Document:

EX-10.35

Exhibit 10.35

Susan Allene Kovach

Vice President, General Counsel 

   and Secretary

Direct: (419) 325-2378

Fax: (419) 325-2585

susan.kovach@libbev.com

December 31, 2008

[Name and address of individual listed on Appendix 1]

Dear                     ,

Libbey Inc. (the “Company”) considers it essential to the best interests of its shareholders to
foster the continuous employment of key management personnel. In that connection, the Company’s
Board of Directors (the “Board”) recognizes that, as is the case with many publicly-held
corporations, the possibility of a change in control of the Company may exist and that the
uncertainty and questions that it may raise among management could result in the departure or
distraction of management personnel to the detriment of the Company and its shareholders.

The Board has decided to reinforce and encourage the continued attention and dedication of members
of the Company’s management, including yourself, to their assigned duties without the distraction
arising from the possibility of a change in control of the Company.

In order to induce you to remain in its employ, the Company hereby agrees that after this letter
agreement (this “Agreement”) has been fully executed, you shall receive the severance benefits set
forth in this Agreement if your employment with the Company is terminated under the circumstances
described below subsequent to a Change in Control (as defined in Section 2), and you shall receive
the compensation set forth in Section 5(a) through (c) below upon the occurrence of a Change in
Control even if your employment is not terminated in connection with, or subsequent to, the Change
in Control.

     1. Term of Agreement. The term of this Agreement, which amends and restates the
letter agreement between you and the Company dated May 27, 1998, shall commence on January 1,
2009, and continue in effect through December 31, 2009. Commencing on January 1, 2010, and on each
January 1 thereafter, the term of this Agreement shall be extended automatically for one (1)
additional year unless the Company gives you written notice, not later than September 30 of the
preceding calendar year, that the Company does not wish to extend this Agreement for the subsequent
year. For example, if the Company does not desire to renew this Agreement for the 2011 calendar
year, the Company must, on or before September 30,

300 Madison Avenue, Toledo, Ohio 43604

 

 

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2010, give you written notice that the term of this Agreement will not be renewed for the 2011
calendar year. If a Change in Control (as defined in Section 2) occurs during the original or any
extended term of this Agreement, the term of this Agreement shall continue in effect for a period
of not less than thirty-six (36) months after the month in which the Change in Control occurred.

     2. Change in Control. For purposes of this Agreement, a Change in Control shall be
deemed to occur if:

          (a) any Person (as defined below) is or becomes the Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company representing thirty percent (30%) or more of
the combined voting power of the Company’s then outstanding securities. For purposes of this
Agreement, the term “Person” is used as that term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, the term “Person” shall
not include the Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their ownership of stock of the Company.
For purposes of this Agreement, the term “Beneficial Owner” shall have the meaning given to that
term in Rule 13d-3 under the Exchange Act;

          (b) during any period of two (2) consecutive years (not including any period prior to the
execution of this Agreement), Continuing Directors (as defined below) cease for any reason to
constitute at least a majority of the Board. The term “Continuing Directors” means (i) individuals
who were members of the Board at the beginning of the two (2) year period referred to above and
(ii) any individuals elected to the Board, after the beginning of the two (2) year period referred
to above, by a vote of at least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination for election was
previously approved in accordance with this provision. Notwithstanding the immediately preceding
sentence, an individual who is elected to the Board after the beginning of the two (2) year period
shall not be deemed a Continuing Director if the individual was designated by a person who has
entered into an agreement with the Company to effect a transaction described in Sections 2(a), (c)
or (d);

          (c) the consummation of a merger or consolidation of the Company with any other corporation
(or other entity), other than a merger or consolidation that would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3%
of the combined voting power of the voting securities of the Company or such surviving entity
outstanding immediately after the merger or consolidation; or

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

     3. Termination Following Change in Control.

          (a) General. If, during the term of this Agreement, a Change in Control occurs and
the Company terminates your employment without Cause (as defined below), or you terminate your
employment for Good Reason (as defined below), within the two (2) year period immediately following
the date on which the Change in Control occurs, then you shall be entitled

 

 

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to the benefits provided in Section 4(b) of this Agreement, and those benefits shall be paid
notwithstanding the subsequent expiration of the term of this Agreement. In addition, you shall be
entitled to the benefits provided in Section 4(b) if:

     (i) After the occurrence of a Potential Change in Control (as defined in Section 9
below) and prior to the date on which the Change in Control actually occurs, the Company
terminates your employment without Cause (other than as a result of your Permanent
Disability, as defined below) or you terminate your employment upon an event that would be
considered Good Reason if it were to occur after a Change in Control; or

     (ii) Prior to the occurrence of a Potential Change in Control, the Company terminates
your employment without Cause (other than as a result of Permanent Disability) or you
terminate your employment upon an event that would be considered Good Reason if it were to
occur after a Change in Control and you reasonably demonstrate that the Company’s
termination of your employment, or the events giving rise to Good Reason, (A) was or were at
the request of, or was or were induced by, a third party who has taken steps reasonably
calculated to effect a Change of Control, or (y) otherwise arose in connection with or in
anticipation of a Change in Control.

Notwithstanding anything to the contrary in this Agreement, you shall not be entitled to any
payment under Section 4 of this Agreement if your employment is terminated as a result of your
death or Permanent Disability. “Permanent Disability” means any incapacity due to physical or
mental illness as a result of which you are absent from the full-time performance of your duties
with the Company for six (6) consecutive months and do not return to the full-time performance of
your duties within thirty (30) days after the Company gives Notice of Termination (as defined in
Section 3(d) below) to you.

          (b) Cause. “Cause” means the occurrence of any of the following events: (i) your
willful and continued failure (other than as a result of your incapacity due to physical or mental
illness or after your issuance of a Notice of Termination for Good Reason) to substantially perform
your duties with the Company after the Board has delivered to you a written demand for substantial
performance that specifically identifies the manner in which the Board believes that you have not
substantially performed your duties; (ii) your willful and continued failure (other than as a
result of your incapacity due to physical or mental illness or after your issuance of a Notice of
Termination for Good Reason) to substantially follow and comply with the specific and lawful
directives of the Board, as reasonably determined by the Board, after the Board has delivered to
you a written demand for substantial performance that specifically identifies the manner in which
the Board believes that you have not substantially performed your duties; (iii) your willful
commission of an act of fraud or dishonesty resulting in material economic or financial injury to
the Company; or (iv) your willful engagement in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company. For purposes of this Section 3(b), no act,
or failure to act, on your part shall be deemed “willful” unless your commission of the act or
failure to act is not in good faith. In any event, the Company may not terminate your employment
for Cause pursuant to Sections 3(b)(i), (ii) or (iv) hereof unless and until the Company has
delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting of the Board (after
reasonable notice to you, an opportunity for you, together with your counsel, to be heard before
the Board and a reasonable opportunity to cure), finding,

 

 

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in the Board’s good faith opinion, that you engaged in any of the conduct set forth in the
definition of “Cause” above and specifying in reasonable detail the particulars of the conduct at
issue.

        (c) Good Reason. “Good Reason” means the occurrence, after a Change in Control, of
any of the following circumstances unless, in the case of Sections 3(c)(i), (v), (vi), (vii) or
(viii), the circumstances are fully corrected (provided such circumstances are capable of
correction) prior to the Date of Termination (as defined in Section 3(e)) specified in the
applicable Notice of Termination:

     (i) the assignment to you of any duties inconsistent with the position in the Company
that you held immediately prior to the Change in Control, a significant adverse alteration
in the nature or status of your responsibilities or the conditions of your employment from
those in effect immediately prior to the Change in Control, including by virtue of the
Company ceasing to be a publicly-held corporation, or any other action by the Company that
results in a material diminution in your position, authority, duties or responsibilities;

     (ii) the Company’s reduction of your annual base salary as in effect on the date of
this Agreement or as the same may be increased from time to time after the date of this
Agreement;

     (iii) the relocation of the Company’s offices at which you are principally employed
immediately prior to the date of the Change in Control (your “Principal Location”) to a
location more than thirty (30) miles from that location, or the Company’s requiring you,
without your written consent, to be based anywhere other than your Principal Location,
except for required travel on the Company’s business to an extent substantially consistent
with your business travel obligations prior to the Change in Control;

     (iv) the Company’s failure to pay to you any portion of your current compensation or to
pay to you any portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven (7) business days of the date on which the
compensation is due;

     (v) the Company’s failure to continue in effect any material compensation or benefit
plan or practice in which you participate immediately prior to the Change in Control, unless
an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the Company’s failure to continue your participation
therein (or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of your
participation relative to other participants, as existed at the time of the Change in
Control;

     (vi) the Company’s failure to continue to provide you with benefits substantially
similar in the aggregate to those enjoyed by you under any of the Company’s life insurance,
medical, health and accident, disability, pension, retirement, or other benefit plans or
practices in which you and your eligible family members were participating at the time of
the Change in Control, the taking of any action by the

 

 

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Company that would directly or indirectly materially reduce any of those benefits, or
the failure by the Company to provide you with the number of paid vacation days to which you
are entitled on the basis of years of service with the Company in accordance with the
Company’s normal vacation policy in effect at the time of the Change in Control (or, if more
favorable to you, on the basis of the terms of your initial employment with the Company);

     (vii) the Company’s failure to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in Section 6 hereof; or

     (viii) any purported termination of your employment that is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 3(d) hereof (and, if
applicable, the requirements of Section 3(b) hereof), which purported termination shall not
be effective for purposes of this Agreement.

Your continued employment shall not constitute consent to, or a waiver of rights with respect to,
any circumstance constituting Good Reason hereunder.

          (d) Notice of Termination. Any purported termination of your employment by the
Company or by you (other than a termination as a result of your death, in which case your
employment shall terminate automatically) shall be communicated by written Notice of Termination to
the other party in accordance with Section 7. “Notice of Termination” means a written notice that
indicates the specific termination provision in this Agreement relied upon and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.

          (e) Date of Termination, Etc. “Date of Termination” means the date on which you incur
a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).

     4. Compensation Upon Termination. Upon termination of your employment pursuant to
Section 3 above, the benefits to which you are entitled, subject to the terms and conditions of
this Agreement, are:

          (a) If the Company terminates your employment for Cause or you terminate your employment other
than for Good Reason, then the Company shall pay you, in accordance with the Company’s normal pay
practices, your base salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which you are entitled under any
compensation plan or practice of the Company in effect at the time such payments are due, and the
Company shall have no further obligations to you under this Agreement.

          (b) If you terminate your employment for Good Reason or the Company terminates your employment
without Cause (other than as a result of your death or Permanent Disability), then you shall be
entitled to the benefits provided below:

       (i) The Company shall pay to you your base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given, plus all other

 

 

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amounts to which you are entitled under any compensation plan or practice of the
Company in effect at the time the payments are due;

     (ii) In lieu of any further salary payments to you for periods subsequent to the Date
of Termination, the Company shall pay to you, at the time specified in Section 4(c), a
lump-sum severance payment equal to the sum of the following:

	 	(A)	 	two (2) times the greater of your annual base
salary at the rate in effect as of the Date of Termination or your
annual base salary at the rate in effect immediately prior to the
Change in Control; and
	 
	 	(B)	 	two (2) times the greater of (i) your target
annual incentive compensation as in effect as of the Date of
Termination or immediately prior to the Change in Control, whichever is
greater, or (ii) your annual bonus for the year immediately preceding
the Date of Termination;

     (iii) For a period of one (1) year following the Date of Termination, the Company
shall, at its sole expense as incurred, provide you with financial planning services of
substantially the same type and scope as those with which the Company was providing you
immediately prior to the Date of Termination, or, if more favorable to you, the date of the
Change in Control, provided that in no event will the amount of financial planning services
provided by the Company in one year affect the amount of expenses eligible for
reimbursement, or in-kind benefits to be provided to you, in any other taxable year;

     (iv) For a period of two (2) years following the Date of Termination, the Company
shall, at its sole expense as incurred, provide you with outplacement services, the scope
and provider of which shall be selected by you in your sole discretion, provided that the
Company’s out-of-pocket cost under this Section 4(b)(iv) shall not exceed fifteen thousand
dollars ($15,000);

     (v) For period of twenty-four (24) months after the Date of Termination, the Company
shall continue to provide you and your eligible family members, on the terms set forth in
the remaining provisions of this Section 4(b)(v), with medical and dental health benefits at
least equal to those that would have been provided to you and them if your employment had
not been terminated or, if more favorable to you, as in effect generally at any time
thereafter; provided, however, that if you become employed by another employer and are
eligible to receive medical and dental health benefits under that employer’s plans, the
Company’s obligations under this Section 4(b)(v) shall be reduced to the extent comparable
benefits are actually received by you during the twenty-four (24) month period following
your termination, and any such benefits actually received by you shall be reported to the
Company. If under the terms of the Company’s benefit plans or programs you are ineligible
to continue to be so covered, the Company shall provide you with substantially equivalent
coverage through other sources. You agree to pay the cost, on an after-tax basis, for the
continued medical and dental coverage; subject to Section 4(c), on or about January 31 of
the year following the year in which the Date of Termination occurs and continuing on or
about each January 31 until the year following the last year of your coverage pursuant to
this Section 4(b)(v),

 

 

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and concurrently therewith the Company will make a payment to you such that, after
payment of all taxes incurred by you, you retain an amount equal to the amount you paid
during the immediately preceding calendar year for medical, and dental benefit plan coverage
described in this Section. At the termination of the benefits coverage under this Section
4(b)(v), you, your spouse and your dependents shall be entitled to continuation coverage
pursuant to section 4980B of the Code, sections 601-608 of the Employee Retirement Income
Security Act of 1974, as amended, and under any other applicable law, to the extent required
by such laws, as if you had terminated employment with the Company on the date such benefits
coverage terminates.

     (vi) (A) Anything in this Agreement to the contrary notwithstanding, but subject to
Section 4(b)(vi)(B), if it shall be determined that any payment or distribution to you or
for your benefit (whether paid or payable or distributed or distributable) pursuant to the
terms of this Agreement or otherwise (the “Payment”) would be subject to the excise tax
imposed by section 4999 of the Code (the “Excise Tax”), then you shall be entitled to
receive from the Company an additional payment (the “Gross-Up Payment”) in an amount such
that the net amount of the Gross-Up Payment retained by you after the calculation and
deduction of any and all federal, state and local income tax, employment tax and Excise Tax
(including any interest or penalties imposed with respect to such taxes) on the Gross-Up
Payment provided for in this Section 4(b)(vi), and taking into account any lost or reduced
tax deductions on account of the Gross-Up Payment, shall be equal to the Excise Tax.

            (B) Notwithstanding any provision of this Agreement to the contrary, but giving effect
to any redetermination of the amount of Gross-Up payments otherwise required by this Section
4(b)(vi), if but for this sentence, the Company would be obligated to make a Gross-Up
Payment to the Executive, and the aggregate “present value” of the “parachute payments” to
be paid or provided to you under this Agreement or otherwise does not exceed 1.10 multiplied
by three times your “base amount,” then the payments and benefits to be paid or provided
under this Agreement will be reduced (or repaid to the Company, if previously paid or
provided) to the minimum extent necessary so that no portion of any payment or benefit to
you, as so reduced or repaid, constitutes an “excess parachute payment.” For purposes of
this Section 4(b)(vi)(B), the terms “excess parachute payment,” “present value,” “parachute
payment,” and “base amount” will have the meanings assigned to them by Section 280G of the
Code. The determination of whether any reduction in or repayment of such payments or
benefits to be provided under this Agreement is required pursuant to this Section
4(b)(vi)(B) will be made at the expense of the Company, if requested by you or the Company,
by the Accountants (as defined in Section 4(b)(vi)(C)). Appropriate adjustments will be
made to amounts previously paid to you, or to amounts not paid pursuant to this Section
4(b)(vi)(B), as the case may be, to reflect properly a subsequent determination that you owe
more or less Excise Tax than the amount previously determined to be due. If a Payment
intended to be provided under the Agreement is required to be reduced pursuant to this
Section 4(b)(vi)(B), the payments shall be reduced in the following order of priority:
payments pursuant to Section 4(b)(ii), payments pursuant to Section 4(b)(v), payments
pursuant to Section 4(b)(iii) and payments pursuant to Section 4(b)(iv).

            (C) All determinations required to be made under this Section 4(b)(vi), including
whether and when the Gross-Up Payment is required and the amount of such

 

 

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Gross-Up Payment, and the assumptions to be utilized in arriving at such determinations
shall be made by the Accountants (as defined below), which shall provide you and the Company
with detailed supporting calculations with respect to such Gross-Up Payment within fifteen
(15) business days of the receipt of notice from you or the Company that you have received
or will receive a Payment. For the purposes of this Section 4(b)(vi), the “Accountants”
means the Company’s independent certified public accountants serving immediately prior to
the Change in Control. If the Accountants are also serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, you shall appoint another
nationally recognized public accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accountants hereunder). All fees
and expenses of the Accountants shall be borne solely by the Company.

For the purposes of determining whether any of the Payments will be subject to the Excise
Tax and the amount of such Excise Tax, such Payments will be treated as “parachute payments”
within the meaning of section 280G of the Code, and all “parachute payments” in excess of
the “base amount” (as defined under section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless and except to the extent that in the opinion of the
Accountants such Payments (in whole or in part) either do not constitute “parachute
payments” or represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4) of the Code) in excess of the “base amount,” or such
“parachute payments” are otherwise not subject to such Excise Tax. Any determination by the
Accountants shall be binding upon the Company and you. As a result of uncertainty in the
application of section 4999 of the Code at the time of the initial determination by the
Accountants hereunder, it is possible that the Gross-Up Payment made will have been an
amount less than the Company should have paid pursuant to this Section 4(b)(vi) (the
“Underpayment”). In the event that the Company exhausts its remedies pursuant to Section
4(b)(vi)(C) and you are required to make a payment of any Excise Tax, the Underpayment shall
be promptly paid by the Company to or for your benefit; and

          (D) You shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable after you are informed in
writing of such claim and shall apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. You shall not pay such claim prior to the
expiration of the 30-day period following the date on which you give such notice to the
Company (or such shorter period ending on the date that any payment of taxes, interest
and/or penalties with respect to such claim is due). If the Company notifies you in writing
prior to the expiration of such period that it desires to contest such claim, you shall:

	 	(1)	 	give the Company any information
reasonably requested by the Company relating to such claim;
	 
	 	(2)	 	take such action in connection with
contesting such claim as the Company shall reasonably request in
writing from time to time, including, without limitation, accepting
legal

 

 

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representation with respect to such claim by an attorney
reasonably selected by the Company;

	 	(3)	 	cooperate with the Company in good faith
in order to effectively contest such claim; and
	 
	 	(4)	 	permit the Company to participate in any
proceedings relating to such claims; provided, however, that the
Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection
with such contest and shall indemnify you for and hold you harmless
from, on an after-tax basis, any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of
such representation and payment of all related costs and expenses.
Without limiting the foregoing provisions of this Section 4(b)(vi),
the Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its
sole option, either direct you to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and you agree
to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs you to pay such claim
and sue for a refund, the Company shall advance the amount of such
payment to you, on an interest-free basis, and shall indemnify you
for and hold you harmless from, on an after-tax basis, any Excise
Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance (including as a result
of any forgiveness by the Company of such advance); provided,
further, that any extension of the statute of limitations relating
to the payment of taxes for the taxable year of you with respect to
which such contested amount is claimed to be due is limited solely
to such contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and you shall be entitled to
settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority;

            (E) Notwithstanding any other provision of this Section 4(b)(vi) to the contrary and
subject to Section 4(c), all taxes and expenses described in this Section 4(b)(vi) shall be
paid or reimbursed within five (5) business days after you submit evidence of incurrence of
such taxes and/or expenses, provided that in all events such reimbursement will be made no
later than the end of the year following the year in which

 

 

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the applicable taxes are remitted or, in the case of reimbursement of expenses incurred
due to a tax audit or litigation to which there is no remittance of taxes, no later than the
end of the year following the year in which the audit is completed or there is a final and
nonappealable settlement or other resolution of the litigation in accordance with Treasury
Regulation Section 1.409A-3(i)(1)(v). Each provision of reimbursements pursuant to this
Section 4(b)(vi) shall be considered a separate payment and not one of a series of payments
for purposes of Section 409A. Any expense reimbursed by the Company in one taxable year in
no event will affect the amount of expenses required to be reimbursed or in-kind benefits
required to be provided by the Company in any other taxable year.

     (vii) In any situation where under applicable law the Company has the power to
indemnify (or advance expenses to) you in respect of any judgments, fines, settlements,
loss, cost or expense (including attorneys’ fees) of any nature related to or arising out of
your activities as an agent, employee, officer or director of the Company or in any other
capacity on behalf of or at the request of the Company, the Company shall promptly on
written request, indemnify (and advance expenses to) you to the fullest extent permitted by
applicable law, including but not limited to making such findings and determinations and
taking any and all such actions as the Company may, under applicable law, be permitted to
have the discretion to take so as to effectuate such indemnification or advancement. Such
agreement by the Company shall not be deemed to impair any other obligation of the Company
respecting your indemnification otherwise arising out of this or any other agreement or
promise of the Company or under any statute;

     (viii) The Company shall pay you, at the time specified in Section 4(c), a lump-sum
payment in an amount equal to the additional benefits that you would have accrued under each
qualified or nonqualified pension, profit sharing, deferred compensation or supplemental
plan maintained by the Company for your benefit had you continued your employment with the
Company for two (2) additional years following your Date of Termination, assuming you were
fully vested under such plans, or $250,000 if greater; provided that if you are eligible to
receive grandfathered benefits under the Company’s pension plan, the provisions of this
Section 4(b)(viii) shall apply to such grandfathered benefits, without reduction for age, in
addition to any other benefits to which you are entitled under this Section 4(b)(viii).

          (c) The payment provided for in Section 4(b)(i) shall be made not later than the fifth
business day following the Date of Termination. Notwithstanding any provisions of this Section 4
to the contrary, if any of you, Terry Hartman, William Herb or Pete Kasper is a “specified
employee” (within the meaning of Section 409A of the Code), the amounts that otherwise would be
payable pursuant to Sections 4(b)(ii), (iii), (v), (vi) and (viii) and 5(d) of this Agreement (as
well as any other payment or benefit that you are entitled to receive upon your separation from
service and that would be considered to be deferred compensation under Section 409A of the Code)
during the six-month period immediately following the Date of Termination (the “Delayed Payments”)
will instead be paid or made available on the earlier of (i) the first day of the seventh month
following your Date of Termination and (ii) your death.

          (d) Each payment to be made to you under the provisions of this Agreement will be considered
to be a separate payment and not one of a series of payments for purposes

 

 

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of Section 409A of the Code. Further, coverages provided during one taxable year will not
affect the degree to which coverages will be provided in any other taxable year.

          (e) You shall not be required to mitigate the amount of any payment provided for in this
Section 4 by seeking other employment or otherwise, nor, except as provided in Section 4(b)(v),
shall the amount of any payment or benefit provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer or self-employment, by
retirement benefits, by offset against any amount claimed to be owed by you to the Company, or
otherwise.

     5. Performance-based Equity Compensation; Other Equity-Based Awards; Annual Incentive
Compensation.

          (a) Notwithstanding anything contained herein, in the event of a Change in Control during the
term of this Agreement, all outstanding stock options and stock appreciation rights, if any,
granted to you under any of the Company’s stock option plans, incentive plans or other similar
plans (or options substituted therefor covering the stock of a successor corporation) shall,
effective immediately prior to the Change in Control, become fully vested and exercisable as to all
shares of stock covered thereby.

          (b) Upon the occurrence of a Change in Control, the Company shall pay to you, in cash, an
amount equal to the value of any Equity Compensation (as defined below) that is “performance-based”
(as defined below) and that is earned, accrued, allocated or awarded with respect to your service
during any performance period or periods that include the date on which the Change in Control
occurred. The amount payable to you will be calculated as if the performance-based Equity
Compensation were earned at the targeted rate and shall be prorated through the date on which the
Change in Control occurs based upon the number of days on which you were employed by the Company
during the applicable performance period(s). For purposes of this Agreement, “Equity Compensation”
means restricted stock units, performance shares, performance units and restricted shares and the
shares that the Company is obligated to issue at the time restricted stock units, performance
shares or performance units are earned, or deemed earned, by you. Compensation is
“performance-based” if the compensation may be earned pursuant to a plan that provides that the
amount of, or the entitlement to, the compensation is contingent on the satisfaction of
pre-established organizational or individual performance criteria relating to a performance period
of at least twelve (12) consecutive months. Organization or individual performance criteria are
considered pre-established if established in writing by the date not later than ninety (90) days
after the commencement of the performance period, provided that the outcome is substantially
uncertain at the time the criteria are established. Compensation also is “performance-based” if
the plan provides for payments based upon subjective performance criteria, provided that —

       (i) The subjective performance criteria are bona fide and relate to your performance or
the performance of a group of employees that includes you, or a business unit for which you
provide services (which may include the entire Company): and

       (ii) The determination that any subjective performance criteria have been met is not
made by you or a member of your family, or a person under your effective control or the
control of a member of your family, and no amount of the compensation of the

 

 

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person making the determination is effectively controlled in whole or in part by you or
a member of your family.

          (c) If a Change in Control occurs during the term of the Agreement, then the Company shall pay
to you, within five (5) business days after the Change in Control, an amount, calculated as if all
objectives under the Company’s annual incentive compensation plan for the year in which the Change
in Control occurs were achieved at targeted levels, equal to your target (as in effect on the date
of the Change in Control) annual incentive compensation opportunity for the year in which the
Change in Control occurs, prorated through the date of the Change in Control; provided, however,
that in no event shall the amount payable to you pursuant to this Section 5(c) be less than fifty
percent (50%) of your target annual incentive compensation opportunity for the year in which the
Change in Control occurs.

          (d) If a Change in Control occurs during the term of this Agreement, then each outstanding
share of restricted stock and each outstanding restricted share unit (other than a
performance-based share of restricted stock or restricted share unit) granted to you under any of
the Company’s incentive plans or other similar plans (an “Equity-Based Award”) shall, immediately
prior to the Change in Control, be converted into a right to receive an amount equal to the value
of one share of the Company’s common stock based on the closing stock price on the last trading day
immediately preceding the Change in Control (a “Cash Equivalent Unit”). Subject to the following
sentence and any deferral election you may have made pursuant to the Executive Savings Plan, the
Executive Deferred Compensation Plan or any other non-qualified deferred compensation plan, the
Cash Equivalent Units shall vest and be paid to you at the same time and upon the same conditions
as the Equity-Based Awards from which the Cash Equivalent Units were converted. If, prior to the
vesting and payment of all of the Cash Equivalent Units and within the two-year period following
the Change in Control, you terminate your employment for Good Reason or the Company terminates your
employment without Cause or for Permanent Disability, subject to Section 4(c), the remaining Cash
Equivalent Units shall vest and the Company shall pay to you within five (5) business days after
the Date of Termination, an amount equal to the value of your remaining Cash Equivalent Units.

     6. Successors; Binding Agreement.

          (a) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any
such succession shall be a breach of this Agreement and shall entitle you to terminate your
employment and receive compensation from the Company in the same amount and on the same terms to
which you would be entitled hereunder if you terminate your employment for Good Reason following a
Change in Control. Unless expressly provided otherwise, “Company” as used herein shall mean the
Company as defined in this Agreement and any successor to its business and/or assets as aforesaid.

          (b) This Agreement shall inure to the benefit of and be enforceable by you and your personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you hereunder had you
continued to live, all such amounts, unless otherwise provided herein,

 

 

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shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other
designee or, if there is no such designee, to your estate.

     7. Notice. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.

     8. Non-Compete, Confidentiality and Non-Solicitation Covenants.

          (a) Non-Compete. In consideration of and in connection with the benefits provided to
you under this Agreement, and in order to protect the goodwill of the Company, you hereby agree
that, if your employment is terminated under circumstances that entitle you to benefits under
Section 4(b) then, for a period of twelve (12) months commencing on the Date of Termination, you
shall not, directly or indirectly, own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be connected as a director, officer, employee,
partner, consultant or otherwise with any of the following entities (or any subsidiary of any such
entity) other than as a shareholder or beneficial owner owning 5% or less of the outstanding
securities of a public company: Anchor Hocking; Arc International or its affiliate Cardinal
International, Inc.; Oneida LTD; or any glass tableware manufacturer, seller or importer for
Bormioli Rocco Casa SpA, for the Kedaung group of companies of Indonesia or for the Sisecam group
of companies of Turkey including Pasabahce.

          (b) Confidentiality. You hereby agree that, for the period commencing on the Date of
Termination and terminating on the second anniversary thereof, you shall not, directly or
indirectly, disclose or make available to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, any Confidential Information (as defined below). You
agree that, upon termination of your employment with the Company, all Confidential Information in
your possession that is in written or other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the Company and shall not be retained by
you or furnished to any third party in any form except as provided herein; provided, however, that
you shall not be obligated to treat as confidential, or return to the Company, copies of any
Confidential Information that (i) was publicly known at the time of disclosure to you, (ii) becomes
publicly known or available thereafter other than by any means in violation of this Agreement or
any other duty owed to the Company by any person or entity, or (iii) is lawfully disclosed to you
by a third party. As used in this Agreement, the term “Confidential Information” means information
disclosed to you or known by you as a consequence of or through your relationship with the Company,
about the customers, employees, business methods, public relations methods, organization,
procedures or finances, including, without limitation, information of or relating to customer
lists, of the Company and its affiliates.

          (c) Non-Solicitation. You hereby agree that, for the period commencing on the Date of
Termination and terminating on the second anniversary thereof, you shall not, either on your own
account or jointly with or as a manager, agent, officer, employee, consultant, partner, joint
venturer, owner or shareholder or otherwise on behalf of any other person, firm or

 

 

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Page 14

corporation, directly or indirectly solicit or attempt to solicit away from the Company any of
its officers or employees or offer employment to any person who, on or during the six (6) months
immediately preceding the date of such solicitation or offer, is or was an officer or employee of
the Company; provided, however, that a general advertisement to which an employee of the Company
responds shall in no event be deemed to result in a breach of this Section 8(c).

     9. Funding of Obligations. In order to partially fund its obligations to provide
benefits under this Agreement (including, without limitation, its obligations under Section
4(b)(vi)) the Company shall establish and fund a trust for your benefit and the benefit of other
executives of the Company with whom the Company has entered into agreements similar to this
Agreement. The trust shall be a grantor trust described in section 671 of the Code. If the
Company has not, prior to the occurrence of a Potential Change in Control (as defined below), fully
funded its obligations to provide benefits under this Agreement, then, upon the occurrence of a
Potential Change in Control, the Company shall, to the extent the amount contributed would not be
treated as property transferred in connection with the performance of services for purposes of Code
Section 83, as provided in Section 409A(b)(3) of the Code, fully fund its obligations to provide
benefits under this Agreement (including, without limitation, its obligations under Section
4(b)(vi)) by irrevocably contributing funds to such trust on your behalf. The amount to be
contributed by the Company to the trust shall not be less than the then present value of the
Company’s obligations under Section 4 hereof, as determined by the firms serving as the Company’s
actuaries and accountants immediately prior to the Change in Control. Such actuaries and
accountants shall be paid by the Company. The establishment and funding of the trust shall not
affect the obligation of the Company to provide benefits under the terms of this Agreement. For
purposes of this Agreement a “Potential Change in Control” shall be deemed to occur if:

          (a) the Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;

          (b) any Person (including the Company) publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control;

          (c) any Person who is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing ten percent (10%) or more of the combined voting power of the Company’s
then outstanding securities, increases such Person’s beneficial ownership of such securities by
five percent (5%) or more of the Company’s then outstanding securities over the percentage so owned
by such Person on the date hereof, provided however, that this subsection (c) shall not apply to
Zesiger Capital (“Zesiger”) by virtue of its individual or collective beneficial ownership of
securities of the Company’s outstanding securities as of the date of this Agreement so long as
Zesiger does not, individually or collectively, beneficially own, or increase its beneficial
ownership to, twenty-five percent (25%) or more of the combined voting power of the Company’s then
outstanding securities; or

          (d) the Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

     10. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by you
and such officer as may be specifically designated by the Board. No waiver by either party

 

 

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Page 15

hereto at any time of any breach by the other party hereto of or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Ohio without regard to its conflicts of law principles. All
references to sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Except as provided in Section 4(b)(vi) hereunder, any
payments provided for hereunder shall be paid net of any applicable withholding required under
federal, state or local law. The obligations of the Company under Section 4 shall survive the
expiration of the term of this Agreement. The section headings contained in this Agreement are for
convenience only, and shall not affect the interpretation of this Agreement.

     11. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

     12. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument.

     13. Suits Actions Proceedings Etc.

          (a) Jurisdiction and Venue. No suit, action or proceeding with respect to this
Agreement, nor any judgment entered by any court in respect thereof, may be brought in any court,
domestic or foreign, or before any similar domestic or foreign authority, other than in a court of
competent jurisdiction in the State of Ohio, and you and the Company hereby irrevocably waive any
right which you or the Company, as applicable, may otherwise have had to bring such a suit, action,
proceeding or judgment in any other court, domestic or foreign, or before any similar domestic or
foreign authority. You and the Company hereby submit to the exclusive jurisdictions of such courts
for the purpose of any such suit, action, proceeding or judgment. By your execution and delivery
of this Agreement, you appoint the Secretary of the Company, at the Company’s office in Toledo,
Ohio, as your agent upon which process may be served in any such suit, action or proceeding; and by
its execution and delivery of this Agreement, the Company appoints the Secretary of the Company, at
its office in Toledo, Ohio, as its agent upon which process may be served in any such suit, action
or proceeding. Service of process upon such applicable agent, together with actual notice of such
service given to you or the Company, as applicable, in the manner provided in Section 7 hereof,
shall be deemed in every respect effective service of process upon the applicable party in any
suit, action, proceeding or judgment. Nothing herein shall be deemed to limit the ability of you
or the Company to serve any such writs, process or summonses in any other manner permitted by
applicable law. You and the Company hereby irrevocably waive any objections which you or the
Company, as applicable, may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the State of Ohio, and hereby further irrevocably waive any claim that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
Notwithstanding the foregoing, in the event that no court of competent jurisdiction in the State of
Ohio will accept such jurisdiction and venue, then any suit, action or

 

 

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Page 16

proceeding with respect to this Agreement, or any judgment entered by any court in respect
thereof, may be brought in any court of competent jurisdiction in the continental United States
which has jurisdiction over such suit, proceeding or action and the parties thereto.

          (b) Compensation During Dispute, Etc. Your compensation during any disagreement,
dispute, controversy, claim, suit, action or proceeding (collectively, a “Dispute”) arising out of
or relating to this Agreement or the interpretation of this Agreement shall be as follows: If
there is a termination by you or the Company followed by a Dispute as to whether you are entitled
to the payments and other benefits provided under this Agreement, then, during the period of that
Dispute the Company shall pay you one hundred percent (100%) of the amount specified in Sections
4(b) hereof if, but only if, you agree in writing that if the Dispute is resolved against you, you
shall promptly refund to the Company all payments you receive under Sections 4(b)(i) and 4(b)(ii)
of this Agreement plus interest at the rate provided in Section 1274(d) of the Code, compounded
quarterly.

          (c) Legal Fees. The Company shall pay to you all reasonable legal fees and expenses
incurred by you in connection with any Dispute arising out of or relating to this Agreement or the
interpretation thereof (including, without limitation, all such fees and expenses, if any, incurred
in contesting or disputing any termination of your employment or in seeking to obtain or enforce
any right or benefit provided by this Agreement, or in connection with any tax audit or proceeding
to the extent attributable to the application of section 4999 of the Code to any payment or benefit
provided hereunder), provided any such reimbursement of reasonable attorneys’ fees and other cost
shall be made not later than December 31 of the year following the year in which you incurred the
expense. In no event will the amount of expenses so reimbursed by the Company in one year affect
the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year.

     14. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto; and any prior agreement of
the parties hereto in respect of the subject matter contained herein, including, without
limitation, any prior severance agreements, is hereby terminated and cancelled. Any of your rights
hereunder shall be in addition to any rights you may otherwise have under benefit plans or
agreements of the Company to which you are a party or in which you are a participant, including,
but not limited to, any Company sponsored employee benefit plans and stock options plans.
Provisions of this Agreement shall not in any way abrogate your rights under such other plans and
agreements.

     15. Coordination with Deferred Compensation Plans; Compliance with Section 409A of the
Code.

          (a) If and to the extent that you have elected, pursuant to the Executive Savings Plan
(“ESP”), the Executive Deferred Compensation Plan (“DCP”) or any other non-qualified deferred
compensation plan (such plans being referred to as “deferred compensation plans”), to defer receipt
of any of your compensation, including without limitation any performance-based Equity Compensation
or other Equity-Based Compensation (as defined in the DCP), the terms of the applicable deferred
compensation plan shall govern as to the events upon which compensation that is subject to a
deferral election is distributed to you and the

 

 

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Page 17

timing of any such distribution. However, the terms of this Agreement or, in the absence of a
Change in Control as defined in this Agreement, any employment agreement to which you and the
Company are party (or, if you are not party to an employment agreement with the Company, any
Company-sponsored severance policy providing benefits to you in the event of a termination of your
employment) shall govern as to whether (and, if so, the extent to which) amounts, including without
limitation annual incentive compensation, performance-based Equity Compensation and other
Equity-Based Compensation, that are subject to deferral elections have been earned or deemed earned
at the time of any distribution event contemplated by the relevant deferred compensation plan.

          (b) To the extent applicable, it is intended that this Agreement comply with the provisions of
Section 409A of the Code. This Agreement will be administered in a manner consistent with this
intent. References to Section 409A of the Code will include any proposed, temporary or final
regulation, or any other formal guidance, promulgated with respect to such section by the U.S.
Department of Treasury or the Internal Revenue Service.

If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the
Company the enclosed copy of this letter, which shall then constitute our agreement on this
subject.

	 	 	 	 	 
	 	Sincerely,

LIBBEY INC.

 	 
	 	By:  	 	 
	 	 	Susan Allene Kovach 	 
	 	 	Vice President, General Counsel and
Secretary 	 
	 

Agreed and Accepted as of the

31st day of December, 2008

	 	 	 
	
 

[Name of Individual Listed on Appendix 1]	 	 

 

 

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December 31, 2008

Page 18

Appendix 1

Each of the executives below is a party to an agreement in substantially this form:

Robert Bules

Terry Hartman

William Herb

Peter KasperEX-10.36

Exhibit 10.36

AMENDED AND RESTATED INDEMNITY AGREEMENT

     This Amended and Restated Agreement (“Agreement”) is made as of December 31, 2008 by
and between Libbey Inc., a Delaware corporation (the “Company”), and [Insert Name of
Executive Officer listed on Appendix 1] (“Indemnitee”).

RECITALS

     A. Highly competent persons have become more reluctant to serve publicly-held corporations as
directors, officers or in other capacities unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of the corporation.

     B. The Board of Directors of the Company (the “Board”) has determined that, in order
to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and other business
enterprises, the Company believes that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and with more exclusions. At the same
time, directors, officers and other persons in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the Company or business
enterprise itself. The By-laws of the Company require indemnification of the officers and directors
of the Company. Indemnitee also may be entitled to indemnification pursuant to the General
Corporation Law of the State of Delaware (“DGCL”). The By-laws and the DGCL, expressly
provide that the indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company and members of the board of
directors, officers and other persons with respect to indemnification.

     C. The uncertainties relating to such insurance and to indemnification have increased the
difficulty of attracting and retaining such persons.

     D. The Board has determined that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s stockholders and that the Company
should act to assure such persons that there will be increased certainty of such protection in the
future.

     E. It is reasonable, prudent and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified.

     F. This Agreement is a supplement to and in furtherance of the By-laws of the Company and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder.

     G. Indemnitee does not regard the protection available under the Company’s By-laws and
insurance as adequate in the present circumstances, and may not be willing to serve as an officer
or director without adequate protection, and the Company desires Indemnitee to serve in

1

 

such capacity. Indemnitee is willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that he or she be so indemnified.

     H. The Company has determined that it is advisable to amend the Indemnity Agreement dated as
of February 1, 2005 between the Company and Indemnitee (the “Original Indemnity Agreement”) in
order to provide that the Company will maintain directors and officers liability insurance covering
Indemnitee for a period of six (6) years following Indemnitee’s separation from service (as defined
by Section 409A of the Internal Revenue Code of 1986, as amended).

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby agree that the Original Indemnity Agreement is hereby amended and
restated in its entirety as follows:

     Section 1. Services to the Company. Indemnitee agrees to serve as an officer and
director of the Company and, at the request of the Company, as a director and/or officer and/or
fiduciary of another corporation, partnership, joint venture, trust employee benefit plan or other
enterprise. Indemnitee may, at any time and for any reason, resign from such position (subject to
any other contractual obligation or any obligation imposed by operation of law), in which event the
Company shall have no obligation under this Agreement to continue Indemnitee in such position.
This Agreement shall not be deemed an employment contract between the Company (or any of its
subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that
Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is
at will, and the Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between Indemnitee and the
Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies
duly adopted by the Board, or, with respect to service as a director or officer of the Company, by
the Company’s Certificate of Incorporation, the Company’s By-laws, and the General Corporation Law
of the State of Delaware. The foregoing notwithstanding, this Agreement shall continue in force
after Indemnitee has ceased to serve as an officer and/or director of the Company.

     Section 2. Definitions. As used in this Agreement:

     (a) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under
the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise
becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the
Company with another entity.

     (b) A “Change in Control” shall be deemed to occur upon the earliest to occur after
the date of this Agreement of any of the following events:

     (i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes
the Beneficial Owner (as defined below), directly or indirectly, of securities of the
Company representing fifteen percent (15%) or more of the combined voting power of the
Company’s then outstanding securities;

     (ii) Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to

2

 

effect a transaction described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the
Board or nomination for election by the Company’s stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a least a majority of the members of the Board;

     (iii) Corporate Transactions. The effective date of a merger or consolidation of the
Company with any other entity, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 51% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after such merger
or consolidation and with the power to elect at least a majority of the board of directors
or other governing body of such surviving entity;

     (iv) Liquidation. The approval by the stockholders of the Company of a 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; and

     (v) Other Events. There occurs any other event of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting requirement.

     (c) “Corporate Status” describes the status of a person who is or was a director,
officer, employee or agent of the Company or of any other corporation, limited liability company,
partnership or joint venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.

     (d) “Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.

     (e) “Enterprise” shall mean the Company and any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent
or fiduciary.

     (f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     (g) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection
with any appeal resulting from any Proceeding, including without limitation the premium, security
for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent, and (ii) for purposes of Section 13(d) only, Expenses incurred by Indemnitee in
connection with the interpretation, enforcement or defense of Indemnitee’s rights under this

3

 

Agreement, by litigation or otherwise, Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

     (h) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee under this Agreement, or of
other indemnitees under similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the
term “Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The
Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above
and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.

     (i) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

     (j) The term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative or investigative nature,
in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or
of any action on his part while acting as director or officer of the Company, or by reason of the
fact that he is or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, limited liability company, partnership, joint venture, trust or other
enterprise, in each case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement; except one initiated by a Indemnitee to enforce his rights under
this Agreement.

     (k) Reference to “other enterprise” shall include employee benefit plans; references
to “fines” shall include any excise tax assessed with respect to any employee benefit plan;
references to “serving at the request of the Company” shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in
the best interests of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in
this Agreement.

     Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified to the fullest extent permitted by applicable law against all Expenses,
judgments, fines

4

 

and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his behalf
in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best interests of
the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his
conduct was unlawful.

     Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue
or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company. No indemnification for Expenses shall be
made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall
have been finally adjudged by a court to be liable to the Company, unless and only to the extent
that the Delaware Court of Chancery or any court in which the Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

     Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is a party to (or a participant in) and is
successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in
such Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably
incurred in connection with a claim, issue or matter related to any claim, issue, or matter on
which the Indemnitee was successful. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

     Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection therewith.

     Section 7. Additional Indemnification.

     (a) Notwithstanding any limitation in Sections 3, 4, or 5, if Indemnitee is a party to or is
threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor), the Company shall indemnify Indemnitee, to the fullest
extent permitted by applicable law, against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

5

 

     (b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:

     (i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL, and

     (ii) to the fullest extent authorized or permitted by any amendments to or replacements
of the DGCL adopted after the date of this Agreement that increase the extent to which a
corporation may indemnify its officers and directors.

     Section 8. Exclusions. Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity in connection with any claim made
against Indemnitee:

     (a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or

     (b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as
defined in Section 2(a) hereof), or similar provisions of state statutory law or common law, or
(ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or
equity-based compensation or of any profits realized by the Indemnitee from the sale of securities
of the Company, as required in each case under the Exchange Act; or

     (c) except as provided in Section 1.3(d) of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees
or other indemnitees, unless (i) the Board of Directors of the Company authorized the Proceeding
(or any part of any Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the Company under
applicable law.

     Section 9. Advances of Expenses. Notwithstanding any provision of this Agreement to
the contrary, the Company shall advance, to the extent not prohibited by law, the expenses incurred
by Indemnitee in connection with any Proceeding, and such advancement shall be made within 30 days
after the receipt by the Company of a statement or statements requesting such advances from time to
time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured
and interest free and shall be made without regard to Indemnitee’s ability to repay the expenses
and without regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses incurred preparing and
forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify
for advances upon the execution and delivery to the Company of this Agreement, which shall
constitute an undertaking providing that the Indemnitee undertakes to repay the advance to the
extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the
Company. This Section 9 shall not apply to any claim made by Indemnitee for which indemnity is
excluded pursuant to Section 8.

6

 

     Section 10. Procedure for Notification and Defense of Claim.

     (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The omission to notify the Company will not relieve the
Company from any liability that it may have to Indemnitee otherwise than under this Agreement. The
Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise
the Board in writing that Indemnitee has requested indemnification.

     (b) The Company will be entitled to participate in the Proceeding at its own expense.

     Section 11. Procedure Upon Application for Indemnification.

     (a) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 10(a), a determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which
shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a
majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a
committee of Disinterested Directors designated by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or,
if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the
stockholders of the Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such determination with
respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information that is not privileged
or otherwise protected from disclosure and that is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making
such determination shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

     (b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as
provided in this Section 11(b). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change in
Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board of Directors, in which event
the preceding sentence shall apply), and Indemnitee shall give written notice to the Company
advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or
the Company, as the case may be, may, within 10 days after such written notice of selection shall
have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection
to such selection; provided, however, that such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and

7

 

timely objection, the person so selected shall act as Independent Counsel. If such written
objection is so made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has determined that
such objection is without merit. If, within 20 days after the later of submission by Indemnitee of
a written request for indemnification pursuant to Section 10(a) hereof and the final disposition of
the Proceeding, no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a court of competent jurisdiction for resolution of any
objection that shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the
Court or by such other person as the Court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent Counsel under
Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant
to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of professional
conduct then prevailing).

     Section 12. Presumptions and Effect of Certain Proceedings.

     (a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall, to the fullest extent not
prohibited by law, have the burden of proof to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary to that presumption. Neither
the failure of the Company (including by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its directors or independent
legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable standard of
conduct.

     (b) Subject to Section 13(e), if the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall, to the fullest
extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a reasonable time,
not to exceed an additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith requires such additional
time for obtaining or evaluating documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 12(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 11(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of
the request for such determination the Board of Directors has resolved to submit such determination
to the stockholders for their consideration at an annual meeting thereof to be held within seventy
five (75) days after such receipt and such determination is made thereat, or (B) a special meeting
of stockholders is called within fifteen (15) days after such receipt for the purpose of making
such determination, such

8

 

meeting is held for such purpose within sixty (60) days after having been so called and such
determination is made thereat, or (ii) if the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 11(a) of this Agreement.

     (c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner that he or she reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

     (d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise,
including financial statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with the reasonable care by the
Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in
any way the other circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

     (e) The knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right
to indemnification under this Agreement.

     Section 13. Remedies of Indemnitee.

     (a) Subject to Section 13(e), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section
11(a) of this Agreement within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last
sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a
written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 7 of this
Agreement is not made within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification, or (vi) in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable, or institutes any
litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the
benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be
entitled to an adjudication by a court of his or her entitlement to such indemnification or
advancement of Expenses.. Alternatively, Indemnitee, at his or her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 13(a); provided,
however, that the foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration.

9

 

     (b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a
de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 13 the Company shall have the burden of proving Indemnitee is not entitled
to indemnification or advancement of Expenses, as the case may be.

     (c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

     (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of
the Company that the Indemnitee not be required to incur legal fees or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by
litigation or otherwise because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Company of a written request therefore) advance, to the extent not
prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with
any action brought by Indemnitee for indemnification or advance of Expenses from the Company under
this Agreement or under any directors’ and officers’ liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may be.

     (e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.

     Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

     (a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Company’s Certificate of Incorporation, the Company’s By-laws,
any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in
his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in
Delaware law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company’s By-laws and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder

10

 

or now or hereafter existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

     (b) The Company shall maintain an insurance policy or policies providing liability insurance
for directors, officers, employees or agents of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise which such person
serves at the request of the Company for as long as Indemnitee provides services to the Company and
for a period not less than six (6) years after Indemnitee’s separation from service from the
Company. Indemnitee shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such director, officer, employee or
agent under such policy or policies, The Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

     (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

     (d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.

     (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification
or advancement of expenses from such other corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise.

     Section 15. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) 10 years after the date that Indemnitee shall have ceased to serve as an
officer and/or director of the Company or (b) 1 year after the final termination of any Proceeding
then pending in respect of which Indemnitee is granted rights of indemnification or advancement of
Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 1.3 of this
Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of Indemnitee and his or her heirs, executors and
administrators.

     Section 16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such

11

 

provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and to the
fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

     Section 17. Enforcement.

     (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
and/or director of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer and/or director of the Company.

     (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation of
the Company, the By-laws of the Company and applicable law, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

     Section 18. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.

     Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement
or otherwise.

     Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:

If to Indemnitee, at the address indicated on the signature page of

this Agreement, or such other address as Indemnitee shall provide to

the Company.

If to the Company to:

Libbey Inc.

Attn: General Counsel

300 Madison Avenue

Toledo, Ohio 43604

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or to any other address as may have been furnished to Indemnitee by the Company.

     Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

     Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 13(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state
or federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp,
One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in
the State of Delaware as such party’s agent for acceptance of legal process in connection with any
such action or proceeding against such party with the same legal force and validity as if served
upon such party personally within the State of Delaware, (iv) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead
or to make, any claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.

     Section 23. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

     Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.

13

 

	 	 	 	 	 	 	 	 	 	 	 
	LIBBEY INC.	 	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: [Insert Name of Executive Officer]	 	 
	Its:

	 	 	 	 	 	Address:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

14

 

APPENDIX 1

Each of the executives below is a party to an agreement in substantially this form:

John F. Meier

Richard I. Reynolds

Gregory T. Geswein

Kenneth A. Boerger

Jonathan S. Freeman

Daniel P. Ibele

Susan A. Kovach

Timothy T. Paige

Scott M. Sellick

Kenneth G. Wilkes

15

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