Document:

exv10w1

 

Exhibit 10.1

TERMINATION AGREEMENT

     THIS TERMINATION AGREEMENT (“Termination Agreement”) is entered into as of December 8,
2006, by and among American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”),
Laserscope, a California corporation and indirect subsidiary of AMS (“Laserscope”),
InnovaQuartz Incorporated, an Arizona corporation and wholly-owned subsidiary of Laserscope (the
“Company”), Stephen Griffin (“Mr. Griffin”), The Griffin Family Revocable Trust
(the “Griffin Trust”), and Brian Barr (“Mr. Barr”). The Griffin Trust and Mr. Barr
as sometimes referred to herein individually as a “Stockholder” and collectively as the
“Stockholders.” Mr. Griffin and Mr. Barr as sometimes referred to herein individually as a
“Company Principal” and collectively as the “Company Principals.”

RECITALS

     WHEREAS, Laserscope, the Griffin Trust, Mr. Griffin, Mr. Barr, and the Company are parties to
that certain Stock Purchase Agreement, dated as of April 30, 2006 (the “Purchase
Agreement”), pursuant to which Laserscope acquired all of the issued and outstanding stock of
the Company.

     WHEREAS, AMS and Laserscope desire to buy out the Earnout Amounts under the Purchase
Agreement.

     WHEREAS, the Company and Mr. Griffin entered into that certain Employment Agreement, dated May
1, 2006 (the “Griffin Employment Agreement”), and the parties desire to terminate Mr.
Griffin’s employment with the Company and engage Mr. Griffin as a consultant to the Company.

     WHEREAS, the Company and Mr. Barr entered into that certain Employment Agreement, dated May 1,
2006 (the “Barr Employment Agreement”), and the parties desire to confirm termination of
Mr. Barr’s employment with the Company.

     WHEREAS, the parties seek to terminate all of their obligations (other than the Barr Lease, as
defined below) under the Purchase Agreement and release each other from all claims they may have
against each other, whether arising under the Purchase Agreement, the Griffin Employment Agreement,
and the Barr Employment Agreement or otherwise.

     NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for
other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

AGREEMENT

     1. Termination of Purchase Agreement. Laserscope, the Griffin Trust, Mr. Griffin, and
Mr. Barr agree that all of their respective obligations under the Purchase Agreement are hereby
terminated and none of the parties hereto shall have any obligation whatsoever to any

 

 

other party under the Purchase Agreement. In furtherance of, and without limiting, the
foregoing: (a) Section 1.3 of the Purchase Agreement is hereby terminated and the Stockholders
shall have no right to receive Earnout Amounts thereunder, (b) Section 6 of the Purchase Agreement
is hereby terminated and none of the parties will have any obligations or be subject to any
restrictions thereunder; and (c) Section 8 of the Purchase Agreement is hereby terminated and none
of the parties will have any rights to indemnification or be subject to indemnification obligations
thereunder.

     2. Termination of Griffin Employment. The parties agree that Mr. Griffin’s employment
with the Company and the Griffin Employment Agreement shall terminate effective as of the date
hereof, and neither the Company nor Mr. Griffin shall have any obligations under the Griffin
Employment Agreement, except that Griffin’s obligations under Section 7 (Non-Solicitation) and
Section 8 (Non-Competition) shall remain in full force and effect, as modified herein. AMS,
Laserscope and the Company acknowledge that Griffin’s obligations under Section 8 do not apply to
Mr. Griffin’s activities in the field of analytical chemistry and that the field of analytical
chemistry specifically excludes all therapeutic medical applications. Section 7 (Non-Solicitation)
of the Griffin Employment Agreement is hereby amended to the extent necessary to permit Mr. Griffin
to sell analytical chemistry products to the Company’s customers, provided that Mr. Griffin shall
not be permitted to sell analytical products that compete with the Company’s current products to
existing customers for a period of one year from the date hereof. Mr. Griffin represents and
warrants to AMS, Laserscope and the Company that he has complied and will comply with all of his
obligations under Section 5 (Inventions) and Section 6 (Company Property; Returning Company
Documents) of the Confidential Information and Assignment Agreement, dated April 30, 2006, between
the Company and Mr. Griffin, and, upon execution of this Termination Agreement, Mr. Griffin will
execute the Termination Certification attached to the Confidential Information and Assignment
Agreement and the Employment Release attached hereto as Exhibit C. Upon execution of this
Termination Agreement, the Company and Mr. Griffin shall enter into the Consulting Agreement
attached as Exhibit A and the Patent License Agreement attached as Exhibit B. The parties hereto
agree that in order to enable Mr. Griffin to pursue activities in the field of analytical chemistry
subsequent to the date hereof, Mr. Griffin’s obligations under such Confidential Information
Assignment Agreement shall not apply to the use and disclosure of information retained in the
unaided memory of Mr. Griffin that he has not deliberately memorized for the purpose of
subsequently using or disclosing (“Residual Information”); provided that the use and disclosure of
Residual Information by Mr. Griffin shall remain subject to Section 8 (Non-Competition) of the
Griffin Employment Agreement. In addition, the parties hereto acknowledge and agreed that Mr.
Griffin’s Relationship (as defined in the Confidential Information Assignment Agreement) is
terminated as of the date hereof and therefore his obligations with regards such matters as
assignment of inventions conceived subsequent to the date hereof shall be governed pursuant to the
terms of his Consulting Agreement.

     3. Termination of Barr Employment. The parties confirm that Mr. Barr’s employment
with the Company and the Barr Employment Agreement shall terminate effective as of the date hereof,
and neither the Company nor Mr. Barr shall have any obligations under the Barr Employment
Agreement, except that Barr’s obligations under Section 6 (Non-Solicitation) and Section 7
(Non-Competition) shall remain in full force and effect, provided Barr’s obligations under Section
7 (Non-Competition) shall not apply to Mr. Barr’s activities in the

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field of analytical chemistry. Mr. Barr acknowledges that he has been paid salary through
August 4, 2006 and that he is not entitled to any additional salary or other compensation. The
parties acknowledge that the field of analytical chemistry specifically excludes all interventional
medical applications. Section 6 (Non-Solicitation) of the Barr Employment Agreement is hereby
amended to the extent necessary to permit Mr. Barr to sell analytical chemistry products to the
Company’s customers, provided that Mr. Barr shall not be permitted to sell analytical products that
compete with the Company’s current products to existing customers for a period of one year from the
date hereof. Mr. Barr represents and warrants to AMS, Laserscope and the Company that he has
complied and will comply with all of his obligations under Section 5 (Inventions) and Section 6
(Company Property; Returning Company Documents) of the Confidential Information and Assignment
Agreement, dated April 30, 2006, between the Company and Mr. Barr, and, upon execution of this
Termination Agreement, Mr. Barr will execute the Termination Certification attached to the
Confidential Information and Assignment Agreement and the Employment Release attached hereto as
Exhibit D. The parties hereto agree that in order to enable Mr. Barr to pursue activities in the
field of analytical chemistry subsequent to the date hereof, Mr. Barr’s obligations under such
Confidential Information Assignment Agreement shall not apply to the use and disclosure of
(“Residual Information”); provided that the use and disclosure of Residual Information by Mr. Barr
shall remain subject to Section 7 (Non-Competition) of the Barr Employment Agreement.

     4. Termination Fee.

	 	(a)	 	On a date between January 8, 2007 and January 12, 2007 and provided that
neither Barr nor Griffin have rescinded the Employment Releases attached hereto as
Exhibits C and D, AMS will issue to: (i) Mr. Barr unlegended, freely tradeable,
registered shares of AMS common stock with an Initial Market Value (as defined below)
of Two Million Four Hundred Thirty-Three Thousand Three Hundred and Thirty-Three
Dollars ($2,433,333.00); and (ii) to Mr. Griffin registered shares of AMS common stock
with an Initial Market Value of Four Million Eight Hundred Sixty-Six Thousand Six
Hundred and Sixty-Six Dollars ($4,866,666). The issuance and sale of AMS common stock
will be registered under the Securities Act of 1933, as amended, pursuant to AMS’
registration statement on Form S-3, filed and effective on June 19, 2006 (File No.
333-135135) (the “Registration Statement”). The parties agree to treat the payment
provided for by this Section 4(a) for all tax purposes as an adjustment to the purchase
price for the Company stock under the Purchase Agreement, and not to take a position
that is inconsistent with such treatment unless otherwise required by a “determination”
within the meaning of the Internal Revenue Code of 1986 (or by a comparably final
proceeding for purposes of any non-federal tax).
	 
	 	(b)	 	The “Initial Market Value” per share of AMS common stock shall mean the closing
sale price per share of AMS common stock as reported on the Nasdaq Global Market on the
trading day immediately prior to the date on which AMS files a prospectus supplement
under the Registration Statement with the Securities and Exchange Commission (the
“Filing Date”). AMS agrees that in the event the gross proceeds per share
(less applicable brokerage sales commission fees, which fees AMS agrees to pay per
Section 4(d) below) received by Mr. Barr or Mr.

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	 	 	 	Griffin for sales of shares thereby in accordance with Section 4(d) from the date
such shares are delivered to the brokerage accounts of Mr. Griffin and Mr. Barr (the
“Delivery Date”) through the end of the 5th trading date thereafter are at a
price per share of less than the Initial Market Value, then AMS shall promptly pay
to Mr. Barr and Mr. Griffin, as applicable, a cash amount equal to the aggregate
amount by which the Initial Market Value exceeds such gross proceeds per share for
all such sales. Mr. Barr and Mr. Griffin each agree that in the event the gross
proceeds per share (less applicable sales commission fees, which fees AMS agree to
pay per Section 4(c) below) received by Mr. Barr or Mr. Griffin, as applicable, for
sales of shares thereby from the Delivery Date through the end of the 5th trading
date thereafter are at a price per share of greater than the Initial Market Value,
then Mr. Barr and Mr. Griffin, as applicable, shall each promptly pay to AMS a cash
amount equal to the aggregate amount by which such gross proceeds per share exceed
the Initial Market Value for all such sales.

     (c) Within 15 days hereof, AMS will pay Mr. Griffin $22,200.10, subject to applicable
withholding, for unused paid time off. Except as set forth in the foregoing sentence, Mr. Griffin
acknowledges and agrees that he is not entitled to any additional payment for unused paid time off,
vacation or the like. Mr. Barr acknowledges and agrees that he is not entitled to any additional
payment for unused paid time off, vacation or the like.

     (d) Mr. Barr and Mr. Griffin each agree to sell the shares issued to them pursuant to Section
4(a) hereof in a manner intended not to disrupt the market for shares of AMS common stock. In
furtherance of the foregoing, Mr. Barr and Mr. Griffin each agree (i) they shall not sell in any
one trading day greater than 30% of the total shares issued to them pursuant to Section 4(a) hereof
and (ii) they shall use the Minneapolis, Minnesota office of Piper Jaffray for their sale of such
shares of AMS common stock. AMS agrees to pay all brokerage commissions fees for sales by Mr. Barr
and Mr. Griffin of such AMS common stock; provided, however, that such sales are conducted through
Piper Jaffray in accordance with this Section 4(d).

     5. Reliance on Independent Legal Advice. Each of the parties represents and warrants
to each other, as of the date hereof:

	 	(a)	 	That it has received advice from its own, independent legal counsel prior to
its execution of this Termination Agreement;
	 
	 	(b)	 	That the legal nature and effect of this Termination Agreement has been
explained to it by its counsel;
	 
	 	(c)	 	That it fully understands the terms and provisions of this Termination
Agreement and the nature and effect hereof;
	 
	 	(d)	 	That it has not relied and is not relying upon any representation or statement
of any person not contained in this Termination Agreement or on the advice of any
counsel other than its own counsel;

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	 	(e)	 	That it has carefully read this Termination Agreement, knows the contents
hereof, and is executing the same freely and voluntarily; and
	 
	 	(f)	 	That it is aware that it or its attorneys may hereafter discover facts
different from or in addition to the facts that it now knows or believes to be true
with respect to the subject matter of this Termination Agreement or the other parties
hereto, but that it is its intention to fully and finally release each of its
respective releasees to the full extent of the releases contained in this Termination
Agreement, and to otherwise agree to the other terms and conditions of this Termination
Agreement.

     6. AMS Global Release of Claims. AMS, Laserscope and the Company, for themselves and
for any parent, subsidiary or affiliate corporation, partnership, limited liability company,
proprietorship, trust, or other form of business entity related directly or indirectly to the
Principals, and for each of their respective heirs, administrators, executors, beneficiaries,
legatees, devisees, trusts, trustees, insurers, attorneys, experts, consultants, partners, joint
venturers, members, officers, directors, shareholders, employees, contractors, agents,
representatives, predecessors, successors and assigns (collectively, the “AMS Releasors”),
hereby release, acquit, and forever discharge the Stockholders and the Company Principals and any
parent, subsidiary or affiliate corporation, partnership, limited liability company,
proprietorship, trust, or other form of business entity related directly or indirectly to
Stockholders or the Company Principals, and each of their respective heirs, administrators,
executors, beneficiaries, legatees, devisees, trusts, trustees, insurers, attorneys, experts,
consultants, partners, joint venturers, members, officers, directors, shareholders, employees,
contractors, agents, representatives, predecessors, successors and assigns (collectively, the
“Stockholder/Principal Releasees”) of and from any and all claims, actions, causes of
action, judgments, awards, costs, expenses, attorneys’ fees, debts, obligations, promises,
representations, warranties, demands, acts, omissions, rights and liabilities, of any kind and
nature whatsoever (“Claims”), including but not limited to those at law, in equity, in
tort, in contract, whether or not asserted to date, and whether known or unknown, suspected or
unsuspected, including, but not limited to, Claims arising from or in connection with the Purchase
Agreement (the matters referred to above being hereinafter referred to as the “AMS Released
Claims”); provided, however, that nothing in this Section 6 shall release the
Stockholder/Principal Releasees from any of their obligations under this Termination Agreement.

     7. Stockholder/Principal Global Release of Claims. The Stockholders and the Company
Principals, for themselves and for any parent, subsidiary or affiliate corporation, partnership,
limited liability company, proprietorship, trust, or other form of business entity related directly
or indirectly to the Principals, and for each of their respective heirs, administrators, executors,
beneficiaries, legatees, devisees, trusts, trustees, insurers, attorneys, experts, consultants,
partners, joint venturers, members, officers, directors, shareholders, employees, contractors,
agents, representatives, predecessors, successors and assigns (collectively, the
“Stockholder/Principal Releasors”), hereby release, acquit, and forever discharge AMS,
Laserscope and the Company, and any parent, subsidiary or affiliate corporation, partnership,
limited liability company, proprietorship, trust, or other form of business entity related directly
or indirectly to any of the foregoing, and each of their respective heirs, administrators,
executors, beneficiaries, legatees, devisees, trusts, trustees, insurers, attorneys, experts,
consultants, partners, joint venturers, members, officers, directors,

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shareholders, employees, contractors, agents, representatives, predecessors, successors and
assigns (collectively the “AMS Releasees”) of and from any and all (“Claims”),
including but not limited to those at law, in equity, in tort, in contract, whether or not asserted
to date, and whether known or unknown, suspected or unsuspected, including, but not limited to,
Claims arising from or in connection with the Purchase Agreement (the matters referred to above
being hereinafter referred to as the “Stockholder/Principals Released Claims”) and claims
arising from or related to their employment with the Company, as more specifically provided in the
Employment Releases attached hereto as Exhibits C and D; provided, however, that nothing in this
Section 7 shall release the AMS Releasees from any of its obligations under this Termination
Agreement, the Patent License Agreement, the Consulting Agreement, and the Lease Agreement between
InnovaQuartz Incorporated and Barr Development Group, LLC. (collectively, the “Surviving
Agreements”). The Company Principals each understand and agree that their execution and
non-revocation of the Employment Releases attached hereto as Exhibits C and D are material terms
and conditions of this Termination Agreement.

     8. Waiver. The parties hereby state that they intend that the releases contained
herein be effective as a bar to each and every Claim hereinabove released as permitted by law. The
parties hereby expressly waive and relinquish all rights and benefits, if any, arising under the
provisions of Section 1542 of the Civil Code of the State of California which provides:

“Section 1542. [Certain Claims Not Affected By General Release.] A
general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.”

     9. Covenant Not to Sue by AMS Releasors. Except for the enforcement of this
Termination Agreement or any rights preserved under this Termination Agreement, the AMS Releasors
hereby covenant that they will not, based on any AMS Released Claim, sue or bring any claim or
action against any Stockholder/Principals Releasee. This Covenant Not to Sue shall be a complete
defense to any such claim or suit by any AMS Releasor.

     10. Covenant Not to Sue by Stockholder/Principals Releasors. Except for the
enforcement of this Termination Agreement and the other Surviving Agreements or any rights
preserved under this Termination Agreement, the other Surviving Agreements or the Employment
Releases attached as Exhibits C and D, the Stockholder/Principal Releasors hereby covenant that
they will not, based on any Stockholder/Principal Released Claim, sue or bring any claim or action
against any AMS Releasee. This Covenant Not to Sue shall be a complete defense to any such claim or
suit by any Stockholder/Principal Releasor.

     11. Governing Law. This Termination Agreement shall be governed by the laws of the
State of California (without regard to conflict of law rules that otherwise might apply).

     12. No Admission of Fault. This Termination Agreement is a compromise settlement of
disputed claims and may not be deemed or used as an admission of liability or fault on the part of
any party hereto.

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     13. Joint Drafting. This Termination Agreement shall be construed as jointly drafted
by the parties, and the rule construing ambiguities against the drafter shall not apply.

     14. Integration Clause. This Termination Agreement, the Consulting Agreement and
Patent License Agreement attached as exhibits hereto and any further documents executed to
implement the transactions contemplated hereby, shall constitute the full and entire understanding
and agreement between the parties with respect to the subject matter hereof and shall supersede all
prior conversations, negotiations, understandings, and agreements between the parties with respect
to the subject matter hereof.

     15. Each party to Bear Own Costs and Attorneys’ Fees. Each party shall bear its own
costs, expenses, and attorneys’ fees in connection with the negotiation, preparation, execution and
delivery of this Termination Agreement and the transactions contemplated herein.

     16. Severability. The parties hereto agree that if any provision of this Purchase
Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, such
provision shall be valid and enforceable to the maximum degree permitted and the remaining
provisions shall nevertheless continue in full force without being impaired or invalidated in any
way.

     17. Survival. The covenants, agreements, representations and warranties contained in
this Termination Agreement shall be continuing and shall survive the execution and delivery of this
Termination Agreement.

     18. No Assignment of Claims. Each party represents and warrants to the other that it
has not hypothecated or otherwise encumbered or assigned any claim or cause of action arising out
of, related to or in connection with the claims alleged or referred to in this Termination
Agreement.

     19. Counterparts. This Termination Agreement may be executed in counterparts, each of
which shall be deemed a duplicate original, but all of which together shall constitute one and the
same instrument. Facsimile execution and delivery of this Termination Agreement shall be legal,
valid and binding execution and delivery for all purposes.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to be duly executed
on their behalf as of the date first written above.

	 	 	 	 	 
	 	AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

 	 
	 	By  	 	 
	 	 	Its: 	 
	 	 	 	 
	 
	 
	 	LASERSCOPE

 	 
	 	By  	 	 
	 	 	Its: 	 
	 	 	 	 
	 
	 
	 	INNOVAQUARTZ INCORPORATED

 	 
	 	By:  	 	 
	 	 	Its: 	 
	 	 	 	 
	 
	 
	 	THE GRIFFIN FAMILY REVOCABLE TRUST

 	 
	 	By:  	 	 
	 	 	Name:  Stephen Griffin	 	 
	 	 	Title:  Trustee	 	 
	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  Teresanne Griffin	 	 
	 	 	Title:  Trustee	 	 
	 
	 
	 	 	 
	 	  	 	 
	 	 	Stephen Griffin 	 
	 	 	 	 
	 
	 
	 	 	 
	 	  	 	 
	 	 	Brian Barr 	 
	 	 	 	 
	 

8exv10w61

 

Exhibit 10.61

LIBBEY INC.

AMENDED AND RESTATED

2006 DEFERRED COMPENSATION PLAN

FOR OUTSIDE DIRECTORS

     LIBBEY INC., a corporation organized under the laws of the State of Delaware (the
“Corporation”), originally adopted the 2006 Deferred Compensation Plan for Outside Directors
effective January 1, 2006 and has adopted this Amendment and Restatement of the Plan effective
October 17, 2006. The purpose of this Plan is to permit the Outside Directors of the Corporation
to defer receipt of all or part of the cash and equity compensation they are entitled to receive
for service on the Corporation’s Board of Directors 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 — Cash Compensation

     “Cash 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.

Section 1.3 — Chief Executive Officer

     “Chief Executive Officer” shall mean the Chief Executive Officer of the Corporation.

Section 1.4 — Chief Financial Officer

     “Chief Financial Officer” shall mean the Chief Financial Officer of the Corporation.

Section 1.5 — Code

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

 

 

Section 1.6 — Common Stock

     “Common Stock” shall mean the Corporation’s Common Stock, $.01 par value.

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.

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Section 1.16 — Employee

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

Section 1.17 — Equity Plan

     “Equity Plan” shall mean the Libbey Inc. 2006 Omnibus Incentive Plan and any successor plan
thereto.

Section 1.18 — Exchange Act

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

Section 1.19 — 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 1.20 — General Counsel

     “General Counsel” shall mean the General Counsel of the Corporation.

Section 1.21 — 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 1.22 — 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.

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Section 1.23 — 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 1.24 — 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.

Section 1.25 — 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 1.26 — 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 1.27 — 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 1.28 — 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 1.29 — 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.

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Section 1.30 — Outside Director

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

Section 1.31 — Plan

     “Plan” shall mean this 2006 Deferred Compensation Plan for Outside Directors.

Section 1.32 — Restricted Stock Units

     “Restricted Stock Units” or “RSUs” shall mean the award that is granted to a Participant
pursuant to the Equity Plan which grants the Director the right to shares of Common Stock at a
future date.

Section 1.33 — Rule 16b-3

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

Section 1.34 — Secretary

     “Secretary” shall mean the Secretary of the Corporation.

Section 1.35 — Separation from Service

     “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 1.36 — 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 1.37 — Stock Compensation

     “Stock Compensation” shall mean remuneration payable by the Corporation to an Outside
Director for services rendered as a Director in the form of Common Stock, Restricted Stock Units
or dividend equivalents after October 17, 2006.

Section 1.38 — Subaccount

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

5

 

Section 1.38
— 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 Cash Compensation and the Stock 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 Cash Compensation and/or Stock Compensation with respect to which
the Participant is electing to defer payment pursuant to the Deferral Election;

     (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

6

 

     (v) The applicable Subaccount to which the Deferred Amount consisting of Cash
Compensation 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 Cash or Stock 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 Cash or Stock Compensation payable for service rendered
in the succeeding calendar year shall be deemed renewed automatically with respect to Cash or
Stock 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
Cash or Stock 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 Cash or Stock 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:

     (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

7

 

     (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 Cash 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.

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.
Notwithstanding anything in this Plan to the contrary, all Stock Compensation subject to a
Deferral Election shall be invested in the Investment Unit Account.

8

 

     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.
Notwithstanding the foregoing, deferrals of Stock Compensation shall only be credited to, and
deemed invested in, the Investment Unit Account.

     (b) A Participant may elect to transfer portions of his Investment Unit Account which
represents the deferral of Cash Compensation or dividend equivalents under Section 4.3 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.

     (c) A Participant may not transfer any Stock Compensation deferred into the Investment Unit
Account and such deferred Stock Compensation shall, at all times, remain in the Investment Unit
Account.

9

 

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 of Cash Compensation
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
such 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) A Participant’s Investment Unit Account shall be credited with the number of Libbey Stock
Units equal to the number of shares of Common Stock subject to the Deferred Amount of Stock
Compensation deferred as of any Deferral Date.

     (c) 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.

10

 

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, 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
(regardless of whether the form of payment is in cash or, in the case of RSUs, in stock) 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) Distributions of Cash Compensation and dividend equivalents credited to the Participant’s
Deferred Compensation Account Balance shall be payable in cash. Distributions of Stock
Compensation from the Investment Unit Account shall be settled in the form of Common Stock payable
from the Equity Plan. Distributions of Common Stock shall equal the number of Libbey Stock Units
held in the Participant’s Investment Unit Account. For purposes of determining the amount of any
cash 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

11

 

(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 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.

12

 

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 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.

13

 

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 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

14

 

     (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 Amended and Restated 2006 Deferred Compensation Plan for
Outside Directors was duly adopted by the Board of Directors of Libbey Inc. on October 17, 2006
and shall be effective as of October 17, 2006.

     Executed on this                      day of                                         , 2006.

	 	 	 
	 

	 	 
	 

	 	 
	 

	 	Susan Allene Kovach
	 

	 	Secretary

15

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