Document:

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                                                                   EXHIBIT 10.74

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported) December 6, 2005

                                   LIBBEY INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                             <C>                          <C>
       Delaware                   1-12084                         34-1559357
      (State of                 (Commission                     (IRS Employer
    incorporation)              File Number)                 Identification No.)
</TABLE>

<TABLE>
<S>                                                               <C>
  300 Madison Avenue
     Toledo, Ohio                                                   43604
(Address of principal                                             (Zip Code)
  executive offices)
</TABLE>

        Registrant's telephone number, including area code (419) 325-2100

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ]  Written communications pursuant to Rule 425 under the Securities Act (17
     CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
     CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

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SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

2006 DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS

On December 6, 2005, the Board of Directors of Libbey Inc. ("Company") adopted
the 2006 Deferred Compensation Plan for Outside Directors (the "Plan") effective
January 1, 2006. The Plan permits directors who are not officers or employees of
the Company ("outside directors') to defer receipt of all or part of their
compensation (meeting fees, retainer or any special fees) for services as a
director until termination of their service as a director or such other date as
they may elect in advance. Directors must elect to defer receipt of the
compensation under the terms of the Plan in the year before the year in which
the services are performed and the compensation is earned.

Compensation deferred into the Plan is either credited with interest or deemed
invested in equivalents of the Company's common stock ("stock units") at the
election of the director. If the director elects to have his/her deferred
compensation credited with interest, such interest will equal the applicable
yield on 10-year U.S. Treasury bills, as determined on the last day of each
calendar quarter. If the director elects investment of his/her deferred
compensation in stock units, the number is determined by dividing the amount of
compensation payable by the fair market value of the Company's common stock on
the date payment otherwise would have been made. Directors who have deferred
compensation invested in stock units also are credited with dividend equivalents
on those stock units. The dividend equivalents are converted to additional stock
units based on the fair market value of the Company's common stock on the date
dividends are paid. Fair market value for all purposes of the Plan is the
closing price of the Company's common stock on the preceding trading day.

If a director does not specify how his or her deferred compensation is deemed to
be invested, the Plan provides that it will automatically be invested in stock
units. Directors may elect to change investments between the fixed interest
investment and the stock units and vice versa, but only once each calendar year,
and only if such change does not cause the director to violate any minimum stock
holdings rule that may be applicable to directors at such time. If a director
switches investment of his or her deferred compensation account between the
fixed interest and the stock units, the value of the stock units is determined
by the fair market value of the Company's common stock on the date of transfer.

Distributions from the Plan are made in cash and may be made in a lump sum or in
installments over a period of five or ten years as elected by the director.
However, if the director dies prior to receiving the entire amount of his or her
deferred compensation account, such amount will be paid in a lump sum.
Distributions may also be made to a director while he or she remains on the
Board on account of an unforeseeable emergency within the meaning of Section
409A of the Internal Revenue Code. If a director has elected a specified date
for distribution, and such director's membership on the board terminates prior
to such date, his or her deferred compensation account will be paid to the
director on the date his or her membership so terminates. If a director's
deferred compensation account is invested in stock units, the amount
distributable is determined based on the fair market value of the Company's
common stock on the date payment is made.

The Plan is administered by the Chief Executive Officer of Company. The Plan may
be amended or terminated by the Board at any time. However, no amendment may
adversely affect a participant's rights without their consent. The Board may,
however, make any such amendments are necessary or advisable to comply with
Section 409A of the Internal Revenue Code without the consent of the
participants.

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At this time the Plan is not funded and no assets have been set aside to meet
the Company's obligations under the Plan. The director's deferred compensation
accounts are merely bookkeeping accounts representing contractual obligations of
the Company. However, the Plan does allow the Board to establish any trusted,
insured or other payment arrangement from which directors' obligations would be
paid. In no event, however, will a director's rights to payment be greater than
any other unsecured creditor of the Company. A copy of the Plan is attached as
Exhibit 99.1.

OPTION VESTING ACCELERATION

On December 6, 2005, the Company's Board of Directors, acting as the
Compensation Committee of the whole, accelerated the vesting of all outstanding
and unvested nonqualified stock options granted through 2004 under the Company's
1999 Equity Participation Plan and Amended and Restated 1999 Equity
Participation Plan. As a result, options to purchase 258,731 shares of the
Company's common stock became exercisable on December 6, 2005. Of that amount,
options that were granted through 2004 to the Company's named executive officers
became immediately exercisable with respect to the following numbers of shares:
John F. Meier: 35,000; Richard I. Reynolds: 27,000; Kenneth G. Wilkes: 22,000;
Daniel P. Ibele: 19,400; and Susan Allene Kovach: 17,000. In the case of each of
the stock options in question, the exercise price greatly exceeded the fair
market value of the Company's common stock on December 6, 2005. The decision to
accelerate vesting of these options was made primarily to avoid recognition,
upon the adoption of Financial Accounting Standards Board Statement No. 123(R)
("FAS123(R)"), "Share-Based Payment," of compensation expense related to these
"underwater" stock options in financial statements relating to future fiscal
periods. The Company will apply the expense recognition provisions of FAS
123(R), relating to stock options, beginning in the first quarter of 2006. By
accelerating these "underwater" stock options, the Company expects to reduce the
stock option expense it otherwise would have been required to record by
approximately $282,000 in 2006, $114,000 in 2007 and $30,000 in 2008 on an
after-tax basis, all of which will be recorded in the 2005 financial statements
as a pro forma footnote disclosure.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1 2006 Deferred Compensation Plan for Outside Directors

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        LIBBEY INC.
                                        (Registrant)

Date: December 6, 2005

                                        /s/ Scott M. Sellick
                                        ----------------------------------------
                                        (Signature)
                                        Name: Scott M. Sellick
                                        Title: Vice President,
                                               Chief Financial Officer
                                               (Principal Accounting Officer)

                                        3

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                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.   Description                                               Page No.
-----------   -----------                                               --------
<S>           <C>                                                       <C>
    99.1      Libbey Inc. 2006 Deferred Compensation Plan for Outside      E-1
              Directors
</TABLE>

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                                   LIBBEY INC.

                         2006 DEFERRED COMPENSATION PLAN

                              FOR OUTSIDE DIRECTORS

LIBBEY INC., a corporation organized under the laws of the State of Delaware
(the "CORPORATION"), hereby adopts this 2006 Deferred Compensation Plan for
Outside Directors effective January 1, 2006. The purpose of this Plan is to
permit the Outside Directors of the Corporation to defer receipt of all or part
of the compensation they are entitled to receive for service on the
Corporation's Board of Directors on and after January 1, 2006 and to provide an
opportunity for appreciation in deferred compensation based upon either the
Interest Rate specified in this Plan or the appreciation, if any, in the price
of the Corporation's Common Stock.

ARTICLE I

                                   DEFINITIONS

Whenever the following terms are used in this Plan, they shall have the meaning
specified below unless the context clearly indicates to the contrary. The
masculine pronoun shall include the feminine and the singular shall include the
plural, where the context so indicates.

SECTION 1.1 - BOARD

"Board" shall mean the Board of Directors of the Corporation.

SECTION 1.2 - CHIEF EXECUTIVE OFFICER

"Chief Executive Officer" shall mean the Chief Executive Officer of the
Corporation.

SECTION 1.3 - CHIEF FINANCIAL OFFICER

"Chief Financial Officer" shall mean the Chief Financial Officer of the
Corporation.

SECTION 1.4 - CODE

"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder.

SECTION 1.5 - COMMON STOCK

"Common Stock" shall mean the Corporation's Common Stock, $.01 par value.

SECTION 1.6 - COMPENSATION

"Compensation" shall mean any cash remuneration payable by the Corporation to an
Outside Director for services rendered as a Director of the Corporation after
January 1, 2006, including the Director's annual fee and compensation for Board
and committee meetings.

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SECTION 1.7 - CORPORATION

"Corporation" shall mean Libbey Inc., a Delaware corporation.

SECTION 1.8 - DEFERRED AMOUNT

"Deferred Amount" shall mean Compensation that, in the absence of a Deferral
Election, would be payable to the Participant on a Deferral Date, and that the
Participant has elected to defer pursuant to a Deferral Election.

SECTION 1.9 - DEFERRAL DATE

"Deferral Date" shall mean the date on which the Compensation that is subject to
a Deferral Election would have been paid in the absence of the Deferral
Election.

SECTION 1.10 - DEFERRAL ELECTION

"Deferral Election" shall mean an election pursuant to Section 3.1.

SECTION 1.11 - DEFERRED COMPENSATION ACCOUNT

"Deferred Compensation Account" shall mean a memorandum account established and
maintained on the books of the Corporation to reflect a Participant's interest
in the Plan.

SECTION 1.12 - DEFERRED COMPENSATION ACCOUNT BALANCE

"Deferred Compensation Account Balance" shall mean, as of a Determination Date,
the aggregate of the applicable Participant's Interest Bearing Account Balance
and Investment Unit Account Balance.

SECTION 1.13 - DETERMINATION DATE

"Determination Date" shall mean any calendar day on which a Participant's
Deferred Compensation Account Balance, Interest Bearing Account Balance and/or
Investment Unit Account Balance is determined for purposes of this Plan.

SECTION 1.14 - DIRECTOR

"Director" shall mean a member of the Board.

SECTION 1.15 - DIVIDEND EQUIVALENT

"Dividend Equivalent" shall mean an amount equal to the cash dividend payable by
the Corporation, on any dividend payment date, on one share of the Corporation's
Common Stock.

SECTION 1.16 - EMPLOYEE

"Employee" shall mean any employee of the Corporation or of any subsidiary or
affiliated organization of the Corporation.

                                        6

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SECTION 1.17 - EXCHANGE ACT

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

SECTION 1.18 - FAIR MARKET VALUE

"Fair Market Value" of a share of Common Stock as of a given date shall mean:
(a) the closing price of a share of the Corporation's stock on the principal
exchange of which shares of the Corporation's stock are then trading, if any, on
the day previous to such date, or if shares were not traded on the day previous
to such date, then on the next preceding trading day during which a sale
occurred; or (b) if such stock is not traded on an exchange but is quoted on
NASDAQ or a successor quotation system, (1) the last sales price (if the stock
is then listed as a National Market Issue under the NASD National Market
System), or (2) the mean between the closing representative bid and asked prices
(in all other cases) for the stock on the day previous to such date as reported
by NASDAQ or such successor quotation system; or (c) if such stock is not
publicly traded on an exchange and not quoted on NASDAQ or a successor quotation
system, the mean between the closing bid and asked prices for the stock, on the
day previous to such date, as determined in good faith by the Chief Financial
Officer; or (d) if the Corporation's stock is not publicly traded, the fair
market value established by the Chief Financial Officer acting in good faith.

SECTION 1.19 - GENERAL COUNSEL

"General Counsel" shall mean the General Counsel of the Corporation.

SECTION 1.20 - INSTALLMENT PAYOUT PERIOD

"Installment Payout Period" shall mean a period of five (5) or ten (10) years,
as specified in the relevant Deferral Election, commencing on the Settlement
Date specified in the Deferral Election.

SECTION 1.21 - INTEREST BEARING ACCOUNT

"Interest Bearing Account" shall mean a subaccount under the Deferred
Compensation Account to which Deferred Amounts may be credited in accordance
with the Deferral Elections of a Participant and to which interest on those
Deferred Amounts is credited in accordance with this Plan.

SECTION 1.22 - INTEREST BEARING ACCOUNT BALANCE

"Interest Bearing Account Balance" shall mean, as of any Determination Date, the
aggregate of the Deferred Amounts credited to a Participant's Interest Bearing
Account in accordance with Deferral Elections made by the Participant prior to
the Determination Date, together with interest credited on those Deferred
Amounts, in accordance with this Plan, prior to the Determination Date, reduced
by (a) any amounts that the Participant previously has elected, in accordance
with Subsection 4.2(b) below, to transfer to the Participant's Investment Unit
Account and (b) any amounts that previously have been distributed to the
Participant from the Interest Bearing Account in accordance with this Plan.

SECTION 1.23 - INTEREST RATE

"Interest Rate" shall mean the applicable yield on 10-year U.S Treasury bills,
as determined on the last day of the calendar quarter for which interest at the
Interest Rate is being credited pursuant to Section 4.5.

                                        7

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SECTION 1.24 - INVESTMENT UNIT ACCOUNT

"Investment Unit Account" shall mean a subaccount under the Deferred
Compensation Account to which Deferred Amounts may be credited in accordance
with the Deferral Election of a Participant.

SECTION 1.25 - INVESTMENT UNIT ACCOUNT BALANCE

"Investment Unit Account Balance" shall mean, as of Determination Date, the
number of Libbey Stock Units credited to the applicable Participant's Investment
Unit Account, reduced by (a) any Libbey Stock Units previously debited against
that account, the value of which the Participant previously has elected, in
accordance with Subsection 4.2(b) below, to transfer to the Participant's
Interest Bearing Account, and (b) any Libbey Stock Units, the value of which
previously has been distributed to the Participant from his Investment Unit
Account in accordance with the Plan.

SECTION 1.26 -- LIBBEY STOCK UNIT

"Libbey Stock Unit" shall mean a hypothetical unit equal in value to one (1)
share of the Corporation's Common Stock.

SECTION 1.27 - MINIMUM STOCK HOLDING RULE

"Minimum Stock Holding Rule" shall mean any rule or policy that the Board has
adopted, that remains in effect at the time in question and that obligates the
applicable Outside Director to own a specified minimum number of shares of
Common Stock, Libbey Stock Units or any combination of Common Stock and Libbey
Stock Units.

SECTION 1.28 - OFFICER

"Officer" shall mean an officer of the Corporation, as defined in Rule 16a-1(f),
or any successor provision thereof, under the Exchange Act, as such Rule may be
amended in the future.

SECTION 1.29 - OUTSIDE DIRECTOR

"Outside Director" shall mean a Director who is not an Officer or Employee of
the Corporation.

SECTION 1.30 - PLAN

"Plan" shall mean this 2006 Deferred Compensation Plan for Outside Directors.

SECTION 1.31 - RULE 16B-3

"Rule 16b-3" shall mean Rule 16b-3 under the Exchange Act.

SECTION 1.32 - SECRETARY

"Secretary" shall mean the Secretary of the Corporation.

SECTION 1.33 - SEPARATION FROM SERVICE

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"Separation from Service" shall have the meaning set forth in Section
409A(a)(2)(A)(i) of the Code, as determined by the Secretary of the Treasury.
The Chief Executive Officer shall have full and final authority, which shall be
exercised in his/her discretion, to determine conclusively whether a Director
has had a "Separation from Service," and the date of such "Separation from
Service.

SECTION 1.34 - SETTLEMENT DATE

"Settlement Date" shall mean (a) as to any Deferred Amounts with respect to
which a Participant has elected a lump sum form of distribution, the date
specified in the relevant Deferral Election as the date on which the Deferred
Amounts shall be distributed, or (b) as to any Deferred Amounts with respect to
which a Participant has elected distribution in the form of installments, the
date on which the first installment shall be distributed.

SECTION 1.35 - SUBACCOUNT

"Subaccount" means the Interest Bearing Account or the Investment Unit Account,
as the case may be.

SECTION 1.36 - UNFORESEEABLE EMERGENCY

"Unforeseeable Emergency" shall have the meaning set forth in Section
409A(a)(2)(B)(ii) of the Code.

                                   ARTICLE II

                                 PARTICIPATION

SECTION 2.1 - ELIGIBILITY

Each Outside Director is eligible to participate in this Plan. Each Outside
Director who elects to participate in this Plan is referred to in this Plan as a
"Participant." A Director who is not an Outside Director is not eligible to
participate in this Plan. Officers and Employees of the Corporation are not
eligible to participate in this Plan. At such time as an Outside Director ceases
to provide services to the Corporation or to qualify as an Outside Director, the
Outside Director shall no longer be entitled to defer further amounts under this
Plan, but the Outside Director shall remain a Participant with respect to his
Deferred Compensation Account Balance until the Deferred Compensation Account
Balance is fully distributed in accordance with this Plan.

                                   ARTICLE III

                               DEFERRAL ELECTIONS

SECTION 3.1 - DEFERRAL ELECTIONS

(a) Except as set forth in Subsection (b) below, on or before December 31 of
each calendar year, each Participant may make a Deferral Election pursuant to
which the Participant elects to defer payment of all or any part of the
Compensation that otherwise would be payable to him for service rendered in the
succeeding calendar year. Each Deferral Election shall be in writing and shall
specify:

     (i) The portion of his Compensation with respect to which he is electing to
     defer payment pursuant to the Deferral Election;

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     (ii) The form of distribution applicable under Section 5.2;

     (iii) The Installment Payout Period, if any, over which the Corporation
     shall pay to the Participant the portion of the Participant's Deferred
     Compensation Account Balance that is attributable to Deferred Amounts
     covered by the Deferral Election;

     (iv) The Settlement Date upon which the Corporation shall pay to the
     Participant the portion of the Participant's Deferred Compensation Account
     Balance that is attributable to Deferred Amounts covered by the Deferral
     Election or upon which the relevant Installment Payout Period shall
     commence, as the case may be, or, if the Deferral Election does not specify
     a Settlement Date, then the Participant's Deferred Compensation Account
     Balance shall be distributed only upon Separation from Service; and

     (v) The applicable Subaccount to which the Deferred Amount that is subject
     to the Deferral Election shall be credited or is deemed invested.

(b) An Outside Director who is first elected or appointed to the Board in 2005
or any subsequent calendar year may participate in this Plan by submitting a
Deferral Election in writing to the Secretary of the Corporation within thirty
(30) days after his election or appointment to the Board. However, such Deferral
Election shall be applicable only to Compensation payable with respect to
service rendered after the date the Deferral Election is submitted.

SECTION 3.2 - DEFERRAL ELECTION CHANGES

(a) Notwithstanding anything to the contrary in Subsection 3.1(a) above, a
Deferral Election made in one calendar year with respect to Compensation payable
for service rendered in the succeeding calendar year shall be deemed renewed
automatically with respect to Compensation payable for service rendered in each
subsequent calendar year during which the Participant renders service to the
Corporation as an Outside Director. However:

     (i) Each renewal of the Deferral Election according to this Subsection
     3.2(a) shall be deemed a separate Deferral Election, the terms of which are
     identical to the original Deferral Election, except that any specified
     Settlement Date with respect to distributions of the portions of the
     Participant's Deferred Compensation Account Balance that are attributable
     to Deferred Amounts to which the renewal relates shall be extended to a
     date that is one (1) year from the specified Settlement Date specified by
     the preceding Deferral Election.

     (ii) The Participant may modify or revoke a Deferral Election as provided
     in this Section 3.2;

     (iii) In lieu of automatically renewing a Deferral Election, the
     Participant may make a separate written Deferral Election, pursuant to
     Subsection 3.1(a) above, with respect to Compensation payable for service
     rendered in the subsequent calendar year.

(b) Except as set forth in Subsection 3.2(a) above, Subsection 3.2(c) or (d)
below or Subsection 5.4, a Participant may not revoke or modify a Deferral
Election during the calendar year in which the Compensation is being earned.

(c) A Participant may modify an existing Deferral Election to extend the
Settlement Date or change the form of distribution specified in the existing
Deferral Election, provided that the Participant delivers written notice to the
Secretary specifying the modification in question and the General Counsel
affirmatively determines that:

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     (i) As a result of the proposed modification, the Settlement Date specified
     in the existing Deferral Election will not be accelerated;

     (ii) The effective date of the proposed modification to the existing
     Deferral Election is on a date that is at least twelve (12) months after
     the Participant submits the written modification to the Secretary; and

     (iii) If, pursuant to the proposed modification, the Settlement Date
     specified by the existing Deferral Election would be extended, then (A) the
     date on which the Participant gives written notice of the proposed
     modification to the Secretary, and the effective date of the proposed
     modification, shall be a date that is not less than one (1) year prior to
     the Settlement Date specified in the existing Deferral Notice; and (B) the
     date to which the Settlement Date is extended shall be a date not less than
     five (5) years from the Settlement Date (provided that distributions on
     account of Unforeseeable Emergency nevertheless may be made prior to such
     date in accordance with this Plan). For purposes of determining the
     relevant five (5) year period with respect to an installment payment,
     installment payments shall be treated as a single payment commencing on the
     Settlement Date for purposes of Section 409A of the Code.

(d) A Participant may modify a Deferral Election to select a different
Subaccount to which Deferred Amounts with respect to Compensation not yet earned
or paid as of the effective date of the modification shall be credited, provided
that the Participant submits written notice specifying the proposed modification
to the Secretary and the General Counsel determines that all of the following
conditions are satisfied:

     (i) To the extent necessary to enable the Participant to qualify for the
     exemption specified by Rule 16b-3, the effective date of the proposed
     modification is not less than six months (or such other period as Rule
     16b-3 may specify) from the Participant's most recent Deferral Date;

     (ii) The modification will not otherwise result in a violation of any other
     provision of the Exchange Act, as determined by the General Counsel;

     (iii) After giving effect to the proposed modification, the Participant
     will be in compliance with any Minimum Stock Holding Rule then in effect
     and applicable to the Participant; and

     (iv) During the calendar year in which the Secretary receives written
     notice of the proposed modification, the Participant has not previously
     modified the Deferral Election in question to specify a different
     Subaccount to which Deferred Amounts are to be credited.

                                       11

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                                   ARTICLE IV

                         DEFERRED COMPENSATION ACCOUNTS

SECTION 4.1 - DEFERRED COMPENSATION ACCOUNT

(a) There shall be established for each Participant an account to be designated
as the Participant's Deferred Compensation Account. All Deferred Amounts under
the Plan shall be credited by the Corporation to the Participant's Deferred
Compensation Account.

(b) The Corporation shall maintain separate subaccounts for Deferred Amounts to
be credited to, or deemed invested in, the Interest Bearing Account and/or the
Investment Unit Account. In addition, the Corporation shall maintain separate
subaccounts for Deferred Amounts under each Deferral Election made by a
Participant in order to accurately reflect the amounts distributable with
respect to each Deferral Election made by the Participant. Amounts deferred
pursuant to each Deferral Election shall be credited to, and deemed invested in,
the appropriate accounts and Subaccounts.

(c) The Corporation shall provide each Participant, at least quarterly, a
statement of his Deferred Compensation Account Balance, Interest Bearing Account
Balance and Investment Unit Account Balance, if any, as of the last day of the
immediately preceding calendar quarter

SECTION 4.2 - INVESTMENT OF DEFERRED COMPENSATION ACCOUNT

(a) The Deferred Amounts credited to each Participant's Deferred Compensation
Account for a calendar year shall be credited to, and deemed invested in, either
the Interest Bearing Account or the Investment Unit Account, as specified in the
applicable Deferral Election. If the Participant's Deferral Election does not
specify the Subaccount to which the related Deferred Amounts shall be credited
and deemed invested, then the Deferred Amount shall be credited automatically
to, and deemed invested in, the Participant's Investment Unit Account.

(b) A Participant may elect to transfer portions of his Investment Unit Account
to his Investment Bearing Account and vice versa; provided, however, that the
Participant submits written notice to the Secretary of the election and the
General Counsel determines that all of the following conditions are satisfied:

     (i) To the extent necessary to enable the Participant to qualify for the
     exemption specified by Rule 16b-3, the effective date of the transfer is
     not less than six months (or such other period as Rule 16b-3 may specify)
     from the Participant's most recent Deferral Date;

     (ii) The proposed transfer will not otherwise result in a violation of any
     other provision of the Exchange Act, as determined by the General Counsel;
     and

     (iii) After giving effect to the proposed transfer, the Participant will be
     in compliance with any Minimum Stock Holding Rule then in effect and
     applicable to the Participant; and

     (iv) During the calendar year in which the Secretary receives written
     notice of the proposed transfer, the Participant has not previously
     effected the transfer of any portion of his Interest Bearing Account to his
     Investment Unit Account or vice versa.

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SECTION 4.3 - DIVIDEND EQUIVALENTS

If a Participant has a positive Investment Unit Account Balance on a dividend
record date for the Common Stock, the Corporation shall credit to the
Participant's Investment Unit Account, on the corresponding dividend payment
date, a number of Libbey Stock Units determined by dividing (a) the product of
(i) the Participant's Investment Unit Account Balance as of that date and (ii)
the Dividend Equivalent on the dividend payment date, by (b) the Fair Market
Value of the Corporation's Common Stock as of the dividend payment date.

SECTION 4.4 - INVESTMENT UNIT ACCOUNT

(a) If a Participant's Deferral Election specifies that Deferred Amounts shall
be credited to the Participant's Investment Unit Account, then the number of
Libbey Stock Units to be credited to a Participant's Investment Unit Account as
of any Deferral Date to which the Deferral Election relates shall be determined
by dividing the applicable Deferred Amounts by the Fair Market Value of the
Corporation's Common Stock as of that Deferral Date.

(b) If a Participant elects, in accordance with Subsection 4.2(b) above, to
transfer amounts from his Interest Bearing Account to his Investment Unit
Account, then the number of Libbey Stock Units to be credited to the
Participant's Investment Unit Account shall be determined by dividing the
portion of the Participant's Interest Bearing Account Balance that is subject to
the election (with the Interest Bearing Account Balance being determined as of
the last day of the calendar quarter immediately preceding the effective date of
the transfer) by the Fair Market Value of the Corporation's Common Stock as of
the effective date of the transfer.

SECTION 4.5 - INTEREST BEARING ACCOUNT

(a) If a Participant elects, in accordance with Subsection 4.2(b) above, to
transfer amounts from his Investment Unit Account to his Interest Bearing
Account, then the amount to be credited to his Interest Bearing Account shall be
the product of (i) the number of Libbey Stock Units that are subject to the
election and (ii) the Fair Market Value of the Corporation's Common Stock as of
the effective date of the transfer.

(b) From and after the date on which Deferred Amounts are credited to a
Participant's Interest Bearing Account and until the Deferred Amounts are either
transferred to the Participant's Investment Unit Account pursuant to a
modification or election made by the Participant in accordance with Subsection
3.2(d) or Subsection 4.2(b), interest on such Deferred Amounts shall likewise be
credited, on the last day of each calendar quarter, to the Interest Bearing
Account at the Interest Rate

                                    ARTICLE V

                           PAYMENT OF ACCOUNT BALANCES

SECTION 5.1 - TIMING OF PAYMENT OF DEFERRED COMPENSATION ACCOUNT BALANCE

A Participant's Deferred Compensation Account Balance (or, if any Deferral
Election of the Participant specifies that a portion of his Deferred
Compensation Account Balance shall be payable in the form of installment
payments, the first installment thereof) shall become payable upon the earlier
of:

     (i) The Participant's Separation from Service or, if the Participant is a
     "specified employee," as defined in Section 409A(a)(2)(B)(i) of the Code,
     at the time of the Participant's Separation from Service,

                                       13

<PAGE>

     such amounts shall be payable on the first business day that is six months
     following the Participant's Separation from Service; or

     (ii) The Settlement Date specified by the Participant under the applicable
     Deferral Election, as the same previously has been modified in accordance
     with Subsection 3.2(c).

SECTION 5.2 - FORM OF PAYMENT

(a) The portion of a Participant's Deferred Compensation Account Balance that is
attributable to each calendar year with respect to which the Participant has
made a Deferral Election shall be payable either in a lump sum that is paid on
the Settlement Date specified in the applicable Deferral Election or in annual
installments that are payable over the Installment Payout Period specified in
the applicable Deferral Election, in each case as the applicable Deferral
Election previously has been modified in accordance with Subsection 3.2(c).

(b) Until distributed, Deferred Amounts shall be deemed to remain invested in
the Participant's Interest Bearing Account and/or Investment Unit Account, as
specified by the Participant in the Deferral Election applicable to the relevant
Deferred Amounts.

(c) All distributions of the Participant's Deferred Compensation Account Balance
shall be payable in cash. For purposes of determining the amount of any such
distribution, the Participant's Investment Unit Account Balance shall be deemed
converted to cash in an amount equal to the product of the number of Libbey
Stock Units held in the Participant's Investment Unit Account on the applicable
Determination Date by the Fair Market Value of a share of the Corporation's
Common Stock on that date.

(d) If the Deferral Notice of a Participant specifies that payments of any
portion of the Participant's Deferred Compensation Account Balance shall be made
in the form of installments, then as of September 30 of the calendar year
preceding the payment of an installment the amount of the installment shall be
determined by dividing the portion of the Participant's Deferred Compensation
Account Balance to which the Deferral Election applies (with the Deferred
Compensation Account Balance being determined as of that date) by the number of
annual installments remaining in the applicable Installment Payout Period.

SECTION 5.3 - DEATH BEFORE PAYMENT

In the event of a Participant's death before his Deferred Compensation Account
Balance has been paid to him in full, then his Deferred Compensation Account
Balance as of the date of his death shall be payable to the beneficiary or
beneficiaries named by him in a written designation filed with the Secretary
(or, in the absence of such a designation, to his estate) in a lump sum within
sixty (60) days after the date of death..

SECTION 5.4 - UNFORESEEABLE EMERGENCY

          (a) Notwithstanding the provisions of Section 5.1 or any election of
the Participant to the contrary, in the event of an Unforeseeable Emergency
resulting in severe financial hardship to the Participant, the Participant may
elect to receive a distribution of all or a part of his Deferred Compensation
Account Balance pursuant to the terms of this Section 5.4.

          (b) The Participant shall file with the Secretary a written request
for a distribution on account of Unforeseeable Emergency. The written request
shall indicate the nature of the Unforeseeable Emergency, the amount of
financial hardship incurred by the Participant as well as whether or not

                                       14

<PAGE>

the hardship may be relieved through insurance or through the disposition of
other assets. The Chief Executive Officer, in his sole discretion, or such other
independent third party as may be required pursuant to Section 409A of the Code,
shall determine whether or not the Participant satisfies the requirements for a
distribution due to an Unforeseeable Emergency.

          (c) If a Participant is determined to qualify for a distribution on
account of an Unforeseeable Emergency, then the amount to be distributed to the
Participant shall not exceed an amount necessary to satisfy the hardship
resulting from the Unforeseeable Emergency, plus an amount necessary to pay
taxes reasonably anticipated as a result of such distribution, all as determined
in the sole discretion of the Chief Executive Officer (or such other independent
third party as may be required pursuant to Section 409A of the Code) after
taking into account the extent to which the Participant could satisfy the
hardship through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant's assets, including cancellation of the
Participant's Deferral Election for that calendar year under Subsection 5.4(d)
below and as otherwise required by Section 409A of the Code.

          (d) A Participant may cancel his Deferral Election in effect for the
calendar year in which he is determined to qualify for a distribution on account
of an Unforeseeable Emergency. If a Participant cancels his Deferral Election
for such calendar year, he may not reinstate such election during that calendar
year, but may file a new Deferral Election effective for the next calendar year
in accordance with Section 3.1.

                                   ARTICLE VI

                                 ADMINISTRATION

SECTION 6.1 - DUTIES AND POWERS OF CHIEF EXECUTIVE OFFICER

It shall be the duty of the Chief Executive Officer to conduct the general
administration of the Plan in accordance with its provisions. The Chief
Executive Officer shall have the power to interpret the Plan and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules; provided,
however, that Deferral Elections under the Plan are intended to defer a
Participant's receipt of income, for purpose of the Code, and all such rules
shall be made and interpreted consistent with that intention. To the extent that
any provision of this Plan or any Deferral Election would otherwise cause any
Deferred Amount to violate the requirements of Section 409A(a)(2), (3) or (4) of
the Code, then that provision or Deferral Election shall be deemed null and
void, and the Chief Executive Officer shall have the authority to modify the
Plan or Deferral Election so that the Plan or Deferral Election complies with
Section 409A(a) of the Code.

SECTION 6.2 - AMENDMENT AND TERMINATION OF THE PLAN

(a) The Board may at any time, and from time to time, amend, suspend, or
terminate the Plan in whole or in part; provided, however, that no such
amendment, suspension or termination may, without the consent of each
Participant affected thereby, have any adverse retroactive effect on the rights
of any Participant (or any person claiming through or under him) under the plan
unless required by applicable law.

(b) Notwithstanding anything to the contrary in the Plan, if and to the extent
the Company shall determine that the terms of the Plan may result in the failure
of the Plan, or amounts deferred by or for any Participant under the Plan, to
comply with the requirements of Section 409A of the Code, or any applicable
regulations or guidance

                                       15

<PAGE>

promulgated by the Secretary of the Treasury in connection therewith, the
Company shall have authority to take such action to amend, modify, cancel or
terminate the Plan or distribute any or all of the amounts deferred by or for a
Participate, as it deems necessary or advisable, including without limitation:

     (i) Any amendment or modification of the Plan to conform the Plan to the
     requirements of Section 409A of the Code or any regulations or other
     guidance thereunder (including, without limitation, any amendment or
     modification of the terms of any applicable to any Participant's Deferred
     Compensation Accounts regarding the timing or form of payment).

     (ii) Immediate payment to the Participant of the amount otherwise payable
     to such Participant.

Any such amendment, modification, cancellation, or termination of the Plan may
adversely affect the rights of a Participant without the Participant's consent.

SECTION 6.3 - NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD

Nothing in this Plan shall confer upon any Outside Director any right to
continue as a director of the Corporation or shall interfere with the rights of
the Corporation and its stockholders, which are hereby expressly reserved, to
remove any Outside Director at any time for any reason whatsoever, with or
without cause.

SECTION 6.4 - NONASSIGNABILITY

Rights under the Plan shall not be assignable or transferable or subject to
encumbrance or change or any nature, other than by designation of beneficiary to
take effect at death or, in the absence of such designation, by will or the laws
of descent and distribution. The Plan shall be binding on and inure to the
benefit of the Company, each Participant and every person claiming through or
under a Participant, and their respective heirs, successors, and assigns.

SECTION 6.5 - NO FUNDING REQUIRED

The Corporation shall be under no duty to segregate or set aside any amount
credited to any account established by the Plan from the general assets of the
Corporation, but the Board may, in its discretion, direct the establishment of
any trusted, insured or other payment arrangement from which the Corporation's
obligations as to a Participant under the Plan may be paid, provided that any
such arrangement shall not give a Participant any greater right than any other
unsecured general creditor of the Corporation. No Participant beneficiary,
estate or other person claiming through or under a Participant shall have any
legal or beneficial property interest whatsoever in any assets of the
Corporation or in any such payment arrangement that may be established at the
direction of the Board (except as may be expressly provided by the payment
arrangement), and no such payment arrangement shall be deemed to create a trust
of any kind, any fiduciary relationship between the Corporation and any person,
or any collateral security for the Corporation's obligations under the Plan. To
the extent that a Participant or any other person acquires a right to receive
any payment from the Corporation under this Plan, such right shall be no greater
than that of any other unsecured general creditor of the Corporation.

SECTION 6.6 - RECAPITALIZATION

If, as a result of any stock split, reverse stock split, stock dividend,
combination or exchange of shares, consolidation, spin-off, recapitalization or
other distribution (other than normal cash dividends) of assets of the
Corporation to its stockholders, or any other change affecting the Corporation's
Common Stock, then the Libbey

                                       16

<PAGE>

Stock Units credited to the Investment Unit Account of any Participant shall be
treated in the same manner as the Corporation's Common Stock.

SECTION 6.7 - NOTICES

Each notice, election or other communication to be given pursuant to this Plan
shall be in writing and shall be deemed given when:

     (i)  delivered by hand;

     (ii) receipt is confirmed if sent by telecopy, or electronic mail; or

     (iii) received by addressee if sent by first class mail or other overnight
          delivery service.

Notices to the Corporation shall be sent to its principal office, and notices to
a Director shall be sent to the last known address of such Director as contained
in the Corporation's records.

SECTION 6.8 - GOVERNING LAW

This Plan shall be construed in accordance with the laws of the State of
Delaware, without regard to conflicts of law principles.

                                    * * * * *

I hereby certify that the foregoing 2006 Deferred Compensation Plan for Outside
Directors was duly adopted by the Board of Directors of Libbey Inc. on December
6, 2005, and shall be effective as of January 1, 2006.

Executed on this 6th day of December, 2005.

                                        /s/ Susan Allene Kovach
                                        ----------------------------------------
                                        Susan Allene Kovach
                                        Secretary

                                       17<PAGE>

                                                                   EXHIBIT 10.75

                                RMB Loan Contract

Contract No.: 2006-01
Type of Loan: Fixed Asset Loan
Borrower (Party A): Libbey Glassware (China) Company Limited
Address: Room 407, EDA Administrative Committee, Youyi Road, Langfang Economic
         Development Area
Post Code: 065001
Legal Representative (Person in Charge): Ken Wilkes
Fax: 0316-6070912
Telephone: 0316-6070913

Lender (Party B): China Construction Bank Corporation Langfang Economic
                  Development Area Sub-branch
Address: No. 1 Huiyuan Street, Langfang Economic Development Area
Post Code: 065001
Person in Charge: Li Jun
Fax: 0316 - 5919902
Telephone: 0316 - 5919901

Borrower (hereinafter referred to as Party A): Libbey Glassware (China) Company
Limited Lender (hereinafter referred to as Party B): China Construction Bank
Corporation Langfang Economic Development Area Sub-branch

Party A applies to Party B for a loan which Party B agrees to grant. Under
relevant laws and regulations concerned, Party A and Party B agree to make this
contract in order to execute and fulfill this contract jointly.

Article 1 Amount of Loan

Party A borrows from Party B (in words) RMB two hundred fifty million (RMB 250
million).

Article 2 Purposes of Loan

The loan will be used for a glassware manufacturing facility project with an
annual capacity of 27,000 tons.

Article 3 Term of Loan

The term of the loan stipulated in this contract is eight (8) years, namely from
23rd January 2006 until 22nd January 2014.

If the starting date of the term of loan under this contract is inconsistent
with the loan redeposit receipts, the recorded date in the loan redeposit
receipts for the first advance shall be the starting date. The loan redeposit
receipts are parts of this contract, and have the same legal effect as this

<PAGE>

contract.

Article 4 Loan Interest Rate, Penalty Interest Rate, Interest Calculation and
Interest Accrual

1. Loan Interest Rate

The loan interest rate under this contract will be per annum, and the interest
rate is variable interest rate as further delineated in Item b below:

a. Fixed Interest Rate, namely ____, the interest rate keeps unchanged during
the term of the loan;

b. Variable Interest Rate, namely floating downward by 10% based on the level of
the base interest rate, which, from the value date onwards, shall be subject to
adjustment every 12 months. The interest rate adjustment date is the
corresponding date of the value date in that month, and if there isn't a
corresponding date in that month, the last day of the month will be the interest
rate adjustment date.

2. Penalty Interest Rate

A. The penalty interest rate is per annum.

B. If Party A does not use the loan for the purposes stipulated in this
contract, penalty interest rate will be charged at variable interest rate as
delineated in Item b below:

a. Fixed Interest Rate, namely ____;

b. Variable Interest Rate, namely floating upward by 100% based on the level of
the base interest rate, and which, from the value date onwards, shall be subject
to adjustment every 12 months. The interest rate adjustment date for penalty
interest is the corresponding date of the value date in that month, and if there
isn't a corresponding date in that month, the last day of the month will be the
penalty interest rate adjustment date for penalty interest.

C. The penalty interest rate for overdue loan under this contract is variable
interest rate as further delineated in Item b below:

a. Fixed Interest Rate, namely ____;

b. Variable Interest Rate, namely floating upward by 50 % based on the level of
the base interest rate, and which, from the value date onwards, shall be subject
to adjustment every 12 months. The interest rate adjustment date for the penalty
interest is the corresponding date of the value date in that month, and if there
isn't a corresponding date in that month, the last day of the month will be the
penalty interest rate adjustment date for the penalty interest.

3. The value date mentioned in this Article is the date when the first loan
advance under this contract is deposited into the account of Party A.

When the first loan advance under this contract is made, the base interest rate
is the loan interest rate announced by the People's Bank of China on the value
date for similar loans; henceforth, when loan interest rate or penalty interest
rate is adjusted according to the aforementioned stipulation, the base interest
rate is the loan interest rate announced by the People's Bank of China at the
adjustment date for similar loans; If the People's Bank of China has stopped
announcing loan interest rate for similar loans, the base interest rate is the
loan interest rate applicable at the adjustment date which is recognized by the
banking business or which is the normal loan interest rate for similar loans,
unless the two parties have agreed otherwise

4. The interest hereunder is calculated from the first day when the loan is
redeposited into the account of Party A. The loan interest under this contract
is calculated daily, daily interest rate= monthly interest rate/30=annual
interest rate/360. If Party A can not make interest payment on time, a compound
interest will be charged starting from the following day.

<PAGE>

5. Interest Accrual

A. If a fixed interest rate is applied, to accrue the interest, the interest
will be calculated according to the stipulated interest rate. If variable
interest rate is applied, the interest will be calculated according to the
decided interest rate of each floating period; if the interest rate floats
several times during a single interest accrual period, the interest of each
floating period shall be first calculated and the interest of the interest
accrual period will be calculated at the interest accrual date by aggregating
the interest of each floating period within such interest accrual period.

B. The interest of the loan under this contract is accrued quarterly, the
accrual date is the 20th day of the last month of each quarter.

Article 5 Release of Funds and Utilization

1. The Precondition for Release of Funds

A. Party B is not obliged to release funds until the following preconditions are
fulfilled, unless Party B waives the preconditions in whole or in part:

a. Party A finishes the processes of approval, registration, delivery and other
due processes related to the loan under this contract, according to laws and
regulations concerned;

b. If security is to be provided under this contract, the guaranty contract or
other security should fulfill the requirement of Party B and should be
effective;

c. Party A doesn't have any event of default stipulated in this contract;

d. Other preconditions as agreed between the Parties for release of funds under
the Loan:

1). The registered capital of RMB 19 million is in place, i.e.

(1) Party A shall provide a valuation report to be prepared by Price Water House
Coopers in the United States confirming the value of the total amount of project
capital spent by Libbey Inc or its affiliates outside China. Price Water House
Coopers office in China shall translate the report into Chinese and confirm the
Chinese translation is consistent with the English version before the same is
forwarded to Party B by post. The total amount of project capital spent by
Libbey Inc. or its affiliates outside China shall include but not limited to
machines, machinery, equipment, technology, furnace materials and controls,
computer software, related services, engineering and design services, transport
and transportation, and the book value of equipment which are spent by Libbey
Inc. or any of its affiliate in the contemplation for sale or contribution to
Party A in connection with the basis of Loan as well as the amount of all other
expenses incurred in connection with such machines, machinery, equipment and
technology.

(2) The total amount spent by Party A on Libbey's investment in China.

(3) Party A shall deposit the difference between the total project capital of 19
million and capital spent within and outside China as stated in (1) and (2)
above in cash into the capital account opened by Party A with Party B, before
signing of the loan agreement.

2). Party A shall open all its accounts with Party B and any use of loan
proceeds shall be monitored and supervised by Party B. If Party A has to open
other accounts with other banks due to business development needs, Party A shall
obtain the consent from Party B in advance.

B. Party B shall release the funds under the loan within 3 bank working day(s)
following the date when Party A fulfills all the aforementioned preconditions.

2. Loan Utilization Plan

a. ____ year ____ month ____day  amount________;

<PAGE>

b. ____ year ____ month ____day  amount________;
c. ____ year ____ month ____day  amount________;
d. ____ year ____ month ____day  amount________;
e. ____ year ____ month ____day  amount________;
f. ____ year ____ month ____day  amount________;

Article 6 Repayment

1. The Principle of Repayment

All repayments by Party A hereunder shall be made in accordance with the
following principle.

1). Repay the loan principal first before paying the interest, if the loan
principal is more than 90 days overdue, or the loan interest is more than 90
days overdue, or if Party A's operations have ceased or the project funded with
the loan has been stopped even if the loan is not overdue or is overdue by less
than 90 days; or for loans as otherwise specified under relevant laws and
regulations.

2). Pay the interest first before repaying the loan principal, and any
outstanding interest shall be paid on at the date of full discharge of the
principal, for cases other than that specified in the above paragraph.

2. Payment of Interest

Party A shall pay due interest to Party A at the interest accrual date. The
first interest payment date is the first interest accrual date following release
of the funds. At the time of the last repayment, the interest shall be paid
together with the principal.

3. Principal Repayment Plan

Party A shall repay the principal according to the following plan:

a. 20 July 2012       amount: RMB 30million;
b. 20 December 2012   amount: RMB 40million;
c. 20 July 2013       amount: RMB 60million;
d. 20 December 2013   amount: RMB 60million
e. 20 January 2014    amount: RMB60million;

4. Means of Repayment

Before the repayment date stipulated in this contract is due, Party A shall
deposit enough money in the account opened by Party B and automatically transfer
the due repayment of that period to make loan repayment, or transfer money from
other accounts to make loan repayment on the repayment date stipulated in this
contract; if Party A doesn't make loan repayment on time, Party B is entitled to
transfer money from the accounts opened by Party A in China Construction Bank
systems.

5. Prepayment

A. If Party A desires to make prepayment of interest, it only needs to notify
Party B in advance.

B. If Party A desires to make prepayment of loan principal, it shall submit a
written application to Party B 20 bank's working days in advance. With the
consent of Party B, Party A can prepay the principal in whole or in part.

If Party A makes prepayment of loan principal, the interest is calculated
according to the number of days of loan utilization and the loan interest rates
stipulated in Article 4 of this contract.

If Party A makes prepayment of loan principal, Party A agrees to pay
compensation to Party B. Compensation=the prepaid principal amount *1%*prepaid
month(s), where any period less than a full month shall be deemed as a full
month.

<PAGE>

If Party A makes repayment in installments, and it prepays part of the
loan principal, the prepayment shall be made in reverse order to the repayment
plan. After the prepayment is made, the outstanding principal shall be repaid at
the loan interest rate stipulated in this contract.

Article 7 Security for the Loan

In case of a secured loan, the forms of security shall be Items 1 as delineated
below:

1. Guarantee
2. Mortgage
3. Pledge
4. Standby Letter of Credit
5. Credit Insurance
6. Others:____

Article 8 Rights and Obligations of Party A

1. Rights of Party A

A.   Party A is entitled to require Party B to release the funds in accordance
     with _____ contractual terms;

B.   Party A is entitled to utilize the loan in accordance with the purpose
     specified under contractual terms;

C.   Party A is entitled to apply to Party B for an extension under the
     conditions stipulated by Party B;

D.   Party A is entitled to require Party B to treat confidentially the
     financial information and business secret used in its production and
     operations which Party A provides to Party B, unless it's stipulated
     otherwise in laws and regulations.

2. The Obligations of Party A

A. Party A shall provide related financial accounting information and production
and operations information as required by Party B, including, but not limited
to, providing to Party B within the first thirty (30) banking days of the first
month of every quarter the balance sheet as of the end of last quarter, profit
and loss statement (statement of revenues and expenditures for public
institutions) as of the end of last quarter, providing statement of cash flow of
the year at the end of every year, and take responsibility for the truthfulness,
completeness and validity of the information provided.

B. Party A must use the loan in accordance with the stipulations of this
Contract and the loan shall not be diverted to any other purpose;

C. Party A shall actively cooperate with Party B in accepting Party B's
inspection and supervision on Party A's production, operation and financial
events, and the use of the loan under this contract;

D. Party A shall make principal repayment and interest payment on time in
accordance with contractual terms;

E. Party A and its investors shall not surreptitiously withdraw funds or
transfer assets to evade debts to Party B;

F. Before full discharge of the loan principal and interest hereunder, Party A
shall not provide without the consent of Party B any security for any third
party with the assets generated through the use of the loan under this contract.

G. If during the term of this Contract Party A wants to provide any security for
any third party which may affect Party A's repayment capability hereunder, Party
A shall notify Party B in written form in advance and seek the consent of Party
B;

<PAGE>

H. If the guarantor under this contract stops production, goes out of business,
nullifies its registration, is revoked business license, goes bankrupt, is
revoked or has deficit in operation, and thus loses part or all of its
corresponding guaranty ability under this loan contract, or if the value of
guaranty or the object of pledge under this loan contract is reduced, destroyed
accidentally or lost, Party A shall provide in a timely manner other means of
security acceptable by Party B;

I. During the period of this contract, if Party A changes its name, its legal
representative (person in charge), address, business scope, registered capital,
etc., Party A shall notify Party B in time;

J. During the period of this contract, in case that Party A experiences any
change which will affect the fulfillment of Party B's creditor's rights, such as
tendering for a contract, leasing, shareholding reorganization, joint
operations, merger, acquisition, spin-off, establishing joint venture, applying
for stopping doing business for internal rectification, filing for dissolution
or bankruptcy etc., Party A shall notify Party B thirty (30) days in advance in
written form, seek Party B's consent and procure new sources for the payment of
the loan under this contract or provide new security as required by Party B.

K. During the period of this contract, in case that Party A experiences any
change which will have serious negative impacts on the repayment obligations
under this contract, such as stopping production, going out of business,
nullifying its registration, being revoked business license, its legal
representative or person in charge engaging in illegal acts, being involved in
important lawsuits, having serious difficulties in production and operation,
having deteriorating financial problems etc. Party A shall notify Party B
immediately in writing and procure new sources for payment of the loan under
this contract or provide new security as required by Party B;

L. Party A shall pay all expenses in connection with the contract and the
security under this contract, such as legal fee, insurance fee, certification
fee, registration fee, storage cost, appraisal cost, notarial fee, etc.

Article 9 The Rights and Obligations of Party B

1. The Rights of Party B

A. Party B is entitled to be kept informed of the production and operation and
the financial conditions of Party A, and is entitled to require Party A to
provide related planning statistics, financial statements and other documents;

B. Party B is entitled to transfer from the account opened by Party A in China
Construction Bank system any sum of money which Party A should pay Party B under
the Contract, no matter what kind of currency it is in.

2. The Obligations of Party B

A. Party B shall release the funds to Party A on time and in full in accordance
with contractual terms, unless it's delayed by Party A;

B. Treat confidential the related financial information and business secret used
in production and operation provided by Party A, unless otherwise stipulated in
laws and regulations.

Article 10 Default Responsibilities

1. Events of Default

A. Default of Party A

a. Party A does not provide truthful, complete and valid financial accounting
information, production and operation information and other related information
as required by Party B;

<PAGE>

b. Party A does not use the loan for the purposes stipulated by the two parties;

c. Party A does not repay the principal and interest of the loan on time;

d. Party A refuses or impedes any inspection and supervision by Party B over the
use of loan;

e. Party A transfer assets, withdraw capital, in order to evade debts;

f. Party A has a deteriorating operation and financial situation, can not repay
due debts, or is involved or will be involved in important lawsuits or
arbitration proceedings or has other legal disputes, which Party B believes may
affect or jeopardize, or has already affected or jeopardized the rights and
interests of Party B under this contract;

g. Party A has any other debt which has already affected or may affect the
fulfillment of its obligations to Party B under this contract;

h. Party A does not fulfill any other due debts to China Construction Bank;

i. During the period of this contract, Party A changes the pattern of management
or the management structure by means of tendering for a contract, leasing,
merger, acquisition, establishing joint venture, spin-off, joint operations,
shareholding reorganization, which Party B believes may affect or jeopardize, or
has already affected or jeopardized the rights and interests of Party B under
this contract;

j. Any other event considered by Party B to be sufficient to affect fulfillment
of the debts;

k. Party A violates other stipulated obligations under this contract.

B. If the following events occur to the guarantor, and Party A can not provide
new security as required by Party B, it will be deemed as breach of contract by
Party A:

a. The guarantor has an event which will be sufficient to affect the guarantor's
joint guarantee liability, such as tendering for a contract, leasing, merger and
acquisition, establishing joint venture, spin-off, joint operations,
shareholding reorganization, going bankrupt, being revoked;

b. The guarantor provides a security for any third party in excess of its
capacity;

c. The guarantor loses or may lose its capacity as a guarantor.

d. Other events of default of the guarantor stipulated in the guaranty contract.

C. If the following events occur to the mortgagor, and Party A can not provide
new security as required by Party B, it will be deemed as breach of contract by
Party A:

a. The Mortgagor does not effect insurance over the collateral as required by
Party B, or does not distribute the insurance compensation in accordance with
the terms of the mortgage contract after an insurance accident happens;

b. The collateral is destroyed, vanished or depreciated due to events caused by
any third party, and the mortgager does not distribute the compensation in
accordance with the terms of the mortgage contract;

c. The mortgagor donates, transfers, leases, re-mortgages, moves or otherwise
disposes the collateral, without written consent of Party B;

d. The mortgagor disposes the collateral with the consent of Party B, but does
not distribute the disposal proceeds in accordance with the terms of the
mortgage contract;

e. The collateral is destroyed, vanished or depreciated, which is sufficient to
affect repayment of the debts under the contract, and the mortgagor does not
recover the value of the collateral in time, or does not provide other security
acceptable by Party B;

f. Other events of default of the mortgagor stipulated in the mortgage contract.

<PAGE>

D. If the following events occur to the pledger, and Party A can not provide new
security as required by Party B, it will be deemed as breach of contract by
Party A:

a. The pledger does effect insurance over the collateral as required by Party B,
or does not distribute the insurance compensation in accordance with the terms
of the pledge contract after an insurance accident happens;

b. The collateral is destroyed, lost or depreciated due to events caused by any
third party, and the pledger does not distribute the compensation in accordance
with the terms of the pledge contract;

c. The pledger disposes the collateral with the consent of Party B, but does not
distribute the disposal proceeds in accordance with the terms of the pledge
contract;

d. The collateral is destroyed, vanished or depreciated, which will be
sufficient to affect repayment of the principal and interest of the debts under
the contract, and the pledger does not recover the value of the collateral, or
does not provide other security acceptable by Party B;

e. Other events of default of the pledger stipulated in the pledge contract.

E. If the guarantee contract or other means of guarantee does not take effect,
is void or is revoked, or the guarantor partly or wholly loses its guarantee
capacity or refuses to perform its guarantee obligations, and Party A does not
procure new security as required by Party B, it will be deemed as breach of
contract by Party A.

2. Remedies for Default

Party B is entitled to exercise one or several of the following rights if the
events of default stipulated in (A) to (E) above occurs:

A. Stop releasing any fund, declares that the loan is immediately due and
payable, and requires immediate repayment of all the principal, interests and
expenses, whether due or not, under this contract.

B. Charge liquidated damages for breach of contract from Party A, which is 5%
of the loan principal.

C. If Party A fails to use the loan for the purposes under this contract, Party
B shall charge interest and compound interest over the amount diverted by Party
A from the day when the loan is diverted for purposes other than those specified
herein till the day when the principal and interest are fully repaid, according
to the penalty interest rate and accrual of interest stipulated in this
contract.

D. Before the loan becomes due, Party B shall charge compound interest on the
interest which Party A fails to pay on time, according to the loan interest rate
and accrual of interest stipulated in Article 4 of this contract.

E. If the loan is overdue, Party B shall charge interest and compound interest
on the principal and interest which Party A fails to repay on time (including
the loan principal and interest declared by Party B to be due and payable
immediately) from the overdue day till the day when the principal and interest
are repaid in full, according to the penalty interest rate and accrual of
interest stipulated in this contract. If Party A fails to repay on time or
according to the installment repayment schedule stipulated in this contract, it
shall be deemed as an overdue loan.

F. Transfer money from the accounts opened by Party A with China Construction
Bank system, no matter what kind of currency it is in.

G. Require that Party A provide new security acceptable by Party B for all the
debts under this

<PAGE>

contract.

H. Exercise the guaranty rights.

I. Terminate the contract.

Article 11 Other agreements reached upon by and between parties.

1. Libbey Inc. shall provide a joint liability repayment guarantee for the Loan
and shall issue a Guarantee Contract (Contract No. 2006-01). Upon completion of
the project, finalization of titles to the plants and equipment and normal
operation of the equipment and machinery and when Party A's operations have
generated profits and its net operating cash flow is positive, a mortgage shall
be processed, subject to consent of Party B, to substitute the above security in
an amount equal to the mortgage value. Subject to satisfaction of reasonable
conditions approved by Party B, the mortgage over land use right and buildings
may be processed earlier to substitute the above security in an amount equal to
the mortgage value.

2. The Loan hereunder shall take priority in terms of repayment to any
shareholder loan.

3. With regard to Article 5(2), the following shall be added: "The loan shall be
drawn down in 8 installments before 31st March 2007 and each drawdown shall be
no less than RMB10 million."

4. With regard to Article 8 (2) A, Party A shall provide Party B with an annual
report no later than 28th February in the following year.

5. With regard to Article 10(1) (A) (c) and (h), the following shall be
inserted:

"Within 10 working days upon the Loan principal and interest have become due and
payable, Party B shall not act on the remedies available to it under Article 10
(2) (A) against Party A".

6. With regard to Article 10(1) (A) (f), the following shall be inserted:

"The word 'affect' or 'jeopardize' as referenced herein shall be understood to
mean that it will render Party A unable to discharge any indebtedness that will
become due and payable soon".

7. Party A shall cover insurance in an insurance company accepted by Party B
(whose acceptance shall not be unreasonably withheld) for equipments,
engineering construction, transportation and risk during the operation of the
project related to the items or trade of the loan. The insured amount shall be
no lower than the principal of loan, and it shall provide in the special
representation clause of the insurance policy that the first beneficiary shall
be China Construction Bank Corporation Langfang Economic Development Area
Sub-branch. Party A shall deliver the original copy of the insurance policy to
Party B in ninety (90) days as of the effective date of the Contract. Party A is
not allowed to terminate the insurance by any reason before the principal,
interests and charges are repaid. If Party A terminates the insurance, Party B
has the right to renew the insurance or cover insurance instead of Party A, and
Party A shall assume the charge. Party A shall be responsible for all loss
suffered by Party B due to the termination of insurance.

Party A shall notify Party B in written form in five (5) business days after
knowing the occurrence of insured accident, and claim for compensation to the
underwriter according to relative stipulation in the insurance policy; Party A
shall bear all losses caused by Party A's failure to notify or claim
compensation in time, or failure to fulfil the obligation under the items of the
insurance policy.

Insurance indemnity shall be used to repay the principal and interest of loan
and other payable expenditures first, but Party B can decide whether the
insurance indemnity will be applied on project or trade supported by the loan
according to the conditions of the project; the insufficiency of

<PAGE>

insurance indemnity which fails to repay the principal and interest shall not be
taken as the excuse of exemption of payable debt of Party A.

Article 12 Resolution of Contract Dispute

Any dispute between Party A and Party B arising in the performance of this
Contract shall be settled by the both Parties through consultation; if it can
not be settled through negotiation, it may be settled through arbitration as
delineated in Item 2 below:

1. Bring an action at the people's court where Party B is located.

2. Submit to China International Economic and Trade Arbitration Commission (in
Beijing) for arbitration according to its rules effective at the time of
arbitration application. The arbitration adjudication is final, and has binding
effects on the two parties. During the legal proceedings or arbitration
proceedings, the terms of the contract not involved in the disputes shall still
be fulfilled.

Article 13 The Effectiveness of the Contract

The contract takes effect from and after the legal representative (person in
charge) or agent of Party A signs and affixes its official seal, and the person
in charge or agent of Party B signs and affixes its official seal.

Article 14 This Contract is prepared in eight (8) original copies.

Article 15 Terms to Declare

1.   Party A knows clearly the business scope and extent of authority of Party
     B.

2.   Party A has read all the terms of this contract. As required by Party A,
     Party B has made explanations to relative terms of this contract. Party A
     is all familiar with and fully understand the meaning of the terms of this
     contract and the corresponding legal consequences.

3.   Party A is authorized to execute this Contract.

Party A (official seal):

------------------------------------------
Legal Representative (Person in Charge) or
Authorized Agent (signature):

Year   Month   Day

Party B (official seal):

------------------------------------------
Person in Charge or
Authorized Agent (signature):

Year   Month   Day

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