<PAGE> 0
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended January 28, 1995
Commission File Number 1-5452
ONEIDA LTD.
ONEIDA, NEW YORK 13421-2829
(315) 361-3636
NEW YORK 15-0405700
(State of Incorporation) (I.R.S. Employer
Identification No)
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange
Title of Class on which registered
Common Stock, par value New York Stock Exchange
$1.00 per share
with attached
Preferred Stock purchase
rights
Securities registered pursuant to Section 12(g) of the Act:
6% Cumulative Preferred Stock, par value $25 per share
(Title Of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10 -K or any amendment to
this Form 10 -K. ( X )
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of the close of business on March 13, 1995 was $156,089,196.
The number of shares of Common stock ($1.00 par value) outstanding as of March
13, 1995 was 10,906,939.
Documents Incorporated by Reference
1. Portions of Oneida Ltd.'s Annual Report to Stockholders for the fiscal year
ended January 28, 1995 (Parts I and II of Form 10-K).
2. Portions of Oneida Ltd.'s Definitive Proxy Statement dated April 28, 1995
(Part III of Form 10-K).
<PAGE> 1
PART I
ITEM 1. BUSINESS.
General.
The Company (unless otherwise indicated by the context, the term "Company" means
Oneida Ltd. and its wholly-owned subsidiaries) was incorporated in New York in
1880 under the name Oneida Community, Limited. In 1935, the Company's name was
changed to Oneida Ltd. It maintains its executive offices in Oneida, New York.
Since its inception, the Company has manufactured and marketed tableware,
initially sterling and later silverplated and stainless steel products. By
acquiring subsidiaries and expanding its tableware lines, the Company has
diversified into the fabrication of copper wire, the manufacture of commercial
china tableware and the marketing of other tableware and gift items, most
notably, crystal.
Financial Information About Industry Segments.
The Company operates in two principal industries: Tableware and Industrial Wire
Products.
Information regarding the Company's operations by industry segment for the
years ended January 28, 1995, January 29, 1994 and January 30, 1993 is set forth
on page 26 of the Company's Annual Report to Shareholders for the year ended
January 28, 1995, parts of which are incorporated herein by reference.
Narrative Description of Business.
The following is a description of the business of the Company in the Tableware
and Industrial Wire Products industries.
TABLEWARE
In the tableware industry, the Company is organized to serve two markets:
consumer and foodservice. This is accomplished by an organizational structure
designed to serve four marketing focal points: the Consumer Retail Division;
Consumer Direct Division; Foodservice Division and the International Division.
Consumer operations focus on individual consumers, both in the United States and
around the world, offering an array of tabletop and giftware products including
stainless steel, silverplated and sterling flatware; silverplated and stainless
steel holloware; cutlery; and crystal stemware and decorative pieces.
Flatware and holloware are manufactured primarily at the Company's facilities in
Sherrill, New York. Increasingly, however, its operations have been harmonized
with the Company's other two North American manufacturing facilities to maximize
the efficiency of producing a comprehensive product line for domestic and
international markets. Production at Oneida Canada, Limited, a wholly owned
subsidiary in Niagara Falls, Ontario, has been integrated with operations at
the Sherrill plant with each facility producing complementary items in similar
product lines. Meanwhile, Oneida Mexicana, S.A., which is operated as a
maquiladora in Toluca, Mexico, manufactures cutlery and consumer flatware
patterns which are not produced at the Company's other facilities. The Company
also imports consumer products from several international sources.
The Company's wide-ranging consumer marketing activities are coordinated by the
Oneida Silversmiths Division from its central offices in Oneida, New York.
Responsibilities are divided between the Consumer Retail and Consumer Direct
divisions.
The Consumer Retail Division serves retail accounts, particularly major retail
outlets, primarily on a direct basis. For some accounts, orders direct from the
retailer to the Company are fulfilled by Oneida's wholly-owned subsidiary,
Oneida Distribution Services, Inc., which has two distribution centers. Oneida
Distribution Services, Inc. also provides sales and merchandising support
services to retail accounts.
<PAGE> 2
The Consumer Direct Division is responsible for managing Special Sales, which
focus on serving business customers in the premium, incentive, mail order and
direct selling markets. This division also includes Kenwood Silver Company,Inc.,
another wholly-owned subsidiary which plays a significant role in the overall
marketing of the Company's products. Kenwood Silver has grown to sixty-eight
retail factory store outlets located in resort and destination shopping areas
across the United States. Two additional factory stores are operated in Canada
by Oneida Canada, Ltd., in Niagara Falls and near
Montreal.
Foodservice operations manufacture and import stainless steel and silverplated
tableware, vitreous, porcelain and bone china, and crystal, which are sold
to restaurants and hotel chains, food distributors, airlines, institutions and
other related customers. These operations are consolidated within the Oneida
Foodservice Division.
Flatware for the foodservice market is sourced primarily from the Company's
manufacturing facilities in Sherrill, Niagara Falls and Toluca, while
foodservice holloware is primarily imported. Buffalo China, Inc., a wholly-
owned subsidiary located in Buffalo, New York, is a leading manufacturer of
vitreous china for the foodservice industry. Buffalo China also owns a
subsidiary organized as a maquiladora in Juarez, Mexico. This subsidiary,
Ceramica de Juarez, S.A., produces bisque china which is finished in Buffalo.
The Foodservice Division is also the exclusive distributor of certain china
products manufactured by Schonwald and Noritake Co., Inc. for the United States
foodservice and institutional markets.
International operations in both the consumer and foodservice markets are
overseen by the Oneida International Division. The International Division
coordinates the marketing of Oneida's domestic products overseas as well as
the distribution of the products of Oneida Silversmiths' United Kingdom branch.
The Company is 80% owner of Oneida International, Inc., a joint venture formed
to market tabletop products of Italian design which are sourced internationally.
Oneida International, Inc. sells these products through its wholly-owned Italian
subsidiary, Sant'Andrea S.r.l., in the international foodservice market. The
foodservice and consumer markets in Mexico, Central America and South America
are served by Oneida Mexicana, S.A.
The percentage of tableware sales to total consolidated sales for the fiscal
years, which end in January, is as follows:
1995 1994 1993
68% 71% 69%
The principal raw materials and supplies used by the Company for metal tableware
are stainless steel, silver and various copper alloys. For china, they are
various clays, flint and aluminum oxide. These materials are purchased in the
open market to meet current requirements. The Company does not anticipate any
delays or difficulties in obtaining raw materials or supplies.
Although the Company maintains design and engineering departments to develop new
products and improve existing products and methods of manufacturing,
expenditures in these research activities are not material. The Company owns
number of design patents in the United States and foreign countries, but these
patents are not material to the Company.
Both consumer and institutional operations use a number of trademarks and trade
names which are advertised or promoted extensively including ONEIDA, COMMUNITY,
HEIRLOOM, ROGERS, LTD, BUFFALO CHINA, SANT'ANDREA, DJ and NORTHLAND.
Although consumer operations normally do a greater volume of business during
October, November and December, primarily because of holiday-related orders
for tableware products, the total tableware business is not considered
seasonal.
No material part of the Company's tableware business is dependent upon a
single customer or a few customers, the loss of whom would have a materially
adverse effect. Sufficient inventories of tableware products are maintained by
the Company to respond promptly to orders.
<PAGE> 3
Tableware operations had order backlogs of $12,465,000 as of March 18, 1995
and $17,600,000 as of April 2, 1994. This backlog is expected to be filled
during the current fiscal year. The amount of backlog is reasonable for the
tableware industry.
The Company is the only domestic manufacturer of a complete line of stainless
steel, silverplated and sterling tableware products. The Company believes that
it is the largest producer of stainless steel and silverplated flatware in the
world. The Company faces competition from several smaller domestic companies
that market both imported and domestically manufactured lines and from at
least thirty importers engaged exclusively in marketing foreign-made tableware
products.
The consumer tableware business is highly competitive. The principal factors
affecting domestic competition in this market are design, price and quality.
Other factors that have an effect on competition are availability of replacement
pieces and product warranties. In the opinion of the Company, no one factor is
dominant, and the significance of the different competitive factors varies
from customer to customer.
The foodservice tableware business is highly competitive. The principal factors
affecting competition in this market are price, service and quality. The
Oneida foodservice operation's products and service are highly regarded in this
industry, and it is one of the largest sources of commercial china, stainless
steel and silverplated tableware in the United States.
INDUSTRIAL WIRE PRODUCTS
The Company manufactures copper wire and cable products through Camden Wire Co.,
Inc. ("Camden"), a wholly-owned subsidiary. Camden, a supplier of copper
conductor wire, produces bare and tinned copper wire in bunched and concentric
stranded, braided and extra flexible stranded forms, as well as tin or alloy
electroplated wire. Camden's customers include integrated and non-integrated
manufacturers of insulated wire and cable, primarily in the
electronics/computer, consumer and automotive industries, and manufacturers of
carbon brushes, circuit-breakers, resistors and capacitors for use in
transformers, generators, motors and appliances. Camden has expanded its
ability to serve customers in its high value-added, fine wire markets by
diversifying into more highly technical wire fabrication through its Shunt
Technology division.
The percentage of sales of wire and cable to total consolidated sales for the
fiscal years, which end in January, is as follows:
1995 1994 1993
32% 29% 31%
The principal raw materials used by Camden are copper rod and tin ingots which
are purchased and readily available in the open market. No delay or difficulty
in obtaining such raw materials is anticipated.
Camden owns certain mechanical patents; however, these are not believed to be
material.
Camden's business is not seasonal. Sufficient inventories of products are
maintained by Camden to respond promptly to orders.
No material part of Camden's business is dependent upon a single customer or a
few customers, the loss of whom would have a permanent and materially adverse
effect on profits. Camden had an order backlog of $17,900,000 as of March 6,
1995 and $17,700,000 as of April 2, 1994.
<PAGE> 4
Camden is one of more than three hundred firms that participate in the
nonferrous wire drawing and insulating industry. However, Camden actually
competes in a segment of this industry: wire fabricators without rod mills or
insulating facilities. While Camden is a leader in this industry segment, it
faces competition from approximately twenty other similar domestic companies.
Foreign competition is increasing on both a direct and indirect basis as the
wire in many products exported to the United States is sourced from wire
manufacturers located in the exporting country.
The principal factors affecting competition in this subindustry are price,
quality, service and the range and selection of wire and cable products. No one
factor is dominant and the significance of the different competitive factors
varies from customer to customer.
Other Matters.
Research and Development
The Company's research activities in connection with the development of
new or improved products and services and related expenditures during the past
three fiscal years have not been material.
Environmental
The Company does not anticipate that compliance with federal, state and
local environmental laws and regulations will have any material effect upon the
capital expenditures, earnings or competitive position of the Company. The
Company does not anticipate any material capital expenditures for environmental
control facilities for the remainder of the current fiscal year or the
succeeding fiscal year.
Employees and Employee Relations
The Company and its wholly-owned subsidiaries employ approximately 4,570
employees in domestic operations and 1,020 employees in foreign operations.
ITEM 2. PROPERTIES
The principal properties of the Company and its subsidiaries are situated at the
following locations and have the following characteristics:
<TABLE>
<CAPTION>
Tableware Approximate
Square Feet
<C> <C> <C>
Oneida, New York Executive Administrative
Offices 95,000
Sherrill, New York Manufacturing Stainless
Steel, Silverplated and
Sterling Tableware 1,082,000
Sherrill, New York Manufacturing Knives 135,000
Buffalo, New York Office and Warehouse 82,000
Buffalo, New York Manufacturing China 257,000
Ontario, California Warehouse 21,000
Nashville, Tennessee Warehouse 25,000
Niagara Falls, Ontario Manufacturing Stainless Steel
and Silverplated Flatware 120,000
Bangor, N. Ireland Office and Warehouse 32,000
<PAGE> 5
Toluca, Mexico Manufacturing Stainless
Steel Flatware 75,000
Juarez, Mexico Manufacturing Bisque China 65,000
Industrial Wire
Camden, New York Administrative Offices and
Manufacturing Wire and Cable
Products 414,000
Pine Bluff, Arkansas Office and Manufacturing
Wire and Cable Products 167,000
</TABLE>
All of these buildings are owned by the Company with the following exceptions:
The offices and warehouses in Ontario, California; Nashville, Tennessee and
Bangor, Northern Ireland are leased.
120,000 square feet of the 167,000 square foot Pine Bluff, Arkansas
manufacturing properties is subject to a mortgage in the amount of $9,000,000
covering real property and equipment to secure a like amount of Industrial
Development Revenue Bonds. Pursuant to an Installment Sale Agreement with the
City of Pine Bluff, Arkansas, dated August 1,1985, Camden Wire Co., Inc. is
purchasing this portion of the Pine Bluff properties over a twenty-year period
and will take title to the property upon retirement of the bonds on or before
August 1, 2005. The remaining 47,000 square feet of the Pine Bluff, Arkansas
properties is owned outright by Camden Wire Co., Inc.
The Buffalo, New York manufacturing property is subject to a mortgage in the
principal amount of approximately $1,846,000 covering both real property and
equipment to secure a like amount of Industrial Revenue Bonds. Pursuant to the
terms of a Lease Agreement dated February 1, 1980, the real property is leased
by Buffalo China from the Erie County Industrial Development Agency for a term
of twenty years upon the expiration of which the property will be conveyed back
to Buffalo China.
In addition to the land primarily associated with its manufacturing operations,
the Company owns approximately 500 additional acres in the cities of Sherrill
and Oneida and the Town of Vernon, New York.
The Company leases sales offices and/or showrooms in New York, Los Angeles,
Dallas, Atlanta and London, England. The Company and its subsidiaries lease
warehouse space in various locations throughout the United States. The Company
also leases retail outlet space through its wholly-owned subsidiary, Kenwood
Silver Company, Inc., in various locations throughout the United States.
In January 1983, the Company entered into a 25-year lease for an office facility
in Redmond, Washington. The remaining lease commitment for this facility is
$26,186,290. The company has sublet substantially all of the building through
1998. The sublease income projected through 1999 is $3,448,794.
The Company's buildings are located on sufficient property to accommodate any
further expansion or development. The properties are served adequately by
transportation facilities, are well maintained and are adequate for the purposes
for which used.
ITEM 3. LEGAL PROCEEDINGS
Management believes there is no ongoing or pending litigation with a material
effect on the financial position of the Company.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF
STOCKHOLDERS.
None.
<PAGE> 6
PART II
Information required to be furnished under this Part (Items 5 through 9) is set
forth in the Company's Annual Report to Shareholders for the year ended January
28, 1995, at the respective pages indicated, and incorporated by reference.
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS.
Pages 28 and 30 of the Company's Annual Report.
ITEM 6. SELECTED FINANCIAL DATA.
Page 31 of the Company's Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Pages 29 and 30 of the Company's Annual Report
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 17 through 31 of the Company's Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
Some of the information required to be furnished under this Part (Items 10
through 13) is set forth in the Company's definitive Proxy Statement dated April
28, 1995 (File 1-5452) at the respective pages indicated, and incorporated by
reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT.
Pages 2 through 4 of the Company's definitive Proxy Statement.
Executive Officers of the Registrant
The persons named below are the executive officers of the Company and have been
elected to serve in the capacities indicated at the pleasure of the Oneida Ltd.
Board of Directors.
Name, Age and Positions Principal Business Affiliations
with Corporation During Past Five Years
Thomas A. Fetzner, 47 Mr. Fetzner has been Corporate
Vice President and Controller and Vice President
Corporate Controller for more than the past five years.
<PAGE> 7
Terry M. French, 51 Mr. French has been President of
President Camden Wire Co., Inc. for more
Camden Wire Co., Inc. than the past five years.
Barry G. Grabow, 51 Mr. Grabow has been Treasurer
Treasurer of the company for more than the past five years.
Glenn B. Kelsey, 43 Mr. Kelsey has been President
President of Foodservice Operations for
Oneida Foodservice more than the past five years.
and International In 1991, he was given the
Divisions; and a additional responsibility of
Director President, Oneida International Division
William D. Matthews, 60 Mr. Matthews has been Chairman
Chairman of the Board, Of the Board and Chief Executive
Chief Executive Officer Officer for more than the past five years.
and a Director
Gary L. Moreau, 40 Mr. Moreau was elected President
President, Chief and Chief Operating Officer
Operating Officer of the Company in 1991. Mr. Moreau
and a Director had been President and Chief Operating Officer of
the Oneida Silversmiths Division since 1987.
Walter A. Stewart, 62 Mr. Stewart has been Senior Vice
Senior Vice President, President, Manufacturing and Engineering, for
Manufacturing and more than the past five years.
Engineering, Oneida
Silversmiths Division
and a Director
Catherine H. Suttmeier, 38 Ms. Suttmeier was elected General Counsel
Vice President, General and Secretary in January 1992 and Vice President
Counsel and Secretary in December 1992. She had served as Associate
Counsel and Assistant Secretary since 1986.
Edward W. Thoma, 49 Mr. Thoma has been Senior Vice
Senior Vice President President, Finance for more
Finance than the past five years.
ITEM 11. EXECUTIVE COMPENSATION.
Pages 5 through 8 of the Company's definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
Pages 1 through 4 of the Company's definitive Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Pages 2 through 4 of the Company's definitive Proxy Statement.
<PAGE> 8
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8K.
(a)1. Financial statements incorporated by reference from the Company's 1995
Annual Report to Shareholders and filed as part of this Report:
Consolidated Statement of Operations for the fiscal years ended
1995, 1994 and 1993 (page 17 of the Company's Annual Report).
Consolidated Balance Sheet for the fiscal years ended in 1995 and 1994
(pages 18 and 19 of the Company's Annual Report).
Consolidated Statement of Cash Flows for the fiscal years ended
1995, 1994 and 1993 (page 20 of the Company's Annual Report).
Notes to Consolidated Financial Statements (pages 21-28 of the
Company's Annual Report).
Independent Auditors' Report (page 28 of the Annual Report).
2. Financial Statement Schedules:
Schedules for the fiscal years ended 1995, 1994 and 1993:
Property, Plant and Equipment (Schedule V)(page 13 of this Report).
Accumulated Depreciation of Property, Plant and Equipment (Schedule
VI) (page 14 of this Report).
Valuation and Qualifying Accounts (Schedule VIII)(page 15 of this
Report).
Short-term Borrowings (Schedule IX)(page 16 of this Report).
Supplementary Income Statement Information (Schedule X)(page 17 of
this Report).
Report of Independent Public Accountants (page 12 of this Report).
All other schedules have been omitted because of the absence of conditions under
which they are required or because the required information is included in the
financial statements submitted.
3. Exhibits:
(3) The Restated Certificate of Incorporation and the By-Laws, as
previously amended, which are incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 29, 1994.
<PAGE> 9
(4)(a) Note Agreement dated as of January 1 1992 between Oneida Ltd. and
Allstate Life Insurance and Pacific Mutual Life Insurance Company, which is
incorporated by reference to the Registrant's Annual Report on Form 10-K for the
year ended January 25, 1992. Letter of Credit, Bond Purchase and Guaranty
Agreement dated August 1, 1990 between Oneida Ltd. and Chemical Bank, N.A.,
which is incorporated by reference to the Registrant's Annual Report on Form 10-
K for the year ended January 26, 1991. Two Amendments dated March 30, 1992 and
November 9, 1992, respectively, to the Letters of Credit,Bond Purchase and
Guaranty Agreement dated August 1, 1990, which are incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended January 30, 1993.
Revolving Credit Agreement dated as of January 21, 1994 between Oneida Ltd. and
The Chase Manhattan Bank, N.A., Chemical Bank, and Nationsbank of North
Carolina, N.A., which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 29, 1994.
(b) Shareholder Rights Agreement dated December 13,1989. Assignment and
Assumption Agreement dated November 1, 1991.
(c) Loan Agreement dated as of August 19, 1992 between Oneida Ltd. and
New York State Urban Development Corporation, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended January 30,
1993.
(10)(a) Employment agreements for two executive employees of the Company
dated October 1, 1982.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board of
Directors on February 24, 1988, which provides for the payment of bonus awards
to senior management employees.
(c) Oneida Ltd. 1987 Stock Option Plan, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 30, 1993.
(d) Oneida Ltd. Employee Security Plan adopted by the Board of Director
on July 26, 1989.
(e) Employment Agreements with five executive employees of the Company
dated July 26, l989.
(f) Oneida Ltd. Restricted Stock Award Plan as adopted by the Board of
Directors on November 29, 1989 and approved by shareholders on May 30, 1990 for
the granting of common stock to key employees, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 26, 1991.
(g) Oneida Ltd. Deferred Compensation Plan for Key Employees as adopted
by the Board of Directors on October 27, 1993, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 29, 1994.
(11) Computation of per share earnings.
(13) Portions of the Oneida Ltd. Annual Report to Shareholders for the
fiscal year ended January 28, 1995, which have been incorporated by reference in
this Form 10-K.
(22) Subsidiaries of the Registrant.
(b) No reports on Form 8-K were filed by the Registrant during the quarter ended
January 28, 1995.
<PAGE> 10
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ONEIDA LTD.
By: /s/ WILLIAM D. MATTHEWS
William D. Matthews
Chairman of the Board and
Chief Executive Officer
March 29, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
Principal Executive Officer
/s/ WILLIAM D. MATTHEWS Chairman of the Board March 29, 1995
William D. Matthews and Chief Executive
Officer
Principal Financial Officer
/s/ EDWARD W. THOMA Senior Vice President March 29, 1995
Edward W. Thoma Finance
Principal Accounting Officer
/s/ THOMAS A. FETZNER Vice President and March 29, 1995
Thomas A. Fetzner Corporate Controller
The Board of Directors
/s/ ROBERT F. ALLEN Director March 29, 1995
Robert F. Allen
/s/ WILLIAM F. ALLYN Director March 29, 1995
William F. Allyn
/s/ R. QUINTUS ANDERSON Director March 29, 1995
R. Quintus Anderson
/s/ GEORGIA S. DERRICO Director March 29, 1995
Georgia S. Derrico
/s/ EDWARD W. DUFFY Director March 29, 1995
Edward W. Duffy
<PAGE> 11
/s/ DAVID E. HARDEN Director March 29, 1995
David E. Harden
/s/ GLENN B. KELSEY Director March 29, 1995
Glenn B. Kelsey
/s/ WILLIAM D. MATTHEWS Director March 29, 1995
William D. Matthews
/s/ GARY L. MOREAU Director March 29, 1995
Gary L. Moreau
/s/ RAYMOND T. SCHULER Director March 29, 1995
Raymond T. Schuler
/s/ WALTER A. STEWART Director March 29, 1995
Walter A. Stewart
<PAGE> 12
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of Oneida Ltd.
We have audited the accompanying consolidated balance sheet of Oneida Ltd. as of
January 28, 1995 and January 29, 1994, and the related consolidated statement of
operations and cash flows for each of the three years in the period ended
January 28, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Oneida Ltd. as of
January 28, 1995 and January 29, 1994, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
January 28, 1995 in conformity with generally accepted accounting principles.
As discussed in Note 9 to the financial statements, the Company changed its
methods of accounting for postemployment and postretirement benefits other than
pensions in 1993.
COOPERS & LYBRAND, L.L.P.
a professional services firm
/s/ Coopers & Lybrand, L.L.P.
Syracuse, New York
February 22, 1995
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Oneida Ltd. on Form S-8 (File No. 2-84304) and Form S-3 (File No. 2-66234) of
our report dated February 22, 1995 on our audits of the consolidated financial
statements and financial statement schedules of Oneida Ltd. as of January 28,
1995 and January 29, 1994, and for each of the three years in the period ended
January 28, 1995 which reports are either included or incorporated by reference
in this Annual Report on Form 10-K.
COOPERS & LYBRAND, L.L.P.
a professional services firm
/s/ Coopers & Lybrand, L.L.P.
Syracuse, New York
April 20, 1995
<PAGE> 13
<TABLE>
SCHEDULE V
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
For the Years Ended January 1995, 1994 and 1993
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
<S> <C> <C> <C> <C> <C>
Balance at Balance
Beginning Additions Other Charges at End
Classification of Period at Cost Retirements Add (Deduct) of Period
YEAR ENDED JANUARY 28, 1995:
Land ......... $ 1,824 $ 1,824
Buildings and
improvements ...... 53,054 $ 898 $ 521 $ 2,311(a) 55,742
Machinery and
equipment ........ 165,668 11,587 1,761 2,951(a) 178,445
Construction
in progress ........ 6,744 4,705 (5,262)(a) 6,187
Total ....... $227,290 $17,190 $2,282 $242,198
YEAR ENDED JANUARY 29, 1994:
Land ........... $ 1,827 $ 3 $ 1,824
Buildings and
improvements ...... 52,533 424 4 $ 101(a) 53,054
Machinery and
equipment ........ 156,817 10,259 2,199 791(a) 165,668
Construction
in progress......... 5,039 2,597 (892)(a) 6,744
Total ....... $216,216 $13,280 $2,206 $227,290
YEAR ENDED JANUARY 30, 1993:
Land .............$ 1,833 $ 6 $ 1,827
Buildings and
improvements ...... 52,510 $ 147 376 $ 252(a) 52,533
Machinery and
equipment ....... $148,922 10,548 4,728 2,075(a) 156,817
Construction
in progress ........ 4,249 3,468 351 (2,327)(a) 5,039
Total ....... $207,514 $14,163 $5,461 $216,216
(a) Reclassifications
</TABLE>
<PAGE> 14
<TABLE>
SCHEDULE VI
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED JANUARY 1995, 1994 AND 1993
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
<S> <C> <C> <C> <C> <C>
Additions
Balance at Charged to Other Balance at
Beginning Costs and Changes End of
Description of Period Expenses Retirements Add(Deduct) Period
YEAR ENDED JANUARY 28, 1995:
Buildings and
improvements ...... $ 21,967 $ 1,795 $ 304 $ 23,458
Machinery
and equipment ...... 94,529 12,551 632 106,448
Total ......... $116,496 $14,346 $ 936 $129,906
YEAR ENDED JANUARY 29, 1994:
Buildings and
improvements ..... $ 20,174 $ 1,807 $ 14 $ 21,967
Machinery
and equipment ....... 84,123 12,272 1,866 94,529
Total.......... $104,297 $14,079 $ 1,880 $116,496
YEAR ENDED JANUARY 30, 1993:
Buildings and
improvements ...... $ 18,618 $ 1,768 $ 212 $ 20,174
Machinery and
equipment .......... 76,416 11,660 3,953 84,123
Total ....... $ 95,034 $13,428 $4,165 $104,297
Note: Depreciation is provided over the estimated useful lives of the related
assets, generally using the straight-line method. Annual depreciation rates are
as follows:
Buildings and improvements, 2% to 5%
Machinery and equipment, 5% to 33%
</TABLE>
<PAGE> 15
<TABLE>
SCHEDULE VIII
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 1995, 1994 AND 1993
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
<S> <C> <C> <C> <C>
Additions
Balance at Charged to
Beginning Costs and Balance at
Description of Period Expenses Deductions End of Period
YEAR ENDED JANUARY 28, 1995:
Reserves deducted from
assets to which they
apply:
Doubtful accounts
receivable ......... $2,066 $ 788 $1,189(a) $1,665
Other reserves:
Rebate program ... $ 605 $ 1,977 $2,111(b) $ 471
YEAR ENDED JANUARY 29, 1994:
Reserves deducted from
assets to which they
apply:
Doubtful accounts
receivable ......... $1,728 $1,749 $1,411(a) $2,066
Other reserves:
Rebate program . $ 427 $1,208 $1,030(b) $ 605
YEAR ENDED JANUARY 30, 1993:
Reserves deducted from
assetsto which they
apply:
Doubtful accounts
receivable .... . $3,332 $1,841 $3,445 $1,728
Other reserves:
Rebate program ......... $ 226 $1,219 $1,018(b) $ 427
(a) Adjustments and doubtful accounts written off.
(b) Payments under rebate program
</TABLE>
<PAGE> 16
<TABLE>
SCHEDULE IX
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
SHORT-TERM BORROWINGS
For the Years Ended January 1995, 1994 and 1993
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
<S> <C> <C> <C> <C> <C>
Category of Weighted Maximum Amount Average Amount Weighted
Aggregate Balance at Average Outstanding Outstanding Average
Short-Term End of Period Interest During the During the Interest
Borrowings Rate Period Period Rate
During the
Period
JANUARY 28, 1995
Notes payable
to banks ........$23,555 6.5% $30,341 $22,040 5.0%
Bankers'
acceptances .....$ 4,000 6.7% $23,000 $16,109 4.9%
JANUARY 29, 1994
Notes payable
to banks ........$11,186 4.0% $34,686 $18,131 3.8%
Bankers'
acceptances .....$17,000 3.9% $30,000 $25,014 4.2%
JANUARY 30, 1993
Notes payable
to banks .......$11,167 4.0% $45,124 $27,100 5.1%
Bankers'
acceptances ....$24,000 6.7% $35,500 $28,800 6.4%
Note: The average amounts outstanding and the weighted average interest
rates for each period were computed based on daily outstanding balances and the
respective rates on those balances.
</TABLE>
<PAGE> 17
<TABLE>
SCHEDULE X
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the Years ended January 1995, 1994 and 1993
(Thousands)
<CAPTION>
Column A Column B
<S> <C> <C> <C>
Amount
Charged to Costs and Expenses
Item Description 1995 1994 1993
Maintenance and repairs.......................$14,007 $12,456 $13,161
Advertising costs.............................$ 6,254 $ 6,639 $ 7,133
</TABLE>
<PAGE> 18
Index to Exhibits
Exhibits:
(3) The Restated Certificate of Incorporation and the By-Laws, as
previously amended, which are incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 29, 1994.
(4)(a) Note Agreement dated as of January 1, 1992 between Oneida Ltd. and
Allstate Life Insurance and Pacific Mutual Life Insurance Company, which is
incorporated by reference to the Registrant's Annual Report on Form 10-K for the
year ended January 25, 1992. Letter of Credit, Bond Purchase and Guaranty
Agreement dated August 1, 1990 between Oneida Ltd. and Chemical Bank, N.A.,
which is incorporated by reference to the Registrant's Annual Report on Form 10-
K for the year ended January 26, 1991. Two Amendments dated March 30, 1992 and
November 9, 1992, respectively, to the Letters of Credit, Bond Purchase and
Guaranty Agreement dated August 1, 1990, which are incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended January 30, 1993.
Revolving Credit Agreement dated as of January 21, 1994 between Oneida Ltd. and
The Chase Manhattan Bank, N.A., Chemical Bank, and Nationsbank of North
Carolina, N.A., which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 29, 1994.
(b) Shareholder Rights Agreement dated December 13, 1989. Assignment and
Assumption Agreement dated November 1, 1991.
(c) Loan Agreement dated as of August 19, 1992 between Oneida Ltd. and
New York State Urban Development Corporation, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended January 30,
1993.
10)(a) Employment agreements for two executive employees of the Company
dated October 1, 1982.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board of
Directors on February 24, 1988, which provides for the payment of bonus awards
to senior management employees.
(c) Oneida Ltd. 1987 Stock Option Plan, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 30, 1993.
(d) Oneida Ltd. Employee Security Plan adopted by the Board of Directors
on July 26, 1989.
(e) Employment Agreements with five executive employees of the Company
dated July 26, l989.
(f) Oneida Ltd. Restricted Stock Award Plan as adopted by the Board of
Directors on November 29, 1989 and approved by shareholders on May 30, 1990 for
the granting of common stock to key employees, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 26, 1991.
(g) Oneida Ltd. Deferred Compensation Plan for Key Employees as adopted by
the Board of Directors on October 27, 1993, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended January 29,
1994.
(11) Computation of per share earnings.
(13) Portions of the Oneida Ltd. Annual Report to Shareholders for the
fiscal year ended January 28, 1995, which have been incorporated by reference in
this Form 10-K.
(22) Subsidiaries of the Registrant.
<PAGE> 19
EXHIBIT 4(b)
_____________________________________________________________
ONEIDA LTD.
and
CHASE LINCOLN FIRST BANK, N.A.
Rights Agent
- - --------------------------------------------------------------
Rights Agreement
Dated as of December 13, 1989
______________________________________________________________
<PAGE> 20
Table of Contents
Section Page
1 Certain Definitions............................ 2
2 Appointment of Rights Agent.................... 7
3 Issue of Rights Certificates................... 7
4 Form of Rights Certificates.................... 11
5 Countersignature and Registration.............. 13
6 Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates............. 14
7 Exercise of Rights; Purchase Price; Expiration
Date of Rights................................. 16
8 Cancellation and Destruction of Rights
Certificates .................................. 21
9 Reservation and Availability of Capital Stock.. 22
10 Preferred Stock Record Date.................... 25
11 Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights.................. 26
12 Certificate of Adjusted Purchase Price or
Number of Shares............................... 50
13 Consolidation, Merger or Sale or Transfer
of Assets or Earning Power..................... 50
14 Fractional Rights and Fractional Shares........ 58
15 Rights of Action............................... 60
16 Agreement of Rights Holders.................... 61
17 Rights Certificate Holder Not Deemed a
Shareholder ................................... 63
18 Concerning the Rights Agent.................... 64
19 Merger or Consolidation or Change of Name of
Rights Agent................................... 65
20 Duties of Rights Agent......................... 66
<PAGE> 21
21 Change of Rights Agent......................... 72
22 Issuance of New Rights Certificates............ 74
23 Redemption and Termination..................... 75
24 Notice of Events .............................. 67
25 Notices ....................................... 79
26 Supplements and Amendments .................... 79
27 Successors .................................... 81
28 Determinations and Actions by the Board of
Directors, etc................................. 81
29 Benefits of this Agreement .................... 82
30 Severability .................................. 82
31 Governing Law ................................. 83
32 Counterparts .................................. 83
33 Descriptive Heading ........................... 84
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
Exhibit C -- Certificate of Amendment of Restated Certificate
of Incorporation
<PAGE> 22
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 13, 1989 (the "Agreement"), between
Oneida Ltd., a New York corporation (the "Company"), and Chase Lincoln First
Bank, N.A., a national banking association (the "Rights Agent").
WHEREAS, on December 13, 1989 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a distribution of one
Right for each share of common stock, par value $6.25 per share, of the Company
(the "Company Common Stock") outstanding as of the Close of Business on December
26, 1989 (the "Record Date"), and has authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant hereto) for each share of
Company Common Stock issued between the Record Date (whether originally issued
or delivered from the Company's treasury) and, except as otherwise provided
in Section 22, the Distribution Date, each Right initially representing the
right to purchase upon the terms and subject to the conditions hereinafter set
forth one Unit of Series A Preferred Stock (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity) which shall (i) be the Beneficial Owner, directly or
indirectly, of 20% or more of the shares of Voting Stock then outstanding or
(ii) is an Affiliate or Associate of the Company and at any time within the five
year period immediately prior to a Stock Acquisition Date was the Beneficial
Owner, directly or indirectly, of more than 20% of the Voting Stock of the
Company; provided, however, that for purpose of determining whether a Person is
an Acquiring Person, the number of shares of Voting Stock of the Company deemed
outstanding shall include shares Beneficially Owned by such Acquiring Person but
shall not include any unissued shares of Voting Stock of the Company which may
be issued pursuant to any agreement, arrangement or understanding or upon
exercise of conversion rights, warrants or options, or otherwise.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Section 912(a) of the New York Business Corporation
Law (the "NYBCL"), as in effect on the date hereof.
(c) "Beneficial Owner", when used with respect to any securities, means
a Person:
(i) that, individually or with or through any of its Affiliates
or Associates, beneficially owns such securities, directly or indirectly; or
(ii) that, individually or with or through any of its
Affiliates or Associates, has (A) the right to acquire such securities (whether
such right is exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise; provided, however, that a person shall not be deemed
the Beneficial Owner of securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Persons' Affiliates or Associates
until such tendered securities are accepted for purchase or exchange or, of
securities that may be issued upon exercise of Rights at any time prior to the
occurrence of a Triggering Event; or (B) the right to vote such stock pursuant
to any agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the Beneficial Owner of any
securities if the agreement, arrangement or understanding to vote such security
(X) arises solely from a revocable proxy or consent given in response to a proxy
or consent solicitation made in accordance with the applicable rules and
regulations under the Exchange Act and (Y) is not then reportable on a Schedule
13D under the Exchange Act (or any comparable or successor report); or
<PAGE> 23
(iii) that has any agreement, arrangement or understanding
(whether or not in writing), for the purpose ofacquiring, holding, voting
(except voting pursuant to a revocable proxy or consent as described in item (B)
of clause (ii) of this subparagraph), or disposing of such security with any
other Person that Beneficially Owns, or whose Affiliates or Associates
Beneficially own, directly or indirectly, such security.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in New York City are authorized or obligated
by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(f) "Common Stock" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such Person
shall have no capital stock, the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Company Common Stock" has the meaning set forth in the Whereas
Clause.
(h) "Distribution Date" has the meaning set forth in Section 3(a).
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Expiration Date" has the meaning set forth in Section 7(a).
(k) "Person" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
(l) "Preferred Stock" shall mean the Series A Preferred Stock, par value
$1.00 per share, of the Company having the relative rights, preferences and
limitations described in the Certificate of Amendment of Restated Certificate of
Incorporation of the Company set forth as Exhibit C hereto.
(m) "Purchase Price" has the meaning set forth in Section 7(b).
(n) "Record Date" has the meaning set forth in the Whereas Clause.
(o) "Right" has the meaning set forth in the Whereas Clause.
(p) "Rights Certificate" has the meaning set forth in Section 3(a).
(q) "Rights Dividend Declaration Date" has the meaning set forth in the
Whereas Clause.
(r) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii)(A), (B) or (C) hereof.
(s) "Section 13 Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
(t) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(u) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is owned, directly or
indirectly, by such Person.
<PAGE> 24
(v) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(w) "Unit'' has the meaning set forth in Section 7(b).
(x) "Voting Stock" shall mean any shares of capital stock of the Company
entitled to vote generally in the election of directors.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the
Close of Business on the tenth day after the Stock Acquisition Date, and (ii)
the Close of Business on the tenth business day after the date that a tender or
exchange offer by any Person other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 30% or more of
the shares of Voting Stock then outstanding (the earlier of (i) and (ii) above
being the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by first-
class, insured, postage prepaid mail, to each record holder of shares of Company
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made
pursuant to Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in a form
which may be appended to certificates that represent shares of Company Common
Stock, in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of shares
of Company Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect of all
shares of Company Common Stock which are issued (including any shares of Company
Common Stock held in treasury) after the Record Date but prior to the earlier of
the Distribution Date and the Expiration Date. Certificates representing such
shares of Company Common Stock issued after the Record Date shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Oneida Ltd. (the
"Company") and Chase Lincoln First Bank, N.A. (the "Rights Agent") dated as of
December 13, 1989 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
office of the stock transfer administration office of the Rights Agent. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by
<PAGE> 25
separate certificates and will no longer be evidenced by this certificate. The
Rights Agent will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void. With respect
to certificates representing shares of Company Common Stock (whether or not such
certificates include the foregoing legend or have appended to them the Summary
of Rights), until the earlier of (i) the Distribution Date and (ii) the
Expiration Date, the Rights associated with the shares of Company Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of the shares of Company Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock represented by such certificates.
Section 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase, assignment and certificate to be printed
on the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed or to conform to usage. Subject
to the provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of Units of Preferred
Stock as shall be set forth therein at the price set forth therein, but the
amount and type of securities, cash or other assets that may be acquired upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer which
the Company's Board of Directors has determined to be part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof shall, upon the written direction of the
Company's Board of Directors, contain (to the extent feasible), the following
legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiriring Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section 7(e)
of such Agreement.
Section 5. Countersignature and Registration. (a) Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be manual or
facsimile. Rights Certificates bearing the manual or facsimile signatures of the
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature of such Rights
Certificates or did not hold such offices at the date of such Rights
Certificates.
<PAGE> 26
No Rights Certificate shall be entitled to any benefit under this Agreement or
be valid for any purpose unless there appears on such Rights Certificate a
countersignature duly executed by the Rights Agent by manual signature of an
authorized officer, and such countersignature upon any Rights Certificate shall
be conclusive evidence, and the only evidence, that such Rights Certificate has
been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address
of each holder of the Rights Certificates, the number of Rights evidenced
on its face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of Units of Preferred Stock (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged,
together with, in the event of a transfer, the form of assignment and related
certificate duly completed and executed, at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Rights Certificate until the registered holder shall have
completed and executed the certificate set forth in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) If a Rights Certificate shall be mutilated, lost, stolen or
destroyed, upon request by the registered holder of the Rights represented
thereby and upon payment the Company and the Rights Agent of all reasonable
expenses incident thereto, there shall be issued, in exchange for and upon
cancellation of the mutilated Rights Certificate, or in substitution for
the lost, stolen or destroyed Rights Certificate, a new Rights Certificate,
in substantially the form of the prior Rights Certificate, of like tenor and
representing the equivalent number of Rights, but, in the case of loss, theft or
destruction, only upon receipt of evidence satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights Certificate and,
if requested by the Company or the Rights Agent, indemnity also satisfactory to
it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Prior to the earlier of (i) the Close of Business on the tenth anniversary
hereof (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being the
"Expiration Date"), the registered holder of any Rights Certificate may, subject
to the provisions of Sections 7(e) and 9(c) hereof, exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as hereinafter defined) for the
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which such surrendered
Rights are then exercisable.
<PAGE> 27
(b) The purchase price for each one one-thousandth of a share (each such
one one-thousandth of a share being a "Unit") of Preferred Stock upon exercise
of Rights shall be $45.00 subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof (such purchase price, as so adjusted, being the
"Purchase Price"), and shall be payable in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good
standing organized under the laws of the United States or any State of the
United States, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority (such institution being the "Depositary Agent") certificates
representing the shares of Preferred Stock that may be acquired upon exercise
of the Rights and shall cause such Depositary Agent to enter into an agreement
pursuant to which the Depositary Agent shall issue receipts representing
interests in the shares of Preferred Stock so deposited. Upon receipt of a
Rights Certificate representing exercisable Rights, with the form of election
to purchase and the certificate duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price for the Units of
Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) to be purchased thereby as set forth below and
an amount equal to any applicable transfer tax or evidence satisfactory to the
Company of payment of such tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) requisition from the Depositary Agent
depositary receipts representing such number of Units of Preferred Stock as are
to be purchased and the Company will direct the Depositary Agent to comply with
such request, (ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. In the event that the Company is
obligated to issue Company Common Stock, other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such Company Common Stock,
other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when appropriate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be
made in cash or by certified or bank check or bank draft payable to the
order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which the Company's
Board of Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or such Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
<PAGE> 28
(f) Notwithstanding anything in this Agreement or any Rights Certificate
to the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise by such registered holder unless such registered
holder shall have (i) completed and executed the certificate following the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) of the
Rights represented by such Rights Certificate or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The Company
shall at all times prior to the Expiration Date cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock, the
number of shares of Preferred Stock that, as provided in this Agreement, will be
sufficient to permit the exercise in full of all outstanding Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of
shares of Preferred Stock (or other equity securities of the Company) issuable
upon exercise of all outstanding Rights above the number then reserved, the
Company shall make an appropriate increase in the number of shares so reserved.
(b) So long as the shares of Preferred Stock to be issued and delivered
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall during the period from the Distribution Date through
the Expiration Date use its best efforts to cause all securities reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to
be delivered by the Company upon exercise of the Rights or, if so required
by law, as soon as practicable following the Distribution Date (such date being
the "Registration Date"), to file a registration statement on an appropriate
form under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities that may be acquired upon exercise of the
Rights (the "Registration Statement"), (ii) to cause the Registration Statement
to become effective as soon as practicable after such filing, (iii) to cause
the Registration Statement to continue to be effective (and to include a
prospectus complying with the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
the securities covered by the Registration Statement, and (B) the Expiration
Date and (iv) to take as soon as practicable following the Registration Date
such action as may be required to ensure that any acquisition of securities upon
exercise of the Rights complies with any applicable state securities or "blue
sky" laws. Notwithstanding anything herein or in the Rights Certificates to the
contrary, after the Distribution Date the Company may instruct the Rights Agent
not to deliver Units of Preferred Stock upon the exercise of Rights (or,
following the occurrence of a Triggering Event, any other securities that
may be delivered upon exercise of Rights) if the Company determines that such
delivery would violate the Securities Act and the rules then in effect
thereunder.
(d) The Company shall take such action as may be necessary to
ensure that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and
fully paid and non-assessable.
<PAGE> 29
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; provided, however, the Company
shall not be required to pay any such tax imposed in connection with the
issuance or delivery of Units of Preferred Stock, or any certificates or
depositary receipts for such Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as the
case may be) to any person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company
shall not be required to issue or deliver any certificates or depositary
receipts for Units of Preferred Stock (or, following the occurrence of a
Triggering Event, any other securities, cash or assets, as the case may be)
to, or in a name other than that of, the registered holder upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Units of
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
securities on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are open; and provided,
further, that if delivery of any certificate for Units of Preferred Stock
(or, following the occurrence of a Triggering Event, any other securities that
may be delivered upon exercise of Rights) is delayed pursuant to Section 9(c)
hereof, such Person shall be deemed to have become the record holder of such
Securities on, and such certificate shall be dated, the date on which such
securities first become deliverable. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to
securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on such
date upon exercise of the Rights, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and kind
of shares of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date, such holder would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
<PAGE> 30
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of such
merger or combination and Company Common Stock shall remain outstanding, (2)
shall, in one transaction or a series of transactions, transfer any assets to
the Company or to any of its Subsidiaries in exchange (in whole or in part) for
shares of Company Common Stock, for other equity securities of the Company or
any such Subsidiary, or for securities exercisable for or convertible into
shares of equity securities of the Company or any of its Subsidiaries (whether
Company Common Stock or otherwise) or otherwise obtain from the Company or
any of its Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable for or convertible
into such equity securities (other than pursuant to a pro rata distribution to
all holders of Company Common Stock), (3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with (as the case may be)
the Company or any of its Subsidiaries or any employee benefit plan maintained
by the Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity, assets (including securities) on
terms and conditions less favorable to the Company or such Subsidiary or
plan than those that could have been obtained in arm's-length negotiations with
an unaffiliated third party, other than pursuant to a transaction set forth in
Section 13(a) hereof, (4) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with the Company or any of the Company's
Subsidiaries or any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity (other than transactions, if any, consistent with those engaged
in, as of the date hereof, by the Company and such Acquiring Person or such
Associate or Affiliate), assets (including securities) having an aggregate fair
market value of more than $1,000,000, other than pursuant to a transaction set
forth in Section 13(a) hereof, (5) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the Company or any
of its Subsidiaries or any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, any material trademark or material service mark, other
than pursuant to a transaction set forth in Section 13(a) hereof, (6) shall
receive, or any designee, agent or representative of such Acquiring Person, or
any Associate or Affiliate of such Acquiring Person shall receive any
compensation from the Company or any of its Subsidiaries other than compensation
for full-time employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (7) shall receive the
benefit, directly or indirectly (except proportionately as a holder of Company
Common Stock or as required by law or governmental regulation), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity; or
(B) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) shall become the Beneficial Owner of 20% or more of the shares of
Voting Stock then outstanding, other than pursuant to any transaction set
forth in Section 13(a) hereof;
or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock
split), or recapitalization of the Company, or any merger or consolidation of
the Company with any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of Section 13(a) apply
(whether or not with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its Subsidiaries which is directly or indirectly
beneficially owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person; then, immediately upon the date of the occurrence of any event
described in Section 11(a)(ii)(A)-(C) hereof (a "Section 11(a)(ii) Event"),
proper provision shall be made so that each holder of a Right (except as
provided
<PAGE> 31
below and in Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of the number of Units of Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, such number of Units of Preferred Stock as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
then number of Units of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event (such
product thereafter being, for all purposes of this Agreement other than Section
13 hereof, the "Purchase Price"), and (y) dividing that product by 50% of the
then current market price (determined pursuant to Section 11(d) hereof) per Unit
of Preferred Stock on the date of such first occurrence (such Units of Preferred
Stock being the "Adjustment Shares").
(iii) In the event that the number of shares of Preferred Stock
which are authorized by the Company's Restated Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company, by the vote of the Company's Board of Directors, shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price (such excess being
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common
Stock or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being
"preferred stock equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined
by the Company's Board of Directors, after receiving advice from a nationally
recognized investment banking firm; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Units of Preferred Stock (to the
extent available) and then, if necessary, cash, which Units of Preferred Stock
and/or cash shall have an aggregate value equal to the Spread. To the extent
that the Company determines that some action need be taken pursuant to the first
sentence of this Section 11(a)(iii), the Company shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights. For purposes of this Section 11(a)(iii), the value of a Unit of
Preferred Stock shall be the current market price (as determined pursuant to
Section 11(d) hereof) per Unit of Preferred Stock on the Section 11(a)(ii)
Trigger Date and the value of any preferred stock equivalent shall be deemed to
have the same value as the Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five calendar
days after such record date) shares of Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of
Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred Stock or
equivalent preferred stock) less than the current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the sum
of the number of shares of Preferred Stock outstanding on such record date plus
the number of shares of Preferred Stock which the aggregate offering price of
the total number of shares of Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price, and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Company's Board of
<PAGE> 32
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Shares of Preferred Stock owned by or held for the account of the
Company or any Subsidiary shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such
a record date is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of shares of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Preferred Stock,
but including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date less the fair market value (as determined in good
faith by the Company's Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holder of the Rights) of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants in
respect of a share of Preferred Stock and the denominator of which shall be
such current market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of
Company Common Stock or Common Stock, as the case may be, for the ten
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, if prior to the expiration of such
requisite ten Trading Day period the issuer announces either (A) a dividend or
distribution on such shares payable in such shares or securities convertible
into such shares (other than the Rights), or (B) any subdivision, combination
or reclassification of such shares, then, following the ex-dividend date for
such dividend or the record date for such subdivision, as the case may be, the
"current market price" shall be properly adjusted to take into account such
event. The closing price for each day shall be, if the shares are listed and
admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such shares are
listed or admitted to trading or, if such shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then
in use, or, if on any such date such shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected by the
Company's Board of Directors. If on any such date no market maker is making a
market in such shares, the fair value of such shares on such date as determined
in good faith by the Company's Board of Directors shall be used. If such
shares are not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share as determined in good faith by the
Company's Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
The term "Trading Day" shall mean, if such shares are listed or admitted to
trading on any national securities exchange, a day on which the principal
national securities exchange on which such shares are listed or admitted to
trading is open for the transaction of business or, if such shares are not so
listed or admitted, a Business Day.
<PAGE> 33
(ii) For the purpose of any computation hereunder, the "current
market price'' per share of Preferred Stock shall be determined in the same
manner as set forth above for Company Common Stock in clause (i) of this
Section 11(d) (other than the fourth sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market
price" per share of Preferred Stock shall be conclusively deemed to be an amount
equal to 1000 (as such amount may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of Company Common Stock. If neither Company
Common Stock nor Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Company's Board of Directors
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
For all purposes of this Agreement, the "current market price" of a Unit of
Preferred Stock shall be equal to the "current market price" of one share of
Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Company
Common Stock or Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Sections 11(a)(ii)
or 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred
Stock (or other securities or amount of cash or combination thereof) that may
be acquired from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one-ten thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of Units of Preferred Stock that may be acquired upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of Units of Preferred Stock or
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after
<PAGE> 34
adjustment of the Purchase Price. The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Rights Certificates have been issued, shall
be at least ten days later than the date of such public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and the number of Units of Preferred
Stock which was expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units
of Preferred Stock issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue such fully paid and non-
assessable number of Units of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that in their good faith judgment the Company's Board of
Directors shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to holders of its Preferred
Stock, shall not be taxable to such holders or shall reduce the taxes payable
by such holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction,
or a series of transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
<PAGE> 35
11(o) hereof), if (x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the Person which constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have distributed or otherwise transferred to its shareholders or other
persons holding an equity interest in such Person Rights previously owned by
such Person or any of its Affiliates and Associates; provided, however, this
Section 11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Company Common Stock payable in shares of Company
Common Stock, (ii) subdivide the outstanding shares of Company Common Stock,
(iii) combine the outstanding shares of Company Common Stock into a smaller
number of shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), the number of Rights associated with each
share of Company Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each share of
Company Common Stock following any such event shall equal the result obtained
by multiplying the number of Rights associated with each share of Company Common
Stock immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Company Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Company Common Stock outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Company Common Stock shall be
converted into or exchanged for stock or other securities of any other Person
or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
to any Person or Persons (other than the Company or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o)
hereof), in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) (any such event being a "Section 13 Event"), then, and
in each such case, proper provision shall be made
<PAGE> 36
so that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price, such number of validly authorized and
issued, fully paid and non-assessable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), which shares shall not be subject
to any liens, encumbrances, rights of first refusal, transfer restrictions or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of Units of Preferred
Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such Units for which a Right would be exercisable hereunder but for
the occurrence of such Section 11(a)(ii) Event by the Purchase Price which
would be in effect hereunder but for such first occurrence) and (2) dividing
that product (which, following the first occurrence of a Section 13 Event,
shall be the "Purchase Price" for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section 11(d) hereof) per share of
the Common Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions of this Agreement shall thereafter
be applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no further effect following the first occurrence of any Section
13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), (A) the Person that is the issuer of
any securities into which shares of Company Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no securities are so issued, the
Person that is the other party to such merger or consolidation, or, if there
is more than one such Person, the Person the Common Stock of which has the
highest aggregate current market price (determined pursuant to Section
11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the
Person receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); provided,
however, that in any such case, (1) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act ("Registered Common
Stock"), and such Person is a direct or indirect Subsidiary of another Person
that has Registered Common Stock outstanding, "Principal Party" shall refer to
such other Person; (2) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person but is not a direct or indirect
Subsidiary of another Person which has Registered Common Stock outstanding,
"Principal Party" shall refer to the ultimate parent entity of such first-
mentioned Person; (3) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is directly
or indirectly controlled by more than one Person, and one or more of such
other Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the
Registered Common Stock having the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); and (4) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is directly or indirectly controlled by more than one Person,
and none of such other Persons have Registered Common Stock outstanding,
"Principal Party" shall refer to whichever ultimate parent entity is the
corporation having the
<PAGE> 37
greatest shareholders equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement under
the Securities Act with respect to the Common Stock that may be acquired upon
exercise of the Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the requirement of
the Securities Act) until the Expiration Date, and (C) as soon as practicable
following the execution of such agreement, take such action as may be required
to ensure that any acquisition of such Common Stock upon the exercise of the
Rights complies with any applicable state securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has provision in any of its authorized securities
or in its Certificate of Incorporation or By-laws or other instrument governing
its corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current market price per
share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than
such then current market price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value
of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if
the Rights are listed or admitted to trading on a national securities exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid
<PAGE> 38
and asked prices as furnished by a professional market maker making a market in
the Rights selected by the Company's Board of Directors. If on any such date no
such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Company's Board of
Directors shall be used and such determination shall be described in a
statement filed with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one one-
thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of
a share of Preferred Stock). In lieu of such fractional shares of Preferred
Stock that are not integral multiples of one one-thousandth of a share, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the then current market value of a Unit of Preferred Stock on
the day of exercise determined in accordance with Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders
of certificates representing shares of Company Common Stock); and any
registered holder of a Rights Certificate (or, prior to the Distribution Date,
of a certificate representing shares of Company Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of a certificate representing shares of
Company Common Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office
of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Company Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order,
<PAGE> 39
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a shareholde
of the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, except as provided in Section 24
hereof, to receive notice of meetings or other actions affecting shareholders,
or to receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability hereunder.
The indemnity provided herein shall survive the expiration of the Rights and
the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to have been signed,
executed and, where necessary, verified or acknowledged by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services businesses of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any document or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
<PAGE> 40
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the validity
of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by
the Company to satisfy conditions contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt by the
Rights Agent of the certificate describing any such adjustment contemplated by
Section 12); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Preferred Stock or any other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or any other securities will, when so issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement.
<PAGE> 41
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered
to be taken by it in good faith in accordance with instructions of any such
officer. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any such officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to
such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct if reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either
not been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with
the Company. If such certificate has been completed and signed and shows a
negative response to clauses 1 and/or 2 of such Certificate, unless previously
instructed otherwise in writing by the Company (which instructions may
impose on the Rights Agent additional ministerial responsibilities, but no
discretionary responsibilities), the Rights Agent may assume without further
inquiry that the Rights Certificate is not owned by a person described in
Section 4(b) or Section 7(e) hereof and shall not be charged with any knowledge
to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate
<PAGE> 42
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of
the United States or any state of the United States in good standing. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred Stock
and the Company Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Company's Board of Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired under the Rights Certificates. In addition,
in connection with the issuance or sale of shares of Company Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Company Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Company's Board of Directors, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) Subject to Section 30
hereof, the Company may, at its option, by action of the Company's Board of
Directors, at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Stock Acquisition Date, or (ii) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being the "Redemption Price"), and
the Company may, at its option, by action of the Company's Board of Directors,
pay the Redemption Price either in shares of Company Common Stock (based on
the "current market price", as defined in Section 11(d) hereof, of the shares
of Company Common Stock at the time of redemption) or cash.
(b) Immediately upon the action of the Company's Board of Directors
ordering the redemption of the Rights, evidence of which shall be filed with
the Rights Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Company's Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for Company Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
<PAGE> 43
Section 24. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company),
(ii) to offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Preferred Stock, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least twenty (20) days prior
to the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of
Preferred Stock whichever shall be the earlier; provided, however, no such
notice shall be required pursuant to this Section 24, if any Subsidiary of the
Company effects a consolidation or merger with or into, or effects a sale or
other transfer of assets or earnings power to, any other Subsidiary of the
Company.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company,
at its address at:
Oneida Ltd.
Oneida, New York 13421
Attention: Secretary
And if to the Rights Agent, at its address at:
Chase Lincoln First Bank, N.A.
P.O. Box 1250
Rochester, New York 14603
Attention: Corporate Agency Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
<PAGE> 44
Section 26. Supplements and Amendments. Prior to the Distribution
Date, the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Company Common Stock. From
and after the Distribution Date, the Company may and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) subject to Section 30 hereof, a time period relating to when the
Rights may be redeemed at such time as the Rights are not then redeemable, or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 26, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Company Common Stock.
Section 27. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares
of Company Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Company Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
Exchange Act Regulations as in effect on the date hereof. Except as otherwise
specifically provided herein, the Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject the Board or any member thereof to any
liability to the holders of the Rights. Any reference herein to action by the
Board of Directors of the Company refers to action by such vote as is required
by the Certificate of Incorporation or By-laws of the Company or otherwise
required by applicable law.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and the Company's
Board of Directors determines in its good faith judgment that severing the
invalid language from this
<PAGE> 45
Agreement would adversely affect the purpose or effect of this Agreement and the
Rights shall not then be redeemable, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth day following the date of such determination by the
Company's Board of Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed entirely in such State.
Section 32. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
Section 33. Descriptive Headlines. The headings contained in this Agreement
are for descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the date first above written.
ONEIDA LTD.
By:/s/William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
CHASE LINCOLN FIRST BANK, N.A.
By:/s/ Doreen H. Gross
Name: Doreen H. Gross
Title: Stock Transfer Officer
<PAGE> 46
Exhibit A
[Form of Rights Certificate]
Certificate No._________ ___________Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] *
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
Rights Certificate
ONEIDA LTD.
This certifies that____________________ , or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of December 13, 1989 (the "Rights Agreement")
between Oneida Ltd., a New York corporation (the "Company"), and Chase Lincoln
First Bank, N.A., a national banking association, as Rights Agent (the "Rights
Agent", which term shall include any successor Rights Agent under the Rights
Agreement), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to the
Expiration Date (as such term is defined in the Rights Agreement) at the office
of the Rights Agent or its successor designated for such purpose, one one-
thousandth of a fully paid nonassessable share of Series A Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), of the Company at the
Purchase Price initially of $45.00 per one one-thousandth share (each such one
one-thousandth of a share being a "Unit") of Preferred Stock, upon presentation
and surrender of this Rights Certificate with the Election to Purchase and
related certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of Units which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per Unit set forth above shall
be subject to adjustment in certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined in the Rights Agreement) or,
under certain circumstances described in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
<PAGE> 47
In certain circumstances described in the Rights Agreement, the rights evidenced
hereby may entitle the registered holder thereof to purchase capital stock of
an entity other than the Company or receive cash or other assets, all as
provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions of the
Rights Agreement, which terms and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the
Rights Agent or the Company upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may
be exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company under certain circumstances at its
option at a redemption price of $.01 per Right, payable at the Company's option
in cash or in common stock of the Company, subject to adjustment in certain
events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ______________________, 19___.
ATTEST: ONEIDA LTD.
By:___________________________ By:___________________________
Name: Name:
Title: Title:
Countersigned:
CHASE LINCOLN FIRST BANK, N.A.
as Rights Agent
By:____________________________
Authorized Signature
<PAGE> 48
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificate.)
FOR VALUE RECEIVED ___________________________________________
hereby sells, assigns and transfers unto
______________________________________________________________
(Please print name and address of transferee)
______________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute
and appoint __________________________ Attorney, to transfer
the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: __________________ , 19___
___________________________
Signature
Signature Guaranteed:
<PAGE> 49
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _________________ , 19____
_____________________________
Signature
Signature Guaranteed:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
The signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States
In the event the certification set forth above is not completed, the Company
will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
<PAGE> 50
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights represented
by the Rights Certificate.)
To: ONEIDA LTD.
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the Units of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
______________________________________________________________
(Please print name and address)
______________________________________________________________
Please insert social security or other identifying number:
____________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
______________________________________________________________
(Please print name and address)
______________________________________________________________
Please insert social security or other identifying number:
____________________________________________
Dated: ________________, 19_____
__________________________________
Signature
<PAGE> 51
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: _________________ , 19_____
_____________________________
Signature
Signature Guaranteed:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
The signature in the foregoing Election to Purchase and Certificate must conform
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States
In the event the certification set forth above is not completed, the Company
will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
<PAGE> 52
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On December 13, 1989, the Board of Directors of Oneida Ltd. (the "Company")
declared a distribution of one Right for each outstanding share of Common Stock,
par value $6.25 per share (the "Company Common Stock"), to shareholders of
record at the close of business on December 26, 1989 and for each share of
Company Common Stock issued (including shares distributed from Treasury) by the
Company thereafter and prior to the Distribution Date. Each Right entitles
the registered holder, subject to the terms of the Rights Agreement, to
purchase from the Company one one-thousandth of a share (a "Unit") of
Series A Preferred Stock, par value $1.00 per share (the "Preferred Stock"), at
a Purchase Price of $45.00 per Unit, subject to adjustment. The Purchase Price
is payable in cash or by certified or bank check or money order payable to
the order of the Company. The description and terms of the Rights are set forth
in a Rights Agreement executed by the Company and Chase Lincoln First
Bank, N.A., as Rights Agent, dated as of December 13, 1989 (the "Rights
Agreement").
Copies of the Rights Agreement and the Certificate of Amendment of Restated
Certificate of Incorporation (the "Certificate of Amendment") for the Preferred
Stock have been filed with the Securities and Exchange Commission as exhibits
to a Registration Statement on Form 8-A. Copies of the Rights Agreement and the
Certificate of Amendment are available free of charge from the Company. This
summary description of the Rights and the Preferred Stock does not purport to
be complete and is qualified in its entirety by reference to all the provisions
of the Rights Agreement and the Certificate of Amendment, including the
definitions therein of certain terms, which Rights Agreement and Certificate of
Amendment are incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates representing shares of
outstanding Company Common Stock, and no separate Rights Certificates will be
distributed. The Rights will separate from the Company Common Stock and the
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement (the date of such announcement being the "Stock Acquisition Date")
that a person or group of affiliated or associated persons (other than the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or such Subsidiary) (an "Acquiring Person") has acquired, obtained the
right to acquire, or otherwise obtained beneficial ownership of 20% or more of
the then outstanding shares of Voting Stock, or (ii) 10 business days
following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 30% or more of the then
outstanding shares of Voting Stock. Until the Distribution Date, (i) the Rights
will be evidenced by Company Common Stock certificates and will be transferred
with and only with such Company Common Stock certificates, (ii) new
Company Common Stock certificates issued after December 26, 1989 (also including
shares distributed from Treasury) will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of any
certificates representing outstanding Company Common Stock will also constitute
the transfer of the Rights associated with the Company Common Stock represented
by such certificate.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on the tenth anniversary of the Rights Agreement unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates will be
mailed to holders of record of Company Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights.
In the event that (i) the Company is the surviving corporation in a merger with
an Acquiring Person and shares of Company Common Stock shall remain outstanding,
(ii) a Person becomes the beneficial owner of 20% or more of the then
outstanding shares of Voting Stock, (iii) an Acquiring Person engages in one or
more "self-dealing" transactions as set forth in the Rights Agreement, or (iv)
during such time as there is an Acquiring Person, an event occurs which results
in such Acquiring Person's ownership interest being increased by more than 1%
(e.g., by means of a reverse stock split or recapitalization), then, in each
such case, each holder of a Right will thereafter have the right to receive,
upon exercise, Units of Preferred Stock having a value equal to
<PAGE> 53
two times the exercise price of the Right. The exercise price is the Purchase
Price multiplied by the number of Units of Preferred Stock issuable upon
exercise of a Right prior to the events described in this paragraph.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this Paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person with be null and void.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction and
the Company is not the surviving corporation, (ii) any Person consolidates or
merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other Person
or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the other Person to such transaction having a value
equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution to
the holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the Purchase Price. The
Company is not required to issue fractional Units. In lieu thereof, an
adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the Company
may, by action of the Company's Board of Directors, redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"), payable,
at the election of the Company's Board of Directors, in cash or shares of
Company Common Stock. Immediately upon the action of the Company's Board of
Directors ordering the redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the Rights will not be
taxable to shareholders or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended at any time prior
to the Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the Rights
will be nonredeemable and subordinate to any other shares of preferred stock
that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly dividend
rate of $0.12 per Unit but will, in any event, be entitled to a dividend equal
to the per share dividend declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $0.01 per Unit
or the per share amount paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
<PAGE> 54
In the event of any merger, consolidation or other transaction in which shares
of Company Common Stock are exchanged, each Unit of Preferred Stock will be
entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and voting
rights, the economic value of one Unit of Preferred Stock that may be acquired
upon the exercise of each Right should approximate the economic value of one
share of Company Common Stock.
<PAGE> 55
Exhibit C
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ONEIDA LTD.
__________________________________________________
Under Section 805 of the
Business Corporation Law
____________________________________________________
We, William D. Matthews and M. Jack Rudnick, respectively the Chairman of the
Board and the Secretary of Oneida Ltd., DO HEREBY CERTIFY:
1. The name of the corporation is ONEIDA LTD. (hereinafter called the
"Corporation"). The name under which it was originally incorporated was Oneida
Community, Limited.
2. The Certificate of Incorporation of the Corporation was filed by the
Department of State on the 20th day of November, 1880, and a Restated
Certificate of Incorporation of the Corporation was filed on the 19th day of
April, 1984.
3. The Certificate of Incorporation of the Corporation is amended by the
addition of the following provisions stating the number, designation, relative
rights, preferences, and limitations of the shares of a series of preferred
stock of the Corporation designated as "Series A Preferred Stock."
4. A new subdivision (C) is added to Article FOURTH thereof, which subdivision
(C) reads in its entirety as follows:
"(C.) Series A Preferred Stock. The designation and amount, relative rights,
preferences and limitations of the shares of Series A Preferred Stock, of a par
value of $1.00 each, as fixed by the Board of Directors, are as follows:
(1) Designation and Amount. The shares of such series shall be designated as
"Series A Preferred Stock" and the number of shares constituting such series
shall be 150,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than that of
the shares then outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Company.
(2) Dividends and Distributions. (a) Subject to the prior and superior rights
of the holders of any shares of any other series of preferred stock or any other
preferred stock of the Corporation ranking prior and superior to the Series A
Preferred Stock with respect to dividends, each holder of one one-thousandth
(1/1000) of a share (a "Unit") of Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for that purpose, (i) quarterly dividends payable in cash on
the 1st day of March, June, September and December in each year (each such date
being a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of such Unit of Series
A Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to
the greater of (A) $0.12 or (B) subject to the provision for adjustment
hereinafter set forth, the aggregate per share amount of all cash dividends
declared on shares of the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of a Unit of Series A Preferred
<PAGE> 56
Stock, and (ii) subject to the provision for adjustment hereinafter set forth,
quarterly distributions (payable in kind) on each Quarterly Dividend Payment
Date in an amount per Unit equal to the aggregate per share amount of all non-
cash dividends or other distributions (other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common Stock, by
reclassification or otherwise) declared on shares of Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Preferred Stock. In the event that the Corporation shall at any time
after December 13, 1989 (the "Rights Declaration Date") (i) declare any dividend
on outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii) combine outstanding shares
of Common Stock into a smaller number of shares, then in each such case the
amount to which the holder of a Unit of Series A Preferred Stock was entitled
immediately prior to such event pursuant to the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of share common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on Units of
Series A Preferred Stock as provided in paragraph (a) above immediately after it
declares a dividend or distribution on the shares of Common Stock (other than a
dividend payable in shares of Common Stock); provided, however, that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.12 per Unit on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and shall be cumulative on each outstanding
Unit of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of such Unit of Series A Preferred Stock, unless
the date of issuance of such Unit is prior to the record date for the first
Quarterly Dividend Payment Date, in which case, dividends on such Unit shall
begin to accrue from the date of issuance of such Unit, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of Units of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on Units of Series A Preferred Stock in an
amount less than the aggregate amount of all such dividends at the time accrued
and payable on such Units shall be allocated pro rata on a unit-by-unit basis
among all Units of Series A Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of Units of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for payment thereof.
(3) Voting Rights. The holders of Units of Series A Preferred Stock shall have
the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each Unit of
Series A Preferred Stock shall entitle the holder thereof to one vote on all
matters submitted to a vote of the shareholders of the Corporation. In the
event the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
then in each such case the number of votes per Unit to which holders of Units of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which shall
be the number of shares of Common Stock outstanding immediately after such event
and the denominator of which shall be the number of shares of Common Stock that
were outstanding immediately prior to such event.
<PAGE> 57
(b) Except as otherwise provided herein or by law, the holders of Units of
Series A Preferred Stock and the holders of Common Stock shall vote together as
one class on all matters submitted to a vote of shareholders of the Corporation.
(c) (i) If at any time Dividends on any Units of Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon,
then during the period (a "default period") from the occurrence of such event
until such time as all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all Units of
Series A Preferred Stock then outstanding shall have been declared and paid
or set apart for payment, all holders of Units of Series A Preferred Stock,
voting separately as a class, shall have the right to elect two Directors.
(ii) During any default period, such voting rights of the holders of Units of
Series A Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(c) or at any annual meeting of
shareholders, and thereafter at annual meetings of shareholders, provided that
neither such voting rights nor any right of the holders of Units of Series A
Preferred Stock to increase, in certain cases, the authorized number of
Directors may be exercised at any meeting unless one-third of the outstanding
Units of Preferred Stock shall be present at such meeting in person or by proxy.
The absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Units of Series A Preferred Stock of such rights. At
any meeting at which the holders of Units of Series A Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting separately as a class, to elect Directors to fill
up to two vacancies in the Board of Directors, if any such vacancies may then
exist, or, if such right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Series A Preferred Stock shall
have the right to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number. After the
holders of Units of Series A Preferred Stock shall have exercised their right
to elect Directors during any default period, the number of Directors shall not
be increased or decreased except as approved by a vote of the holders of Units
of Series A Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to the Series A Preferred Stock.
(iii) Unless the holders of Series A Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any shareholder or shareholders owning in the
aggregate not less than 25% of the total number of Units of Series A Preferred
Stock outstanding may request, the calling of a special meeting of the holders
of Units of Series A Preferred Stock, which meeting shall thereupon be called by
the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Units of Series A Preferred Stock are entitled to
vote pursuant to this subparagraph (c)(iii) shall be given to each holder of
record of Units of Series A Preferred Stock by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 10 days and not later
than 50 days after such order or request or in default of the calling of such
meeting within 50 days after such order or request, such meeting may be
called on similar notice by any shareholder or shareholders owning in the
aggregate not less than 25% of the total number of outstanding Units of Series A
Preferred Stock. Notwithstanding the provisions of this paragraph (c)(iii), no
such special meeting shall be called during the 60 days immediately preceding
the date fixed for the next annual meeting of the shareholders.
(iv) During any default period, the holders of shares of Common Stock and Units
of Series A Preferred Stock, and other classes or series of stock of the
Corporation, if applicable, shall continue to be entitled to elect all the
Directors until the holders of Units of Series A Preferred Stock shall have
exercised their right to elect two Directors voting as a separate class, after
the exercise of which right (x) the Directors so elected by the holders of
Units of Series A Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in subparagraph (c)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of the
class of capital stock which elected the Director whose office shall have
become vacant. References in this paragraph (c) to Directors elected by the
holders of a
<PAGE> 58
particular class of capital stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right of the
holders of Units of Series A Preferred Stock as a separate class to elect
Directors shall cease, (y) the term of any Directors elected by the holders
of Units of Series A Preferred Stock as a separate class shall terminate, and
(z) the number of Directors shall be such number as may be provided for in the
Certificate or by-laws irrespective of any increase made pursuant to the
provisions of subparagraph (c)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the
Certificate or by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by
a majority of the remaining Directors.
(vi) The provisions of this subparagraph (c) shall govern the election of
Directors by holders of Units of Series A Preferred Stock during any default
period notwithstanding any provisions of the Certificate or by-laws to the
contrary.
(d) Except as set forth herein, holders of Units of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of shares of
Common Stock as set forth herein) for taking any corporate action.
(4) Certain Restrictions. (a) Whenever quarterly dividends or other
dividends or distributions payable on Units of Series A Preferred Stock
as provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on outstanding
Units of Series A Preferred Stock shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any junior shares;
(ii) declare or pay dividends on or make any other distributions on any parity
shares, except dividends paid ratably on Units of Series A Preferred Stock and
shares of all such parity shares on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of such Units and all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any
parity shares, provided, however, that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity shares in exchange for
any junior shares;
(iv) purchase or otherwise acquire for consideration any Units of Series A
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of such
Unit.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of the Corporation
unless the Corporation could, under paragraph (a) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner.
(5) Reacquired Shares. Any Units of Series B Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such Units shall, upon
their cancellation, become authorized but unissued preferred stock and may be
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
(6) Liquidation, Dissolution or Winding Up. (a) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of junior shares unless
the holders of Units of Series A Preferred Stock shall have received, subject
to adjustment as
<PAGE> 59
hereinafter provided in paragraph (b), the greater of either (x) $0.01 per
Unit plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not earned or declared, to the date of such payment, or (y)
the amount equal to the aggregate per share amount to be distributed to holders
of shares of Stock, or (ii) to the holders of shares of parity shares, unless
simultaneously therewith distributions are made ratably on Units of Series A
Preferred Stock and all other shares of such parity shares in proportion to the
total amounts to which the holders of Units of Series A Preferred Stock are
entitled under clause (i)(x) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up.
(b) In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the aggregate amount to which holders of Units
of Series A Preferred Stock were entitled immediately prior to such event
pursuant to clause (i)(y) of paragraph (a) of this Section 6 shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(7) Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or converted into other shares or securities,
cash and/or any other property, then in any such case Units of Series A
Preferred Stock shall at the same time be similarly exchanged for or converted
into an amount per Unit (subject to the provision for adjustment hereinafter
set forth) equal to the aggregate amount of shares, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the immediately preceding sentence with respect to
the exchange or conversion of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which
shall be the number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.
(8) Redemption. The Units of Series A Preferred Stock shall not be redeemable.
(9) Ranking. The Units of Series A Preferred Stock shall rank junior to all
other series of preferred stock and to any other class of preferred stock that
hereafter may be issued by the Corporation as to the payment of dividends and
the distribution of assets, unless the terms of any such series or class shall
provide otherwise.
(10) Amendment. The Certificate, including, without limitation, this
resolution, shall not hereafter be amended, either directly or indirectly, or
through merger or consolidation with another corporation, in any manner that
would alter or change the powers, preferences or special rights of the Series
A Preferred Stocck so as to affect them adversely without the affirmative vote
of the holders of a majority or more of the outstanding Units of Series A
Preferred Stock, voting separately as a class.
(11) Fractional Shares. The Series A Preferred Stock may be issued in Units
or other fractions of a share, which Units or fractions shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.
(12) Certain Definitions. As used herein with respect to the Series A
Preferred Stock, the following terms shall have the following meanings:
<PAGE> 60
(a) The term "Common Stock" shall mean the class of shares designated as the
Common Stock, par value $6.25 per share, of the Corporation at the date hereof
or any other class of shares resulting from successive changes or
reclassification of the common stock.
(b) The term "junior shares" (i) as used in Section 4, shall mean the Common
Stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends and (ii) as used in
Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Corporation over which the Series A Preferred Stock has
preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
(c) The term "parity shares" (i) as used in Section 4, shall mean any class or
series of capital stock of the Corporation hereafter authorized or issued
ranking pari passu with the Series A Preferred Stock as to dividends and (ii) as
used in Section 6, shall mean any class or series of capital stock ranking pari
passu with the Series A Preferred Stock in the distribution of assets or any
liquidation, dissolution or winding up."
5. The manner in which the foregoing amendment of the Certificate of
Incorporation was authorized is as follows: The Board of Directors of the
Corporation authorized the amendment under the authority vested in said Board
under the provisions of the Certificate of Incorporation of the Company and of
Section 502 of the Business Corporation Law.
IN WITNESS WHEREOF, we have subscribed this document on the date hereof and do
hereby affirm, under the penalties of perjury, that the statements contained
herein have been examined by us and are true and correct.
DATE: December 13, 1989
By: _____________________
Name: William D. Matthews
Title: Chairman of the Board
By:_____________________
Name: M. Jack Rudnick
Title: Secretary
<PAGE> 61
Assignment and Assumption Agreement
This Assignment and Assumption Agreement (herein called the "Agreement"),
made and entered into as of the 1st day of November, 1991, by and among The
Chase Manhattan Bank, N.A., a national banking association (herein called
"Assignor"), Harris Trust and Savings Bank, an Illinois banking association
organized under the laws of the United States of America (herein called
"Assignee"), and Oneida Ltd., a New York corporation (herein called the
"Company").
WITNESSETH:
WHEREAS, the Chase Lincoln First Bank, N.A. on December 13, 1989, entered
into a certain Rights Agreement with the Company (herein called the "Rights
Agreement") pursuant to which it agreed to act as rights agent, depositary,
transfer agent and registrar for the Company in respect to its Rights (the
"Rights Certificates"), upon the terms and conditions set forth in the Rights
Agreement, a copy of which is attached hereto and made a part for all
purposes; and
WHEREAS, on January 2, 1991, the Assignor was appointed the successor
rights agent; and
WHEREAS, the Rights Agreement provides that Assignor may be removed by
delivery of written notice effective upon the appointment of a successor
rights agent; and
WHEREAS, the Company has given written notice to the Assignor of its
desire to remove Assignor and appoint a successor rights agent, such termination
to be effective at the close of business on November 1, 1991 (herein called the
"Effective Time"); and
WHEREAS, the parties hereto desire to execute an instrument whereby
Assignor will transfer all its authority, powers and rights in and under the
Rights Agreement to Assignee and Assignee will agree to assume and perform all
the duties and obligations of Assignor under the Depositary Agreement;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
1. Assignment. Assignor assigns and transfers as of the Effective Time
all of its authority, powers and rights in and under the Rights Agreement to
Assignee and Assignee, as successor rights agent, shall, by virtue of this
Agreement and the Rights Agreement, be vested with all the authority,
powers, rights and immunities of Assignor to the same extent as if Assignee had
been originally named as Rights agent in the Rights Agreement.
2. Assumption. Assignee assumes and covenants to perform from and after
the Effective Time all the duties and obligations of the Assignor under the
Rights Agreement and Assignee, as successor rights agent, shall, by virtue of
this Agreement and the Rights Agreement, be subject to all the duties and
obligations of Assignor to the same extent as if Assignee had been originally
named as rights agent in the Rights Agreement.
3. Notice. Within a reasonable period after the Effective Time, the Company
shall give notice of its appointment of a successor rights agent to the Assignee
and the registered holders of the Rights Certificates.
4. Transfer of Property. By agreement with the Assignee, Assignor shall
deliver and transfer to Assignee, at the expense of the Company, any
property held by Assignor, at the Effective Time or thereafter, under the Rights
Agreement.
5. Qualification. By execution of this Agreement, Assignee represents
and warrants to the Assignor and the Company that Assignee is a corporation
organized, in good standing and doing business under the laws of the United
States of America, and authorized under such laws to exercise corporate trust
powers and subject to supervision or examination by Federal or State authority.
<PAGE> 62
6. Additional Instruments. The Company agrees to make, execute,
acknowledge and deliver any and all additional instruments in writing necessary
or appropriate to fully and effectually vest in and conform to Assignee all
authority, powers, rights, immunities, duties and obligations under the
Rights Agreement.
7. Counterpart Originals. This Agreement may be executed in one or more
counterparts, with each such counterpart constituting an original and all such
counterparts collectively constituting one and the same instrument.
8. Amendment to Rights Agreement. The Rights Agreement is hereby amended as
follows:
a. The references to "Notice" in Section 25 is amended to mean the Office of the
Assignee, Harris Trust and Savings Bank with offices located at 111 West Monroe
Street, Chicago, Illinois, 60690, Attention: Stock Transfer Division
b. The reference set forth in Section 3(C) with respect to the Legend is amended
to mean the Assignee, Harris Trust and Savings Bank, and any and all references
in Exhibit 'A' and Exhibit 'B' to Chase Lincoln First Bank, N.A. is amended to
mean Harris Trust and Savings Bank.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective seals as of the day and year first above written.
ONEIDA LTD.
(Corporate Seal) By: /s/ M. Jack Rudnick
Attest: Its: Vice President
HARRIS TRUST AND SAVINGS BANK
(Corporate Seal) By: /s/ Donald W. Koslow
Attest: Its: Vice President
THE CHASE MANHATTAN BANK, N.A.
(Corporate Seal) By: /s/ John Shaw
Attest: Its: Vice President
<PAGE> 63
EXHIBIT 10(a)
AGREEMENT made as of
October 1, 1982, by and between Oneida Ltd. (the "Company"), a
New York corporation with its principal place of business at
163-181 Kenwood Avenue, Oneida, New York and William D.
Matthews ("Executive"), Senior Vice President, Secretary and
General Counsel of the Company.
WHEREAS, Executive is
now and for several years has been the Senior Vice President,
Secretary and General Counsel of the Company; and
WHEREAS, the Company
wishes to retain the services of Executive for an extended
period and to provide for continuity of management in the
event of any actual or threatened change in control of the
Company and to provide certain security to the Executive and
Executive is agreeable thereto;
NOW, THEREFORE, in
consideration of the mutual agreements and promises set forth
herein, the parties agree as follows:
1. Employment and
Acceptance. The Company hereby agrees to employ Executive, and
Executive hereby accepts employment from the Company, in the
capacity and on the terms and conditions set forth herein.
2. Position and
Responsibilities. During the term of employment set forth in
Paragraph 3 of this Agreement, the Company shall employ
Executive, and Executive agrees to serve, as Senior Vice
President, Secretary and General Counsel of the Company.
Executive shall report to the Board of Directors, the Chairman
and Chief Executive Officer and the President and Chief
Operating Officer of the Company. Executive shall serve as
Senior Vice President, Secretary and General Counsel of the
Company and shall supervise, control and be responsible for
the legal and corporate secretarial affairs of the Company and
its subsidiaries. At all times during the term of employment,
Executive shall have such powers and duties as may be, from
time to time, prescribed by the Board of Directors of the
Company, the Chairman and Chief Executive Officer or the
President and Chief Operating Officer. Executive agrees,
subject to his election as such, to serve as Senior Vice
President, Secretary and General Counsel of the Company, a
Director or as a member of any committee of the Board of
Directors of the Company during such term of employment.
During the term of
employment, Executive shall devote substantially all of his
working time, attention and skill to the business and affairs
of the Company, provided, however, Executive may serve on the
boards of directors of such other corporations as approved by
the Board of Directors.
Executive shall not,
without his consent, be required to regularly perform his
duties at any location which is more than ten miles from the
present location of the Company's principal executive offices
in Oneida, New York.
3. Term of Agreement.
The term of this Agreement shall be five years from the
Operative Date (as hereinafter defined), provided it has not
been terminated in accordance with its terms. In the event,
however, that Executive attains the age of sixty-five (65)
during the five-year term, then this Agreement shall terminate
on the last day of the month in which the Executive attains
the age of sixty-five (65). Executive's "term of employment"
under this Agreement shall commence on the Operative Date as
hereinafter defined and shall continue for a period of five
years thereafter unless sooner terminated as hereinafter
provided.
"Operative Date" as
used herein shall be the date on which a "change in control of
the Company" occurs if, but only if (i) Executive is then in
the employ of the Company and (ii) such change in control of
the Company occurs before Executive reaches age sixty-five
(65). A "change in control of the Company" as used herein
shall mean a change in control of a nature that would be
required to be reported or disclosed by the Company in
response to the requirements of any rule or regulation
promulgated by the Securities Exchange Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
as in effect on September 1, 1982; provided, however, that
such a change in control shall be deemed to have occurred if
and when (i) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the 1934 Act) is or becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any
period of twenty-four consecutive
<PAGE> 64
months, commencing before or
after September 1, 1982, individuals who, at the beginning of
such twenty-four month period, were Directors of the Company
for whom Executive shall have voted cease for any reason to
constitute at least a majority of the Board of Directors of
the Company.
4. Compensation and
Benefit Plans.
(a) Base Salary. The Company shall pay to Executive
during each year of the term of employment under this
Agreement a base salary at a rate of not less than the
Executive's monthly salary rate for the fiscal year in which
the Operative Date occurs ("Base Salary"), payable in
accordance with customary payroll practices of the Company,
but in no event less frequently than monthly. The Executive's
Base Salary shall be reviewed by the Board of Directors not
less often than every 12 months. Upon each such review,
Executive's Base Salary shall be increased to such rate as
shall be considered appropriate and fixed by the Board, but in
no event shall any such increase be less, as a percentage of
Executive's Base Salary then in effect, than the percentage
increase in cost-of-living (as reflected in such statistics or
indices as the Board shall reasonably consider appropriate for
such purposes) subsequent to the last previous such review of
Executive's Base Salary.
(b) Bonus or Incentive Compensation. During the term
of employment, Executive shall be entitled to participate in
any bonus or incentive compensation which may be declared in
accordance with the same formula and upon the same basis as
such Executive's bonus or incentive compensation shall have
been computed for the last previous fiscal year for which a
bonus or incentive compensation was declared, immediately
preceding the fiscal year in which the Operative Date occurs.
(c) Participation in Benefit Plans. During the term
of employment, Executive shall be entitled to participate and
shall be included in any pension or retirement,
profit-sharing, stock option, stock purchase or similar plan
or other program of the Company for key executives which is in
existence on the Operative Date or which is established
hereafter.
Executive shall also
be entitled to participate in any group insurance,
hospitalization, medical, health and accident, disability or
similar plan or other insurance or death benefit plan or
program of the Company which is in existence on the Operative
Date or which is established thereafter, and shall be entitled
to participate in the Company's MONY Double Dollar Program and
Retired Lives Reserve Insurance Plan. The benefits provided by
such plans and programs shall be continued at levels not less
than those provided on September 1, 1982, unless Executive
shall otherwise consent, and participation in such plans and
programs shall be consistent with Executive's rate of
compensation to the extent compensation is a determinant of
coverage or amount of benefits.
5. Payments to
Executive Upon Termination of Employment.
(a) Termination. Upon the occurrence of an event of
termination (as hereinafter defined) during the term of this
Agreement, the provisions of this Paragraph 5 shall apply. As
used in this Agreement, an "event of termination" shall mean
and include any one or more of the following:
(i) The termination by the Company of
Executive's full-time employment hereunder for any reason
other than a breach by Executive of this Agreement; or
(ii) Executive's resignation from the Company's
employ, pursuant to the provisions of the next sentence, upon
any (A) failure to elect or reelect or to appoint or reappoint
Executive to the Office of Senior Vice President, Secretary
and General Counsel of the Company; (B) material change by the
Company in the Executive's functions, duties, or
responsibilities which change would cause Executive's position
with the Company to become of less dignity, responsibility,
importance, or scope from the position and attributes thereof
described in Paragraph 2 above, and any such material change
shall be deemed a continuing breach of this Agreement; (C)
liquidation, dissolution, consolidation or merger of the
Company, or transfer of all or substantially all of its
assets, other than as permitted by Paragraph 8 below; or (D)
other breach of this Agreement by the Company, or (E)
Executive's determination, in good faith, that due to changed
circumstances,
<PAGE> 65
he is unable to carry out his responsibilities.
Upon the occurrence of any event described in clauses (A),
(B), (C), (D) or (E) above, Executive shall have the right to
elect to terminate his employment under this Agreement by
resignation upon not less than 60 days' prior written notice
given within a reasonable period of time not to exceed, except
in case of a continuing breach, four calendar months after the
event giving rise to said right to elect.
(b) Continuation of Compensation. Upon the
occurrence of an event of termination, the Company shall pay
Executive monthly (subject to the provisions of Paragraph 7
below) as severance pay or liquidated damages, or both, for
the period described below a sum equal to (i) the highest
monthly rate of Base Salary paid to Executive at any time
under this Agreement, plus (ii) any applicable bonus or
incentive compensation under Paragraph 4(b) of this Agreement.
Such payments shall commence on the last day of the month
following the date of said occurrence and shall continue until
the date this Agreement expires under Section 3 above.
(c) Benefits. Upon the occurrence of an event of
termination:
(i) All amounts earned or awarded but not paid
under the Company's bonus or incentive compensation plan shall
be paid to Executive. If the event of termination occurs
before declaration and payment of any bonus or incentive
compensation applicable to the fiscal year, Executive shall be
entitled to share in any such bonus or incentive compensation
when declared and paid as provided in Paragraph 4(b) above.
(ii) Executive shall continue to participate in
all plans and programs of the Company referred to in Paragraph
4(c) (other than plans providing for the issuance to
participants of stock options or stock appreciation rights) to
the extent such continued participation is possible under the
general terms and provisions of such plans and programs. In
the event that Executive's continued participation in any such
plans and programs is barred, and in lieu thereof, the Company
shall maintain for the remaining term of this Agreement health
and welfare benefits substantially equivalent to those enjoyed
by him on the date of such termination.
(iii) Executive shall have the right to
exercise any option to purchase shares of the common stock of
the Company in accordance with the terms of the underlying
plans and related agreements under which Executive has been
granted options in effect immediately prior to the date of
such termination. Executive's rights under this section shall
be exercisable by Executive at any time within 90 days after
the date of termination of his employment by giving written
notice of such exercise to the Company, specifying the option
or options he is surrendering to the issuer and accompanied by
delivery to the issuer of the option or agreements relating to
such option or options.
(e) For purposes of this Paragraph 5, the term
"Executive" shall, if the context requires, refer to the
Executive's beneficiary or beneficiaries or his estate,
executor, administrator, guardian or committee.
6. Retirement Benefits. Nothing in this Agreement shall
preclude the Company from terminating or amending its pension
plans so as to eliminate, reduce or otherwise change any
benefit payable thereunder; provided, however, that if the
total retirement benefit payable to Executive on his
retirement under the Company's Pension Plan or other
retirement or pension plans as in effect immediately prior to
the Operative Date (collectively, the "Plans"), is for any
reason whatsoever less than the retirement benefit which would
have been payable (including any adjustment of benefits for
the effects of inflation) (the "guaranteed pension") had he
been vested under such Plans and had all of his years of
service with the Company or any subsidiary or affiliate
thereof and all of his compensation received during those
years been counted in full (for both vesting and benefit
purposes), assuming any period that he was entitled to receive
payments from the Company under Paragraph 5(b) above were
included in years of service and such payments were included
in "compensation," then the Company shall pay to Executive
such additional pension amounts as, together with said lesser
pension, will equal the guaranteed pension. Such additional
pension amounts shall commence to be payable at the same time
and in the same form as the retirement benefit under the
Plans. At Executive's request on or before the date he first
becomes entitled to payment of his retirement benefit pursuant
to the Plans, and in lieu of the payments otherwise to be made
pursuant to this Paragraph, the Company shall purchase a
single premium annuity from a
<PAGE> 66
duly licensed insurance carrier
which will provide Executive with the same benefits as the
Company would have otherwise been required to provide pursuant
to this Paragraph.
7. Noncompetition and Confidential Information. While any
compensation is being paid to him under this Agreement,
Executive will not directly or indirectly own greater than a
5% equity interest in any class of stock of, or manage,
operate, participate in, be employed by, perform consulting
services for, or otherwise be connected in any manner with any
firm, person, corporation or enterprise that is engaged in
whole or in part in a business which is in substantial or
direct competition with the business of the Company or any of
its subsidiaries. Executive will not at any time disclose to
others any trade secrets or other confidential information,
including customer lists, relating to the Company or to the
business of the Company and confirms that such information
constitutes the exclusive property of the Company.
8. Successors; Binding Agreement. The Company will use
its best efforts to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
had occurred. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 8 or which
otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. This Agreement and all
rights of Executive hereunder and under any other benefit plan
of the Company, including its retirement plan, shall inure to
the benefit of and be enforceable by his personal or legal
representatives, executors, administrators, heirs and
devisees. If any amounts would be payable to Executive
hereunder or thereunder after his death, all such amounts,
unless otherwise provided, shall be paid to Executive's
estate.
9. Notices. All notices, requests, demands and other
communications made or given in connection with this Agreement
shall be in writing and shall be deemed to have been duly
given (a) if delivered, at the time delivered, or (b) if
mailed, at the time mailed at any general or branch United
States Post Office, enclosed in a registered or certified
postpaid envelope addressed to the address of the respective
parties as follows:
To the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
To Executive: William D. Matthews
621 Patio Circle Drive
Oneida, New York 13421
or to such other addresses as the party to whom notice is to
be given may have previously furnished to the other party in
writing in the manner set forth above, provided that notices
of changes of address shall only be effective upon receipt.
10. Modifications and Waivers. No provision of this
Agreement may be modified or discharged unless such
modification or discharge is authorized by the Board and is
agreed to in writing, signed by Executive and by another
executive officer of the Company. No waiver by either party
hereto of any breach of the other party hereto of any
condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any
prior or subsequent time. Failure by any party to exercise his
or its rights hereunder shall not be deemed to be a waiver of
such rights.
11. Entire Agreement. This Agreement supersedes all
prior agreements between Executive and the Company relating to
all or any part of the subject matter hereof. This Agreement
constitutes the entire agreement of the parties hereto
relating to the subject matter hereof and there are no written
or oral terms or representations made by either party other
than those contained herein.
<PAGE> 67
12. Indemnification. The Company shall indemnify
Executive to the fullest extent permitted by the New York
Business Corporation Law, as amended from time to time, for
all amounts (including without limitation, judgments, fines,
settlement payments, expenses and attorneys' fees) incurred or
paid by Executive in connection with any action, suit,
investigation or proceeding arising out of or relating to the
performance by Executive of services for, or action of
performance by Executive of services for, or action of
Executive as a director, officer or employee of, the Company,
any subsidiary of the Company or any other person or
enterprise at the Company's request. The Company shall
maintain the Directors' and Officers' Liability Insurance
Policy presently in effect, or one providing substantially
similar protection to Executive, in full force and effect
during Executive's employment with the Company and for 3 years
thereafter, which Policy shall provide minimum liability
coverage in the amount of $5,000,000.
13. Law Governing. The validity, interpretation,
construction, performance and enforcement of this Agreement
shall be governed by the laws of the State of New York.
14. Invalidity. The invalidity or unenforceability of any
term or terms of this Agreement shall not invalidate, make
unenforceable or otherwise affect any other term of this
Agreement which shall remain in full force and effect.
15. Headings. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the
parties hereto have executed this Employment Agreement as of
the 1st day of October, 1982.
ATTEST: O N E I D A L T D .
/s/ M. Jack Rudnick by /s/ William Rockefeller
Assistant Secretary Chairman, Management
Development and Executive
Compensation Committee
on behalf of the Corporation
/s/ William D. Matthews
William D. Matthews
<PAGE> 68
September 24, 1986
Mr. William D. Matthews
621 Patio Circle Drive
Oneida, New York 13421
Dear Mr. Matthews:
The Management Development and Executive Compensation
Committee of the Board of Directors has authorized me to
advise you that it has reviewed your employment agreement with
Oneida Ltd. dated as of October 1, 1982 (the Agreement"), and
that the Agreement shall remain in full force and effect.
As your position with Oneida has changed from that of Senior
Vice President, Secretary and General Counsel to Chief
Executive Officer and Chairman of the Board, the Agreement
shall be read in all respects as though the positions and
responsibilities described therein were those of Chief
Executive Officer and Chairman of the Board.
Sincerely,
/s/ David E. Harden
Chairman, Management
Development and
Executive
Compensation Committee
Agreed to: /s/ William D. Matthews
William D. Matthews
<PAGE> 69
AGREEMENT made as of
October 1, 1982, by and between Oneida Ltd. (the "Company"), a
New York corporation with its principal place of business at
163-181 Kenwood Avenue, Oneida, New York and Walter A. Stewart
("Executive"), Senior Vice President of the Company and Senior
Vice President - Manufacturing and Corporate Engineering of
the Company's Oneida Silversmiths Division.
WHEREAS, Executive is
now and for several years has been the Senior Vice President
of the Company and Senior Vice President - Manufacturing and
Corporate Engineering of the Company's Oneida Silversmiths
Division; and
WHEREAS, the Company
wishes to retain the services of Executive for an extended
period and to provide for continuity of management in the
event of any actual or threatened change in control of the
Company and to provide certain security to the Executive and
Executive is agreeable thereto;
NOW, THEREFORE, in
consideration of the mutual agreements and promises set forth
herein, the parties agree as follows:
1. Employment and
Acceptance. The Company hereby agrees to employ Executive, and
Executive hereby accepts employment from the Company, in the
capacity and on the terms and conditions set forth herein.
2. Position and
Responsibilities. During the term of employment set forth in
Paragraph 3 of this Agreement, the Company shall employ
Executive, and Executive agrees to serve, as Senior Vice
President of the Company and, in such capacity, shall report
to the Board of Directors, the Chairman and Chief Executive
Officer and the President and Chief Operating Officer of the
Company. Executive shall also serve as Senior Vice President -
Manufacturing and Corporate Engineering of the Company's
Oneida Silversmiths Division and, in such capacity, shall
report to the Chairman and President of the Oneida
Silversmiths Division and shall supervise, control and be
responsible for the manufacturing and engineering operations
of the Division. At all times during the term of employment,
Executive shall have such powers and duties as may be, from
time to time, prescribed by the Board of Directors of the
Company, the Chairman and Chief Executive Officer or the
President and Chief Operating Officer. Executive agrees,
subject to his election as such, to serve as Senior Vice
President of the Company and Senior Vice President -
Manufacturing and Corporate Engineering of the Company's
Oneida Silversmiths Division, a Director or as a member of any
committee of the Board of Directors of the Company during such
term of employment.
During the term of
employment, Executive shall devote substantially all of his
working time, attention and skill to the business and affairs
of the Company, provided, however, Executive may serve on the
boards of directors of such other corporations as approved by
the Board of Directors.
Executive shall not,
without his consent, be required to regularly perform his
duties at any location which is more than ten miles from the
present location of the Company's principal executive offices
in Oneida, New York.
3. Term of Agreement.
The term of this Agreement shall be five years from the
Operative Date (as hereinafter defined), provided it has not
been terminated in accordance with its terms. In the event,
however, that Executive attains the age of sixty-five (65)
during the five-year term, then this Agreement shall terminate
on the last day of the month in which the Executive attains
the age of sixty-five (65). Executive's "term of employment"
under this Agreement shall commence on the Operative Date as
hereinafter defined and shall continue for a period of five
years thereafter unless sooner terminated as hereinafter
provided.
"Operative Date" as
used herein shall be the date on which a "change in control of
the Company" occurs if, but only if (i) Executive is then in
the employ of the Company and (ii) such change in control of
the Company occurs before Executive reaches age sixty-five
(65). A "change in control of the Company" as used herein
shall mean a change in control of a nature that would be
required to be reported or disclosed by the Company in
response to the requirements of any rule or regulation
promulgated by the Securities Exchange Commission under the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
as in effect on September 1, 1982; provided, however, that
such a change in control shall be deemed to have occurred if
and when (i) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the 1934 Act) is or becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined
<PAGE> 70
voting power of the
Company's then outstanding securities, or (ii) during any
period of twenty-four consecutive months, commencing before or
after September 1, 1982, individuals who, at the beginning of
such twenty-four month period, were Directors of the Company
for whom Executive shall have voted cease for any reason to
constitute at least a majority of the Board of Directors of
the Company.
4. Compensation and
Benefit Plans.
(a) Base Salary. The Company shall pay to Executive
during each year of the term of employment under this
Agreement a base salary at a rate of not less than the
Executive's monthly salary rate for the fiscal year in which
the Operative Date occurs ("Base Salary"), payable in
accordance with customary payroll practices of the Company,
but in no event less frequently than monthly. The Executive's
Base Salary shall be reviewed by the Board of Directors not
less often than every 12 months. Upon each such review,
Executive's Base Salary shall be increased to such rate as
shall be considered appropriate and fixed by the Board, but in
no event shall any such increase be less, as a percentage of
Executive's Base Salary then in effect, than the percentage
increase in cost-of-living (as reflected in such statistics or
indices as the Board shall reasonably consider appropriate for
such purposes) subsequent to the last previous such review of
Executive's Base Salary.
(b) Bonus or Incentive Compensation. During the term
of employment, Executive shall be entitled to participate in
any bonus or incentive compensation which may be declared in
accordance with the same formula and upon the same basis as
such Executive's bonus or incentive compensation shall have
been computed for the last previous fiscal year for which a
bonus or incentive compensation was declared, immediately
preceding the fiscal year in which the Operative Date occurs.
(c) Participation in Benefit Plans. During the term
of employment, Executive shall be entitled to participate and
shall be included in any pension or retirement,
profit-sharing, stock option, stock purchase or similar plan
or other program of the Company for key executives which is in
existence on the Operative Date or which is established
hereafter.
Executive shall also
be entitled to participate in any group insurance,
hospitalization, medical, health and accident, disability or
similar plan or other insurance or death benefit plan or
program of the Company which is in existence on the Operative
Date or which is established thereafter, and shall be entitled
to participate in the Company's MONY Double Dollar Program and
Retired Lives Reserve Insurance Plan. The benefits provided by
such plans and programs shall be continued at levels not less
than those provided on September 1, 1982, unless Executive
shall otherwise consent, and participation in such plans and
programs shall be consistent with Executive's rate of
compensation to the extent compensation is a determinant of
coverage or amount of benefits.
5. Payments to
Executive Upon Termination of Employment.
(a) Termination. Upon the occurrence of an event of
termination (as hereinafter defined) during the term of this
Agreement, the provisions of this Paragraph 5 shall apply. As
used in this Agreement, an "event of termination" shall mean
and include any one or more of the following:
(i) The termination by the Company of
Executive's full-time employment hereunder for any reason
other than a breach by Executive of this Agreement; or
(ii) Executive's resignation from the Company's
employ, pursuant to the provisions of the next sentence, upon
any (A) failure to elect or reelect or to appoint or reappoint
Executive to the Office of Senior Vice President, Secretary
and General Counsel of the Company; (B) material change by the
Company in the Executive's functions, duties, or
responsibilities which change would cause Executive's position
with the Company to become of less dignity, responsibility,
importance, or scope from the position and attributes thereof
described in Paragraph 2 above, and any such material change
shall be deemed a continuing breach of this Agreement; (C)
liquidation, dissolution, consolidation or merger of the
Company, or transfer of all or substantially all of its
assets, other than as permitted by Paragraph 8 below; or (D)
other breach of this
<PAGE> 71
Agreement by the Company, or (E)
Executive's determination, in good faith, that due to changed
circumstances, he is unable to carry out his responsibilities.
Upon the occurrence of any event described in clauses (A),
(B), (C), (D) or (E) above, Executive shall have the right to
elect to terminate his employment under this Agreement by
resignation upon not less than 60 days' prior written notice
given within a reasonable period of time not to exceed, except
in case of a continuing breach, four calendar months after the
event giving rise to said right to elect.
(b) Continuation of Compensation. Upon the
occurrence of an event of termination, the Company shall pay
Executive monthly (subject to the provisions of Paragraph 7
below) as severance pay or liquidated damages, or both, for
the period described below a sum equal to (i) the highest
monthly rate of Base Salary paid to Executive at any time
under this Agreement, plus (ii) any applicable bonus or
incentive compensation under Paragraph 4(b) of this Agreement.
Such payments shall commence on the last day of the month
following the date of said occurrence and shall continue until
the date this Agreement expires under Section 3 above.
(c) Benefits. Upon the occurrence of an event of
termination:
(i) All amounts earned or awarded but not paid
under the Company's bonus or incentive compensation plan shall
be paid to Executive. If the event of termination occurs
before declaration and payment of any bonus or incentive
compensation applicable to the fiscal year, Executive shall be
entitled to share in any such bonus or incentive compensation
when declared and paid as provided in Paragraph 4(b) above.
(ii) Executive shall continue to participate in
all plans and programs of the Company referred to in Paragraph
4(c) (other than plans providing for the issuance to
participants of stock options or stock appreciation rights) to
the extent such continued participation is possible under the
general terms and provisions of such plans and programs. In
the event that Executive's continued participation in any such
plans and programs is barred, and in lieu thereof, the Company
shall maintain for the remaining term of this Agreement health
and welfare benefits substantially equivalent to those enjoyed
by him on the date of such termination.
(iii) Executive shall have the right to
exercise any option to purchase shares of the common stock of
the Company in accordance with the terms of the underlying
plans and related agreements under which Executive has been
granted options in effect immediately prior to the date of
such termination. Executive's rights under this section shall
be exercisable by Executive at any time within 90 days after
the date of termination of his employment by giving written
notice of such exercise to the Company, specifying the option
or options he is surrendering to the issuer and accompanied by
delivery to the issuer of the option or agreements relating to
such option or options.
(e) For purposes of this Paragraph 5, the term
"Executive" shall, if the context requires, refer to the
Executive's beneficiary or beneficiaries or his estate,
executor, administrator, guardian or committee.
6. Retirement Benefits. Nothing in this Agreement shall
preclude the Company from terminating or amending its pension
plans so as to eliminate, reduce or otherwise change any
benefit payable thereunder; provided, however, that if the
total retirement benefit payable to Executive on his
retirement under the Company's Pension Plan or other
retirement or pension plans as in effect immediately prior to
the Operative Date (collectively, the "Plans"), is for any
reason whatsoever less than the retirement benefit which would
have been payable (including any adjustment of benefits for
the effects of inflation) (the "guaranteed pension") had he
been vested under such Plans and had all of his years of
service with the Company or any subsidiary or affiliate
thereof and all of his compensation received during those
years been counted in full (for both vesting and benefit
purposes), assuming any period that he was entitled to receive
payments from the Company under Paragraph 5(b) above were
included in years of service and such payments were included
in "compensation," then the Company shall pay to Executive
such additional pension amounts as, together with said lesser
pension, will equal the guaranteed pension. Such additional
pension amounts shall commence to be payable at the same time
and in the same form as the retirement benefit under the
Plans. At Executive's request on or before the date he first
becomes entitled to payment of his retirement benefit pursuant
to the Plans, and in lieu of the payments
<PAGE> 72
otherwise to be made
pursuant to this Paragraph, the Company shall purchase a
single premium annuity from a duly licensed insurance carrier
which will provide Executive with the same benefits as the
Company would have otherwise been required to provide pursuant
to this Paragraph.
7. Noncompetition and Confidential Information. While any
compensation is being paid to him under this Agreement,
Executive will not directly or indirectly own greater than a
5% equity interest in any class of stock of, or manage,
operate, participate in, be employed by, perform consulting
services for, or otherwise be connected in any manner with any
firm, person, corporation or enterprise that is engaged in
whole or in part in a business which is in substantial or
direct competition with the business of the Company or any of
its subsidiaries. Executive will not at any time disclose to
others any trade secrets or other confidential information,
including customer lists, relating to the Company or to the
business of the Company and confirms that such information
constitutes the exclusive property of the Company.
8. Successors; Binding Agreement. The Company will use
its best efforts to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
had occurred. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 8 or which
otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. This Agreement and all
rights of Executive hereunder and under any other benefit plan
of the Company, including its retirement plan, shall inure to
the benefit of and be enforceable by his personal or legal
representatives, executors, administrators, heirs and
devisees. If any amounts would be payable to Executive
hereunder or thereunder after his death, all such amounts,
unless otherwise provided, shall be paid to Executive's
estate.
9. Notices. All notices, requests, demands and other
communications made or given in connection with this Agreement
shall be in writing and shall be deemed to have been duly
given (a) if delivered, at the time delivered, or (b) if
mailed, at the time mailed at any general or branch United
States Post Office, enclosed in a registered or certified
postpaid envelope addressed to the address of the respective
parties as follows:
To the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
To Executive: Walter A. Stewart
Verona Beach, New York 13162
or to such other addresses as the party to whom notice is to
be given may have previously furnished to the other party in
writing in the manner set forth above, provided that notices
of changes of address shall only be effective upon receipt.
10. Modifications and Waivers. No provision of this
Agreement may be modified or discharged unless such
modification or discharge is authorized by the Board and is
agreed to in writing, signed by Executive and by another
executive officer of the Company. No waiver by either party
hereto of any breach of the other party hereto of any
condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any
prior or subsequent time. Failure by any party to exercise his
or its rights hereunder shall not be deemed to be a waiver of
such rights.
11. Entire Agreement. This Agreement supersedes all
prior agreements between Executive and the Company relating to
all or any part of the subject matter hereof. This Agreement
constitutes the entire agreement of the parties hereto
relating to the subject matter hereof and there are no written
or oral terms or representations made by either party other
than those contained herein.
<PAGE> 73
12. Indemnification. The Company shall indemnify
Executive to the fullest extent permitted by the New York
Business Corporation Law, as amended from time to time, for
all amounts (including without limitation, judgments, fines,
settlement payments, expenses and attorneys' fees) incurred or
paid by Executive in connection with any action, suit,
investigation or proceeding arising out of or relating to the
performance by Executive of services for, or action of
performance by Executive of services for, or action of
Executive as a director, officer or employee of, the Company,
any subsidiary of the Company or any other person or
enterprise at the Company's request. The Company shall
maintain the Directors' and Officers' Liability Insurance
Policy presently in effect, or one providing substantially
similar protection to Executive, in full force and effect
during Executive's employment with the Company and for 3 years
thereafter, which Policy shall provide minimum liability
coverage in the amount of $5,000,000.
13. Law Governing. The validity, interpretation,
construction, performance and enforcement of this Agreement
shall be governed by the laws of the State of New York.
14. Invalidity. The invalidity or unenforceability of any
term or terms of this Agreement shall not invalidate, make
unenforceable or otherwise affect any other term of this
Agreement which shall remain in full force and effect.
15. Headings. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the
parties hereto have executed this Employment Agreement as of
the 1st day of October, 1982.
ATTEST: O N E I D A L T D .
/s/ M. Jack Rudnick /s/ William Rockefeller
Assistant Secretary William Rockefeller
Chairman, Management
Development and Executive
Compensation Committee on
behalf of the Corporation
/s/ Walter A. Stewart
Walter A. Stewart
<PAGE> 74
EXHIBIT 10(b)
ONEIDA SILVERSMITHS DIVISION
EMPLOYEE INCENTIVE PROGRAM
FISCAL 1988 RECOMMENDATION
The following two plans form the fiscal 1988 Employee Incentive Program
for the Oneida Silversmiths Division:
PROFIT SHARING PLAN
- All eligible employees of Oneida Silversmiths will participate,
excluding salesmen, regional sales managers and those employees in the
management incentive plan. (Eligibility chart attached).
- No contribution will be made to the plan if Silversmiths operating
income is under $8,000,000. Above $8,000,000, the contribution to the plan
will be $400,000 plus 10% of all operating income over $8,000,000.
- The monies in the plan will be allocated based upon W-2 earnings.
- To provide additional financial recognition to exempt employees, an
additional 11% of the initial contribution to the plan will be allocated to
salary employees, excluding those on the management incentive plan. Allocation
will be based upon W-2 earnings. (W-2 earnings include 401(K) contributions and
exclude imputed income.).
MANAGEMENT INCENTIVE PLAN
- Approximately 45 key managers from Oneida Silversmiths will participate
in the management incentive plan.
- The amount of the payout is dependent upon the manager's grade as
follows:
<TABLE>
<CAPTION>
Grade Target Amount
<C> <C>
30 $30,000
29 30,000
28 20,000
26 20,000
25 20,000
24 15,000
23 15,000
22 10,000
21 10,000
20 10,000
19 6,000
18 6,000
</TABLE>
<PAGE> 75
- The plan target is:
Measure Weighting FY 1988 Goal
Operating Income 100% $15,800,000
- A minimum of 50% of the target amount is paid if 50% of the goal is
achieved. A maximum of 150% of the target amount is paid if 150% of the goal is
achieved. Points in between are determined arithmetically.
- Division management, with the approval of the Corporate CEO and COO, has
the discretion to increase or decrease a participant's final payout based upon
personal performance.
For BOTH plans:
- The calculation of the Operating Income targets does not include the
cost of either the Profit Sharing Plan or the Management Incentive Plan.
- The Corporate CEO and COO have the authority to adjust the calculation
of Operating Income in recognition of extraordinary or non-recurring events, or
because of changes in methods of accounting during the fiscal year.
- If actual results for FYE January 1989 equal the targets, the total
cost of both plans will be approximately $2,000,000.
- The bonus will be paid in March, and participants must be on the active
payroll on the last day of the Fiscal Year in order to receive payment. In the
event of illness, death, retirement or "slack work layoff" during the fiscal
year, a bonus will be paid on a pro-rata basis based on W-2 earnings for that
year.
<TABLE>
PROFIT-SHARING ELIGIBILITY
<CAPTION>
QUALIFICATIONS: REQUIRE 1000 HRS MUST BE ON ACTIVE
AT WORK. PAYROLL 1ST DAY OF FY
<S> <C> <C>
____________________________________________________________________
Active Employee: YES YES
- - --------------------------------------------------------------
Retiree: NO NO
- - --------------------------------------------------------------
Active Employee dies during FY:
NO NO
- - --------------------------------------------------------------
Active Employee disabled during FY and dies before end of FY:
NO NO
- - --------------------------------------------------------------
<PAGE> 76
Active Employee on short-term disability (less than 6 mo.)
Hourly: YES NO
Salary: YES, but* NO
*salary continuation counts as time worked
- - --------------------------------------------------------------
Active Employee goes to LTD during FY:
Hourly: YES NO
Salary: YES* NO
*if salary continuation + time worked = 6 months
- - --------------------------------------------------------------
Disabled all year: YES YES
- - --------------------------------------------------------------
Workers' Comp: NO NO
- - --------------------------------------------------------------
Slack work layoff, not recalled:
YES NO
- - --------------------------------------------------------------
</TABLE>
<PAGE> 77
ONEIDA CORPORATE
MANAGEMENT INCENTIVE PROGRAM
FISCAL 1988 RECOMMENDATION
The following plan forms the Fiscal 1988 Management Incentive Program or
Oneida Corporate:
MANAGEMENT INCENTIVE PLAN
- The CEO and COO plus approximately 8 key managers from Corporate will
participate.
- The amount of the payout is dependent upon the manager's grade as
follows:
<TABLE>
<CAPTION>
Grade Target Amount
<C> <C>
35 $90,000 *(See Appendix A)
33 66,000 *(See Appendix A)
30 30,000
29 30,000
28 20,000
26 20,000
25 20,000
24 15,000
23 15,000
22 10,000
21 10,000
20 10,000
19 6,000
l8 6,000
</TABLE>
- The plan targets are as follows:
Measures Weighting FY 1988 Goal
Income before Taxes 60% $16,700,000
Return on Equity 40% 12.0%
- A minimum of 50% of the target amount is paid if 50% of the goal is
achieved. A maximum of 150% of the target amount is paid if 150 of the goal is
achieved. Points in between are determined arithmetically.
- The CEO and COO have the discretion to increase or decrease a
participant's final payout based upon personal performance.
- The calculation of the Income Before Tax target does not include the
cost of the plan.
- The CEO and COO will adjust the calculation of Income Before Tax in
recognition of extraordinary or non-recurring events, or because of changes in
methods of accounting during the fiscal year.
- If actual results for FYE January 1989 equal the targets, the total
cost of the plan will be approximately $246,000.
- The bonus will be paid in March, and participants must be on the active
payroll on the last day of the Fiscal Year in order to receive payment. In the
event of illness, death or retirement during the fiscal year, a bonus will be
paid on a pro-rata basis based on W-2 earnings for that year.
<PAGE> 78
EXHIBIT 10(d)
ONEIDA LTD.
EMPLOYEE SECURITY PLAN
Oneida Ltd. hereby adopts the Oneida Ltd. Employee
Security Plan for the benefit of certain employees of the
Company, its affiliates and subsidiaries, on the terms and
conditions hereinafter stated.
The Plan, as set forth herein, is intended to help
retain qualified employees, maintain a stable work environment
and provide economic security to certain Employees of the
Employer in the event of a Severance of employment under the
enumerated circumstances. The Plan, as a "severance pay
arrangement" within the meaning of Section 3(2)(B)(i) of
ERISA, is intended to be excepted from the definitions of
"employee pension benefit plan" and "pension plan" set forth
under Section 3(2) of ERISA, and is intended to meet the
descriptive requirements of a plan constituting a "severance
pay plan" within the meaning of regulations published by the
Secretary of Labor at Title 29, Code of Federal Regulations,
Section 2510.3-2(b).
SECTION 1. Definitions. As used herein:
1.1 "Board" means the Board of Directors of the Company.
1.2 A "Chance in Control" of the Company shall be
deemed to have occurred if:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Company, any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities;
(b) during any period of two consecutive years (not
including any period prior to the Effective Date), individuals
who at the beginning of such period constitute the Board, and
any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this
Section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
(c) the stockholders of the Company approve a merger
or consolidation of the Company with any other company, other
than (1) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than 20% of the combined voting power of the
company's then outstanding securities; or
(d) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company's assets.
1.3 "Code" means the Internal Revenue Code of 1986, as it
may be amended from time to time.
1.4 "Company" means Oneida Ltd. or any successors
thereto.
<PAGE> 79
1.5 "Effective Date" means July 26, 1989.
1.6 An "Employee" means a person who is an active,
full-time employee of an Employer, excluding any employee who
is included in a unit of employees covered by a negotiated
collective bargaining agreement which does not provide for his
or her participation in the Plan. A director of the Company is
not eligible for participation in the Plan unless he or she is
also an Employee. Notwithstanding the foregoing, any person
who has entered into a written agreement with the Company or
an Employer that provides for the payment of benefits in the
event of the termination of such person's employment following
a Change in Control of the Company or Recapitalization shall
not be considered an Employee for purposes of this Plan.
1.7 "Employer" means the Company and such subsidiaries or
affiliates of the Company as authorized and approved by the
Board and listed on Annex I hereto.
1.8 "ERISA" means the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.
1.9 "Hours of Service" means hours during which an
Employee performs service for which he or she is directly or
indirectly paid or entitled to pay (including any back pay
irrespective of mitigation of damages).
1.10 "Mandatory Retirement Age" means the age at which
the Employer may legally require an Employee to retire. An
Employee who has served for a minimum of two (2) years at a
high level executive or high policy-making position and who is
entitled to a nonforfeitable immediate annual
Employer-provided retirement benefit, from any source, which
is at least equal to a benefit, computed as a life annuity, of
$44,000 per year (or such other as may be provided by future
legislation) attains Mandatory Retirement Age at age
sixty-five (65), unless otherwise provided by law.
1.11 "Pay" means all compensation, including salary,
wages, fees, commissions, profit-sharing bonus and overtime
pay, paid to the Employee for personal services actually
rendered to the Company or the Employer as reported on the
Employee's IRS Form W-2 for the tax year out of the three tax
years immediately prior to a Change in Control of the Company
or Recapitalization in which the Employee's W-2 amount was the
highest, and including the amount of any elective deferrals
contributed on behalf of such Employee to a cash or deferred
arrangement maintained by the Company or any affiliate of the
Company under Section 401(k) of the Code. A "Month of Pay"
shall be equal to one twelfth (1/12) of Pay.
1.12 The "Plan" means the Oneida Ltd. Employee Security
Plan, as set forth herein, as may be amended from time to
time.
1.13 The "Plan Administrator" means an administrative
committee appointed by the Board and acting in accordance with
the terms of the Plan. Such committee shall consist of at
least three members who are active Employees, including the
Vice President of Human Resources of the Company.
1.14 "Recapitalization" means a transaction approved by
the Board involving a special distribution in respect of
shares of Common Stock, par value $6.25 per share, of the
Company or a similar transaction designated by the Board as a
Recapitalization for purposes of the Plan.
1.15 "Service" means active, full-time employment with
the Company or an Employer and, to the extent and for the
purposes determined by the Plan Administrator under rules
uniformly applicable to all Employees similarly situated,
shall include (i) periods of vacation, (ii) periods of paid
layoff, (iii) periods of absence authorized by the Company or
an Employer for sickness, temporary disability or personal
reasons, (iv) if and to the extent required by the Military
Selective Service Act as amended or any other Federal law,
service in the Armed Forces of the United States and (v) such
other periods as the Plan Administrator shall specify in such
rules.
<PAGE> 80
1.16 "Severance" means the termination of an Employee's
employment with the Employer within two (2) years following a
Change in Control or Recapitalization, (i) by the Employer
other than for Cause, or (ii) by the Employee for Good Reason.
Notwithstanding the foregoing, an Employee will not be
considered to have incurred a Severance (i) if his or her
employment is discontinued by reason of the Employee's
voluntary or Mandatory Retirement, the Employee's death or a
physical or mental condition causing the Employee's inability
to substantially perform his or her duties with the Employer,
including without limitation, such condition entitling him or
her to benefits under any sick pay or disability income policy
or program of the Employer, (ii) if his or her employment is
temporarily discontinued by reason of a temporary lay-off for
a period of less than six months or (iii) by reason of the
divestiture of a facility or subsidiary of the Employer in
which the Employee works if the Employee is offered comparable
employment by the successor company and the successor company
assumes the Employer's responsibilities under the Plan with
respect to such Employee. For purposes of the Plan, "Cause"
means (i) an Employee's willful and continued failure to
substantially perform his duties with the Employer, (ii) an
Employee's willful engagement in conduct which is demonstrably
and materially injurious to the Employer, monetarily or
otherwise (provided, however, that no act, or failure to act,
on an Employee's part shall be deemed "willful" unless done,
or omitted to be done, by the Employee not in good faith and
without reasonable belief that such action or omission was in
the best interest of the Employer) or (iii) an Employee's
material failure to comply with the work rules or policies of
the Company or the Employee's Employer. For the purposes of
the Plan, "Good Reason" means (i) the Employer's seeking the
transfer of the Employee to another Employer facility more
than 25 miles from the Employee's then current place of
employment, (ii) a reduction by the Employer in the Employee's
Pay or benefits, including, without limitation, retirement and
health and welfare benefits or (iii) a change in the
Employee's duties or responsibilities in the nature of a
demotion (other than for Cause).
1.17 "Severance Date" means the date after the Effective
Date on which an Employee incurs a Severance.
1.18 "Severance Pay" means payments made to eligible
Employees pursuant to Section 3.1 hereof.
1.19 "Year of Service" means, with respect to any
Employee, each calendar year during which the Employee
completes at least 1,000 Hours of Service. In addition, if an
Employee does not complete 1,000 Hours of Service during the
calendar year in which his or her Service commences, but does
complete at least 1,000 Hours of Service during the
12-consecutive month period beginning on the date the
Employee's Service commenced, as determined by the Plan
Administrator, then, for purposes of determining when an
Employee shall be eligible to participate in the Plan as
provided in Section 2, he or she shall be credited with a Year
of Service for such 12-consecutive month period.
SECTION 2. Eligibility.
2.1 Notwithstanding any provision to the contrary
contained herein, each Employee shall be eligible to
participate in the Plan upon completion of one Year of
Service.
SECTION 3. Benefits.
3.1 Each Employee who incurs a Severance shall be
entitled to receive a one-time Severance Pay equal to 2-1/2
Months of Pay for each year of Service, up to a maximum amount
of 24 Months of Pay.
3.2 Severance Payments will be made to an eligible
severed Employee in one lump sum on the second pay day
following the Severance Date.
3.3 Health care benefits and life insurance benefits
will be continued (at the active employee rate) for a severed
Employee for the number of months determined in Section 3.1
above, but not after he or she becomes an employee of another
employer and covered under another group health or group life
plan, respectively.
<PAGE> 81
3.4 In the event of a claim by an Employee as to the
amount of any distribution or its method of payment, such
Employee shall present the reason for his or her claim in
writing to the Plan Administrator. The Plan Administrator
shall, within sixty (60) days after receipt of such written
claim, send a written notification to the Employee as to its
disposition. In the event the claim is wholly or partially
denied, such written notification shall (a) state the specific
reason or reasons for the denial, (b) make specific reference
to pertinent Plan provisions on which the denial is based, (c)
provide a description of any additional material or
information necessary for the Employee to perfect the claim
and an explanation of why such material or information is
necessary, and (d) set forth the procedure by which the
Employee may appeal the denial of his claim. In the event an
Employee wishes to appeal the denial of his claim, he or she
may request a review of such denial by making application in
writing to the Plan Administrator within sixty (60) days after
receipt of such denial. Such Employee (or his or her duly
authorized legal representative) may, upon written request to
the Plan Administrator, review any documents pertinent to his
or her claim, and submit in writing issues and comments in
support of his or her position. Within sixty (60) days after
receipt of a written appeal (unless special circumstances,
such as the need to hold a hearing, require an extension of
time, but in no event more than one hundred twenty (120) days
after such receipt), the Plan Administrator shall notify the
Employee of the final decision. The final decision shall be in
writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan
provisions on which the decision is based.
3.5 The Company will pay to each Employee all legal fees
and expenses incurred by such employee in seeking to obtain or
enforce any right or benefit provided under this Plan (other
than any such fees and expenses incurred in pursuing any claim
determined to be frivolous by a court of competent
jurisdiction).
SECTION 4. Limitation on Severance Payments.
4.1 Notwithstanding any provision in this Plan or in any
other agreement, commitment, arrangement or plan regarding
payments or transfers of property to an Employee to the
contrary, the aggregate of all Severance Payments to an
Employee under this Plan and all other agreements and
arrangements with, and plans of, the Employer shall be reduced
by such amount as may be necessary so that no Payment, either
alone or when taken together with all other Payments, results
in the failure of any Payment, or any other amount paid or
property transferred to, or for the benefit of, an Employee,
to be allowed as a deduction to the Company on its Federal
income tax return under Code Section 280G; provided, however,
that no provision of this Plan shall be deemed to prohibit or
restrict any Payment, or any payment or transfer of property,
to an Employee pursuant to an Employee Benefit Plan.
4.2 Promptly, and in any event within 10 days before any
Severance Payment is due, the Company shall determine whether
any Payment, or any portion thereof, payable to, or for the
benefit of, an Employee would result in the failure of any
Payment, or any other amount paid or property transferred to,
or for the benefit of, an Employee, to be allowed as a
deduction to the Company on its Federal income tax return
under Code Section 280G, and shall immediately notify the
Employee of its determination by delivering to the Employee a
statement (the "Statement") which sets out a detailed account
of its determination, including a description of the method by
which the Fair Market Value was assigned in such determination
to any property constituting a Payment. Within 8 days of
delivery of the Statement, and after consulting with the
Employee to determine how the Company can best implement its
obligation to compensate the Employee under the terms of this
Plan, the Company shall reduce the Severance Payment under the
Plan by the amount described in Section 4.1.
4.3 In the event the Employee disputes a determination
reflected in the Statement, including the assignment of a Fair
Market Value to any property constituting a Payment, the
Employee shall promptly notify the Company in writing, and the
parties shall use their best efforts to resolve such dispute.
If no resolution has been reached within 2 days of receipt of
the notice of such dispute, the dispute shall be referred to
an Independent Auditor, whose determination with respect to
such dispute shall be communicated in writing to the parties
within 5 days of the date of such referral. The determination
of the Independent Auditor shall be at the expense of the
Company and shall be conclusive and binding on the parties.
The 8 day time period provided
<PAGE> 82
in Section 4.2 shall be
suspended and shall not elapse during the period provided for
the resolution of disputes pursuant to this Section 4.3.
4.4 For the purposes of this Section 4, the following
terms shall have the following meanings:
(i) "Affiliate" means any person or entity
affiliated with the Company, including any corporation which
is part of an affiliated or controlled group (or which as a
result of a Change in Control of the Company becomes part of
an affiliated or controlled group) within the meaning of
Sections 1504 or 1563 of the Code;
(ii) "Base Amount" means the Employee's annualized
includible compensation for the base period, determined in
accordance with Code Section 280G. For the purposes of this
Section, "annualized includible compensation for the base
period" means the average annual compensation which (1) was
payable by the Employer to the Employee and (2) was includible
in the gross income of the Employee for the most recent 5
taxable years ending before the date of the Change of
Ownership (or such shorter portion during which the Employee
was an employee of the Employer);
(iii) "Change of Ownership" means a change in the
ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the
Company, as determined under Code Section 280G; and the
determination that payments are contingent upon a Change of
Ownership shall be made in accordance with Code Section 280G;
(iv) "Employee Benefit Plan" means an employee
benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, which is
contributed to or maintained by the Employer;
(v) "Fair Market Value" means the value of any
property, determined in accordance with the applicable
provisions of the Code and the rulings and regulations issued
by the Secretary of Treasury or his delegate thereunder, or,
in the absence of such authority, determined by the Board of
Directors of the Company in good faith as reflecting the fair
market value of such property;
(vi) "Independent Auditor" means a nationally
recognized independent auditing firm selected by the Employee;
(vii) "Payments" means any payments or transfers of
property required to be made by the Employer or an Affiliate,
or which would be required to be made by the Employer or an
Affiliate pursuant to an agreement, including this Plan,
commitment or arrangement with, or a plan of, the Employer or
an Affiliate, but for the provisions of this Section 4, in the
nature of compensation to, or for the benefit of, an Employee,
which are contingent on a Change of Ownership to the extent
required to be considered, pursuant to Code Section 280G, in
determining whether a payment is a "parachute payment", as
defined under such Section;
(viii) "Present Value" shall be determined in
accordance with Section 1274(b)(2) of the Code and the rulings
and regulations issued by the Secretary of the Treasury or his
delegate under such Section and Code Section 280G; and
(ix) "Code Section 280G" means Section 280G of the
Code and the rulings and regulations issued by the Secretary
of the Treasury or his delegate under such Section.
4.5 The provisions of this Section 4 shall be
administered in accordance with Code Section 280G.
<PAGE> 83
SECTION 5. Plan Administration.
5.1 The Plan shall be interpreted, administered and
operated by the Plan Administrator, who shall have complete
authority, in its sole discretion subject to the express
provisions of the Plan, to determine who shall be eligible for
Severance Pay, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make all
other determinations necessary or advisable for the
administration of the Plan.
5.2 All questions of any character whatsoever arising in
connection with the interpretation of the Plan or its
administration or operation shall be submitted to and settled
and determined by the Plan Administrator in an equitable and
fair manner in accordance with the procedure for claims and
appeals described in Section 3.4. Any such settlement and
determination shall be final and conclusive, and shall bind
and may be relied upon by the Employer, each of the Employees
and all other parties in interest.
5.3 The Plan Administrator may delegate any of their
duties hereunder to such person or persons from time to time
as they may designate.
5.4 The Plan Administrator is empowered, on behalf of the
Plan, to engage accountants, legal counsel and such other
personnel as it deems necessary or advisable to assist it in
the performance of its duties under the Plan. The functions of
any such persons engaged by the Plan Administrator shall be
limited to the specified services and duties for which they
are engaged, and such persons shall have no other duties,
obligations or responsibilities under the Plan. Such persons
shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. All reasonable
expenses thereof shall be borne by the Company.
SECTION 6. Plan Modification or Termination.
6.1 The Plan may be amended or terminated by the Board at
any time; provided, however, that within the two-year period
following a Change in Control or Recapitalization, the Plan
may not be terminated or amended if such amendment would be
adverse to the interests of any Employee.
SECTION 7. General Provisions.
7.1 Nothing in the Plan shall be deemed to give any
Employee the right to be retained in the employ of the
Employer without the Employer's consent, nor to interfere with
the right of the Employer to discharge him or her at any time
and for any lawful reason, with or without cause, with or
without notice.
7.2 Except as otherwise provided herein or by law, no
right or interest of any Employee under the Plan shall be
assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including
without limitation by execution, levy, garnishment,
attachment, pledge or in any manner; no attempted assignment
or transfer thereof shall be effective; and no right or
interest of any Employee under the Plan shall be liable for,
or subject to, any obligation or liability of such Employee.
When a payment is due under this Plan to an Employee who is
unable to care for his affairs, payment may be made directly
to his legal guardian or personal representative.
7.3 If an Employer is obligated by law or by contract to
pay severance pay, a termination indemnity, notice pay, or the
like, or if the Employer is obligated by law or by contract to
provide advance notice of separation ("Notice Period"), then
any Severance Pay hereunder shall be reduced by the amount of
any such severance pay, termination indemnity, notice pay or
the like, as applicable, and shall be reduced by the amount of
any compensation received during any Notice Period.
7.4 All payments provided under the Plan shall be paid in
cash from the general funds of the Company, and no special or
separate fund shall be established, and no other segregation
of assets made, to assure payment. Employees shall have no
right, title, or interest whatever in or to any investments
which the Company may make to aid the Company in meeting its
obligations hereunder.
<PAGE> 84
7.5 If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be
construed and enforced as if such provisions had not been
included.
7.6 The Plan shall be governed by and construed in
accordance with ERISA and all applicable rules and regulations
thereunder.
7.7 The Plan shall be effective as of the Effective Date
and shall remain in effect unless and until terminated
pursuant to Section 6.1 hereof.
IN WITNESS WHEREOF, the Company has caused the
Plan to be adopted this 26th day of July, 1989.
ONEIDA LTD.
By: /s/ M. Jack Rudnick
WITNESS:
/s/ Sandra C. Britton
<PAGE> 85
ANNEX I
Camden Wire Co., Inc.
Buffalo China, Inc.
Kenwood Silver Company, Inc.
Oneida Canada, Limited
<PAGE> 86
EXHIBIT 10(e)
July 26, 1989
Mr. Edward W. Thoma
733 West Hamilton Avenue
Sherrill, New York 13461
Dear Mr. Thoma:
Oneida Ltd. (the
"Company") considers it essential to the best interests of its
stockholders to foster the continuous employment of key
management personnel. In this connection, the Board of
Directors of the Company (the "Board') recognizes that the
possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the
departure or distraction of management personnel to the
detriment of the Company and its stockholders.
The Board has
determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of
members of the Company's management, including yourself, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible
change in control of the Company.
In order to induce you
to remain in the employ of the Company, the Company agrees
that you shall receive the severance benefits set forth in
this letter agreement (the "Agreement") in the event that your
employment with the Company is terminated subsequent to a
Change in Control (as defined in Section 2).
1. Term of Agreement.
The term of this Agreement (the "Term") shall commence on the
Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not
been terminated in accordance with its terms. In the event,
however, that you attain the age of sixty-five (65) during the
Term, then this Agreement shall terminate on the last day of
the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall
mean the date on which a Change in Control occurs, provided
that (i) you are then in the employ of the Company and (ii)
such Change in Control occurs before you reach age sixty -five
(65).
2. Change in Control.
No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
(A) any ''Person", as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(B) during any period
of two (2) consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
<PAGE> 87
(C) the stockholders
of the Company approve a merger or consolidation of the
Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger
or consolidation effected to implement a recapitalization of
the Company (or similar transaction in which no ''person" (as
hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders
of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination
Following Change in Control. If a Change in Control shall have
occurred, you shall be entitled to the benefits provided in
Subsection 4(D) upon the subsequent termination of your
employment during the Term unless such termination is because
of your death or retirement, by the Company for cause or
disability, or by you other than for good reason. In the event
your employment with the Company is terminated for any reason
prior to the Operative Date, you shall not be entitled to any
benefits hereunder.
(A) Disability;
Retirement. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from the
full-time performance of your duties with the Company for six
(6) consecutive months, and within thirty (30) days after
written Notice of Termination (as defined in Subsection 3(D))
is given you shall not have returned to the full-time
performance of your duties, the Company may terminate your
employment for "Disability." Any question as to the existence
of your Disability upon which you and the Company cannot agree
shall be determined by a qualified independent physician
selected by you (or, if you are unable to make such selection,
it shall be made by any adult member of your immediate
family), and approved by the Company. The determination of
such physician made in writing to the Company and to you shall
be final and conclusive for all purposes of this Agreement.
Termination of your employment based on "Retirement" shall
mean your voluntary termination of employment on a Retirement
Date as defined in the Retirement Plan for Employees of Oneida
Ltd. or any successor plan thereto (the "Pension Plan") as in
effect immediately prior to the occurrence of a Change in
Control (whether or not you are a participant in the Pension
Plan) or in accordance with any retirement arrangement
established with your consent with respect to you.
(B) Cause. Termination
by the Company of your employment for "Cause" shall mean
termination upon (i) the willful and continued failure by you
to substantially perform your duties with the Company (other
than any such failure resulting from your incapacity due to
physical or mental illness or from your Retirement or any such
actual or anticipated failure resulting from termination by
you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in
which the Board believes that you have not substantially
performed your duties, or (ii) the willful engaging by you in
conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of this
Subsection, no act or failure to act on your part shall be
deemed ''willful'' unless done, or omitted to be done, by you
in other than good faith and without reasonable belief that
your action or omission was in the best interests of the
Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at
a meeting of the Board (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board you were guilty of conduct set forth above in clause
(i) or (ii) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(C) Good Reason. You
shall be entitled to terminate your employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence
after a Change in Control of any of the following
circumstances:
<PAGE> 88
(i) Inconsistent
Duties. A meaningful and detrimental alteration in your
position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from
those in effect immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase
Salary. A reduction by the Company in your annual base salary
as in effect on the date hereof or as the same may be
increased from time to time; a failure by the Company to
increase your salary at a rate commensurate with that of other
key executives of the Company; or a failure by the Company to
increase your salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in
accordance with such statistics or indices as the Board shall
reasonably consider appropriate for such purposes).
(iii) Relocation. The relocation of the office
of the Company where you are employed at the time of the
Change in Control (the "CIC Location") to a location which in
your good faith assessment is an area not generally considered
conducive to maintaining the executive offices of a company
such as the Company because of hazardous or undesirable
conditions, including, without limitation, a high crime rate
or inadequate facilities, or to a location which is more than
twenty-five (25) miles away from the CIC Location or the
Company's requiring you to be based more than twenty-five (25)
miles away from the CIC Location (except for required travel
on the Company's business to an extent substantially
consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the
Company to continue in effect any material compensation,
benefit or profit sharing plan in which you were participating
immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure by the Company to continue your participation
therein (or in such substitute or alternative plan) on at
least as favorable a basis, both in terms of the amount of
benefits provided and the level of your participation relative
to other participants, as existed immediately prior to the
Change in Control;
(v) Benefits and
Perquisites. The failure by the Company to continue to provide
you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance,
medical, health and accident, disability or savings plans in
which you were participating immediately prior to the Change
in Control; the taking of any action by the Company which
would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite
enjoyed by you immediately prior to the Change in Control; or
the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect immediately prior
to the Change in Control;
(vi) No Assumption by Successor. The failure
of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof or, if the business of the
Company for which your services are principally performed is
sold at any time after a Change in Control, the failure of the
purchaser of such business to agree to provide you with the
same or a comparable position, duties, compensation, benefits
and perquisites (as described in clauses (iv) and (v) above)
as provided to you by the Company immediately prior to the
Change in Control; or
(vii) No Notice. Any purported termination of
your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (D)
below (and, if applicable, the requirements of Subsection (B)
above), which purported termination shall not be effective for
purposes of this Agreement.
(D) Notice of
Termination. Any purported termination of your employment by
the Company or by you shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 6. For purposes of his Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.
<PAGE> 89
(E) Date of
Termination, Etc. For purposes of this Agreement, "Date of
Termination' shall mean (i) if your employment is terminated
for Disability, thirty (30) days after a Notice of Termination
is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30)
day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other
reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination
pursuant to Subsection B) above shall not be less than thirty
(30) days from the date such Notice of Termination is given,
and in the case of a termination pursuant to Subsection (C)
above shall not be less than thirty (30) nor more than sixty
(60) days from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any
Notice of Termination is given, the party receiving such
Notice of Termination. notifies the other party that a dispute
exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and
no appeal having been perfected); provided further, however,
that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the
party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
you your full compensation in effect when the notice giving
rise to the dispute was given and continue you as a
participant in all compensation, benefit and insurance plans
and perquisites in which you were participating when the
notice giving rise to the dispute was given, until the dispute
is finally resolved in accordance with this Subsection.
Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement
and shall not be reduced by any compensation earned by you as
the result of employment by another employer.
4. Compensation Upon
Termination or During Disability. Following a Change in
Control, you shall be entitled to the following benefits
during a period of Disability, or upon termination of your
employment, as the case may be, provided that such period or
termination occurs during the Term:
(A) Disability. During
any period that you fail to perform your full-time duties with
the Company as a result of your Disability, you shall continue
to receive your base salary at the rate in effect at the
commencement of any such period, together with compensation
payable to you under the Company's disability insurance
coverage or other plan during such period, until your
employment is terminated pursuant to Subsection 3(A).
Thereafter, your benefits shall be determined in accordance
with the Company's insurance programs and other benefit or
pension plans then in effect in accordance with the terms of
such programs and plans.
(B) Termination for
Other than Good Reason or for Cause. If your employment shall
be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay
you your full base salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is
given, plus all other amounts to which you are entitled
pursuant to the Company's benefit and pension plans then in
effect, and the Company shall have no further obligations to
you under this Agreement.
(C) Retirement; Death.
If your employment shall be terminated for Retirement, or by
reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then
in effect.
(D) Breach by the
Company. If your employment by the Company shall be terminated
by the Company other than for Cause, Retirement or Disability
or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The
Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time the Notice of
Termination is given;
<PAGE> 90
(ii) Severance Payment. In lieu of any further
salary payments to you for periods subsequent to the Date of
Termination, the Company shall pay as severance pay to you,
not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to
2.99 times the average of the annual compensation which was
payable to you by the Company (or any corporation affiliated
with the Company within the meaning of section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"),
determined without regard to section 1504(b) of the Code) and
includable in your gross income for Federal income tax
purposes for the five (5) taxable years preceding your taxable
year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance
with the regulations (including proposed regulations)
promulgated under section 280G(d) of the Code; provided,
however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual
compensation shall be determined by including as compensation
any contribution (a "401(k) Contribution") pursuant to any
cash or deferred arrangement (as described in section 401(k)
of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and
(b) the amount of any such 401(k) Contribution shall be
treated as includable in your gross income in the taxable year
such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and
Expenses. The Company shall also pay to you all legal fees
and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this
Agreement (other than any such fees or expenses incurred in
connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a
thirty-six (36) month period after such termination, the
Company shall arrange to provide you with life, disability,
accident and health insurance benefits substantially similar
to and at no greater cost to you than those which you were
receiving immediately prior to the Notice of Termination.
Benefits otherwise receivable by you pursuant to this
Subsection 4(D)(iv) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six
(36) month period following your termination, and any such
benefits actually received by you shall be reported to the
Company.
(v) Supplemental
Pension. In addition to the Pension benefits to which you are
entitled under the Pension Plan, the Company shall pay you in
one sum in cash on the tenth (10th) business day following the
Date of Termination, a lump sum equal to the actuarial
equivalent of the excess of (1) the retirement pension
(determined as a straight life annuity commencing at age 65)
which you would have accrued under the terms of the Pension
Plan and any other pension benefit program (without regard to
any amendment to such Pension Plan or other pension benefit
program made subsequent to the Change in Control and on or
prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits
thereunder), determined as if you were fully vested thereunder
and had accumulated (after the Date of Termination thirty-six
(36) additional months of service credit thereunder at your
highest annual rate of compensation (the "Compensation Rate")
during the twelve (12) months immediately preceding the Date
of Termination (but in no event shall you be deemed to have
accumulated additional months of service credit after your
sixty-fifth (65th) birthday), over (2) the retirement pension
(determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the
provisions of the Pension Plan and any other pension benefit
program. For purposes of clause (1) above, the Compensation
Rate shall be deemed to include amounts payable pursuant to
Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent
thirty-six (36) months of compensation (or such lesser number
of months of compensation to your sixty-fifth (65th) birthday)
for purposes of determining benefits under the Pension Plan.
For purposes of this Subsection, "actuarial equivalent" shall
be determined using the same methods and assumptions utilized
under the Pension Plan immediately prior to the Change in
Control.
(vi) Employee Benefit
Plans. You shall be entitled to receive all benefits payable
to you under the Company's benefit and pension plans, not
otherwise specifically provided for in this Subsection 4(D).
<PAGE> 91
(E) No Mitigation.
You shall not be required to mitigate the amount of any
payment provided for in this Section 4 by seeking other
employment or otherwise, nor shall the amount of any payment
or benefit provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by
another employer or by pension benefits after the Date of
Termination, or otherwise except as specifically provided in
this Section 4.
(F) Reduction of
Payments In Certain Cases. Notwithstanding anything herein to
the contrary, if any amounts due to you under this Agreement
and any other plan or program of the Company constitute a
"parachute payment," 2S such term is defined in Section
280G(b)(2) of the Code (the "Parachute Payment"), and the
amount of the Parachute Payment, reduced by all federal, state
and local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the
amount you would receive if you were paid three times your
"base amount," as defined in Section 280G(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes
applicable thereto, then the aggregate of the amounts
constituting the Parachute Payment shall be reduced to an
amount that will equal three times your base amount less
$1.00. The determinations to be made with respect to this
Subsection 4(F) shall be made by an accounting firm (the
"Auditor") jointly selected by the Company and you and paid by
the Company. The Auditor shall be a nationally recognized
United States public accounting firm that has not during the
two years preceding the date of its selection acted in any way
on behalf of the Company or any of its subsidiaries. If you
and the Company cannot agree on the accounting firm to serve
as the Auditor, then you and the Company shall each select one
accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor
determines that a reduction in the aggregate of the amounts
constituting the Parachute Payment is required by this
Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under
this Agreement and each applicable plan or program of the
Company, respectively. If you do not so specify within, 60
days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall
determine, in its sole discretion, the portion of such
reduction, if any, to be made under this Agreement and each
applicable plan or program of the Company, respectively.
5. Successors; Binding
Agreement. (A) Assumption By Successor. The Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your
employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement,
"the Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(B) Enforceability By
Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount
would still be payable to you hereunder had you continued to
live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no
such designee, to your estate.
6. Notice. For
purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to
the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
<PAGE> 92
If to you: Edward W. Thoma
33 West Hamilton Avenue
Sherrill, New York 13461
or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon
receipt.
7. Miscellaneous. No
provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and
this Agreement shall supersede all Prior agreements,
negotiations, correspondence, undertakings and communications
of the parties, oral or written, with respect to the subject
matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York.
8. Validity. The
invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
9. Counterparts. This
Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any
dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the
rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with
this Agreement.
11. No Contract of
Employment. Nothing in this Agreement shall be construed as
giving you any right to be retained in the employ of the
Company.
12. Headings. The
headings contained in this Agreement are intended solely for
convenience and shall not affect the rights of the parties to
this Agreement.
If this letter sets
forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
and President
Agreed to this 26th day of July, 1989
/s/ Edward W. Thoma
Edward W. Thoma
July 26, 1989
<PAGE> 93
July 26, 1989
Mr. Gary L. Moreau
2028 Syosset Drive
Cazenovia, New York 13035
Dear Mr. Moreau:
Oneida Ltd. (the
"Company") considers it essential to the best interests of its
stockholders to foster the continuous employment of key
management personnel. In this connection, the Board of
Directors of the Company (the "Board') recognizes that the
possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the
departure or distraction of management personnel to the
detriment of the Company and its stockholders.
The Board has
determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of
members of the Company's management, including yourself, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible
change in control of the Company.
In order to induce you
to remain in the employ of the Company, the Company agrees
that you shall receive the severance benefits set forth in
this letter agreement (the "Agreement") in the event that your
employment with the Company is terminated subsequent to a
Change in Control (as defined in Section 2).
1. Term of Agreement.
The term of this Agreement (the "Term") shall commence on the
Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not
been terminated in accordance with its terms. In the event,
however, that you attain the age of sixty-five (65) during the
Term, then this Agreement shall terminate on the last day of
the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall
mean the date on which a Change in Control occurs, provided
that (i) you are then in the employ of the Company and (ii)
such Change in Control occurs before you reach age sixty -five
(65).
2. Change in Control.
No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
(A) any ''Person", as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(B) during any period
of two (2) consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
<PAGE> 94
(C) the stockholders
of the Company approve a merger or consolidation of the
Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger
or consolidation effected to implement a recapitalization of
the Company (or similar transaction in which no ''person" (as
hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders
of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination
Following Change in Control. If a Change in Control shall have
occurred, you shall be entitled to the benefits provided in
Subsection 4(D) upon the subsequent termination of your
employment during the Term unless such termination is because
of your death or retirement, by the Company for cause or
disability, or by you other than for good reason. In the event
your employment with the Company is terminated for any reason
prior to the Operative Date, you shall not be entitled to any
benefits hereunder.
(A) Disability;
Retirement. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from the
full-time performance of your duties with the Company for six
(6) consecutive months, and within thirty (30) days after
written Notice of Termination (as defined in Subsection 3(D))
is given you shall not have returned to the full-time
performance of your duties, the Company may terminate your
employment for "Disability." Any question as to the existence
of your Disability upon which you and the Company cannot agree
shall be determined by a qualified independent physician
selected by you (or, if you are unable to make such selection,
it shall be made by any adult member of your immediate
family), and approved by the Company. The determination of
such physician made in writing to the Company and to you shall
be final and conclusive for all purposes of this Agreement.
Termination of your employment based on "Retirement" shall
mean your voluntary termination of employment on a Retirement
Date as defined in the Retirement Plan for Employees of Oneida
Ltd. or any successor plan thereto (the "Pension Plan") as in
effect immediately prior to the occurrence of a Change in
Control (whether or not you are a participant in the Pension
Plan) or in accordance with any retirement arrangement
established with your consent with respect to you.
(B) Cause. Termination
by the Company of your employment for "Cause" shall mean
termination upon (i) the willful and continued failure by you
to substantially perform your duties with the Company (other
than any such failure resulting from your incapacity due to
physical or mental illness or from your Retirement or any such
actual or anticipated failure resulting from termination by
you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in
which the Board believes that you have not substantially
performed your duties, or (ii) the willful engaging by you in
conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of this
Subsection, no act or failure to act on your part shall be
deemed ''willful'' unless done, or omitted to be done, by you
in other than good faith and without reasonable belief that
your action or omission was in the best interests of the
Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at
a meeting of the Board (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board you were guilty of conduct set forth above in clause
(i) or (ii) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(C) Good Reason. You
shall be entitled to terminate your employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence
after a Change in Control of any of the following
circumstances:
<PAGE> 95
(i) Inconsistent
Duties. A meaningful and detrimental alteration in your
position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from
those in effect immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase
Salary. A reduction by the Company in your annual base salary
as in effect on the date hereof or as the same may be
increased from time to time; a failure by the Company to
increase your salary at a rate commensurate with that of other
key executives of the Company; or a failure by the Company to
increase your salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in
accordance with such statistics or indices as the Board shall
reasonably consider appropriate for such purposes).
(iii) Relocation. The relocation of the office
of the Company where you are employed at the time of the
Change in Control (the "CIC Location") to a location which in
your good faith assessment is an area not generally considered
conducive to maintaining the executive offices of a company
such as the Company because of hazardous or undesirable
conditions, including, without limitation, a high crime rate
or inadequate facilities, or to a location which is more than
twenty-five (25) miles away from the CIC Location or the
Company's requiring you to be based more than twenty-five (25)
miles away from the CIC Location (except for required travel
on the Company's business to an extent substantially
consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the
Company to continue in effect any material compensation,
benefit or profit sharing plan in which you were participating
immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure by the Company to continue your participation
therein (or in such substitute or alternative plan) on at
least as favorable a basis, both in terms of the amount of
benefits provided and the level of your participation relative
to other participants, as existed immediately prior to the
Change in Control;
(v) Benefits and
Perquisites. The failure by the Company to continue to provide
you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance,
medical, health and accident, disability or savings plans in
which you were participating immediately prior to the Change
in Control; the taking of any action by the Company which
would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite
enjoyed by you immediately prior to the Change in Control; or
the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect immediately prior
to the Change in Control;
(vi) No Assumption by Successor. The failure
of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof or, if the business of the
Company for which your services are principally performed is
sold at any time after a Change in Control, the failure of the
purchaser of such business to agree to provide you with the
same or a comparable position, duties, compensation, benefits
and perquisites (as described in clauses (iv) and (v) above)
as provided to you by the Company immediately prior to the
Change in Control; or
(vii) No Notice. Any purported termination of
your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (D)
below (and, if applicable, the requirements of Subsection (B)
above), which purported termination shall not be effective for
purposes of this Agreement.
(D) Notice of
Termination. Any purported termination of your employment by
the Company or by you shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 6. For purposes of his Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.
<PAGE> 96
(E) Date of
Termination, Etc. For purposes of this Agreement, "Date of
Termination' shall mean (i) if your employment is terminated
for Disability, thirty (30) days after a Notice of Termination
is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30)
day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other
reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination
pursuant to Subsection B) above shall not be less than thirty
(30) days from the date such Notice of Termination is given,
and in the case of a termination pursuant to Subsection (C)
above shall not be less than thirty (30) nor more than sixty
(60) days from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any
Notice of Termination is given, the party receiving such
Notice of Termination. notifies the other party that a dispute
exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and
no appeal having been perfected); provided further, however,
that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the
party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
you your full compensation in effect when the notice giving
rise to the dispute was given and continue you as a
participant in all compensation, benefit and insurance plans
and perquisites in which you were participating when the
notice giving rise to the dispute was given, until the dispute
is finally resolved in accordance with this Subsection.
Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement
and shall not be reduced by any compensation earned by you as
the result of employment by another employer.
4. Compensation Upon
Termination or During Disability. Following a Change in
Control, you shall be entitled to the following benefits
during a period of Disability, or upon termination of your
employment, as the case may be, provided that such period or
termination occurs during the Term:
(A) Disability. During
any period that you fail to perform your full-time duties with
the Company as a result of your Disability, you shall continue
to receive your base salary at the rate in effect at the
commencement of any such period, together with compensation
payable to you under the Company's disability insurance
coverage or other plan during such period, until your
employment is terminated pursuant to Subsection 3(A).
Thereafter, your benefits shall be determined in accordance
with the Company's insurance programs and other benefit or
pension plans then in effect in accordance with the terms of
such programs and plans.
(B) Termination for
Other than Good Reason or for Cause. If your employment shall
be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay
you your full base salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is
given, plus all other amounts to which you are entitled
pursuant to the Company's benefit and pension plans then in
effect, and the Company shall have no further obligations to
you under this Agreement.
(C) Retirement; Death.
If your employment shall be terminated for Retirement, or by
reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then
in effect.
(D) Breach by the
Company. If your employment by the Company shall be terminated
by the Company other than for Cause, Retirement or Disability
or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The
Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time the Notice of
Termination is given;
<PAGE> 97
(ii) Severance Payment. In lieu of any further
salary payments to you for periods subsequent to the Date of
Termination, the Company shall pay as severance pay to you,
not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to
2.99 times the average of the annual compensation which was
payable to you by the Company (or any corporation affiliated
with the Company within the meaning of section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"),
determined without regard to section 1504(b) of the Code) and
includable in your gross income for Federal income tax
purposes for the five (5) taxable years preceding your taxable
year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance
with the regulations (including proposed regulations)
promulgated under section 280G(d) of the Code; provided,
however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual
compensation shall be determined by including as compensation
any contribution (a "401(k) Contribution") pursuant to any
cash or deferred arrangement (as described in section 401(k)
of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and
(b) the amount of any such 401(k) Contribution shall be
treated as includable in your gross income in the taxable year
such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and
Expenses. The Company shall also pay to you all legal fees
and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this
Agreement (other than any such fees or expenses incurred in
connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a
thirty-six (36) month period after such termination, the
Company shall arrange to provide you with life, disability,
accident and health insurance benefits substantially similar
to and at no greater cost to you than those which you were
receiving immediately prior to the Notice of Termination.
Benefits otherwise receivable by you pursuant to this
Subsection 4(D)(iv) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six
(36) month period following your termination, and any such
benefits actually received by you shall be reported to the
Company.
(v) Supplemental
Pension. In addition to the Pension benefits to which you are
entitled under the Pension Plan, the Company shall pay you in
one sum in cash on the tenth (10th) business day following the
Date of Termination, a lump sum equal to the actuarial
equivalent of the excess of (1) the retirement pension
(determined as a straight life annuity commencing at age 65)
which you would have accrued under the terms of the Pension
Plan and any other pension benefit program (without regard to
any amendment to such Pension Plan or other pension benefit
program made subsequent to the Change in Control and on or
prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits
thereunder), determined as if you were fully vested thereunder
and had accumulated (after the Date of Termination thirty-six
(36) additional months of service credit thereunder at your
highest annual rate of compensation (the "Compensation Rate")
during the twelve (12) months immediately preceding the Date
of Termination (but in no event shall you be deemed to have
accumulated additional months of service credit after your
sixty-fifth (65th) birthday), over (2) the retirement pension
(determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the
provisions of the Pension Plan and any other pension benefit
program. For purposes of clause (1) above, the Compensation
Rate shall be deemed to include amounts payable pursuant to
Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent
thirty-six (36) months of compensation (or such lesser number
of months of compensation to your sixty-fifth (65th) birthday)
for purposes of determining benefits under the Pension Plan.
For purposes of this Subsection, "actuarial equivalent" shall
be determined using the same methods and assumptions utilized
under the Pension Plan immediately prior to the Change in
Control.
(vi) Employee Benefit
Plans. You shall be entitled to receive all benefits payable
to you under the Company's benefit and pension plans, not
otherwise specifically provided for in this Subsection 4(D).
<PAGE> 98
(E) No Mitigation. You
shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer
or by pension benefits after the Date of Termination, or
otherwise except as specifically provided in this Section 4.
(F) Reduction of
Payments In Certain Cases. Notwithstanding anything herein to
the contrary, if any amounts due to you under this Agreement
and any other plan or program of the Company constitute a
"parachute payment," 2S such term is defined in Section
280G(b)(2) of the Code (the "Parachute Payment"), and the
amount of the Parachute Payment, reduced by all federal, state
and local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the
amount you would receive if you were paid three times your
"base amount," as defined in Section 280G(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes
applicable thereto, then the aggregate of the amounts
constituting the Parachute Payment shall be reduced to an
amount that will equal three times your base amount less
$1.00. The determinations to be made with respect to this
Subsection 4(F) shall be made by an accounting firm (the
"Auditor") jointly selected by the Company and you and paid by
the Company. The Auditor shall be a nationally recognized
United States public accounting firm that has not during the
two years preceding the date of its selection acted in any way
on behalf of the Company or any of its subsidiaries. If you
and the Company cannot agree on the accounting firm to serve
as the Auditor, then you and the Company shall each select one
accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor
determines that a reduction in the aggregate of the amounts
constituting the Parachute Payment is required by this
Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under
this Agreement and each applicable plan or program of the
Company, respectively. If you do not so specify within, 60
days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall
determine, in its sole discretion, the portion of such
reduction, if any, to be made under this Agreement and each
applicable plan or program of the Company, respectively.
5. Successors; Binding
Agreement. (A) Assumption By Successor. The Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your
employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement,
"the Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(B) Enforceability By
Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount
would still be payable to you hereunder had you continued to
live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no
such designee, to your estate.
6. Notice. For
purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to
the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
<PAGE> 99
If to you: Gary L. Moreau
2028 Syosset Drive
Cazenovia, New York 13035
or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon
receipt.
7. Miscellaneous. No
provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and
this Agreement shall supersede all Prior agreements,
negotiations, correspondence, undertakings and communications
of the parties, oral or written, with respect to the subject
matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York.
8. Validity. The
invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
9. Counterparts. This
Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any
dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the
rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with
this Agreement.
11. No Contract of
Employment. Nothing in this Agreement shall be construed as
giving you any right to be retained in the employ of the
Company.
12. Headings. The
headings contained in this Agreement are intended solely for
convenience and shall not affect the rights of the parties to
this Agreement.
If this letter sets
forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
and President
Agreed to this 26th day of July, 1989
/s/ Gary L. Moreau
Gary L. Moreau
<PAGE> 100
July 26, 1989
Mr. Terry M. French
Nichols Pond Road
Canastota, New York 13032
Dear Mr. French:
Oneida Ltd. (the
"Company") considers it essential to the best interests of its
stockholders to foster the continuous employment of key
management personnel. In this connection, the Board of
Directors of the Company (the "Board') recognizes that the
possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the
departure or distraction of management personnel to the
detriment of the Company and its stockholders.
The Board has
determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of
members of the Company's management, including yourself, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible
change in control of the Company.
In order to induce you
to remain in the employ of the Company, the Company agrees
that you shall receive the severance benefits set forth in
this letter agreement (the "Agreement") in the event that your
employment with the Company is terminated subsequent to a
Change in Control (as defined in Section 2).
1. Term of Agreement.
The term of this Agreement (the "Term") shall commence on the
Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not
been terminated in accordance with its terms. In the event,
however, that you attain the age of sixty-five (65) during the
Term, then this Agreement shall terminate on the last day of
the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall
mean the date on which a Change in Control occurs, provided
that (i) you are then in the employ of the Company and (ii)
such Change in Control occurs before you reach age sixty -five
(65).
2. Change in Control.
No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
(A) any ''Person", as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(B) during any period
of two (2) consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
<PAGE> 101
(C) the stockholders
of the Company approve a merger or consolidation of the
Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger
or consolidation effected to implement a recapitalization of
the Company (or similar transaction in which no ''person" (as
hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders
of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination
Following Change in Control. If a Change in Control shall have
occurred, you shall be entitled to the benefits provided in
Subsection 4(D) upon the subsequent termination of your
employment during the Term unless such termination is because
of your death or retirement, by the Company for cause or
disability, or by you other than for good reason. In the event
your employment with the Company is terminated for any reason
prior to the Operative Date, you shall not be entitled to any
benefits hereunder.
(A) Disability;
Retirement. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from the
full-time performance of your duties with the Company for six
(6) consecutive months, and within thirty (30) days after
written Notice of Termination (as defined in Subsection 3(D))
is given you shall not have returned to the full-time
performance of your duties, the Company may terminate your
employment for "Disability." Any question as to the existence
of your Disability upon which you and the Company cannot agree
shall be determined by a qualified independent physician
selected by you (or, if you are unable to make such selection,
it shall be made by any adult member of your immediate
family), and approved by the Company. The determination of
such physician made in writing to the Company and to you shall
be final and conclusive for all purposes of this Agreement.
Termination of your employment based on "Retirement" shall
mean your voluntary termination of employment on a Retirement
Date as defined in the Retirement Plan for Employees of Oneida
Ltd. or any successor plan thereto (the "Pension Plan") as in
effect immediately prior to the occurrence of a Change in
Control (whether or not you are a participant in the Pension
Plan) or in accordance with any retirement arrangement
established with your consent with respect to you.
(B) Cause. Termination
by the Company of your employment for "Cause" shall mean
termination upon (i) the willful and continued failure by you
to substantially perform your duties with the Company (other
than any such failure resulting from your incapacity due to
physical or mental illness or from your Retirement or any such
actual or anticipated failure resulting from termination by
you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in
which the Board believes that you have not substantially
performed your duties, or (ii) the willful engaging by you in
conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of this
Subsection, no act or failure to act on your part shall be
deemed ''willful'' unless done, or omitted to be done, by you
in other than good faith and without reasonable belief that
your action or omission was in the best interests of the
Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at
a meeting of the Board (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board you were guilty of conduct set forth above in clause
(i) or (ii) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(C) Good Reason. You
shall be entitled to terminate your employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence
after a Change in Control of any of the following
circumstances:
<PAGE> 102
(i) Inconsistent
Duties. A meaningful and detrimental alteration in your
position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from
those in effect immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase
Salary. A reduction by the Company in your annual base salary
as in effect on the date hereof or as the same may be
increased from time to time; a failure by the Company to
increase your salary at a rate commensurate with that of other
key executives of the Company; or a failure by the Company to
increase your salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in
accordance with such statistics or indices as the Board shall
reasonably consider appropriate for such purposes).
(iii) Relocation. The relocation of the office
of the Company where you are employed at the time of the
Change in Control (the "CIC Location") to a location which in
your good faith assessment is an area not generally considered
conducive to maintaining the executive offices of a company
such as the Company because of hazardous or undesirable
conditions, including, without limitation, a high crime rate
or inadequate facilities, or to a location which is more than
twenty-five (25) miles away from the CIC Location or the
Company's requiring you to be based more than twenty-five (25)
miles away from the CIC Location (except for required travel
on the Company's business to an extent substantially
consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the
Company to continue in effect any material compensation,
benefit or profit sharing plan in which you were participating
immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure by the Company to continue your participation
therein (or in such substitute or alternative plan) on at
least as favorable a basis, both in terms of the amount of
benefits provided and the level of your participation relative
to other participants, as existed immediately prior to the
Change in Control;
(v) Benefits and
Perquisites. The failure by the Company to continue to provide
you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance,
medical, health and accident, disability or savings plans in
which you were participating immediately prior to the Change
in Control; the taking of any action by the Company which
would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite
enjoyed by you immediately prior to the Change in Control; or
the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect immediately prior
to the Change in Control;
(vi) No Assumption by Successor. The failure
of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof or, if the business of the
Company for which your services are principally performed is
sold at any time after a Change in Control, the failure of the
purchaser of such business to agree to provide you with the
same or a comparable position, duties, compensation, benefits
and perquisites (as described in clauses (iv) and (v) above)
as provided to you by the Company immediately prior to the
Change in Control; or
(vii) No Notice. Any purported termination of
your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (D)
below (and, if applicable, the requirements of Subsection (B)
above), which purported termination shall not be effective for
purposes of this Agreement.
(D) Notice of
Termination. Any purported termination of your employment by
the Company or by you shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 6. For purposes of his Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.
<PAGE> 103
(E) Date of
Termination, Etc. For purposes of this Agreement, "Date of
Termination' shall mean (i) if your employment is terminated
for Disability, thirty (30) days after a Notice of Termination
is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30)
day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other
reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination
pursuant to Subsection B) above shall not be less than thirty
(30) days from the date such Notice of Termination is given,
and in the case of a termination pursuant to Subsection (C)
above shall not be less than thirty (30) nor more than sixty
(60) days from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any
Notice of Termination is given, the party receiving such
Notice of Termination. notifies the other party that a dispute
exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and
no appeal having been perfected); provided further, however,
that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the
party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
you your full compensation in effect when the notice giving
rise to the dispute was given and continue you as a
participant in all compensation, benefit and insurance plans
and perquisites in which you were participating when the
notice giving rise to the dispute was given, until the dispute
is finally resolved in accordance with this Subsection.
Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement
and shall not be reduced by any compensation earned by you as
the result of employment by another employer.
4. Compensation Upon
Termination or During Disability. Following a Change in
Control, you shall be entitled to the following benefits
during a period of Disability, or upon termination of your
employment, as the case may be, provided that such period or
termination occurs during the Term:
(A) Disability. During
any period that you fail to perform your full-time duties with
the Company as a result of your Disability, you shall continue
to receive your base salary at the rate in effect at the
commencement of any such period, together with compensation
payable to you under the Company's disability insurance
coverage or other plan during such period, until your
employment is terminated pursuant to Subsection 3(A).
Thereafter, your benefits shall be determined in accordance
with the Company's insurance programs and other benefit or
pension plans then in effect in accordance with the terms of
such programs and plans.
(B) Termination for
Other than Good Reason or for Cause. If your employment shall
be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay
you your full base salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is
given, plus all other amounts to which you are entitled
pursuant to the Company's benefit and pension plans then in
effect, and the Company shall have no further obligations to
you under this Agreement.
(C) Retirement; Death.
If your employment shall be terminated for Retirement, or by
reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then
in effect.
(D) Breach by the
Company. If your employment by the Company shall be terminated
by the Company other than for Cause, Retirement or Disability
or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The
Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time the Notice of
Termination is given;
<PAGE> 104
(ii) Severance Payment. In lieu of any further
salary payments to you for periods subsequent to the Date of
Termination, the Company shall pay as severance pay to you,
not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to
2.99 times the average of the annual compensation which was
payable to you by the Company (or any corporation affiliated
with the Company within the meaning of section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"),
determined without regard to section 1504(b) of the Code) and
includable in your gross income for Federal income tax
purposes for the five (5) taxable years preceding your taxable
year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance
with the regulations (including proposed regulations)
promulgated under section 280G(d) of the Code; provided,
however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual
compensation shall be determined by including as compensation
any contribution (a "401(k) Contribution") pursuant to any
cash or deferred arrangement (as described in section 401(k)
of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and
(b) the amount of any such 401(k) Contribution shall be
treated as includable in your gross income in the taxable year
such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and
Expenses. The Company shall also pay to you all legal fees
and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this
Agreement (other than any such fees or expenses incurred in
connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a
thirty-six (36) month period after such termination, the
Company shall arrange to provide you with life, disability,
accident and health insurance benefits substantially similar
to and at no greater cost to you than those which you were
receiving immediately prior to the Notice of Termination.
Benefits otherwise receivable by you pursuant to this
Subsection 4(D)(iv) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six
(36) month period following your termination, and any such
benefits actually received by you shall be reported to the
Company.
(v) Supplemental
Pension. In addition to the Pension benefits to which you are
entitled under the Pension Plan, the Company shall pay you in
one sum in cash on the tenth (10th) business day following the
Date of Termination, a lump sum equal to the actuarial
equivalent of the excess of (1) the retirement pension
(determined as a straight life annuity commencing at age 65)
which you would have accrued under the terms of the Pension
Plan and any other pension benefit program (without regard to
any amendment to such Pension Plan or other pension benefit
program made subsequent to the Change in Control and on or
prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits
thereunder), determined as if you were fully vested thereunder
and had accumulated (after the Date of Termination thirty-six
(36) additional months of service credit thereunder at your
highest annual rate of compensation (the "Compensation Rate")
during the twelve (12) months immediately preceding the Date
of Termination (but in no event shall you be deemed to have
accumulated additional months of service credit after your
sixty-fifth (65th) birthday), over (2) the retirement pension
(determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the
provisions of the Pension Plan and any other pension benefit
program. For purposes of clause (1) above, the Compensation
Rate shall be deemed to include amounts payable pursuant to
Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent
thirty-six (36) months of compensation (or such lesser number
of months of compensation to your sixty-fifth (65th) birthday)
for purposes of determining benefits under the Pension Plan.
For purposes of this Subsection, "actuarial equivalent" shall
be determined using the same methods and assumptions utilized
under the Pension Plan immediately prior to the Change in
Control.
(vi) Employee Benefit
Plans. You shall be entitled to receive all benefits payable
to you under the Company's benefit and pension plans, not
otherwise specifically provided for in this Subsection 4(D).
<PAGE> 105
(E) No Mitigation. You
shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer
or by pension benefits after the Date of Termination, or
otherwise except as specifically provided in this Section 4.
(F) Reduction of
Payments In Certain Cases. Notwithstanding anything herein to
the contrary, if any amounts due to you under this Agreement
and any other plan or program of the Company constitute a
"parachute payment," 2S such term is defined in Section
280G(b)(2) of the Code (the "Parachute Payment"), and the
amount of the Parachute Payment, reduced by all federal, state
and local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the
amount you would receive if you were paid three times your
"base amount," as defined in Section 280G(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes
applicable thereto, then the aggregate of the amounts
constituting the Parachute Payment shall be reduced to an
amount that will equal three times your base amount less
$1.00. The determinations to be made with respect to this
Subsection 4(F) shall be made by an accounting firm (the
"Auditor") jointly selected by the Company and you and paid by
the Company. The Auditor shall be a nationally recognized
United States public accounting firm that has not during the
two years preceding the date of its selection acted in any way
on behalf of the Company or any of its subsidiaries. If you
and the Company cannot agree on the accounting firm to serve
as the Auditor, then you and the Company shall each select one
accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor
determines that a reduction in the aggregate of the amounts
constituting the Parachute Payment is required by this
Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under
this Agreement and each applicable plan or program of the
Company, respectively. If you do not so specify within, 60
days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall
determine, in its sole discretion, the portion of such
reduction, if any, to be made under this Agreement and each
applicable plan or program of the Company, respectively.
5. Successors; Binding
Agreement. (A) Assumption By Successor. The Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your
employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement,
"the Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(B) Enforceability By
Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount
would still be payable to you hereunder had you continued to
live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no
such designee, to your estate.
6. Notice. For
purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to
the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
<PAGE> 106
If to you: Terry M. French
Nichols Pond Road
Canastota, New York 13032
or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon
receipt.
7. Miscellaneous. No
provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and
this Agreement shall supersede all Prior agreements,
negotiations, correspondence, undertakings and communications
of the parties, oral or written, with respect to the subject
matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York.
8. Validity. The
invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
9. Counterparts. This
Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any
dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the
rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with
this Agreement.
11. No Contract of
Employment. Nothing in this Agreement shall be construed as
giving you any right to be retained in the employ of the
Company.
12. Headings. The
headings contained in this Agreement are intended solely for
convenience and shall not affect the rights of the parties to
this Agreement.
If this letter sets
forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
and President
Agreed to this 26th day of July, 1989
/s/ Terry M. French
Terry M. French
<PAGE. 107
July 26, 1989
Mr. Glenn B. Kelsey
Box 200-A, RD 1
Verona, New York 13478
Dear Mr. Kelsey:
Oneida Ltd. (the
"Company") considers it essential to the best interests of its
stockholders to foster the continuous employment of key
management personnel. In this connection, the Board of
Directors of the Company (the "Board') recognizes that the
possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the
departure or distraction of management personnel to the
detriment of the Company and its stockholders.
The Board has
determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of
members of the Company's management, including yourself, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible
change in control of the Company.
In order to induce you
to remain in the employ of the Company, the Company agrees
that you shall receive the severance benefits set forth in
this letter agreement (the "Agreement") in the event that your
employment with the Company is terminated subsequent to a
Change in Control (as defined in Section 2).
1. Term of Agreement.
The term of this Agreement (the "Term") shall commence on the
Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not
been terminated in accordance with its terms. In the event,
however, that you attain the age of sixty-five (65) during the
Term, then this Agreement shall terminate on the last day of
the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall
mean the date on which a Change in Control occurs, provided
that (i) you are then in the employ of the Company and (ii)
such Change in Control occurs before you reach age sixty -five
(65).
2. Change in Control.
No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
(A) any ''Person", as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(B) during any period
of two (2) consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
<PAGE> 108
(C) the stockholders
of the Company approve a merger or consolidation of the
Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger
or consolidation effected to implement a recapitalization of
the Company (or similar transaction in which no ''person" (as
hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders
of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination
Following Change in Control. If a Change in Control shall have
occurred, you shall be entitled to the benefits provided in
Subsection 4(D) upon the subsequent termination of your
employment during the Term unless such termination is because
of your death or retirement, by the Company for cause or
disability, or by you other than for good reason. In the event
your employment with the Company is terminated for any reason
prior to the Operative Date, you shall not be entitled to any
benefits hereunder.
(A) Disability;
Retirement. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from the
full-time performance of your duties with the Company for six
(6) consecutive months, and within thirty (30) days after
written Notice of Termination (as defined in Subsection 3(D))
is given you shall not have returned to the full-time
performance of your duties, the Company may terminate your
employment for "Disability." Any question as to the existence
of your Disability upon which you and the Company cannot agree
shall be determined by a qualified independent physician
selected by you (or, if you are unable to make such selection,
it shall be made by any adult member of your immediate
family), and approved by the Company. The determination of
such physician made in writing to the Company and to you shall
be final and conclusive for all purposes of this Agreement.
Termination of your employment based on "Retirement" shall
mean your voluntary termination of employment on a Retirement
Date as defined in the Retirement Plan for Employees of Oneida
Ltd. or any successor plan thereto (the "Pension Plan") as in
effect immediately prior to the occurrence of a Change in
Control (whether or not you are a participant in the Pension
Plan) or in accordance with any retirement arrangement
established with your consent with respect to you.
(B) Cause. Termination
by the Company of your employment for "Cause" shall mean
termination upon (i) the willful and continued failure by you
to substantially perform your duties with the Company (other
than any such failure resulting from your incapacity due to
physical or mental illness or from your Retirement or any such
actual or anticipated failure resulting from termination by
you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in
which the Board believes that you have not substantially
performed your duties, or (ii) the willful engaging by you in
conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of this
Subsection, no act or failure to act on your part shall be
deemed "willful" unless done, or omitted to be done, by you
in other than good faith and without reasonable belief that
your action or omission was in the best interests of the
Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at
a meeting of the Board (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board you were guilty of conduct set forth above in clause
(i) or (ii) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(C) Good Reason. You
shall be entitled to terminate your employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence
after a Change in Control of any of the following
circumstances:
<PAGE> 109
(i) Inconsistent
Duties. A meaningful and detrimental alteration in your
position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from
those in effect immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase
Salary. A reduction by the Company in your annual base salary
as in effect on the date hereof or as the same may be
increased from time to time; a failure by the Company to
increase your salary at a rate commensurate with that of other
key executives of the Company; or a failure by the Company to
increase your salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in
accordance with such statistics or indices as the Board shall
reasonably consider appropriate for such purposes).
(iii) Relocation. The relocation of the office
of the Company where you are employed at the time of the
Change in Control (the "CIC Location") to a location which in
your good faith assessment is an area not generally considered
conducive to maintaining the executive offices of a company
such as the Company because of hazardous or undesirable
conditions, including, without limitation, a high crime rate
or inadequate facilities, or to a location which is more than
twenty-five (25) miles away from the CIC Location or the
Company's requiring you to be based more than twenty-five (25)
miles away from the CIC Location (except for required travel
on the Company's business to an extent substantially
consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the
Company to continue in effect any material compensation,
benefit or profit sharing plan in which you were participating
immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure by the Company to continue your participation
therein (or in such substitute or alternative plan) on at
least as favorable a basis, both in terms of the amount of
benefits provided and the level of your participation relative
to other participants, as existed immediately prior to the
Change in Control;
(v) Benefits and
Perquisites. The failure by the Company to continue to provide
you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance,
medical, health and accident, disability or savings plans in
which you were participating immediately prior to the Change
in Control; the taking of any action by the Company which
would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite
enjoyed by you immediately prior to the Change in Control; or
the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect immediately prior
to the Change in Control;
(vi) No Assumption by Successor. The failure
of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof or, if the business of the
Company for which your services are principally performed is
sold at any time after a Change in Control, the failure of the
purchaser of such business to agree to provide you with the
same or a comparable position, duties, compensation, benefits
and perquisites (as described in clauses (iv) and (v) above)
as provided to you by the Company immediately prior to the
Change in Control; or
(vii) No Notice. Any purported termination of
your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (D)
below (and, if applicable, the requirements of Subsection (B)
above), which purported termination shall not be effective for
purposes of this Agreement.
(D) Notice of
Termination. Any purported termination of your employment by
the Company or by you shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 6. For purposes of his Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.
<PAGE> 110
(E) Date of
Termination, Etc. For purposes of this Agreement, "Date of
Termination' shall mean (i) if your employment is terminated
for Disability, thirty (30) days after a Notice of Termination
is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30)
day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other
reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination
pursuant to Subsection B) above shall not be less than thirty
(30) days from the date such Notice of Termination is given,
and in the case of a termination pursuant to Subsection (C)
above shall not be less than thirty (30) nor more than sixty
(60) days from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any
Notice of Termination is given, the party receiving such
Notice of Termination. notifies the other party that a dispute
exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and
no appeal having been perfected); provided further, however,
that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the
party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
you your full compensation in effect when the notice giving
rise to the dispute was given and continue you as a
participant in all compensation, benefit and insurance plans
and perquisites in which you were participating when the
notice giving rise to the dispute was given, until the dispute
is finally resolved in accordance with this Subsection.
Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement
and shall not be reduced by any compensation earned by you as
the result of employment by another employer.
4. Compensation Upon
Termination or During Disability. Following a Change in
Control, you shall be entitled to the following benefits
during a period of Disability, or upon termination of your
employment, as the case may be, provided that such period or
termination occurs during the Term:
(A) Disability. During
any period that you fail to perform your full-time duties with
the Company as a result of your Disability, you shall continue
to receive your base salary at the rate in effect at the
commencement of any such period, together with compensation
payable to you under the Company's disability insurance
coverage or other plan during such period, until your
employment is terminated pursuant to Subsection 3(A).
Thereafter, your benefits shall be determined in accordance
with the Company's insurance programs and other benefit or
pension plans then in effect in accordance with the terms of
such programs and plans.
(B) Termination for
Other than Good Reason or for Cause. If your employment shall
be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay
you your full base salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is
given, plus all other amounts to which you are entitled
pursuant to the Company's benefit and pension plans then in
effect, and the Company shall have no further obligations to
you under this Agreement.
(C) Retirement; Death.
If your employment shall be terminated for Retirement, or by
reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then
in effect.
(D) Breach by the
Company. If your employment by the Company shall be terminated
by the Company other than for Cause, Retirement or Disability
or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The
Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time the Notice of
Termination is given;
<PAGE> 111
(ii) Severance Payment. In lieu of any further
salary payments to you for periods subsequent to the Date of
Termination, the Company shall pay as severance pay to you,
not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to
2.99 times the average of the annual compensation which was
payable to you by the Company (or any corporation affiliated
with the Company within the meaning of section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"),
determined without regard to section 1504(b) of the Code) and
includable in your gross income for Federal income tax
purposes for the five (5) taxable years preceding your taxable
year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance
with the regulations (including proposed regulations)
promulgated under section 280G(d) of the Code; provided,
however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual
compensation shall be determined by including as compensation
any contribution (a "401(k) Contribution") pursuant to any
cash or deferred arrangement (as described in section 401(k)
of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and
(b) the amount of any such 401(k) Contribution shall be
treated as includable in your gross income in the taxable year
such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and
Expenses. The Company shall also pay to you all legal fees
and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this
Agreement (other than any such fees or expenses incurred in
connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a
thirty-six (36) month period after such termination, the
Company shall arrange to provide you with life, disability,
accident and health insurance benefits substantially similar
to and at no greater cost to you than those which you were
receiving immediately prior to the Notice of Termination.
Benefits otherwise receivable by you pursuant to this
Subsection 4(D)(iv) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six
(36) month period following your termination, and any such
benefits actually received by you shall be reported to the
Company.
(v) Supplemental
Pension. In addition to the Pension benefits to which you are
entitled under the Pension Plan, the Company shall pay you in
one sum in cash on the tenth (10th) business day following the
Date of Termination, a lump sum equal to the actuarial
equivalent of the excess of (1) the retirement pension
(determined as a straight life annuity commencing at age 65)
which you would have accrued under the terms of the Pension
Plan and any other pension benefit program (without regard to
any amendment to such Pension Plan or other pension benefit
program made subsequent to the Change in Control and on or
prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits
thereunder), determined as if you were fully vested thereunder
and had accumulated (after the Date of Termination thirty-six
(36) additional months of service credit thereunder at your
highest annual rate of compensation (the "Compensation Rate")
during the twelve (12) months immediately preceding the Date
of Termination (but in no event shall you be deemed to have
accumulated additional months of service credit after your
sixty-fifth (65th) birthday), over (2) the retirement pension
(determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the
provisions of the Pension Plan and any other pension benefit
program. For purposes of clause (1) above, the Compensation
Rate shall be deemed to include amounts payable pursuant to
Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent
thirty-six (36) months of compensation (or such lesser number
of months of compensation to your sixty-fifth (65th) birthday)
for purposes of determining benefits under the Pension Plan.
For purposes of this Subsection, "actuarial equivalent" shall
be determined using the same methods and assumptions utilized
under the Pension Plan immediately prior to the Change in
Control.
(vi) Employee Benefit
Plans. You shall be entitled to receive all benefits payable
to you under the Company's benefit and pension plans, not
otherwise specifically provided for in this Subsection 4(D).
<PAGE> 112
(E) No Mitigation. You
shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer
or by pension benefits after the Date of Termination, or
otherwise except as specifically provided in this Section 4.
(F) Reduction of
Payments In Certain Cases. Notwithstanding anything herein to
the contrary, if any amounts due to you under this Agreement
and any other plan or program of the Company constitute a
"parachute payment," 2S such term is defined in Section
280G(b)(2) of the Code (the "Parachute Payment"), and the
amount of the Parachute Payment, reduced by all federal, state
and local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the
amount you would receive if you were paid three times your
"base amount," as defined in Section 280G(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes
applicable thereto, then the aggregate of the amounts
constituting the Parachute Payment shall be reduced to an
amount that will equal three times your base amount less
$1.00. The determinations to be made with respect to this
Subsection 4(F) shall be made by an accounting firm (the
"Auditor") jointly selected by the Company and you and paid by
the Company. The Auditor shall be a nationally recognized
United States public accounting firm that has not during the
two years preceding the date of its selection acted in any way
on behalf of the Company or any of its subsidiaries. If you
and the Company cannot agree on the accounting firm to serve
as the Auditor, then you and the Company shall each select one
accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor
determines that a reduction in the aggregate of the amounts
constituting the Parachute Payment is required by this
Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under
this Agreement and each applicable plan or program of the
Company, respectively. If you do not so specify within, 60
days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall
determine, in its sole discretion, the portion of such
reduction, if any, to be made under this Agreement and each
applicable plan or program of the Company, respectively.
5. Successors; Binding
Agreement. (A) Assumption By Successor. The Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your
employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement,
"the Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(B) Enforceability By
Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount
would still be payable to you hereunder had you continued to
live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no
such designee, to your estate.
6. Notice. For
purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to
the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
<PAGE> 113
If to you: Glenn B. Kelsey
Box 200-A, RD 1
Verona, New York 13478
or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon
receipt.
7. Miscellaneous. No
provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and
this Agreement shall supersede all Prior agreements,
negotiations, correspondence, undertakings and communications
of the parties, oral or written, with respect to the subject
matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York.
8. Validity. The
invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
9. Counterparts. This
Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any
dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the
rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with
this Agreement.
11. No Contract of
Employment. Nothing in this Agreement shall be construed as
giving you any right to be retained in the employ of the
Company.
12. Headings. The
headings contained in this Agreement are intended solely for
convenience and shall not affect the rights of the parties to
this Agreement.
If this letter sets
forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
and President
Agreed to this 26th day of July, 1989
/s/ Glenn B. Kelsey
Glenn B. Kelsey
<PAGE> 114
July 26, 1989
Mr. Thomas A. Fetzner
7767 Academy Street
Fabius, New York 13063
Dear Mr. Fetzner:
Oneida Ltd. (the
"Company") considers it essential to the best interests of its
stockholders to foster the continuous employment of key
management personnel. In this connection, the Board of
Directors of the Company (the "Board') recognizes that the
possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the
departure or distraction of management personnel to the
detriment of the Company and its stockholders.
The Board has
determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of
members of the Company's management, including yourself, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible
change in control of the Company.
In order to induce you
to remain in the employ of the Company, the Company agrees
that you shall receive the severance benefits set forth in
this letter agreement (the "Agreement") in the event that your
employment with the Company is terminated subsequent to a
Change in Control (as defined in Section 2).
1. Term of Agreement.
The term of this Agreement (the "Term") shall commence on the
Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not
been terminated in accordance with its terms. In the event,
however, that you attain the age of sixty-five (65) during the
Term, then this Agreement shall terminate on the last day of
the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall
mean the date on which a Change in Control occurs, provided
that (i) you are then in the employ of the Company and (ii)
such Change in Control occurs before you reach age sixty -five
(65).
2. Change in Control.
No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
(A) any ''Person", as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(B) during any period
of two (2) consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
<PAGE> 115
(C) the stockholders
of the Company approve a merger or consolidation of the
Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger
or consolidation effected to implement a recapitalization of
the Company (or similar transaction in which no ''person" (as
hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders
of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination
Following Change in Control. If a Change in Control shall have
occurred, you shall be entitled to the benefits provided in
Subsection 4(D) upon the subsequent termination of your
employment during the Term unless such termination is because
of your death or retirement, by the Company for cause or
disability, or by you other than for good reason. In the event
your employment with the Company is terminated for any reason
prior to the Operative Date, you shall not be entitled to any
benefits hereunder.
(A) Disability;
Retirement. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from the
full-time performance of your duties with the Company for six
(6) consecutive months, and within thirty (30) days after
written Notice of Termination (as defined in Subsection 3(D))
is given you shall not have returned to the full-time
performance of your duties, the Company may terminate your
employment for "Disability." Any question as to the existence
of your Disability upon which you and the Company cannot agree
shall be determined by a qualified independent physician
selected by you (or, if you are unable to make such selection,
it shall be made by any adult member of your immediate
family), and approved by the Company. The determination of
such physician made in writing to the Company and to you shall
be final and conclusive for all purposes of this Agreement.
Termination of your employment based on "Retirement" shall
mean your voluntary termination of employment on a Retirement
Date as defined in the Retirement Plan for Employees of Oneida
Ltd. or any successor plan thereto (the "Pension Plan") as in
effect immediately prior to the occurrence of a Change in
Control (whether or not you are a participant in the Pension
Plan) or in accordance with any retirement arrangement
established with your consent with respect to you.
(B) Cause. Termination
by the Company of your employment for "Cause" shall mean
termination upon (i) the willful and continued failure by you
to substantially perform your duties with the Company (other
than any such failure resulting from your incapacity due to
physical or mental illness or from your Retirement or any such
actual or anticipated failure resulting from termination by
you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in
which the Board believes that you have not substantially
performed your duties, or (ii) the willful engaging by you in
conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of this
Subsection, no act or failure to act on your part shall be
deemed ''willful'' unless done, or omitted to be done, by you
in other than good faith and without reasonable belief that
your action or omission was in the best interests of the
Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at
a meeting of the Board (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board you were guilty of conduct set forth above in clause
(i) or (ii) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(C) Good Reason. You
shall be entitled to terminate your employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence
after a Change in Control of any of the following
circumstances:
<PAGE> 116
(i) Inconsistent
Duties. A meaningful and detrimental alteration in your
position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from
those in effect immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase
Salary. A reduction by the Company in your annual base salary
as in effect on the date hereof or as the same may be
increased from time to time; a failure by the Company to
increase your salary at a rate commensurate with that of other
key executives of the Company; or a failure by the Company to
increase your salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in
accordance with such statistics or indices as the Board shall
reasonably consider appropriate for such purposes).
(iii) Relocation. The relocation of the office
of the Company where you are employed at the time of the
Change in Control (the "CIC Location") to a location which in
your good faith assessment is an area not generally considered
conducive to maintaining the executive offices of a company
such as the Company because of hazardous or undesirable
conditions, including, without limitation, a high crime rate
or inadequate facilities, or to a location which is more than
twenty-five (25) miles away from the CIC Location or the
Company's requiring you to be based more than twenty-five (25)
miles away from the CIC Location (except for required travel
on the Company's business to an extent substantially
consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the
Company to continue in effect any material compensation,
benefit or profit sharing plan in which you were participating
immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure by the Company to continue your participation
therein (or in such substitute or alternative plan) on at
least as favorable a basis, both in terms of the amount of
benefits provided and the level of your participation relative
to other participants, as existed immediately prior to the
Change in Control;
(v) Benefits and
Perquisites. The failure by the Company to continue to provide
you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance,
medical, health and accident, disability or savings plans in
which you were participating immediately prior to the Change
in Control; the taking of any action by the Company which
would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite
enjoyed by you immediately prior to the Change in Control; or
the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of
years of service with the Company in accordance with the
Company's normal vacation policy in effect immediately prior
to the Change in Control;
(vi) No Assumption by Successor. The failure
of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof or, if the business of the
Company for which your services are principally performed is
sold at any time after a Change in Control, the failure of the
purchaser of such business to agree to provide you with the
same or a comparable position, duties, compensation, benefits
and perquisites (as described in clauses (iv) and (v) above)
as provided to you by the Company immediately prior to the
Change in Control; or
(vii) No Notice. Any purported termination of
your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (D)
below (and, if applicable, the requirements of Subsection (B)
above), which purported termination shall not be effective for
purposes of this Agreement.
(D) Notice of
Termination. Any purported termination of your employment by
the Company or by you shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 6. For purposes of his Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.
<PAGE> 117
(E) Date of
Termination, Etc. For purposes of this Agreement, "Date of
Termination' shall mean (i) if your employment is terminated
for Disability, thirty (30) days after a Notice of Termination
is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30)
day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other
reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination
pursuant to Subsection B) above shall not be less than thirty
(30) days from the date such Notice of Termination is given,
and in the case of a termination pursuant to Subsection (C)
above shall not be less than thirty (30) nor more than sixty
(60) days from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any
Notice of Termination is given, the party receiving such
Notice of Termination. notifies the other party that a dispute
exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and
no appeal having been perfected); provided further, however,
that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the
party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
you your full compensation in effect when the notice giving
rise to the dispute was given and continue you as a
participant in all compensation, benefit and insurance plans
and perquisites in which you were participating when the
notice giving rise to the dispute was given, until the dispute
is finally resolved in accordance with this Subsection.
Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement
and shall not be reduced by any compensation earned by you as
the result of employment by another employer.
4. Compensation Upon
Termination or During Disability. Following a Change in
Control, you shall be entitled to the following benefits
during a period of Disability, or upon termination of your
employment, as the case may be, provided that such period or
termination occurs during the Term:
(A) Disability. During
any period that you fail to perform your full-time duties with
the Company as a result of your Disability, you shall continue
to receive your base salary at the rate in effect at the
commencement of any such period, together with compensation
payable to you under the Company's disability insurance
coverage or other plan during such period, until your
employment is terminated pursuant to Subsection 3(A).
Thereafter, your benefits shall be determined in accordance
with the Company's insurance programs and other benefit or
pension plans then in effect in accordance with the terms of
such programs and plans.
(B) Termination for
Other than Good Reason or for Cause. If your employment shall
be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay
you your full base salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is
given, plus all other amounts to which you are entitled
pursuant to the Company's benefit and pension plans then in
effect, and the Company shall have no further obligations to
you under this Agreement.
(C) Retirement; Death.
If your employment shall be terminated for Retirement, or by
reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then
in effect.
(D) Breach by the
Company. If your employment by the Company shall be terminated
by the Company other than for Cause, Retirement or Disability
or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The
Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time the Notice of
Termination is given;
<PAGE> 118
(ii) Severance Payment. In lieu of any further
salary payments to you for periods subsequent to the Date of
Termination, the Company shall pay as severance pay to you,
not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to
2.99 times the average of the annual compensation which was
payable to you by the Company (or any corporation affiliated
with the Company within the meaning of section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"),
determined without regard to section 1504(b) of the Code) and
includable in your gross income for Federal income tax
purposes for the five (5) taxable years preceding your taxable
year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance
with the regulations (including proposed regulations)
promulgated under section 280G(d) of the Code; provided,
however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual
compensation shall be determined by including as compensation
any contribution (a "401(k) Contribution") pursuant to any
cash or deferred arrangement (as described in section 401(k)
of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and
(b) the amount of any such 401(k) Contribution shall be
treated as includable in your gross income in the taxable year
such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and
Expenses. The Company shall also pay to you all legal fees
and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this
Agreement (other than any such fees or expenses incurred in
connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a
thirty-six (36) month period after such termination, the
Company shall arrange to provide you with life, disability,
accident and health insurance benefits substantially similar
to and at no greater cost to you than those which you were
receiving immediately prior to the Notice of Termination.
Benefits otherwise receivable by you pursuant to this
Subsection 4(D)(iv) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six
(36) month period following your termination, and any such
benefits actually received by you shall be reported to the
Company.
(v) Supplemental
Pension. In addition to the Pension benefits to which you are
entitled under the Pension Plan, the Company shall pay you in
one sum in cash on the tenth (10th) business day following the
Date of Termination, a lump sum equal to the actuarial
equivalent of the excess of (1) the retirement pension
(determined as a straight life annuity commencing at age 65)
which you would have accrued under the terms of the Pension
Plan and any other pension benefit program (without regard to
any amendment to such Pension Plan or other pension benefit
program made subsequent to the Change in Control and on or
prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits
thereunder), determined as if you were fully vested thereunder
and had accumulated (after the Date of Termination thirty-six
(36) additional months of service credit thereunder at your
highest annual rate of compensation (the "Compensation Rate")
during the twelve (12) months immediately preceding the Date
of Termination (but in no event shall you be deemed to have
accumulated additional months of service credit after your
sixty-fifth (65th) birthday), over (2) the retirement pension
(determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the
provisions of the Pension Plan and any other pension benefit
program. For purposes of clause (1) above, the Compensation
Rate shall be deemed to include amounts payable pursuant to
Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent
thirty-six (36) months of compensation (or such lesser number
of months of compensation to your sixty-fifth (65th) birthday)
for purposes of determining benefits under the Pension Plan.
For purposes of this Subsection, "actuarial equivalent" shall
be determined using the same methods and assumptions utilized
under the Pension Plan immediately prior to the Change in
Control.
(vi) Employee Benefit
Plans . You shall be entitled to receive all benefits payable
to you under the Company's benefit and pension plans, not
otherwise specifically provided for in this Subsection 4(D).
<PAGE> 119
(E) No Mitigation. You
shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer
or by pension benefits after the Date of Termination, or
otherwise except as specifically provided in this Section 4.
(F) Reduction of
Payments In Certain Cases. Notwithstanding anything herein to
the contrary, if any amounts due to you under this Agreement
and any other plan or program of the Company constitute a
"parachute payment," 2S such term is defined in Section
280G(b)(2) of the Code (the "Parachute Payment"), and the
amount of the Parachute Payment, reduced by all federal, state
and local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the
amount you would receive if you were paid three times your
"base amount," as defined in Section 280G(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes
applicable thereto, then the aggregate of the amounts
constituting the Parachute Payment shall be reduced to an
amount that will equal three times your base amount less
$1.00. The determinations to be made with respect to this
Subsection 4(F) shall be made by an accounting firm (the
"Auditor") jointly selected by the Company and you and paid by
the Company. The Auditor shall be a nationally recognized
United States public accounting firm that has not during the
two years preceding the date of its selection acted in any way
on behalf of the Company or any of its subsidiaries. If you
and the Company cannot agree on the accounting firm to serve
as the Auditor, then you and the Company shall each select one
accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor
determines that a reduction in the aggregate of the amounts
constituting the Parachute Payment is required by this
Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under
this Agreement and each applicable plan or program of the
Company, respectively. If you do not so specify within, 60
days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall
determine, in its sole discretion, the portion of such
reduction, if any, to be made under this Agreement and each
applicable plan or program of the Company, respectively.
5. Successors; Binding
Agreement. (A) Assumption By Successor. The Company will
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your
employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement,
"the Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(B) Enforceability By
Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount
would still be payable to you hereunder had you continued to
live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no
such designee, to your estate.
6. Notice. For
purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to
the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
<PAGE> 120
If to you: Thomas A. Fetzner
7767 Academy Street
Fabius, New York 13063
or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon
receipt.
7. Miscellaneous. No
provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and
this Agreement shall supersede all Prior agreements,
negotiations, correspondence, undertakings and communications
of the parties, oral or written, with respect to the subject
matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York.
8. Validity. The
invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
9. Counterparts. This
Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any
dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the
rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that you shall be
entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with
this Agreement.
11. No Contract of
Employment. Nothing in this Agreement shall be construed as
giving you any right to be retained in the employ of the
Company.
12. Headings. The
headings contained in this Agreement are intended solely for
convenience and shall not affect the rights of the parties to
this Agreement.
If this letter sets
forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
and President
Agreed to this 26th day of July, 1989
/s/ Thomas A. Fetzner
Thomas A. Fetzner
<PAGE> 121
EXHIBIT 11
<TABLE>
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
TABULATION OF AVERAGE NUMBER OF COMMON SHARES FOR COMPUTATION
OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
Common Shares
(in thousands)
<CAPTION>
Primary Earnings Fully Diluted Earnings
Per Share Per Share
Actual Used in Actual Used in
Number Average Number Average
<S> <C> <C> <C> <C>
Year Ended JANUARY 30, 1993:
Shares outstanding beginning . 9,876 9,876 9,876 9,876
Shares issued under:
Stock purchase plan ............ 50 50
Dividend reinvestment plan ..... 60 60
Stock option plan .............. 7 7
ESOP shares allocated to
participants .................. 212 125 212 125
Common share equivalents under
employee stock purchase stock
option and dividend
reinvestment plans............ 55 55
TOTAL..................... 10,205 10,056 10,205 10,056
Year Ended JANUARY 29, 1994:
Shares outstanding beginning .. 10,205 10,205 10,205 10,205
Shares issued under:
Stock purchase plan ........... 22 22
Dividend reinvestment plan .... 45 45
Stock option plan ............. 14 14
ESOP shares allocated to
participants.................. 212 103 212 103
Common share equivalents under
employee stock purchase stock
option and dividend
reinvestment plans............ 85 125
TOTAL..................... 10,498 10,393 10,498 10,433
Year Ended JANUARY 28, 1995:
Shares outstanding beginning .. 10,498 10,498 10,498 10,498
hares issued under:
Stock purchase plan ........... 110 110
Dividend reinvestment plan .... 42 42
Stock option plan ............. 40 40
ESOP shares allocated to
participants.................. 212 193 212 193
Common share equivalents under
employee stock purchase stock
option and dividend
reinvestment plans............ 93 93
TOTAL .................... 10,902 10,784 10,902 10,784
</TABLE>
<PAGE> 122
<TABLE>
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
Calculation of Earnings Per Share
<CAPTION>
(Thousands except Per share amounts)
January 28, 1995 January 29, 1994 January 30, 1993
<S> <C> <C> <C>
Net income ................ $13,493 $10,662 $(33,252)
Less preferred dividends ... 134 135 136
Net income (loss) for primary
and fully diluted earnings
per share ................. 13,359 10,527 (33,388)
Average common shares:
Primary ............... 10,784 10,393 10,056
Fully diluted ......... 10,784 10,433 10,056
Earnings per share:
Primary ............... 1.24 1.01 (3.32)
Fully diluted.......... 1.24 1.01 (3.32)
</TABLE>
<PAGE> 123
EXHIBIT 13
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
ONEIDA LTD.
For the years ended January 1995, 1994 and 1993
(Thousands except per share amounts)
<CAPTION>
Year ended in January 1995 1994 1993
<S> <C> <C> <C>
NET SALES .............................. $492,954 $455,192 $479,442
COST OF SALES .......................... 360,098 328,623 356,150
GROSS MARGIN ........................... 132,856 126,569 123,292
OPERATING REVENUES ..................... 468 477 522
133,324 127,046 123,814
OPERATING EXPENSES:
Selling, advertising and
distribution ..................... 72,550 69,397 71,308
General and administrative ........ 29,397 30,677 32,945
Restructuring costs. .............. 2,386
Total ........................ 101,947 100,074 106,639
INCOME FROM OPERATIONS ................. 31,377 26,972 17,175
OTHER EXPENSE........................... 1,182 1,218 932
INTEREST EXPENSE ...................... 7,362 7,751 10,304
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGES............................. 22,833 18,003 5,939
PROVISION FOR INCOME TAXES ............. 9,340 7,341 2,227
INCOME BEFORE ACCOUNTING CHANGES........ 13,493 10,662 3,712
CUMULATIVE EFFECT ON PRIOR YEARS OF
ACCOUNTING CHANGES (NET OF
INCOME TAX BENEFIT $21,373) ........ (36,964)
NET INCOME (LOSS) ...................... $ 13,493 $ 10,662 $ (33,252)
EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
Income before accounting changes... $1.24 $1.01 ($.36)
Cumulative effect of accounting
changes .......................... (3.68)
Net income (loss)........... $1.24 $1.01 $(3.32)
</TABLE>
See notes to consolidated financial statements.
<PAGE> 124
<TABLE>
CONSOLIDATED BALANCE SHEET
ONEIDA LTD.
<CAPTION> (Thousands)
ASSETS January 28, 1995 January 29, 1994
<S> <C> <C>
CURRENT ASSETS:
Cash ....................... $ 2,207 $ 3,227
Receivables ................ 64,873 55,710
Inventories ................ 135,810 128,331
Other current assets ....... 9,234 9,478
Total current assets ...... 212,124 196,746
PROPERTY, PLANT AND EQUIPMENT:
Land and buildings ......... 57,566 56,929
Machinery and equipment .... 184,632 170,361
Total ..................... 242,198 227,290
Less accumulated
depreciation............... 129,906 116,496
Property, plant and
equipment - net..... 112,292 110,794
OTHER ASSETS:
Deferred income taxes ....... 7,055 6,254
Other ....................... 4,559 4,711
TOTAL .............. $336,030 $318,505
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt. ............. 27,555 28,186
Accounts payable.............. 27,625 27,773
Accrued liabilities........... 33,004 28,071
Current installments of
long-term debt... ............ 5,022 899
Total current liabilities.... 93,206 84,929
LONG -TERM DEBT............... 77,278 75,301
OTHER LIABILITIES:
Accrued postretirement
liability.................... 60,509 60,806
Accrued pension liability..... 4,618 5,511
Other liabilities............. 5,223 6,045
Total........................ 70,350 72,362
<PAGE> 125
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock
-$25 par value; authorized
95,660 shares, issued 89,202
and 89,433 shares, respectively;
callable at $30 per share .... 2,230 2,236
Common stock - $l .00 par
value; authorized 24,000,000
shares, issued 11,579,964 and
11,429,843 shares, respectively 11,580 11,430
Additional paid-in capital.... 79,740 78,423
Retained earnings............. 16,255 8,129
Equity adjustment from
translation.................. (6,035) (2,461)
Less cost of common stock held
in treasury; 678,298 and
720,340 shares, respectively. (8,574) (9,102)
Less unallocated ESOP shares
of common stock of 211,465 in
1994......................... (2,742)
Stockholders' equity........ 95,196 85,913
TOTAL.................... $336,030 $318,505
</TABLE>
See notes to consolidated financial statements.
<PAGE> 126
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
ONEIDA LTD.
for the years ended January 1995, 1994 and 1993
<CAPTION>
(Thousands)
Year ended in January 1995 1994 1993
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)........................ $13,493 $10,662 $(33,252)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation........................... 14,345 14,079 13,428
ESOP shares allocated to participants.. 2,753 2,753 2,753
Deferred taxes and other non-cash
charges............................. (2,889) (1,707) 36,176
Decrease (increase) in operating
assets:
Receivables....................... (10,023) 1,130 4,743
Inventories....................... (8,181) (2,143) 9,917
Other current assets.............. 220 888 1,379
Other assets...................... (84) 249 207
Increase (decrease) in accounts
payable................ ........... (162) 4,161 (948)
Increase in accrued liabilities..... 4,658 4,165 2,532
Net cash provided by operating activities 14,130 34,237 36,935
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment
expenditures......................... (18,532) (13,800) (16,330)
Retirement of property, plant and
equipment............................ 1,241 540 3,070
Other, net............................ 211 1,045 (4)
Net cash used in investing
activities............. ....... (17,080) (12,215) (13,264)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock. 1,982 910 1,375
Purchase of treasury stock, net........ (3) (19) (3)
Net payment under short -term debt and
banker's acceptances.............. (631) (6,981) (22,758)
Proceeds from issuance of long-term
debt................................. 7,000 33,000 41,400
Payment of long-term debt............. (899) (42,582) (36,892)
Dividends paid........................ (5,367) (5,264) (5,213)
Net cash provided by (used in)
financing activities............. 2,082 (20,936) (22,091)
EFFECT OF EXCHANGE RATE CHANGES
ON CASH.............................. (152) (62) (164)
NET INCREASE (DECREASE) IN CASH ...... (1,020) 1,024 1,416
CASH AT BEGINNING OF YEAR............. 3,227 2,203 787
CASH AT END OF YEAR................... $ 2,207 $ 3,227 $ 2,203
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid ................... $6,860 $8,272 $10,869
Income taxes paid................ 8,873 4,346 5,566
</TABLE>
See notes to consolidated financial statements.
<PAGE> 127
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. The Company uses a 52-53 week fiscal year ending on the
last Saturday in January. Results of operations include 53 weeks in 1993.
The financial statements of certain foreign subsidiaries are consolidated
with those of the parent on the basis of years ending in December.
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated principally at
the year-end rates of exchange and revenue and expense accounts are translated
at average rates of exchange during the year. Net transaction gains and losses
reflected in the statement of operations were not material.
Earnings Per Share
Earnings per share are based on the weighted average number of shares of
common stock outstanding. The weighted average number of shares for
earnings per share includes the potentially dilutive effect of shares
issuable under the employee stock purchase, stock option and
dividend reinvestment plans. No fully diluted earnings per share are presented
as the difference between primary and fully diluted earnings per share is not
significant. The allocated shares owned by the Company's employee stock
ownership plan are treated as outstanding for purposes of the earnings per
share calculation.
Inventories
Inventories are valued at the lower of cost or market. Approximately
66% of inventories are valued under the last-in, first-out (LIFO) method, with
the remainder valued under the first-in, first -out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is provided
over the estimated useful lives of the related assets, generally using the
straight-line method. Interest relating to the cost of acquiring certain
fixed assets is capitalized and amortized over the asset's estimated useful
life.
Fair Value of Financial Instruments
The estimated fair market values of the Company's financial instruments
approximate their recorded values.
2. INCOME TAXES
The Company accounts for taxes in accordance with Statement of Financial
Accounting Standards (FAS) No. 109, Accounting for Income Taxes, which
requires the use of the liability method of computing deferred income
taxes. Under the liability method, deferred income taxes are based on the
tax effect of temporary differences between the financial statement and tax
bases of assets and liabilities and are adjusted for tax rate changes as they
occur.
<PAGE> 128
The components of the deferred tax assets and liabilities are
as follows:
<TABLE>
<CAPTION>
(Thousands)
Net Assets (Liabilities)
1995 1994
<S> <C> <C>
Deferred Income Taxes:
Postretirement benefits.............. $24,004 $22,751
Employee benefits.................... 7,039 6,080
Total deferred tax assets........ 31,043 28,831
Depreciation......................... (17,951) (16,571)
Settlement of pension liability... (1,032)
Other................................ (2,437) (1,120)
Total deferred tax liabilities... (20,388) (18,723)
Total................................ 10,655 10,108
Current deferred................. 3,600 3,854
Non-current deferred............. $ 7,055 $ 6,254
</TABLE>
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current tax expense:
U.S. Federal .................... $8,688 $7,599 $3,584
Foreign............................ 241 170 413
State.............................. 958 596 408
9,887 8,365 4,405
Deferred tax expense ................ (547) (1,024)(2,178)
Total................................ $9,340 $7,341 $2,227
</TABLE>
The income tax provision differed from the total income tax expense as
computed by applying the statutory U.S. Federal income tax rate to income
before income taxes and cumulative effect of accounting changes. The reasons
for the differences are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Statutory U.S. Federal taxes.......... $7,992 $6,301 $2,019
Difference due to:
Foreign taxes...................... 260 246 283
State taxes........................ 629 487 269
Other.............................. 459 307 (344)
Provision for taxes................ $9,340 $7,341 $2,227
</TABLE>
The following presents the U.S. and non-U.S. components of income before
income taxes and cumulative effect of accounting changes:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
U.S. income......................... $21,202 $15,970 $ 3,944
Non-U.S. income..................... 1,631 2,033 1,995
Total......................... $22,833 $18,003 $ 5,939
</TABLE>
<PAGE> 129
3. RECEIVABLES
Receivables by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1995 1994
<S> <C> <C>
Accounts receivable................... $63,875 $55,001
Other accounts and notes receivable... 2,663 2,775
Less allowance for doubtful accounts.. (1,665) (2,066)
Receivables......................... $64,873 $55,710
</TABLE>
4. INVENTORIES
Inventories by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1995 1994
<S> <C> <C>
Finished goods........................ $99,218 $ 97,469
Goods in process...................... 22,668 16,733
Raw materials and supplies........... 13,924 14,129
Total............................ $135,810 $128,331
Excess of replacement cost over LIFO
value of inventories................. $ 31,400 $ 23,400
</TABLE>
5. LEASES
The Company leases many factory store and warehouse facilities. It
also leases transportation and manufacturing equipment under operating
leases. Lease expense charged to operations was $8,208,000, $8,010,000 and
$7,467,000, for 1995, 1994 and 1993, respectively.
Future minimum lease payments and related sublease income for all non-
cancelable operating leases having a remaining term in excess of one year at
January 1995 are as follows:
<TABLE>
<CAPTION>
(Thousands)
Lease Sublease
Commitment Income
<S> <C> <C>
1996........................... $ 6,814 $ 1,161
1997........................... 6,201 836
1998........................... 5,618 723
1999........................... 5,194 672
2000........................... 3,951 57
Remainder through 2008......... 17,944
Total.......................... $45,722 $ 3,449
</TABLE>
A number of these operating leases provide the Company with the option,
after a specified period, either to purchase the property at the then fair
value, or renew its lease at stipulated rates for various terms. Under the
provisions of some leases, the Company pays taxes, maintenance, insurance
and other operating expenses related to leased premises. Sublease income
relates to an office facility for which the Company has currently sublet
substantially all of the facility.
<PAGE> 130
6. SHORT-TERM DEBT, COMPENSATING BALANCES AND BANKER'S ACCEPTANCES
The Company has been granted lines of credit to borrow at interest rates
up to the prime rate from various banks. Certain credit lines call for
the maintenance of compensating balances of up to 1.25% of the credit line or
fees in lieu thereof. At January 1995, the Company had lines of credit of
$85,000,000 of which $57,000,000 was available. Banker's acceptances
outstanding were $4,000,000.
The average balances of short-term debt for 1995 and 1994 were $38,148,000 and
$43,145,000, respectively, computed by using daily balances. The weighted
average interest rates were 5.0% in 1995 and 3.9% in 1994.
7. ACCRUED LIABILITIES
Accrued liabilities by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1995 1994
<S> <C> <C>
Accrued vacation pay................ $ 6,441 $ 6,261
Accrued wage incentive.............. 6,456 5,430
Accrued workmen's compensation...... 6,252 3,488
Accrued wages and commissions....... 4,741 4,453
Accrued income taxes................ 1,882 1,828
Dividends payable................... 1,342 1,319
Other accruals...................... 5,890 5,292
Total.............................. $33,004 $28,071
</TABLE>
8. LONG-TERM DEBT
Long-term debt at January 1995 and 1994 consisted of the following:
<TABLE>
<CAPTION>
(Thousands)
1995 1994
<S> <C> <C>
Senior notes, 8.52% due
January 15, 2002, payable $4,285,710
annually beginning January 1996.......$30,000 $30,000
Notes payable at various interest
rates (6.44% -6.88%), due January 20,
1997.................................. 40,000 33,000
Industrial Revenue Bond, Chemical
Bank Tax Exempt Money Market Index
rate, due August 1,2005............... 9,000 9,000
Other debt at various interest
rates (5% -9.25%) due through 2000.... 3,300 4,200
Total............................. 82,300 76,200
Less amounts due currently............ 5,022 899
Long-term debt........................$77,278 $75,301
</TABLE>
Certain note agreements restrict borrowings, business investments,
acquisition of the Company's stock and payment of cash dividends. The
Industrial Revenue Bonds are collateralized by the facilities acquired
through the proceeds of the related bond issuances and letters of credit.
<PAGE> 131
The aggregate amounts of long -term maturities due each year are as follows:
<TABLE>
<S> <C>
1996.................... $ 5,022
1997.................... 44,950
1998.................... 4,989
1999.................... 4,831
2000.................... 4,752
After................... 17,756
Total................. $82,300
</TABLE>
Total interest costs incurred by the Company are presented net of capitalized
interest of $354,000, $390,000 and $460,000 for 1995, 1994 and 1993,
respectively.
9. RETIREMENT BENEFIT AND EMPLOYEE SECURITY PLANS
Pension Plans
The Company maintains defined contribution and defined benefit plans covering
substantially all employees in the United States and Canada. Employees of
the Silversmiths Division are covered by both an Employee Stock Ownership Plan
(ESOP) and a defined benefit floor plan. ESOP shares are allocated to
employee accounts semiannually based upon each participant's wages and years
of service. The annual ESOP expense is based on the number of shares
allocated. Dividends on all shares are added to participant accounts. Future
contributions will be primarily in the form of cash.
The Company maintains salary deferral (401-K) plans covering substantially
all employees. Employees of the Company's industrial wire subsidiary
are covered under a defined contribution plan, for which contributions
are determined based on that subsidiary's operating income.
The net periodic pension cost for the Company's various defined benefit
plans for 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
(Thousands)
1995 1994 1993
<S> <C> <C> <C>
Service cost-benefits earned during the year...$1,031 $1,028 $965
Interest cost on projected benefit obligation.. 1,501 1,569 1,405
Actual return on plan assets................... 278 (1,306) (1,303)
Net amortization and deferral..................(1,448) (24) 28
Net periodic pension cost....................$1,362 $1,267 $1,095
</TABLE>
<PAGE> 132
Plan assets consist primarily of stocks, bonds, and cash equivalents. The
following table presents a reconciliation of the funded status of the plans and
assumptions used at January 1995 and 1994.
<TABLE>
<CAPTION>
(Thousands)
U.S. PLANS FOREIGN PLAN
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Plan assets at fair value............ $11,508 $10,963 $ 5,346 $ 6,426
Actuarial present value of
benefit obligations:
Vested benefits.................. 12,568 16,249 4,198 4,509
Nonvested benefits................ 10,884 208 157 139
Accumulated benefit obligation.. .... 23,452 16,457 4,355 4,468
Projected future salary increases.... 524 533 921 910
Projected benefit obligation......... 23,976 16,990 5,276 5,558
Plan assets more (less) than
projected benefit obligation....... (12,468) (6,027) 70 868
Unrecognized net losses.............. 9,117 5,378 1,402 712
Unrecognized prior service cost...... 285 (3,159) 12 16
Unrecognized net asset............... (1,552) (1,703) (450) (577)
Accrued pension asset (liability).... $(4,618) $(5,511) $1,034 $1,019
Discount rate........................ 8.2% 6.8% 7.5% 7.5%
Expected long-term rate of
return on assets................... 8.5% 8.5% 8.5% 8.5%
Rate of increase in
compensation levels............... 4.5% 4.5% 5.0% 5.0%
</TABLE>
The net pension cost associated with the Company's defined contribution
plans, including the cost of shares allocated to the ESOP, was $3,377,000,
$3,166,000, and $3,136,000 for 1995, 1994 and 1993, respectively.
Postretirement Health Care and Life Insurance Benefits
The Company reimburses a portion of the health care and life insurance
benefits for the majority of its retired employees who have attained
specified age and service requirements. During the year ended January 1993,
the Company adopted FAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions. The Company elected to immediately
recognize the cumulative effect of this change in accounting
of $35,400,000 ($55,800,000 before income tax benefit) which represented the
accumulated postretirement benefit obligation at January 1992.
Net periodic postretirement benefit cost for 1995, 1994 and 1993 included the
following components:
<TABLE>
<CAPTION>
(Thousands)
1995 1994 1993
<S> <C> <C> <C>
Service cost of benefits earned................... $1,290 $1,444 $1,754
Interest cost on accumulated postretirement
benefit obligation.............................. 3,735 4,291 4,472
Net amortization and deferral..................... (722) (596)
Net periodic postretirement benefit cost.......... $4,303 $5,139 $6,226
</TABLE>
<PAGE> 133
The following table sets forth the status of the Company's postretirement
plans, which are unfunded, at January 1995 and January 1994:
<TABLE>
<CAPTION>
(Thousands)
1995 l994
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees...................................... $27,168 $31,960
Fully eligible active plan participants....... 5,943 8,404
Other active plan participants................ 15,008 24,579
Accrued postretirement benefit cost............. 48,119 69,943
Unrecognized prior service cost................. 9,063 8,379
Unrecognized net gain (loss).................... 5,327 (12,516)
Accrued postretirement benefit cost............. $62,509 $60,806
Discount rate................................... 8.4% 7.3%
Health care inflation rate...................... 10.0% 12.0%
</TABLE>
During 1994, plan amendments were adopted which related to future service
requirements and cost-sharing provisions. The 1995 health care inflation
rate is assumed to decrease gradually to 5% by the year 2003 and remain
at that level thereafter. An increase in the assumed health care inflation
rate by 1% per year would increase the accumulated postretirement
benefit obligation at January 1995 by $5,647,000 and the net periodic
postretirement benefit cost for 1995 by $647,000.
Postemployment Benefits
During the year ended January 1993, the Company adopted FAS No. 112,
Employers' Accounting for Postemployment Benefits. This statement requires
employers to recognize the obligation to provide postemployment benefits to
former or inactive employees prior to retirement. These benefits
include severance, disability related benefits and continuation of benefits
such as health care and life insurance coverage. The cumulative effect of
adopting this standard at January 1992 resulted in a charge to income of
$1,564,000 ($2,537,000 before income tax benefit). Amounts charged to
operations for postemployment benefits are not material.
Employee Security Plan
The Company maintains an employee security plan which provides severance
benefits for all eligible employees of the Company and its subsidiaries who
lose their jobs in the event of a change in control as defined by the
plan. Employees are eligible if they have one year or more of service and are
not covered by a collective bargaining agreement. The plan provides two
and one half months of pay for each year of service, up to twenty-four
months maximum, and a continuation of health care and life insurance benefits on
the same basis.
10. STOCK PURCHASE PLAN
At January 1995, under the terms of a stock purchase plan, the Company has
reserved 610,900 shares of common stock for issuance to its employees. The
purchase price of the stock is the lower of 90% of the market price at the
time of grant or at the time of exercise.
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Outstanding at beginning of year........... 426,770 422,073 379,022
Exercised during the year.................. (110,175) (21,797) (49,867)
Expired during the year.................... (322,712)(423,891) (343,095)
Granted during the year.................... 459,127 450,385 436,013
Outstanding at end of year................. 453,010 26,770 422,073
Average per share price of rights exercised. $11.00 $10.68 $11.54
</TABLE>
<PAGE> 134
Rights to purchase are exercisable on date of grant. Unexercised
rights expire on June 30 of each year and become available for future
grants. Employees are entitled to purchase one share of common stock for
each $250 of their earnings for the calendar year preceding July 1.
The consolidated statement of operations does not contain any charges as a
result of accounting for this plan.
11. STOCK OPTION AND RIGHTS PLANS
At January 1995, under the terms of its incentive stock option plans, the
Company has reserved shares of common stock for issuance to selected key
employees.
Options were granted at prices equal to the fair market value
on the date of the grant and may be paid for in cash or by tendering
previously held common stock of the Company at the time the option is
exercised.
Stock options are non-transferable other than on death, are partially
exercisable one year from the date of grant and expire ten years from date
of grant.
<TABLE>
<CAPTION>
Option Price
No. of Per (Thousands)
Shares Share Total
<S> <C> <C> <C>
Outstanding at:
January 1992........................ 698,799 $9.00-15.00 $8,985
Exercised........................... (18,164) 9.00-15.00 (206)
Expired............................. (49,180) 9.00-15.00 (572)
Outstanding at:
January 1993........................ 631,455 9.00-15.00 8,207
Granted............................. 154,000 11.38 1,752
Exercised........................... (11,000) 9.00 (99)
Expired............................. (74,140) 9.00-15.00 (963)
Outstanding at:
January 1994 ........................ 700,315 9.00-15.00 8,897
Granted............................ 152,000 13.63 2,071
Exercised..........................(107,500) 9.00-15.00 (1,290)
Expired............................ (6,936) 9.00-15.00 (86)
Outstanding at:
January 1995........................ 737,879 9.00-15.00 $9,592
Shares remaining available for grant.... 300,239
Total exercisable as of January l995.... 398,029
</TABLE>
At the time options are exercised the proceeds of the shares issued are
credited to the related stockholders' equity accounts. There are no
charges to income in connection with the options.
The Company maintains a shareholder rights plan. The rights were distributed
to shareholders at the rate of one right per share. The rights entitle the
holder to purchase one additional share of voting common stock at a
substantial discount and are exercisable only in the event of the
acquisition of 20% or more of the Company's voting common stock, or the
commencement of a tender or exchange offer under which the offeror would own
30% or more of the Company's voting common stock. The rights will expire on
December 13, 1999.
<PAGE> 135
12. OPERATIONS BY INDUSTRY SEGMENT
The Company's operations and assets are in two principal industries:
tableware products and industrial wire products. The Company's tableware
operations, which are located in the United States, Canada, Mexico, Italy and
the United Kingdom, involve the manufacture and distribution of stainless,
plated and sterling flatware, silverplated and stainless holloware, cutlery
and crystal. These products are sold directly to a broad base of retail
outlets including department stores, mass merchandisers and chain stores.
Additionally, these products are sold to special sales markets, which include
customers who use them as premiums, incentives and business gifts. The
Company also sells flatware, holloware and commercial chinaware directly or
through distributors to foodservice operations worldwide, including hotels,
restaurants, airlines, schools and health care facilities.
The Company's industrial wire division produces copper conducting wire,
as well as tin or alloy plated wire for a wide range of customers in
electronics, transportation, industrial/energy, construction and consumer
products markets.
Information as to the Company's operations by industry segment for 1995, 1994
and 1993 is summarized below:
<TABLE>
<CAPTION>
(Thousands)
1995 1994 1993
<S> <C> <C> <C>
NET SALES AND OTHER OPERATING
REVENUES:
Tableware products........................... $336,300 $322,988 $329,201
Industrial wire products..................... 157,122 132,681 150,763
Total........................................ $493,422 $455,669 $479,964
OPERATING PROFIT:
Tableware products........................... $28,205 $26,917 $17,920
Industrial wire products..................... 6,829 4,127 3,226
Operating profit............................. 35,034 31,044 21,146
Corporate expense............................ 4,839 5,290 4,903
Interest expense............................. 7,362 7,751 10,304
Income before income taxes and cumulative
effect of accounting changes.............. $22,833 $18,003 $5,939
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
(NET OF INCOME TAX BENEFIT $21,373):
Tableware products........................... $(31,842)
Industrial wire products..................... (5,122)
Total ....................................... $(36,964)
IDENTIFIABLE ASSETS:
Tableware products........................... $255,073 $246,510 $245,103
Industrial wire products..................... 78,750 68,768 70,373
Total........................................ 333,823 315,278 315,476
Corporate Assets-Cash........................ 2,207 3,227 2,203
Total....................................... $336,030 $318,505 $317,679
DEPRECIATION EXPENSE:
Tableware products........................... $ 9,712 $9,681 $9,136
Industrial wire products..................... 4,633 4,398 4,292
Total.................................... $ 14,345 $14,079 $13,428
<PAGE> 136
PROPERTY, PLANT AND EQUIPMENT ADDITIONS:
Tableware products.......................... $ 11,443 $10,587 $9,986
Industrial wire products.................... 5,747 2,693 4,177
Total................................... 17,190 $13,280 $14,163
</TABLE>
Foreign operations of the Company are not material and are therefore not
separately set forth.
13. CHANGES IN STOCKHOLDERS' EQUITY
Following is a summary of the changes in Stockholders' Equity for the three
years ended January 1995:
<TABLE>
<CAPTION>
(Thousands)
Equity
Add'l Adj Unalloc
Common Common Pfd Paid-In Ret. From Treas ESOP
Shares Stock Stock Capital Earning Tran Stock Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bal Jan 1992...11,245,067 $70,282 $2,276 $17,427 $41,209 $703 $(9,262) $(8,248)
Change in par
of common stock (59,037) 59,037
Stock pur plan.. 49,867 50 525
Div reinvestment
plan........... 59,676 60 703
Restricted stock
plan........... (3,000) (3) (23)
Stock option plan. 9,669 9 54
Pur/retire of
treasury stock. (5) 2
Cash div declared
($.48 per share).. (5,226)
Net loss........ (33,252)
ESOP shares allocated
to participants 2,753
Equity adjustment
from translation.. (2,370)
Bal Jan 1993...11,361,279 11,361 2,271 77,725 2,731(1,667)(9,262) (5,495)
Stock pur plan. 21,797 22 211
Div reinvestment
plan.......... 44,818 45 517
Restricted stock
plan......... 4,996 5 29
Stock option plan...9,619 10 72
Pur/retire of
treasury stock (12,666) (13) (35) (131) 160
Cash div declared
($.48 per share) (5,264)
Net income...... 10,662
ESOP shares allocated
to participants 2,753
Equity adjustment from
translation... (794)
<PAGE> 137
Bal Jan 1994...11,429,843 11,430 2,236 78,423 8,129(2,461)(9,102) (2,742)
Stock pur plan. 110,175 110 1,112
Div reinvestment
plan.......... 80 529 (11)
Restricted stock
plan.......... 7,920 8 118
Stock option plan. 32,026 32 (6) 7
Cash div declared
($.48 per share). (5,367)
Net income..... 13,493
ESOP shares allocated
to participants 2,753
Equity adjustment from
translation... (3,574)
Bal Jan l995...11,579,964 $11,580 $2,230 $79,740$16,255$(6,035)$(8,573)
</TABLE>
14. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Quarter Ended
1995 April 30, July 30, October 29, January 28,
1994 1994 1994 1995
<S> <C> <C> <C> <C>
Net sales................ $111,022 $115,561 $134,212 $132,159
Gross margin............. 29,186 30,736 35,563 37,371
Net income.............. 1,706 1,938 4,368 5,481
Earnings per share....... .16 .18 .40 .50
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended
1994 May 1, July 31, October 30, January 29,
1993 1993 1993 1994
<S> <C> <C> <C> <C>
Net sales................ $113,833 $106,977 $119,816 $114,566
Gross margin............ 30,091 29,585 33,613 33,280
Net income.............. 2,382 1,488 3,530 3,262
Earnings per share....... .23 .14 .33 .31
</TABLE>
<PAGE> 138
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Oneida Ltd.
We have audited the accompanying consolidated balance sheet of Oneida Ltd. as
of January 28, 1995 and January 29, 1994, and the related consolidated
statements of operations and cash flows for each of the three years in the
period ended January 28, 1995. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Oneida Ltd.
as of January 28, 1995 and January 29, 1994, and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended January 28, 1995 in conformity with generally accepted
accounting principles.
As discussed in Note 9 to the financial statements, the Company changed
its methods of accounting for postemployment and postretirement benefits other
than pensions in 1993.
Coopers & Lybrand, L.L.P.
a professional services firm
/s/ Coopers & Lybrand, L.L.P.
Syracuse, New York
February 22, 1995
<PAGE> 139
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Thousands)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net Sales................. $492,954 $455,192 $479,442
Gross Margin.............. 132,856 126,569 123,292
% Net Sales.............. 27.0% 27.8% 25.7%
Operating Expense......... 101,947 100,074 106,639
% Net Sales............. 20.7% 22.0% 22.2%
</TABLE>
Fiscal year ended January 1995 compared with fiscal year ended January 1994
Operations
1995 consolidated net sales were $37,762, or 8.3% higher than in the previous
year. Approximately two thirds of this increase was attributable to the
industrial wire division. Sales of wire products increased by 18.4% over
1994, primarily as a result of significantly higher copper costs (which are
passed along to customers) throughout fiscal 1995. Sales of tableware
products rose 4.1 % over 1994 levels. Both the consumer and foodservice
tableware divisions recorded higher sales volume. Consumer sales were below
1994 during the first half of the year, but ended slightly higher for the year
with a very strong second half. Foodservice sales were up throughout the
year.
Gross margin as a percent of net sales decreased to 27.0% from 27.8% in 1994.
When the higher copper costs incurred by the industrial wire division are
factored out, the gross margin percentage was unchanged from 1994.
Operating expenses increased by $1,873 or 1.9% over 1994. Selling and
distribution costs rose by 4.5%, in direct relation to the higher sales
level realized by the Company this year. In contrast, general and
administrative costs decreased by 4.2%. The restructuring charges recorded in
1993 were settled in 1994 and 1995 for the amounts originally accrued.
There is no future impact on either operations or liquidity.
1995 interest expense (prior to capitalized interest) decreased by $425
or 5.2%. Although the Company's average debt level decreased in 1995,
rising interest rates offset approximately one -third of the potential
benefit.
Liquidity and Financial Resources
During the current year, the Company has invested approximately
$18,500 in capital additions, primarily in its manufacturing facilities. The
Company plans to spend $16,000 on similar projects in 1996.
Total outstanding debt increased by $5,469 or 5.2% during 1995. Additional
funds were utilized to finance working capital needs principally as a
result of higher carrying costs of copper. Cash from 1996 operations should
provide sufficient liquidity to meet the Company's capital
requirements. Significant bank lines of credit are also available.
The Company operates two manufacturing facilities in Mexico. These plants
produce Foodservice china and stainless steel tableware. As a result of the
recent devaluation of the peso, the Company has recorded, as a negative
adjustment to equity, a $3,150 charge which relates to the effect of the
devaluation on the Company's long-term investments in its Mexican assets. In
the Company's opinion, the underlying economic value of both these Mexican
plants have been enhanced since the products they manufacture should
become even more cost competitive in the future. The Company expects no
negative impact on liquidity and intends to continue operating these plants
at current levels.
<PAGE> 140
Fiscal year ended January 1994 compared with fiscal year ended January 1993
Operations
Consolidated net sales for the year ended January 1994 decreased by
$24,250 or 5.1% over the previous year. The $18,082, or 12%, decrease in
the industrial wire division's sales is the result of significantly lower
copper costs throughout fiscal 1994, which are passed along to customers.
The tableware division's sales decreased by $6,168, or 1.9%, when compared to
1993 sales. This decline was primarily in the foodservice division, reflecting
the Company's decision to scale back on certain lower gross profit contracts.
Increased sales volume is forecast for all divisions in the upcoming year.
Gross margin as a percent of net sales increased to 27.8% from 25.7% for the
previous year. Contributing to this trend were the lower copper costs at the
industrial wire division and a more favorable mix in foodservice product
sales, both cited above.
In addition, increased manufacturing efficiencies were realized at the
Company's tableware and industrial wire factories.
Operating expense (excluding restructuring costs) as a percent of net sales
remained consistent with the prior year. Operating expenses actually
decreased $4,100 from 1993 levels, primarily as the result of lower
administrative costs.
Interest expense (prior to capitalized interest) decreased $2,623 or 24.3%.
The decrease is mainly attributable to the Company's lower average debt
level in 1994 as compared to 1993. Lower interest rates throughout the
year also contributed to this decrease.
Dividends and Price Range of the Company's Stock
The Company's Common Stock is traded on the New York Stock Exchange and the
total number of stockholders of record as of January 1995 was 5,336. The
following table sets forth the high and low sales prices per share of the
Company's Common Stock for the periods indicated on the Composite Tape, and
cash dividends declared for the quarters in the Company's 1995 and 1994 fiscal
years.
<TABLE>
<CAPTION>
JANUARY 1995 JANUARY 1994
Fiscal Dividends Fiscal Dividends
Quarter High Low Per Share Quarter High Low Per Share
<S> <C> <C> <C> <S> <C> <C> <C>
First.... $16.63 $14.00 $.12 First.... $13.00 $11.13 $.12
Second... 16.00 13.50 .12 Second... 12.63 11.38 .12
Third.... 14.63 13.38 .12 Third.... 13.75 12.13 .12
Fourth... 15.00 12.38 .12 Fourth... 14.25 12.50 .12
</TABLE>
<PAGE> 141
FIVE YEAR SUMMARY
ONEIDA LTD.
(Thousands except per share amounts)
<TABLE>
<CAPTION>
Year ended in January 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net sales.......................$492,954 $455,192 $479,442 $446,602 $428,403
Gross margin ................... 132,856 126,569 123,292 122,566 117,093
Interest expense................ 7,362 7,751 10,304 10,452 11,173
Income before income taxes and
cumulative effect............... 22,833 18,003 5,939 14,510 12,502
Income taxes ................... 9,340 7,341 2,227 5,586 4,688
Net income (loss)............... 13,493 10,662 (33,252) 8,924 7,814
Cash dividends declared--
Preferred stock.............. 134 135 136 137 137
Common stock................. 5,233 5,129 5,090 5,026 5,192
PER SHARE OF COMMON STOCK
Income before accounting changes 1.24 1.01 .36 .90 .80
Net income (loss)............... 1.24 1.01 (3.32) .90 .80
Dividends declared.............. .48 .48 .48 .48 .48
Book value...................... 8.53 7.97 7.39 11.35 10.94
FINANCIAL DATA
Current assets.................. 212,124 196,746 195,712 210,952 178,061
Working capital................. 118,918 111,817 109,388 103,691 92,028
Total assets.................... 336,030 318,505 317,679 328,613 292,223
Long-term debt.................. 77,278 75,301 81,906 77,573 71,271
Stockholders' equity............ 95,196 85,913 77,664 114,387 107,151
Additions to property, plant
and equipment................ 17,190 13,280 14,163 18,755 19,464
Property, plant and
equipment -at cost ............ 242,198 227,290 216,216 207,514 194,749
Accumulated depreciation........ 129,906 116,496 104,297 95,034 87,304
SHARES OF CAPITAL STOCK
Outstanding at end of year
Preferred.................... 89 89 91 91 91
Common....................... 10,902 10,498 10,205 9,876 9,588
Weighted average number of
common shares outstanding
during the year.............. 10,784 10,393 10,056 9,767 9,607
SALES OF MAJOR PRODUCTS BY PERCENT
OF TOTAL SALES
Tableware....................... 68% 71% 69% 71% 70%
Industrial wire products........ 32% 29% 31% 29% 30%
AVERAGE NUMBER OF EMPLOYEES ...... 5,590 5,466 5,530 5,252 4,982
</TABLE>
<PAGE> 141
EXHIBIT 22
PARENTS AND SUBSIDIARIES
There are no parents of the Company. There is no subsidiary for
which separate financial statements are filed. The following list includes
the Company and its subsidiaries, all of which are included, in the
consolidated financial statements.
<TABLE>
<CAPTION>
State or Percentage of
Country of Voting Securities
Name Incorporation Owned by the Company
<S> <C> <C>
Oneida Ltd. New York
Oneida Canada, Limited Canada 100
Camden Wire Co., Inc. New York 100
Buffalo China, Inc. New York 93
Kenwood Silver Company, Inc. New York 100
Oneida Mexicana, S.A. de C.V. Mexico 100
Oneida Distribution Services, Inc. New York 100
Oneida International, Inc. Delaware 80
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Jan-28-1995
<PERIOD-START> Jan-30-1994
<PERIOD-END> Jan-28-1995
<PERIOD-TYPE> 12-MOS
<CASH> 2,207
<SECURITIES> 0
<RECEIVABLES> 63,875
<ALLOWANCES> 1,665
<INVENTORY> 135,810
<CURRENT-ASSETS> 212,124
<PP&E> 242,198
<DEPRECIATION> 129,906
<TOTAL-ASSETS> 336,030
<CURRENT-LIABILITIES> 93,206
<BONDS> 77,278
0
2,230
<COMMON> 11,580
<OTHER-SE> 81,386
<TOTAL-LIABILITY-AND-EQUITY> 336,030
<SALES> 492,954
<TOTAL-REVENUES> 493,422
<CGS> 360,098
<TOTAL-COSTS> 360,098
<OTHER-EXPENSES> 101,947
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,362
<INCOME-PRETAX> 22,833
<INCOME-TAX> 9,340
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,493
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.24
</TABLE>
