<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
LIBBEY INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
LIBBEY INC.
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
- --------------------------------------------------------------------------------
MEETING DATE
MAY 1, 1997
YOUR VOTE IS IMPORTANT!
Please mark, date and sign the enclosed proxy card and promptly
return it to the Company in the enclosed envelope.
[Libbey Logo]
<PAGE> 3
LIBBEY INC.
P.O. BOX 10060
300 MADISON AVENUE
TOLEDO, OHIO 43699-0060
-------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------------------------------------------------------------------
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Libbey
stockholders which will be held Thursday, May 1, 1997, at 2:00 p.m. in the
Belvedere Room at The Toledo Club, 235 14th Street (Madison Avenue and 14th
Street), Toledo, Ohio.
At the meeting, stockholders will elect two directors for a term of three
years and will transact such other business as may properly come before the
meeting.
The close of business on March 14, 1997 is the record date for voting at
the meeting. Only stockholders owning the Company's common stock, par value $.01
per share, on the record date are entitled to notice of, and to vote at, the
Annual Meeting.
Please sign, date and return your Proxy in the enclosed envelope as soon as
possible so that your shares can be voted at the meeting. If the shares are held
in more than one name, all holders of record should sign.
Management sincerely appreciates your support.
By Order of the Board of Directors,
John F. Meier
Chairman of the Board and Chief
Executive Officer
Arthur H. Smith
Secretary
March 28, 1997
Toledo, Ohio
<PAGE> 4
LIBBEY INC.
PROXY STATEMENT
This statement is furnished in connection with the solicitation on behalf
of the Board of Directors of Libbey Inc., a Delaware corporation ("Libbey" or
"Company"), of proxies for use at the Annual Meeting of Stockholders of the
Company ("Annual Meeting"), to be held in the Belvedere Room at The Toledo Club,
235 14th Street (Madison Avenue and 14th Street), Toledo, Ohio at 2:00 p.m., and
at any and all adjournments thereof. It is anticipated that the mailing to
stockholders of this Proxy Statement and the enclosed proxy will commence on or
about March 28, 1997. A complete list of stockholders entitled to vote at the
Annual Meeting will be maintained at the Company's principal executive offices
at 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio 43699-0060 for a period of
at least ten days prior to the Annual Meeting.
Only stockholders of record at the close of business on March 14, 1997 will
be entitled to vote at the meeting. At such date, there were 15,082,931 shares
of the Company's common stock outstanding. Each share of common stock is
entitled to one vote. The holders of a majority of the total shares issued and
outstanding, whether present in person or represented by proxy, will constitute
a quorum for the transaction of business at the meeting. Votes cast in person or
by proxy will be tabulated by the inspectors of election appointed for the
meeting and will determine whether or not a quorum is present. Abstentions will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the matter to which the abstention applies. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter. The common stock outstanding on the record
date held by the trustee under the Company's Stock Purchase and Supplemental
Retirement Plan, Stock Purchase and Retirement Savings Plan and Long-Term
Savings Plan and Trust will be voted by the trustee in accordance with written
instructions from participants in such plans or, as to those shares for which no
instructions are received, in a uniform manner as a single block in accordance
with the instructions received with respect to the majority of shares of each
respective plan for which instructions were received.
1
<PAGE> 5
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and By-Laws provide that the
Board of Directors is divided into three classes. Each year the stockholders are
asked to elect the members of a class for a term of three years.
On March 3, 1997, the Board of Directors acknowledged the retirement of
Board member Joseph H. Lemieux. The Company wishes to acknowledge the generous
service and valuable counsel of Mr. Lemieux who has served on the Board of
Directors since 1987.
Currently, the term of office for members of Class I of the Board of
Directors will expire on the date of the Annual Meeting in 1997. The members of
Class I are John F. Meier and Gary L. Moreau. The Board of Directors has fixed
the number of directors to be elected at the 1997 Annual Meeting at two and has
nominated Mr. Meier and Mr. Moreau for election to Class I. Those persons who
are elected directors at the 1997 Annual Meeting will hold office until their
terms expire on the date of the 2000 Annual Meeting or until the election and
qualification of their successors. The terms of office of the members of Class
II and Class III of the Board of Directors will expire, respectively, on the
date of the Annual Meeting in 1998 and 1999.
So far as the Board has been advised, only the two persons named above as
nominees will be nominated for election as directors at the Annual Meeting. It
is intended that the shares represented by proxies in the accompanying form will
be voted for the election of these two nominees unless authority to so vote is
withheld. The nominees have consented to being named herein and to serve if
elected. If either of them should become unavailable prior to the Annual
Meeting, the proxy will be voted for a substitute nominee or nominees designated
by the Board of Directors or the number of directors may be reduced accordingly.
The Board, however, expects each of the nominees to be available. Directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. A stockholder entitled to vote for the election of directors may
withhold authority to vote for all or certain nominees.
The following information, which has been provided by the directors, sets
forth for each of the nominees for election to the Board of Directors and for
each director whose term continues, his name, age, principal occupation and
employment during at least the past five years, the name of the corporation or
other organization, if any, in which such occupation and employment is carried
on and the period during which such person has served as a director of the
Company.
1997 NOMINEES (CLASS I)
JOHN F. MEIER, age 49, has been a director of the Company since 1987 and
Chairman of the Board and Chief Executive Officer of the Company since June
1993. Mr. Meier was Executive Vice President and General Manager of the Company
from December 1990 to June 1993. From May 1987 to December 1990, Mr. Meier was
Vice President, Director of Sales and Marketing of the Company.
GARY L. MOREAU, age 42, has been a director of the Company since September
1996. Mr. Moreau is President and Chief Executive Officer of Lionel LLC, a
position he has held since January 1996. From 1991 until that time, Mr. Moreau
served as President and Chief Operating Officer of Oneida Ltd. Mr. Moreau is a
member of the Audit and Compensation Committees of the Board of Directors. Mr.
Moreau is also a director of GSW, Inc.
The Board of Directors unanimously recommends a vote FOR both nominees.
CONTINUING DIRECTORS:
WILLIAM A. FOLEY, age 49, has been a director of the Company since
September 1994. Mr. Foley has been Chairman of the Board, President and Chief
Executive Officer of Lesco, Inc. since October 1994. From July 1993 to October
1994, he was President and Chief Executive Officer of Lesco, Inc. From 1990 to
July 1993, he was President and Chief Executive Officer of Imperial Wall
Coverings. He is a member of Class III of the Board of Directors and a member of
the Audit and Compensation Committees. Mr. Foley is also a director of Alltrista
Corporation.
2
<PAGE> 6
PETER C. MCC. HOWELL, age 47, has been a director of the Company since
October 1993. Mr. Howell has been Chairman and Chief Executive Officer of Health
o meter, Inc. since August 1994. From 1989 to August 1994, Mr. Howell was
President, Chief Executive Officer and a director of Mr. Coffee, inc. He is a
member of Class II of the Board of Directors and a member of the Audit and
Compensation Committees.
RICHARD I. REYNOLDS, age 50, has been a director of the Company since June
1993. Mr. Reynolds has been the Executive Vice President and Chief Operating
Officer of the Company since November 1995. From June 1993 to November 1995, Mr.
Reynolds was Vice President and Chief Financial Officer of the Company. From
January 1989 until June 1993, Mr. Reynolds was Vice President, Director of
Finance and Administration of the Company. He is a member of Class II of the
Board of Directors.
TERRY L. WILKISON, age 55, has been a director of the Company since 1987.
Mr. Wilkison has been Executive Vice President, of Owens-Illinois, Inc. with
responsibilities for its West coast operations since November 1996. From May
1993 to November 1996 he was Executive Vice President, Domestic Packaging
Operations of Owens-Illinois. He was Vice President and General Manager of
Plastics, Closures and Prescription Products of Owens-Illinois from 1992 to May
1993 and Vice President and General Manager of the Specialty Glass Operations of
Owens-Illinois from 1987 to 1992. He is a member of the Class III of the Board
of Directors and a member of the Audit and Compensation Committees.
COMPENSATION OF DIRECTORS:
Non-management directors receive a retainer for service on the Board, a fee
for attendance at Board meetings of $750 per meeting and a fee for attendance at
committee meetings of $500 per meeting. The retainer for service on the Board
was at the annual rate of $18,000 for the period January 1, 1996 through July
31, 1996 and at the annual rate of $21,000 for the period August 1, 1996 through
December 31, 1996. The retainer and all fees are payable in cash quarterly or
subject to deferral. In 1996, each of the directors except Mr. Moreau elected to
defer all or a portion of the retainer and fees into an account, the value of
which is based upon the value of the Company's common stock plus dividends.
Management directors do not receive additional compensation for service on the
Board of Directors.
BOARD MEETINGS AND COMMITTEES OF THE BOARD:
The Board of Directors met six times during 1996. During 1996, each
incumbent member of the Board of Directors, other than Mr. Foley (who attended
all meetings except the Board meeting and two committee meetings held on
November 21), attended 75% or more of the aggregate number of meetings of the
Board and of committees of the Board of which he was a member.
The Board of Directors currently has an Audit Committee and a Compensation
Committee. The Company does not have a nominating committee or any regularly
constituted committee performing the functions of such a committee. The Audit
Committee makes recommendations to the Board of Directors as to the engagement
or discharge of the independent auditors; reviews the plan and results of the
auditing engagement with the independent auditors; reviews the scope and results
of the Company's internal auditing procedures; reviews the adequacy of the
Company's system of internal accounting controls; and directs and supervises
investigations into matters within the scope of its duties. The Audit Committee
met twice during 1996. The Audit Committee is comprised of Messrs. Howell,
Foley, Moreau and Wilkison.
The Compensation Committee of the Board of Directors is comprised of
directors who are not officers or employees of the Company and are not eligible
to participate in any of the Company's executive compensation programs. The
Committee has overall responsibility for administering the executive
compensation program of the Company. The Committee regularly evaluates the
executive compensation program to ensure its appropriateness in the context of
the Company's business and its competitiveness with the compensation practices
of other companies. From time to time, the
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<PAGE> 7
Committee seeks the advice of independent experts in evaluating plan design,
compensation levels and administration. Each year the Compensation Committee
reviews and approves salaries for the executive officers of the Company. The
Committee is also responsible for administering the Stock Option Plan for Key
Employees and certain other incentive compensation plans covering executive
officers. The Committee met twice during 1996. The Committee is comprised of
Messrs. Wilkison, Foley, Howell and Moreau.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation paid
by the Company for the last three completed fiscal years to the Company's Chief
Executive Officer ("CEO") and the four most highly compensated executive
officers other than the CEO who were serving as such at the end of 1996 (the
"named executive officers").
SUMMARY COMPENSATION TABLE:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------ ------------------------- -------
OTHER
ANNUAL RESTRICTED SHARES ALL OTHER
COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME & PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) SATION(3) AWARDS OPTIONS PAYOUTS SATION(4)
- ------------------------- ---- -------- -------- ------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John F. Meier 1996 $353,333 $139,920 0 0 25,000 0 $ 9,925
Chairman of the Board 1995 $312,917 $179,100 0 0 22,500 0 $ 9,388
and Chief Executive 1994 $277,500 $225,000 $22,893 0 5,000 0 $ 8,325
Officer
Richard I. Reynolds 1996 $212,708 $ 70,000 $ 241 0 16,000 0 $ 6,381
Executive Vice 1995 $179,958 $ 80,000 $ 2,719 0 14,000 0 $ 5,399
President and 1994 $159,583 $100,000 $16,076 0 4,000 0 $ 4,787
Chief Operating Officer
Robert R. Falter 1996 $170,100 $ 44,906 $ 1,673 0 6,200 0 $ 5,103
Vice President, 1995 $160,417 $ 62,242 $ 2,842 0 6,000 0 $ 4,813
Manufacturing and 1994 $150,625 $ 80,000 $16,276 0 2,500 0 $ 4,519
Engineering
L. Frederick Ashton 1996 $156,387 $ 41,286 $ 187 0 6,500 0 $ 4,692
Vice President, General 1995 $148,958 $ 57,796 $ 2,759 0 6,000 0 $ 4,469
Sales Manager 1994 $138,750 $ 72,000 $14,556 0 2,500 0 $ 4,163
Arthur H. Smith 1996 $152,628 $ 39,050 $ 33 0 8,500 0 $ 4,579
Vice President, 1995 $143,000 $ 50,000 0 0 7,500 0 $ 4,290
General Counsel & 1994 $134,667 $ 65,000 $14,449 0 2,000 0 $ 4,040
Secretary
</TABLE>
- ---------------
1 Includes amounts deferred at the election of the named executive officer
pursuant to the salary reduction provisions of benefit plans.
2 The amounts disclosed in this column represent awards under the Libbey Inc.
Senior Management Incentive Plan.
3 The amounts disclosed in this column for 1995 and 1996 represent amounts
reimbursed for the payment of taxes payable with respect to perquisites. The
amounts disclosed in this column for 1994 represent amounts reimbursed for the
payment of taxes payable with respect to perquisites and payment in lieu of
implementation of a long term incentive compensation plan. In each year, the
aggregate incremental cost of perquisites and other personal benefits for any
executive officer did not exceed the lesser of $50,000 or 10% of base salary
plus bonus.
4 The amounts disclosed in this column represent matching cash contributions to
the Libbey Inc. Stock Purchase and Retirement Savings Plan, a defined
contribution plan, and the Libbey Inc. Executive Savings Plan, a non-qualified
plan designed to provide similar benefits to the extent such benefits cannot,
under limitations of the Internal Revenue Code, be provided by the Stock
Purchase and Retirement Savings Plan.
4
<PAGE> 8
OPTION GRANTS IN 1996:
The following table sets forth information on stock option grants to the
named executive officers during 1996 pursuant to the Company's Non-Qualified
Stock Option Plan for Key Employees. The Company does not maintain a stock
appreciation rights plan covering executive officers.
<TABLE>
<CAPTION> GRANT DATE
INDIVIDUAL GRANTS VALUE
- ------------------------------------------------------------------------------------------------ ----------
NUMBER OF
SHARES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO GRANT DATE
GRANTED EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME (#) FISCAL YEAR PRICE DATE VALUE(1)
- ----------------------------------------- ---------- ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John F. Meier............................ 25,000 17.72 $ 26.875 12/03/06 $251,000
Richard I. Reynolds...................... 16,000 11.34 $ 26.875 12/03/06 $160,640
Robert R. Falter......................... 6,200 4.40 $ 26.875 12/03/06 $ 62,248
L. Frederick Ashton...................... 6,500 4.61 $ 26.875 12/03/06 $ 65,260
Arthur H. Smith.......................... 8,500 6.03 $ 26.875 12/03/06 $ 85,340
</TABLE>
- ---------------
1 Options are all granted at the fair market value at the date of the grant and
become exercisable to the extent of 40% of the grant on the first anniversary
of the grant and thereafter an additional 20% of the grant becomes exercisable
on each of the second, third and fourth anniversaries of the grant.
Present value is calculated using the Black-Scholes option pricing model.
Assumptions used in calculating the reported values include (a) an expected
volatility based on the monthly change for the thirty-nine month period June
18, 1993 through August 30, 1996, (b) a weighted average risk-free rate of
return of 5.99%, (c) dividend yield of 1.12%, and (d) a time of exercise of
seven years. No adjustments were made for non-transferability or forfeiture.
AGGREGATED OPTION EXERCISES AND YEAR-END VALUES:
The following table sets forth the aggregate dollar value of unexercised
options held at the end of 1996 by the named executive officers. The value is
based upon a share price of $27.875, the closing price on the New York Stock
Exchange on December 31, 1996. None of the named executive officers exercised
any options in 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING OPTIONS IN-THE-MONEY OPTIONS
SHARES ACQUIRED VALUE AT FY-END AT FY-END
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------- ---------------- --------- --------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
John F. Meier............... 0 0 122,122 68,031 $1,716,440 $523,337
Richard I. Reynolds......... 0 0 102,990 49,748 $1,466,538 $428,602
Robert R. Falter............ 0 0 96,371 33,918 $1,404,456 $379,130
L. Frederick Ashton......... 0 0 64,278 26,195 $ 927,073 $260,088
Arthur H. Smith............. 0 0 98,939 37,485 $1,437,668 $391,952
</TABLE>
RETIREMENT PLANS:
The Company maintains a qualified retirement plan, the Salary Retirement
Plan ("Salary Plan"), for its salaried employees, including executive officers,
and a Supplemental Retirement Plan ("SERP"), which is a non-qualified plan
designed to provide substantially identical retirement benefits to the extent
that such benefits cannot, under the limitations of the Internal Revenue Code,
be provided by the Salary Plan.
The following table illustrates the estimated annual retirement benefits
which would be provided under the Salary Plan and the SERP for all executive
officers in various average earnings classifications upon normal retirement at
age 65:
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<PAGE> 9
<TABLE>
<CAPTION>
HIGHEST
CONSECUTIVE
THREE-YEAR YEARS OF CREDITED SERVICE
AVERAGE -----------------------------------------------------------------------------------------------------------
EARNINGS 15 20 25 30 35 40 45
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
100,000 $ 19,093 $ 25,458 $ 31,822 $ 38,187 $ 44,551 $ 47,051 $ 49,551
125,000 $ 24,298 $ 32,398 $ 40,497 $ 48,597 $ 56,696 $ 59,821 $ 62,946
150,000 $ 29,503 $ 39,338 $ 49,172 $ 59,007 $ 68,841 $ 72,591 $ 76,341
175,000 $ 34,708 $ 46,278 $ 57,847 $ 69,417 $ 80,986 $ 85,361 $ 89,736
200,000 $ 39,913 $ 53,218 $ 66,522 $ 79,827 $ 93,131 $ 98,131 $ 103,131
225,000 $ 45,118 $ 60,158 $ 75,197 $ 90,237 $ 105,276 $ 110,901 $ 116,526
250,000 $ 50,323 $ 67,098 $ 83,872 $ 100,647 $ 117,421 $ 123,671 $ 129,921
300,000 $ 60,876 $ 81,168 $ 101,460 $ 121,752 $ 142,044 $ 149,544 $ 157,044
400,000 $ 82,305 $ 109,739 $ 137,174 $ 164,609 $ 192,044 $ 202,044 $ 212,044
450,000 $ 93,019 $ 124,025 $ 155,031 $ 186,038 $ 217,044 $ 228,294 $ 239,544
500,000 $ 103,733 $ 138,311 $ 172,889 $ 207,466 $ 242,044 $ 254,544 $ 267,044
600,000 $ 125,162 $ 166,882 $ 208,603 $ 250,323 $ 292,044 $ 307,044 $ 322,044
700,000 $ 146,590 $ 195,454 $ 244,317 $ 293,181 $ 342,044 $ 359,544 $ 377,044
</TABLE>
At December 31, 1996, Messrs. Meier, Reynolds, Falter, Ashton and Smith had
total Credited Service under the Salary Plan and the SERP, respectively, of 26
years, 26 years, 37 years, 26 years and 28 years.
The above pension table sets forth benefits calculated on a straight-life
annuity basis and reflects the greater of the regular benefit or the
"grandfathered" benefit available under the formula in effect prior to January
1, 1989. The regular benefit does not contain an offset for social security or
other amounts, whereas the "grandfathered" benefit does provide for a partial
offset for social security benefits.
Annual covered earnings include base salary and amounts earned under the
Senior Management Incentive Plan and the covered compensation under the Plans is
the highest consecutive three year average of such amounts. The retirement
benefit may be adjusted if the employee has more or less than 35 years of
credited service or retires prior to age 65. The Salary Plan and the SERP
provide for additional benefit accruals beyond age 65 and for annual annuity
benefits as well as an optional lump sum form of benefit. The lump sum option is
designed to be equivalent in value to that of the lifetime annual annuity
benefit.
EXECUTIVE EMPLOYMENT AGREEMENTS:
Libbey has entered into employment agreements with each of the Company's
executive officers, including the named executive officers, that entitle them to
receive their base salaries and to participate in designated benefit plans of
the Company. Each employment agreement also provides that the officer's
employment is not for any specified term and may be terminated at any time. In
addition, each agreement provides that, in the event of the officer's
termination other than for "cause" (as defined in the agreements), payment of
base salary will continue for two years in Mr. Meier's case and one year in the
case of the other executive officers. The employment agreements also provide
that the officer's base salary may be adjusted periodically and that benefit
plans in which the officer is entitled to participate may be adjusted or
terminated by the Company at any time, but that no vested or accrued benefit may
be adversely affected.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS:
The Compensation Committee is comprised of Messrs. Foley, Howell, Moreau,
Wilkison and prior to his retirement from the Board, Mr. Lemieux. Mr. Lemieux is
Chairman of the Board and Chief Executive Officer of Owens-Illinois and Mr.
Wilkison is an Executive Vice President of Owens-Illinois. Prior to completion
of the Company's initial public offering, both Mr. Lemieux and Mr. Wilkison were
6
<PAGE> 10
directors of the Company and Mr. Wilkison held certain officer positions with
the Company and certain of its subsidiaries. In connection with the Company's
initial public offering and separation from Owens-Illinois, the Company entered
into a Management Services Agreement with Owens-Illinois for the provision of
services to the Company by a subsidiary of Owens-Illinois for a monthly fee and
certain other charges, including computer and other services. The current term
of this Agreement continues until March 30, 1997 with respect to computer
services and continues thereafter subject to notice by either party. The current
term of this Agreement with respect to services other than computer services
continues until December 31, 1997 and will automatically renew for additional
one year terms subject to termination by either party at the end of each year.
The Agreement, with respect to any or all services, is terminable by the Company
subject to thirty days notice of termination and by Owens-Illinois subject to
thirty days notice of termination if it ceases to provide such services to its
affiliated companies. During 1996, the Company paid approximately $1,987,000 to
Owens-Illinois under this Agreement.
In connection with the Company's initial public offering, the Company and
Owens-Illinois entered into certain other agreements with respect to various
matters. These agreements included: (i) a tax allocation and indemnification
agreement pursuant to which (a) Owens-Illinois will, subject to certain
limitations, indemnify the Company and its affiliates from liability for any and
all income taxes of the Owens-Illinois affiliated group or any member thereof,
including the Company and its affiliates, for taxable periods ending on or
before June 24, 1993, the completion of the Company's initial public offering;
(b) the Company and its affiliates will indemnify the Owens-Illinois affiliated
group from liability for any and all income taxes of the Company and its
affiliates for taxable periods after June 24, 1993; and (c) the Company and its
affiliates will pay Owens-Illinois for the benefit derived by the Company or any
affiliate from the use of certain Owens-Illinois tax benefits; (ii) a pension
and savings plan agreement pursuant to which (a) the Company adopted pension and
savings plans ("Libbey Plans") for its employees and former employees to provide
benefits accrued as of June 24, 1993 under the existing pension and savings
plans of Owens-Illinois in which such employees and former employees
participated ("Owens Plans"); (b) Owens-Illinois caused the Owens Plans, in the
case of the pension plans, to transfer assets to the Libbey Plans in excess of
that required to satisfy the plan asset and liability transfer requirements
under Section 414(I) of the Internal Revenue Code of 1986, as amended, or in the
case of the savings plans, to transfer the accounts of the employees and former
employees and assets equal to the balance thereof; and (c) Libbey caused the
Libbey Plans to accept and assume from the Owens Plans, and be liable for, all
liabilities and obligations attributed to the Libbey employees and former
employees and to indemnify and hold Owens-Illinois and the Owens Plans harmless
from and against all claims made by any current or former Libbey employee for
benefits accrued under the Owens Plans; and (iii) a cross-indemnity agreement
pursuant to which (a) each of Owens-Illinois and the Company remain liable for,
and indemnify and hold harmless, the other and its subsidiaries for liabilities
arising out of, relating to, based upon or incurred in connection with their own
businesses and operations, except that Owens-Illinois agreed to indemnify the
Company and its subsidiaries to the extent that their liabilities, if any, in
connection with their disposal of waste at waste disposal sites in which the
Company, directly or through Owens-Illinois, is or may be a potentially
responsible party and which was the subject of pending proceedings as of June
24, 1993, exceed $3,000,000 and except that Owens-Illinois assumed all liability
for post-retirement health and life insurance benefits due to former employees
of Libbey who retired prior to June 24, 1993.
In addition, through a subsidiary of the Company, a supplier-customer
relationship exists with a subsidiary of Owens-Illinois whereby the Company
sells products subject to receipt of purchase orders acceptable to the Company.
COMPENSATION COMMITTEE REPORT:
Compensation Policies Applicable to Executive Officers. The Company's
overall compensation program for salaried employees has been established and is
administered to ensure that employee
7
<PAGE> 11
compensation motivates superior job performance and the achievement of business
objectives. With respect to executive officer compensation, the policies
followed in designing and administering this component of the overall program
are based upon the main objective of increasing stockholder value through
increasing operating income and return on invested capital. The Compensation
Committee believes that this can best be accomplished by an executive
compensation program which (1) attracts and retains highly qualified
individuals; (2) includes major components directly linked to increases in
recognized measures of stockholder value; and (3) rewards superior performance
as measured by financial and non-financial factors. Compensation for executive
officers is currently deductible for federal income tax purposes and the
Committee intends to structure the Company's compensation and benefit plans to
meet the currently proposed requirements for continued deduction.
Executive officer compensation consists of annual base salary and annual
incentive awards. Annual base salaries plus target annual bonus awards are set
at levels which are intended to be competitive within the industry and with
companies of comparable size. In 1996, Towers Perrin, a nationally recognized
compensation and employee benefits consulting firm, was retained to assist the
Company in assessing the competitiveness of base salary and target total cash
compensation. In this assignment Towers Perrin reviewed the Company's executive
compensation program. In conducting this review it examined the following survey
sources: Towers Perrin, Executive Compensation Data Base, 1996; Executive
Compensation Services Report on Top Management Compensation, 1996, 1997; and one
private survey source. The Company was compared to companies within the general
and consumer products industries with sales of $358 million. The peer group used
by the Company to measure the performance of its stock was not used to compare
compensation in view of significant differences between the Company and the peer
group with regard to capital structure and the diversity, size and scope of the
businesses in which various members of the peer group engage.
The Committee intends to review base salaries annually, and in consultation
from time to time with outside professional advisers, intends to make
adjustments depending upon competitive salary levels, past individual
performance as measured by both qualitative and quantitative factors and the
potential for making significant contributions in the future. Individual factors
are expected to be more significant than overall Company performance in a
particular year in determining base salary levels and the rate of increase,
while Company performance is expected to be more significant in determining
short and long-term incentive compensation.
The incentive compensation components of the executive compensation program
are designed to provide rewards for past contributions and motivation for future
performance. The performance goals and criteria for these components are tied
directly to factors which the Committee believes will enhance the financial
success of the Company and increase stockholder value. Thus, the total payouts
under the annual incentive plan are determined primarily by the Company's
performance against operating budget goals and in particular operating income
and Economic Value Added or EVA(R)(1) budget goals. However, qualitative factors
such as progress in implementing strategic plans, and employee commitment to,
and involvement in, Company goals are important elements in determining payout
levels. The Committee believes that these and other qualitative factors will
lead to the increased profitability of the Company and should be recognized and
taken into consideration in determining the payout levels. Total actual payouts
may be adjusted above or below target amounts based upon Company performance
which exceeds or fails to meet preestablished goals. Individual performance
against established goals will affect individual payments.
The Committee believes that a stock-based incentive plan is an important
element of long-term compensation. The value of such plans for the executive is
tied directly to stock price increases and thus provides strong incentives for
increasing stockholder value. It was determined that a stock option plan with
exercise prices set at market value on the date of grant would focus
management's attention on earnings performance sustained on a long-term basis.
The initial Libbey Inc. Stock Option Plan for
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(1)EVA is a registered trademark of Stern Stewart & Co.
8
<PAGE> 12
Key Employees ("Option Plan") was approved by the Board of Directors and
stockholders of the Company prior to completion of its initial public offering
on June 24, 1993 and in 1995 the Board of Directors and the Stockholders of the
Company approved and adopted an Amended and Restated Libbey Inc. Stock Option
Plan for Key Employees. The Option Plan is a broad-based program covering
executive officers and other management employees. Exercise dates are deferred
for one year from date of grant subject to acceleration in specified instances.
The number of shares covered by option grants is based upon the individual's
potential to make a contribution to the earnings growth of the Company. All of
the executive officers listed in the Compensation table of this proxy statement
were equity investors in the Company and were granted stock options at the time
of the Company's initial public offering on June 24, 1993.
Compensation of Chief Executive Officer. The compensation policies
described above apply as well to the compensation of the Chief Executive Officer
("CEO"). The Compensation Committee is directly responsible for determining the
salary level of the CEO and for all awards and grants to the CEO under the
incentive components of the compensation program. The overall compensation
package for the CEO is designed to recognize that the CEO bears primary
responsibility for increasing the value of stockholders' investments. Thus, a
substantial portion of the CEO's compensation is incentive-based, providing
greater compensation as direct and indirect financial measures of stockholder
value increase. The Committee believes that the current and changing business
and industry environment requires a high degree of leadership, innovation and
prudent risk taking in order to meet and sustain corporate objectives for
increasing stockholder value. The CEO's compensation is thus structured and
administered to motivate and reward the successful exercise of these qualities.
The annual base salary and target bonus level of the CEO, as with other
executives, is based upon a review, in consultation with the Committee's outside
consultants, of similar positions within the industry and of companies of
comparable size. The incentive components of the CEO's compensation package
consist of the annual incentive award and stock options. The factors described
above for all executive officers are also used in determining the level of
awards, grants and payouts under these plans for the CEO.
The Committee believes that the CEO's compensation for 1996 was directly
related to the size and the overall performance of the Company as measured by
financial criteria and important qualitative factors. Successful financial
performance during the year was measured by the growth in operating income and
earnings per share and increased financial strength. In addition, the CEO's
compensation reflected (1) progress in implementing the growth objectives of the
Company as reflected in earnings growth from existing assets, and (2) continued
development of an effective senior management team.
Terry L. Wilkison, Chairman
William A. Foley
Peter C. McC. Howell
Gary L. Moreau
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<PAGE> 13
PERFORMANCE GRAPH:
The graph below compares the total stockholder return on Libbey common
stock to the cumulative total return for a broad market index (the Standard &
Poor's 500 Stock Index) and to the cumulative total return for a peer group. The
indices reflect the year end market value of an investment in the stock of each
company in the index, including additional shares assumed to have been acquired
with cash dividends, if any.
The peer group consists of Corning, Inc., Ekco Group Inc., General
Housewares Corp., Lancaster Colony Corp., Newell Co., Oneida Ltd., Premark
International Inc. and Rubbermaid Inc. These eight companies were chosen because
their lines of business or product end uses are comparable to those of the
Company. The peer group is limited to those companies for which market
quotations are available.
The graph assumes a $100 investment in Libbey stock on June 18, 1993 at the
initial public offering price of $13 on that date and also assumes investments
of $100 in each of the S&P 500 and the peer group indices, respectively, on June
18, 1993. The value of these investments on December 31, 1996 is shown in the
table below the graph.
LIBBEY PERFORMANCE GRAPH
<TABLE>
<CAPTION>
MEASUREMENT PERIOD STANDARD &
(FISCAL YEAR COVERED) LIBBEY INC. POOR'S 500 PEER GROUP
<S> <C> <C> <C>
6/18/93 100.00 100.00 100.00
1993 128.48 106.57 106.76
1994 137.64 107.98 106.80
1995 180.43 148.55 116.65
1996 226.20 182.66 155.39
</TABLE>
10
<PAGE> 14
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of December 31, 1996 with
respect to any person known to the Company to be the beneficial owner of more
than five percent of its common stock based upon Schedule 13Gs received by the
Company and as of March 14, 1997, with respect to each of the Company's
directors and nominees for director, each of the named executive officers and
all directors and executive officers of the Company as a group and shares held
by the trustee of the Company's Stock Purchase and Retirement Savings Plan,
Stock Purchase and Supplemental Retirement Plan and Long-Term Savings Plan and
Trust. The shares owned by the executive officers set forth below include the
shares held in their accounts in the Stock Purchase and Retirement Savings Plan
of the Company. An asterisk indicates ownership of less than one percent of the
outstanding stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED(1) PERCENT OF
OF BENEFICIAL OWNER & (2) CLASS
----------------------------------------------- -------------------- ----------
<S> <C> <C>
The Capital Group Companies, Inc.(3) 1,346,000 8.94
333 South Hope Street
Los Angeles, CA 90071
FMR Corp.(4) 1,454,600 9.66
82 Devonshire Street
Boston, MA 02109
Key Trust Company of Ohio, N.A.(5) 943,506 6.26
4900 Tiedeman Road
Brooklyn, Ohio 44144
Liberty Investment Management, Inc.(6) 1,262,900 8.39
2502 Rocky Point Drive, Suite 500
Tampa, FL 3360
Neuberger & Berman, LLC(7) 1,246,550 8.28
605 Third Avenue
New York, NY 10158
L. Frederick Ashton 85,209 *
Robert R. Falter 138,058 *
William A. Foley 500
Peter C. McC. Howell 1,5008 *
John F. Meier 153,7589 *
Gary L. Moreau 500
Richard I. Reynolds 134,833 *
Arthur H. Smith 130,614
Terry L. Wilkison 2,000 *
Directors & Executive Officers as a Group 724,852 4.63
</TABLE>
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1 For purposes of this table, a person or group of persons is deemed to have
beneficial ownership of any shares as of a given date which such person has
the right to acquire within 60 days after such date. For purposes of computing
the percentage of outstanding shares held by each person or group of persons
named above on a given date, any security which such person has the right to
acquire within 60 days of such date is deemed outstanding, but is not deemed
to be outstanding for the purpose of computing the percentage ownership of any
other person. The information includes all currently exercisable options
granted to Messrs. Meier, Reynolds, Falter, Ashton and Smith. The number of
shares beneficially owned includes shares subject to options as follows: Mr.
Meier -- 122,122; Mr. Reynolds -- 102,990; Mr. Falter -120,729; Mr.
Ashton -- 64,278; Mr. Smith -- 98,939, and all executive officers as a
group -- 624,531. Upon Mr. Falter's retirement on January 31, 1997 the options
to purchase shares previously granted to him were, or became, exercisable with
respect to 120,729 shares and permanently unexercisable with respect to 9,560
shares.
2 The table includes the number of equivalent shares of common stock that
Messrs. Meier, Reynolds, Falter, Ashton, Smith and all officers as a group
held in the Libbey Stock Purchase and Retirement Savings Plan as of March 14,
1997.
3 The schedule 13G received by the Company from The Capital Group Companies,
Inc. indicates that it and its subsidiaries are the beneficial owners of
1,346,000 shares of common stock with dispositive power with respect to
1,346,000 common shares which were owned by various institutional investors
and sole voting power with respect to 1,198,000 common shares. One of its
subsidiaries, Capital Guardian Trust Company, a bank, is the beneficial owner
with sole dispositive power of 1,296,000 common shares and sole voting power
with respect to 1,148,000 common shares as a result of serving as investment
manager of various institutional accounts.
11
<PAGE> 15
4 The Schedule 13G received by the Company from FMR Corp. indicates that a
wholly-owned subsidiary, Fidelity Management & Research Company, is the
beneficial owner of 1,454,600 common shares as the result of acting as
investment advisor to several registered investment companies. The ownership
of one investment company, Fidelity Low-Priced Stock Fund, amounted to 767,300
common shares. FMR Corp. has the sole power to dispose of the 1,454,600 common
shares. The power to vote the shares owned directly by the funds resides with
the fund's Boards of Trustees.
5 Key Trust Company of Ohio, N.A., as trustee of the Company's Stock Purchase
and Retirement Savings Plan is the beneficial owner of 832,768 common shares;
as trustee of the Company's Stock Purchase and Supplemental Retirement Plan is
the beneficial owner of 110,715 common shares; and as trustee of the Company's
Long-Term Savings Plan and Trust is the beneficial owner of 23 common shares.
These plans are defined contribution plans for the Company's employees, each
of whom has the right to instruct the trustee as to the manner in which the
equivalent shares of the Company in his or her account in the Plans are to be
voted.
6 The Schedule 13G received by the Company from Liberty Investment Management,
Inc. indicates that it is the beneficial owner of 1,262,900 common shares with
sole voting power and sole dispositive power with respect to 1,262,900 shares.
7 The Schedule 13G received by the Company from Neuberger & Berman, LLC.
indicates that it is the beneficial owner of 1,246,550 common shares with
shared dispositive power with respect to 1,246,550 common shares, with sole
voting power with respect to 475,125 common shares and shared voting power
with respect to 134,100 common shares. The foregoing schedule 13G indicates
that in addition to the above shares, partners of Neuberger & Berman, LLC own
20,800 common shares in which Neuberger & Berman, LLC disclaims beneficial
ownership.
8 Includes 750 shares held by family members of Mr. Howell. Mr. Howell disclaims
any beneficial interest in such shares.
9 Includes 8,406 shares held by family members of Mr. Meier. Mr. Meier disclaims
any beneficial interest in such shares.
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has selected Ernst & Young LLP as independent auditors for the
Company for the fiscal year ending December 31, 1997.
A representative of Ernst & Young LLP is expected to attend the Annual
Meeting and will have an opportunity to make a statement if the representative
so desires. The representative will be available to respond to appropriate
questions.
OTHER BUSINESS
As of the date of this Proxy Statement, neither the Board nor management
knows of any other business that will be presented for consideration at the
Annual Meeting. However, if other proper matters are presented at the meeting,
it is the intention of the proxy holders named in the accompanying proxy to take
such action as shall be in accordance with their judgment on such matters. All
other matters to be voted upon by stockholders will require a majority vote of
common stock represented in person or by proxy.
GENERAL INFORMATION
REVOCABILITY OF PROXIES:
Any proxy solicited hereby may be revoked by the person giving it at any
time before it has been exercised at the Annual Meeting by giving notice of
revocation to the Company in writing or at the Annual Meeting.
SOLICITATION COSTS:
The Company will pay the cost of preparing and mailing this proxy statement
and other costs of the proxy solicitation made by the Company's Board of
Directors. Certain of the Company's officers and employees may solicit the
submission of proxies authorizing the voting of shares in accordance with the
Board of Directors' recommendations, but no additional remuneration will be paid
by the Company for the solicitation of those proxies. Such solicitations may be
made by personal interview, telephone and telegram. Arrangements have been made
with Corporate Investor Communications,
12
<PAGE> 16
Inc. for a broker-nominee search and with brokerage firms and others for the
forwarding of proxy solicitation materials to the beneficial owners of common
stock, and the Company will reimburse them for reasonable out-of-pocket expenses
incurred in connection therewith.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT:
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership (Forms 3, 4 and 5) with the Securities and Exchange Commission and the
New York Stock Exchange. Officers, directors and greater-than-ten-percent
holders are required by SEC regulation to furnish the Company with copies of all
such forms which they file.
Based solely on the Company's review of the copies of Forms 3 and 4 and
amendments thereto received by it during 1996, Forms 5 and amendments thereto
received by it with respect to fiscal 1996, or written representations from
certain reporting persons that no Forms 5 were required to be filed by those
persons, the Company believes that during the fiscal year ending December 31,
1996 all filing requirements applicable to its officers, directors and
greater-than-ten-percent beneficial owners subject to Section 16 of the Exchange
Act were complied with.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING:
A stockholder desiring to submit a proposal for inclusion in the Company's
Proxy Statement for the 1998 Annual Meeting must deliver the proposal so that it
is received by the Company no later than November 27, 1997. The Company requests
that all such proposals be addressed to Arthur H. Smith, Vice President, General
Counsel and Secretary, Libbey Inc., 300 Madison Avenue, P.O. Box 10060, Toledo,
Ohio 43699-0060.
REPORTS TO STOCKHOLDERS:
The Company has mailed this Proxy Statement and a copy of its 1996 Annual
Report to each stockholder entitled to vote at the Annual Meeting. Included in
the 1996 Annual Report are the Company's consolidated financial statements for
the year ended December 31, 1996.
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, including the financial statement schedules, as filed with
the Securities and Exchange Commission, may be obtained without charge by
sending a written request therefore to Libbey Inc., Attention: Investor
Relations, Kenneth G. Wilkes, Vice President, Chief Financial Officer and
Treasurer, 300 Madison Avenue, P.O. Box 10060, Toledo, Ohio 43699-0060.
By Order of the Board of Directors,
ARTHUR H. SMITH, Secretary
Toledo, Ohio
March 28, 1997
13
<PAGE> 17
<TABLE>
<S> <C> <C> <C>
1. Election of all Directors FOR all nominees [X] WITHHOLD AUTHORITY to vote [X] *EXCEPTIONS [x]
listed below for all nominees listed below
The nominees for the board of directors are: John F. Meier and Gary L. Moroau
(INSTRUCTIONS: TO withhold authority to vote any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided
below.)
*Exceptions
-----------------------------------------------------------------
To vote your shares for all Director nominees, mark "For" box on item 1. To
withhold voting for all nominees mark "Withhold" box. If you do not wish
your shares voted for a particular nominee, enter the name(s) of the
exception(s) in the space provided above.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
Address Change and
or Comments Mark here [X]
The form must be signed exactly
as name(s) appear hereon.
Attorneys-in-fact executors,
trustees, guardians, corporate
officers, etc. should give full title.
Dated: 1997
------------------------
----------------------------------
Signature
----------------------------------
Signature
Sign, Date and Return the Proxy Card Votes MUST be indicated [X]
in the Enclosed Envelope. (X) in Black or Blue ink.
LIBBEY INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints each of John F. Meier, Richard I.
Reynolds, Arthur H. Smith and Kenneth G. Wilkes, as proxy, with full power of
substitution, to vote all shares of Common Stock of Libbey Inc. held of record
by the undersigned on March 14, 1997, at the Annual Meeting of Stockholders to
be held on May 1, 1997, and at any adjournment thereof, upon the matters referred
to on the reverse side and described in the proxy statement furnished herewith,
and in their discretion, upon any other matters which may properly come before
the meeting. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE FOR THE ELECTION
OF ALL LISTED DIRECTOR NOMINEES, AND IN THE PROXIES' DISCRETION ON ANY OTHER
MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL LISTED
DIRECTOR NOMINEES.
Please sign on the reverse side of this card and return it promptly in
the enclosed return envelope.
(Continued, and please sign on reverse side)
LIBBEY INC.
P.0. BOX 11035
NEW YORK, N.Y. 10203-0035
</TABLE>
