same may
be amended from time to time.

 

 

(m)

“Separation from Service” has the meaning given it in §409A. Generally speaking,
separation from service occurs when the facts and circumstances indicate that
the employer and employee reasonably anticipated that no further services would
be performed after a certain date or that the level of bona fide services the
employee would perform after that date (whether as an employee or as an
independent contractor) would permanently decrease to no more than 20 percent of
the average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of services to the employer, if the employee has been providing
services to the employer for less than 36 months).

 

 

(n)

“Severance Period” means (a) with respect to the Chief Executive Officer of the
Company, 104 weeks, and (b) with respect to each other Covered Employee, 52
weeks.

 

 

(o)

“Specified Employee” means a Covered Employee who is any of the following:

 

 

1.

An officer with annual compensation greater than $160,000 (as indexed for
inflation in 2010);

 

 

2.

A five percent owner of the Company; or

 

 

3.

A one percent owner of the Company with annual compensation greater than
$160,000 (as indexed for inflation in 2010).

 

   

Whether a Covered Employee is an “officer” will be determined by the Company in
accordance with Section 409A. The term "officer" is not limited to corporate
officers, but includes any employee who has significant administrative or
policy-making responsibility. The determination is based on all the facts,
including:

 

 

●

The source of the employee's authority;

 

●

The term for which the employee was elected or appointed; and

 

●

The nature and extent of the employee's duties.

 

   

An employee who merely has the title of an officer but not the authority is not
considered an officer. Similarly, an employee who does not have an officer title
but does have the authority of an officer is considered an officer regardless of
title. Therefore, vice presidents, and even directors or managers, who are
normally not considered officers for corporate purposes may be considered
officers under Section 409A.

 

III.

AMOUNT OF SEVERANCE PAYABLE; LIMITATIONS ON PAYMENT

 

 

(a)

If a Covered Employee is entitled to severance compensation pursuant to Part I
above, the Company will pay or provide to the Covered Employee the following
benefits:

 

3

--------------------------------------------------------------------------------

 

 

LIBBEY INC.   Executive Severance Compensation Policy

 

 

1.

Base salary through the Date of Termination;

 

 

2.

Reimbursement of any expenses properly incurred prior to the Date of Termination
in accordance with the Company’s policy on business expense reimbursement;

 

 

3.

Any amount or benefit to which the Covered Employee is entitled under any
pension plan, retirement savings plan, equity participation plan, stock purchase
plan, medical benefit plan or other benefit plan or employment policy maintained
by the Company in accordance with the terms of such plan;

 

 

4.

With respect to the Covered Employee's annual incentive compensation opportunity
during the year in which the Date of Termination occurs, payment, between
January 1 and March 15 of the year following the year in which the Date of
Termination occurs, of a prorated amount, based on actual performance for the
year;

 

 

5.

Continuation of base salary, in accordance with the Company’s normal pay
practices, during the Severance Period;

 

 

 

Note:   The Severance Period will not be counted as additional years of service
for purposes of the Company’s other employee benefit plans.

 

 

6.

Payment, in a lump sum on the first payroll date after the Date of Termination
occurs, of an amount equal to (a) in the case of the Chief Executive Officer of
the Company, two (2) times his or her target annual incentive, and (b) in the
case of any other Covered Employee, one (1) times the Covered Employee’s target
annual incentive;

 

 

7.

Until the last day of the calendar month in which the Severance Period expires,
continuation of the Covered Employee’s medical, prescription drug and dental
benefits, provided that the Covered Employee pays the active-employee
contributions for these benefits. Contributions will be paid through deduction
from the Covered Employee’s salary continuation payments;

 

 

8.

For the duration of the Severance Period, executive outplacement services at a
cost to the Company not to exceed $10,000 per year.

 

 

(b)

If the Covered Employee is a Specified Employee, any severance that constitutes
Nonqualified Deferred Compensation will not be payable to the Covered Employee
until the first to occur of (1) the first day of the seventh month after the
Covered Employee’s Separation from Service or (2) the Covered Employee’s death,
unless and to the extent that the Company, in its sole discretion, determines
that §409A provides a valid exception to the 6-month delay rule contained in
§409A, including the exception for short-term deferrals set forth in Treasury
Regulation §1.409A-1(b)(4) and the exception for certain separation pay plans
set forth in Treasury Regulation §1.409A-1(b)(9)(iii), which shall be applied to
all installments commencing with the first installment that does not qualify as
a short-term deferral until the limitation on separation pay plans is reached.
In connection with the Company’s determination as set forth in the preceding
sentence, the Covered Employee may furnish the Company with a tax opinion or
other evidence that an exception to the 6-month delay applies, but the Company
shall not be bound by any such opinion or evidence.

 

4

--------------------------------------------------------------------------------

 

 

LIBBEY INC.   Executive Severance Compensation Policy

 

 

(c)

Severance benefits may be withheld or reduced if and to the extent that, as of
the Covered Employee’s Separation from Service:

 

 

1.

the Covered Employee is indebted to the Company for any loan or cash advance
that is unpaid and satisfactory arrangements are not made with regard to the
obligations;

 

 

2.

the Covered Employee has participated in the Company’s Educational Assistance
Policy, has not satisfied the minimum service requirements specified in that
Policy and has not made satisfactory arrangements to repay the cost expended by
the Company on the Covered Employee’s behalf pursuant to the Policy;

 

 

3.

the Covered Employee has charged personal expenses to a Company credit card and
either (a) has not paid to the Company or the credit card company the amount of
such personal expenses or (b) has paid the amount of the personal expenses to
the credit card company but has submitted for and received reimbursement from
the Company for such personal expenses;

 

 

4.

the Covered Employee has incurred late charges on a Company credit card account
and has received reimbursement from the Company for such late charges; or

 

 

5.

the Covered Employee is in a position in which he or she handles Company cash
and an audit of the accounts that the Covered Employee is responsible for
handling discloses a discrepancy.

 

IV.

EXCEPTIONS

 

 

(a)

Exceptions to this Severance Policy may be made only with the approval of the
Chief Executive Officer, unless the Covered Employee in question is the Chief
Executive Officer, in which case the approval of the Compensation Committee will
be required.

 

V.

RIGHT TO TERMINATE OR AMEND SEVERANCE POLICY

 

 

(a)

The Company shall have the right, in its sole discretion, to suspend, terminate,
amend, amend and restate, or otherwise modify this Severance Policy at any time
and from time to time upon at least 90 days’ prior written notice.

 

5

--------------------------------------------------------------------------------

 

 

Appendix A

 

GENERAL RELEASE AND WAIVER OF CLAIMS 

 

The undersigned, _______________________, resident of the State of _____________
(“Releasor”), in accordance with and pursuant to the terms of the Executive
Severance Compensation Policy dated as of May 11, 2015 (the “Policy”) of Libbey
Inc., a Delaware corporation (the “Company”), and in consideration of the
separation benefits provided pursuant to the Policy, except as set forth herein,
hereby:

 

(a)     agrees that all Confidential Information of the Company or any of the
Affiliates shall be treated by Releasor as confidential, and Releasor shall not,
without the consent of the Company, disclose such Confidential Information to
any third party or use such Confidential Information for Releasor’s personal
benefit for as long as the Confidential Information is not generally available
to the public. For purposes of this Agreement, “Confidential Information” means
information disclosed to Releasor, or known to Releasor, fully as a consequence
of or through Releasor’s employment by the Company or any Affiliate, including
without limitation, information concerning customers, suppliers, employees,
business methods, business plans, business strategy, technology, research,
manufacturing methods, manufacturing operations, business operations, sales,
costs, prices, profits and procedures of the Company or any Affiliate. As soon
as possible after the Company’s written request, Releasor will return to the
Company all written or electronic Confidential Information that has been
provided to the Releasor, and the Releasor will destroy or return (at the
Company’s option) all copies of any analyses, compilations, studies or other
documents prepared by the Releasor or for the Releasor’s use containing or
reflecting any Confidential Information. Within ten (10) business days of
Releasor’s receipt of such request from the Company, Releasor shall deliver to
the Company a notarized document certifying that such Confidential Information
has been returned or destroyed in accordance with this provision.

 

(b)     agrees to disclose promptly in writing to the Company any and all
information, discoveries, improvements and inventions that may have been or be
made by Releasor as a result of or in conjunction with Releasor’s employment
with the Company. Releasor further agrees to assign all such information,
discoveries, improvements and inventions to the Company and at the request and
expense of the Company to execute all patent applications and patents to the
Company. If the Company is not interested in obtaining title to any particular
invention, discovery or improvement and so advises Releasor in writing, then
Releasor may consider the same to be Releasor’s personal property subject to the
right of the Company and any Affiliate to make, use, employ and practice it for
its or their own uses and purposes;

 

(c)     agrees that he or she shall not engage in any pattern of conduct that
involves the making or publishing of written or oral statements or remarks
(including, but not limited to, the repetition or distribution of derogatory
rumors, allegations, negative reports, or comments) that are disparaging,
deleterious or damaging to the integrity, reputation or goodwill of the Company,
any Affiliate or any of the respective managements of either. To the extent
inquiries regarding Releasor’s employment are directed to the Company’s
Corporate Human Resources Manager, prospective employers will be provided the
dates of Releasor’s employment and position with the Company. If Releasor
directs a request for reference to a source other than the Company’s Corporate
Human Resources Manager, the Company is not responsible for the results of that
request;

 

(d)     agrees that, for a period of twelve (12) months commencing on the date
of on which Releasor’s employment with the Company or its Affiliates was
terminated (the “Date of Termination”), Releasor shall not directly or
indirectly, personally or on behalf of any other person, business, corporation,
or entity, contact or do business with any customer of the Company with respect
to any product, business activity or service that is competitive with any
product, business, activity or service of the type sold or provided by the
Company;

 

6

--------------------------------------------------------------------------------

 

 

(e)     agrees that, unless the Company otherwise agrees in writing, for a
period of twelve (12) months commencing on the Date of Termination, the Releasor
shall not, directly or indirectly, own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be
connected as a director, officer, employee, partner, consultant or otherwise
with any entity engaged in a business that sells, in competition with the
Company and its affiliates, the same type of products as sold by the Company,
including without limitation glass tableware, ceramic dinnerware and metal
flatware to the foodservice industry other than as a shareholder or beneficial
owner owning five percent (5%) or less of the outstanding securities of a public
company. Without limiting the foregoing, currently the following business
operations among others sell, in competition with the Company and its
affiliates, the same type of products as sold by the Company and its affiliates:
Anchor Hocking and Oneida and any affiliate thereof; Arc International and its
affiliate Cardinal International, Inc.; and any glass tableware manufacturer,
seller or importer for Bormioli Rocco Casa SpA, for the Kedaung group of
companies of Indonesia or for the Sisecam group of companies of Turkey including
Pasabahce;

 

(f)     agrees that, for a period of twelve (12) months following the Date of
Termination, Releasor shall not divert or attempt to divert or take advantage of
or attempt to take advantage of any actual or potential business opportunities
of the Company (e.g., joint ventures, other business combinations, investment
opportunities, potential investors in the Company, and other similar
opportunities) of which the Releasor became aware as a result of Releasor’s
employment with the Company;

 

(g)     acknowledges that the Company has invested substantial time and effort
in assembling its present workforce. Accordingly, Releasor covenants and agrees
that, for period of twelve (12) months commencing on the Date of Termination,
Releasor shall not, either for Releasor’s own account or jointly with or as a
manager, agent, officer, employee, consultant, partner, joint venture owner or
shareholder or otherwise on behalf of any other person, firm or corporation,
directly or indirectly entice, solicit, attempt to solicit, or seek to induce or
influence any officer or employee of the Company to leave his or her employment
with the Company or to offer employment to any person who on or during the six
(6) month period immediately preceding the date of such solicitation or offer
was an employee of the Company; provided, however, that this Section 15 shall
not be deemed to be breached with respect to an employee or former employee of
the Company who responds to a general advertisement seeking employment or who
otherwise independently initiates contact for the purpose of seeking employment;
and

 

(h)     remises, releases and forever discharges and covenants not to sue, and
by these presents does for Releasor and Releasor’s legal representatives,
trustees, beneficiaries, heirs and assigns (Releasor and such persons referred
to herein, collectively, as the “Releasing Parties”) hereby remise, release and
forever discharge and covenant not to sue, the Company and its affiliates and
the respective Officers, directors, employees, equity holders, agent and
representatives of each of them and all of their respective successor and
assigns (each a “Released Party” and collectively, the “Released Parties”), of
and from any and all manner of actions, proceedings, claims, causes of action,
suits, promises, damages, judgments, executions, claims and demands, of any
nature whatsoever, and of every kind and description, choate and inchoate, known
or unknown, at law or in equity (collectively, “Claims”), which the Releasing
Parties, or any of them, now have or ever had, or hereafter can, shall or may
have, for, upon or by reason of any matter, cause or thing whatsoever, against
the Released Parties, and each of them, from the beginning of time to the date
hereof;

 

7

--------------------------------------------------------------------------------

 

 

 

(i)

arising from Releasor’s employment, compensation, commissions, insurance, stock
ownership, stock options, employee benefits and other terms and conditions of
employment or employment practices of the Company under federal, state or local
law or regulation, including, but not limited to the Employee Retirement Income
Security Act of 1974 (“ERISA”), as amended;

 

 

(ii)

relating to the termination of Releasor’s employment or the circumstances
surrounding thereof based on any contract, tort, whistleblower, personal injury,
retaliatory, wrongful discharge or any other theory under any federal, state or
local constitution, law, regulation, common law or otherwise;

 

 

(iii)

relating to payment of any attorneys’ fees incurred by Releasor; and

 

 

(iv)

based on any alleged discrimination on the basis of race, color, religion, sex,
age, national origin, handicap, disability or another category protected by any
federal, state or local law or regulation, including, but not limited to, the
Age Discrimination in Employment Act (“ADEA”), Title VII of the Civil Rights Act
of 1964 (“Title VII”), the Americans with Disabilities Act (“ADA”), the Fair
Labor Standards Act (“FLSA”), the Older Workers Benefit Protection Act of 1990
(“OWBPA”), or Executive Order 11246 (as any of these laws or orders may have
been amended) or any other similar federal, state or local labor, employment or
anti-discriminatory laws.

 

Notwithstanding any other provision of this General Release and Waiver of
Claims, Releasor does not release or waive Releasor’s rights and Claims against
the Company arising out of, or related to, the obligations of the Company
pursuant to the Policy, Claims for Releasor’s vested benefits under any pension
plan, retirement plan and savings plan, rights under any equity participation
plan and stock purchase plan and rights to continuation of medical care coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
and any similar state law.

 

Releasor represents and warrants on behalf of the Releasing Parties that there
has been, and there will be, no assignment or other transfer of any right or
interest in any Claims which Releasor has or may have against the Released
Parties, and Releasor hereby agrees to indemnify and hold each Released Party
harmless from any Claims, costs, expenses and attorney’s fees directly or
indirectly incurred by any of the Released Parties as a result of any person
asserting any right or interest pursuant to his, her or its assignment or
transfer of any such right or interest.

 

Nothing in this General Release will foreclose Releasor’s right to consult or
cooperate with any governmental agency.

 

Releasor agrees that if any Releasing Party hereafter commences, joins in, or in
any manner seeks relief through any suit arising out of, based upon, or relating
to any of the Claims released hereunder, or in any manner asserts against any
Released Party any of the Claims released hereunder, then Releasor will pay to
such Released Party, in addition to any all damages and compensation, direct or
indirect, all attorney’s fees incurred in defending or otherwise responding to
such suit or Claims.

 

Releasor further agrees that the Company and its Affiliates shall be entitled,
in the event of any breach by Releasor of Releasor’s obligations under this
General Release and Waiver of Claims, to exercise such remedies as the Company
and its Affiliates may have at law or in equity, including without limitation
the right to seek injunctive relief and monetary damages.

 

8

--------------------------------------------------------------------------------

 

 

Releasor acknowledges that (i) Releasor has received the advice of legal counsel
in connection with this General Release and Waiver of Claims, (ii) Releasor has
read and understands that this is a General Release and Waiver of Claims, and
(iii) Releasor intends to be legally bound by the same.

 

Releasor acknowledges that Releasor has been given the opportunity to consider
this Release for twenty-one (21) days and has been encouraged and given the
opportunity to consult with legal counsel of Releasor’s choosing before signing
it. Releasor understands that Releasor shall have seven (7) days from the date
on which Releasor executes this General Release and Waiver of Claims (as
indicated by the date below his signature) to revoke Releasor’s signature and
agreement to be bound hereby by providing written notice of revocation to the
Company within such seven (7) day period. Releasor further understands and
acknowledges this Release shall become effective, if not sooner revoked, on the
eighth day after the execution hereof by Releasor (the “Effective Date”).

 

IN WITNESS WHEREOF, Releasor has executed and delivered this General Release and
Waiver of Claims on behalf of the Releasing Parties as of the day and year set
forth below.

 

Dated: _______, 20___.

 

 

 

 

 

 

 

RELEASOR:

 

 

 

 

 

 

 

 

 

 

     

  

 

Name:

 

 

         

 

 

9