exv10w29






Exhibit 10.29



Appendix A



Amended and Restated Libbey Inc.

2006 Omnibus Incentive Plan



Effective May 6, 2010






 









 








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
	 	 	13	 
	 
	 	 	 	 
	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
	 	 	18	 
	 
	 	 	 	 
	Article 13. Nonemployee Director Awards
	 	 	18	 
	 
	 	 	 	 
	Article 14. Dividend Equivalents
	 	 	18	 
	 
	 	 	 	 
	Article 15. Beneficiary Designation
	 	 	18	 
	 
	 	 	 	 
	Article 16. Rights of Participants
	 	 	19	 
	 
	 	 	 	 
	Article 17. Change of Control
	 	 	19	 
	 
	 	 	 	 
	Article 18. Amendment, Modification, Suspension, and Termination
	 	 	21	 
	 
	 	 	 	 
	Article 19. Withholding
	 	 	21	 
	 
	 	 	 	 
	Article 20. Successors
	 	 	21	 
	 
	 	 	 	 
	Article 21. General Provisions
	 	 	21	 






 









 






Amended and Restated 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. Amended and Restated 2006
Omnibus Incentive Plan (the “Plan”), as set forth in this document. The Plan amends and
restates the Libbey Inc. 2006 Omnibus Incentive Plan (the “2006 Plan”).



     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




1









 












	 	 	 	Units, Performance Shares, Performance Units, Cash-Based Awards or Other Stock-Based
Awards, in each case subject to the terms of this Plan.
	 
	 	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)




2









 












	 	 	 	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; or
	 
	 	(d)	 	Consummation of a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all of
the Company’s assets.






	 	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.
	 
	 	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.




3









 












	 	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 applicable date, or if shares were not
traded on the applicable date, then on the 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.
	 
	 	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




4









 












	 	 	 	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.
	 
	 	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




5









 












	 	 	 	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 Plan” means 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, 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




6









 












	 	 	 	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.



     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



7









 




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
one million four hundred sixty thousand (1,460,000) 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 Plan. In
connection with approving the 2006 Plan, the Board of Directors approved a merger
of the Prior Plan into the 2006 Plan. Accordingly, 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
Plan and the 2006 Plan, reduced by any awards made from the 2006 Plan during the
period beginning January 1, 2010.
	 
	 	(b)	 	The maximum number of Shares that may be issued pursuant to ISOs under
this Plan shall be one million four hundred sixty thousand (1,460,000) 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.





     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 the Prior Plan or 2006
Plan 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



8









 




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,
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



9









 




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 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



10









 




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.



     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



11









 




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.



     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



12









 




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 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



13









 




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 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



14









 




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 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



15









 




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.



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.



16









 





     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 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



17









 




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.



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



18









 




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 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



19









 




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 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, or by exchange for cash, 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.



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     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 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




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	 	 	 	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.



     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:



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	 	(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.



     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.



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     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.



     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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