<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ONEIDA LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
ONEIDA
ONEIDA LTD., ONEIDA, NY 13421
WILLIAM D. MATTHEWS
Chairman of the Board
Chief Executive Officer
April 24, 1998
To Our Stockholders:
You are cordially invited to attend Oneida Ltd.'s 117th Annual Meeting on May
27, 1998.
Details regarding time and place as well as the matters which will be
considered at the meeting are described in the accompanying Notice and Proxy
Statement.
We hope that you can attend. However, whether or not you plan to attend,
please sign and date the enclosed proxy card and return it promptly in the
postpaid envelope we have provided. This will enable you to vote on the
business to be transacted, whether or not you attend the meeting.
Sincerely,
/s/ William D. Matthews
<PAGE>
ONEIDA LTD.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 27, 1998
----------------
Notice is Hereby Given that the Annual Meeting of Stockholders of ONEIDA LTD.
will be held in the Big Hall of the Mansion House at Kenwood in the City of
Oneida, New York, on May 27, 1998 at 2 p.m. for the following purposes:
(a) to elect three directors for a three-year term and one director for a
one-year term and until their respective successors shall be elected
and qualify;
(b) to consider and vote upon a proposal to approve the 1998 Stock Option
Plan;
(c) to consider and vote upon a proposal to approve the 1998 Non-Employee
Directors Stock Option Plan;
(d) to consider and approve a proposal to amend the Certificate of
Incorporation to increase the number of shares of Common Stock;
(e) to consider and vote upon a proposal to approve the appointment of
Coopers & Lybrand as independent auditors for the fiscal year ending
January 30, 1999; and
(f) to transact such other business as may properly come before the meeting
or any adjournment of it.
Only holders of Common Stock of record at the close of business on April 17,
1998 are entitled to notice of or to vote at the meeting.
By Order of the Board of Directors
/s/ CATHERINE H. SUTTMEIER
CATHERINE H. SUTTMEIER
Secretary
Oneida, New York
April 24, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE SO YOUR STOCK
CAN BE VOTED IN ACCORDANCE WITH THE TERMS OF THE PROXY STATEMENT.
<PAGE>
ONEIDA LTD.
ONEIDA, NEW YORK 13421
----------------
PROXY STATEMENT
The solicitation of the enclosed proxy is made by the Board of Directors of
Oneida Ltd. (the "Corporation"), which will bear the cost of the solicitation.
Regular employees of the Corporation may solicit proxies personally or by
telephone. Expenses, including out-of-pocket expenses and charges which may be
incurred or made by nominees or custodians solicited in obtaining authorization
from their principals to execute proxies, will be borne by the Corporation. The
Corporation has retained Corporate Investor Communications, Inc. to assist in
the solicitation of proxies from banks, brokers and nominees for an estimated
fee of $6,500.
Proxies and proxy soliciting material were first mailed to stockholders on or
about April 24, 1998.
Only holders of Common Stock of the Corporation of record as of the close of
business April 17, 1998 are entitled to vote at the Annual Meeting. As of that
date, there were outstanding 16,866,693 shares of Common Stock. Each share is
entitled to one vote. The presence, in person or by proxy, of the holders of a
majority of the outstanding shares entitled to vote is necessary for a quorum
at the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists the only stockholders known to the Corporation to
be beneficial owners of more than five percent of the Corporation's Common
Stock as of December 31, 1997.
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL NUMBER OF
NAME AND ADDRESS NUMBER OF OUTSTANDING
OF BENEFICIAL OWNERS SHARES OWNED SHARES
-------------------- ------------ ---------------
<S> <C> <C>
Chase Manhattan Bank, N.A.................... 2,836,690 17%
Trustee for the Benefit of the Oneida Ltd.
Employee Stock Ownership Plan
P.O. Box 1412
Rochester, NY 14603(1)
Sanford C. Bernstein & Co., Inc. ............ 1,271,979 7.6%
One State Street Plaza
New York, NY 1004(2)
</TABLE>
- --------
(1) On June 8, 1987, the Corporation established an Employee Stock Ownership
Plan for the benefit of its Oneida Ltd. employees. The individual employee
participants have sole voting power for the shares. The Corporation is the
named fiduciary and administrator of the plan, and a committee appointed by
the Board of Directors has sole dispositive power with regard to the
shares, except that the individual employee participants have dispositive
powers with regard to the shares in the event of a tender offer or any
other offer or option to buy or exchange a significant number of shares in
the trust. Chase Manhattan Bank, N.A., as trustee for the plan, has no
discretionary power over the shares.
(2) The Corporation has received copies of a Schedule 13G filed with the
Securities and Exchange Commission by Sanford C. Bernstein & Co., Inc.
reporting beneficial ownership. The stockholder is described in the
Schedule as an "Investment Advisor/Broker Dealer."
<PAGE>
ACTION TO BE TAKEN UNDER THE PROXY
Unless the giver of the proxy directs otherwise, the shares represented by
the accompanying proxy will be voted (a) for the election of three directors
for a three-year term and one director for a one-year term; (b) for the
proposal to approve the 1998 Stock Option Plan; (c) for the proposal to approve
the 1998 Non-Employee Directors Stock Option Plan; (d) for the proposal to
amend the Certificate of Incorporation to increase the number of shares of
Common Stock; and (e) for the proposal to approve the appointment of Coopers &
Lybrand as independent auditors. In each case where the giver of a proxy has
directed that the proxy be voted otherwise, it will be voted according to the
direction given. As to any other business which properly comes before the
meeting or any adjournment of it, the persons acting under the proxy intend to
vote according to their judgment. Management is not aware of any such other
matters of business.
REVOCATION OF PROXY
Anyone who gives a proxy may still vote in person. The giver may revoke the
proxy at any time before it has been exercised. In this event, written notice
of revocation should be filed with the Secretary of the Corporation.
SIGNATURES ON PROXIES IN CERTAIN CASES
If stock is registered in the name of two or more trustees or other persons,
the proxy should be signed by each of them. If stock is registered in the name
of a decedent, the proxy should be signed by an executor or administrator,
whose title should follow the signature. If a stockholder is a corporation, the
enclosed proxy should be signed by an executive officer, whose title should be
indicated.
ELECTION OF DIRECTORS
NOMINEES FOR DIRECTORS
The Corporation's Board of Directors is divided into two classes of four
directors and one class of three directors serving staggered three-year terms.
At the 1998 Annual Meeting, stockholders are being asked to elect one director
for a one-year term expiring at the 1999 Annual Meeting and three directors for
a three-year term expiring at the 2001 Annual Meeting. An affirmative vote of
the majority of shareholders present in person or by proxy is necessary for the
election of these directors.
One nominee, William F. Allyn, is a member of the present Board of Directors
and was elected to a three-year term in 1995. David E. Harden and Walter A.
Stewart, who were also elected to three-year terms in 1995, are retiring at the
end of their present terms. Gregory M. Harden and Catherine H. Suttmeier have
been nominated to fill these positions. Mr. Harden is President and Chief
Executive Officer of the Harden Furniture Co., Inc. Ms. Suttmeier is Vice
President, Secretary and General Counsel of the Corporation.
Glenn B. Kelsey, who was a member of the class of directors whose term
expires in 1999, resigned as of January. J. Peter Fobare is nominated to fill
the remainder of that term. Mr. Fobare is Senior Vice President and General
Manager of the Corporation's Consumer Retail Division.
Each nominee has consented to being named in this Proxy Statement and to
serve if elected. The Management has no reason to believe that any of the
nominees will be unable or unwilling to serve. Should any nominee named in the
table become unable or unwilling to accept nomination or election as a
director, the persons acting under the proxy intend to vote for the election in
his or her stead of such other person as the Management may recommend.
2
<PAGE>
NOMINEES FOR A THREE-YEAR TERM EXPIRING MAY 30, 2001
<TABLE>
<S> <C> <C>
WILLIAM F. ALLYN (b) (c)..................... President, Welch Allyn, Inc.
Director since 1989, Age 62
Mr. Allyn has held the above position for more than the past five years. Mr. Allyn
is a director of Niagara Mohawk Power Corporation and First Empire State Corp.
GREGORY HARDEN............................... President and
Age 41 Chief Executive Officer,
Harden Furniture Co., Inc.
Mr. Harden has held the above position since 1994. He has been employed by Harden
Furniture since 1981. Mr. Harden is a director of Daniel Green Co., Inc.
CATHERINE H. SUTTMEIER....................... Vice President, Secretary and
Age 41 General Counsel
Ms. Suttmeier has held the above position for more than the past five years.
</TABLE>
NOMINEE FOR A ONE-YEAR TERM EXPIRING MAY 26, 1999
<TABLE>
<S> <C> <C>
J. Peter Fobare............................... Senior Vice President and
Age 48 General Manager, Oneida
Consumer Retail Division
Mr. Fobare has held the above position for more than the past five years.
</TABLE>
DIRECTORS CONTINUING IN OFFICE WHOSE TERM EXPIRES MAY 31, 2000
<TABLE>
<S> <C> <C>
GEORGIA S. DERRICO (b) (c)................. Chairman of the Board and
Director since 1982, Age 53 Chief Executive Officer,
Southern Financial Bancorp,
Inc.
Ms. Derrico has held the above position for more than the past five years.
WILLIAM D. MATTHEWS (a) (c)................ Chairman of the Board and
Director since 1973, Age 63 Chief Executive Officer
Mr. Matthews has held the above position for more than the past five years. Mr.
Matthews is a director of Conmed Corporation.
R. QUINTUS ANDERSON (b) (c)................ Chairman of the Board,
Director since 1994, Age 67 Aarque Capital Corporation
Mr. Anderson has held the above position for more than the past five years. He is
a director of Cold Metal Products, Inc. and Northwestern Mutual Life Insurance
Company. (4)
PETER J. KALLET (a)........................ President and
Director since 1996, Age 51 Chief Operating Officer
Mr. Kallet was elected to the above position in 1996. He previously served as
Senior Vice President and General Manager of the Oneida Foodservice Division.
</TABLE>
3
<PAGE>
DIRECTORS CONTINUING IN OFFICE WHOSE TERM EXPIRES MAY 26, 1999
<TABLE>
<S> <C> <C>
WHITNEY D. PIDOT (d).................... Managing Partner, Shearman &
Director since 1996, Age 54 Sterling Attorneys, New York
Mr. Pidot has been a partner with Shearman & Sterling for more than the past
five years. Shearman & Sterling has served as counsel to the Corporation for
more than the past five years.
RAYMOND T. SCHULER (b) (c).............. Former Vice Chairman,
Director since 1988, Age 68 President and Chief Executive
Officer, The Business Council
of
New York State, Inc.
Mr. Schuler served as the founding President and the Chief Executive Officer
of the Business Council of New York State since its inception in 1980 and
prior to that was the President and Chief Executive Officer of Associated
Industries of New York State. He also served under Governors Rockefeller,
Wilson and Carey as the Commissioner of the New York State Department of
Transportation. Mr. Schuler is a director of Consolidated Rail Corporation.
WILLIAM M. TUCK (b) (c)................. President, Crouse-Hinds
Director since 1996, Age 62 Division of Cooper
Industries, Inc.
Mr. Tuck has held the above position for more than the past five years.
</TABLE>
- --------
(a) Member of Executive Committee; (b) Member of Audit Committee; (c) Member of
Management Development and Executive Compensation Committee (Mr. Matthews
is a non-voting ex officio member); (d) of counsel to the Audit Committee
and Management Development and Executive Compensation Committee.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table lists the Corporation's Common Stock beneficially owned
by the management of the Corporation as of March 13, 1998:
<TABLE>
<CAPTION>
NUMBER OF
NAME OF BENEFICIAL OWNER SHARES OWNED
------------------------ ------------
<S> <C>
William F. Allyn 2,250
R. Quintus Anderson 63,708
Georgia S. Derrico 12,398
J. Peter Fobare 35,888(1)
Gregory Harden 38,544
Peter J. Kallet 41,006(1)
Glenn B. Kelsey 45,475(1)
William D. Matthews 180,221(1)(2)
Whitney D. Pidot 1,500
Raymond T. Schuler 4,321
Catherine H. Suttmeier 11,472(1)
Edward W. Thoma 42,556(1)
William M. Tuck 300
Nominees for director and directors and officers as a 555,574(1)
group
</TABLE>
Mr. Matthews individually owns more than 1% of the Corporation's Common Stock.
The nominees and directors and officers as a group own 3.3%(1)
- --------
(1) Includes shares which as of March 13, 1998 could be acquired within 60 days
upon the exercise of options in the following amounts: J. Peter Fobare -
23,172; Peter J. Kallet - 22,121; Glenn B. Kelsey - 3,900; William D.
Matthews - 4,596; Catherine H. Suttmeier - 4,913; E. Thoma - 29,909; and
other officers - 37,700.
(2) Mr. Matthews also owns 390 shares of Oneida Ltd. 6% Preferred Stock.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
During the past fiscal year, the Board of Directors held nine meetings. All
directors attended more than seventy-five percent of the total number of
meetings of the Board of Directors and of the standing committees on which they
served. Certain members designated in the Election of Directors section
attended the following standing committee meetings:
Audit Committee. During the past fiscal year, the Committee met three times.
None of the members of the Committee is an officer or an employee of the
Corporation. The Committee reviews and makes recommendations to the Board of
Directors with respect to the independent accountants' management letter and
reviews the accounting systems and controls of the Corporation on a continuing
basis.
Management Development and Executive Compensation Committee. During the past
fiscal year, the Committee met on three occasions. None of the members of the
Committee is an officer or an employee of the Corporation except Mr. Matthews
who is a non-voting ex officio member of the Committee. The Committee reviews
and establishes the salaries of the officers who are compensated at an annual
basic rate of $100,000 or more. The Committee also makes recommendations to the
Board of Directors with respect to the organization, management and personnel
of the Corporation and has responsibility for administering the Corporation's
stock option plans, restricted stock awards and incentive compensation plans.
The Corporation does not have a standing Nominating Committee.
5
<PAGE>
DIRECTORS' COMPENSATION
Directors who are not employees of the Corporation receive $14,000 on an
annual basis for serving as directors of the Corporation. They also receive
$1,250 per Board meeting, $750 each for the first two Committee Meetings held
on the day of regular Board Meetings, $400 for the third Committee meeting held
on the day of regular Meetings and $750 for Special Committee Meetings not held
on the day of regular Board Meetings. Committee Chairpersons receive an
additional $50 per Committee Meeting.
The Board of Directors has unanimously approved the 1998 Non Employee
Directors Stock Option Plan and recommends that shareholders approve the plan.
It is further described at pages 17-20.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows for the past three fiscal years the cash
compensation paid by the Corporation and its subsidiaries, as well as certain
other compensation paid or accrued, to the Corporation's Chief Executive
Officer and each of the Corporation's four other most highly compensated
executive officers.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------------- ---------- ------------------
RESTRICTED
NAME AND PRINCIPAL CASH STOCK OTHER ANNUAL STOCK OPTIONS LTIP ALL OTHER
POSITION YEAR SALARY INCENTIVE INCENTIVE/1/ COMPENSATION AWARDS/2/ # PAYOUTS/3/ COMPENSATION/4/
------------------ ---- -------- --------- ------------ ------------ ---------- ------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William D. Matthews 1997 $278,720 $210,595 $164,580 $0 $89,015 5,000 $0 $5,668
Chairman & CEO 1996 268,893 105,420 91,523 0 40,360 0 0 5,218
1995 260,850 138,370 92,025 0 46,124 0 0 3,930
Peter J. Kallet 1997 240,000 258,270 65,937 0 89,015 15,000 0 5,908
Pres. & COO 1996 203,333 153,020 0 0 40,360 0 0 4,712
1995 164,842 64,353 0 0 0 0 0 3,926
Glenn B. Kelsey 1997 192,400 99,390 0 0 0 10,500 0 4,333
Executive Vice 1996 185,617 83,010 0 0 0 0 0 3,456
President and 1995 157,500 77,223 0 0 0 0 0 3,052
Chief Financial Offi-
cer(/5/)
Peter J. Fobare 1997 169,600 82,825 0 0 0 9,000 0 5,267
Senior Vice President 1996 160,000 69,175 0 0 0 0 0 4,232
and General Manager 1995 151,410 60,824 0 0 0 0 0 3,891
Consumer Retail Divi-
sion
Edward W. Thoma 1997 133,592 66,260 0 0 0 7,500 0 4,653
Senior Vice President, 1996 129,229 55,340 0 0 0 0 0 3,206
Finance 1995 127,349 30,685 0 0 0 0 0 3,422
</TABLE>
- --------
(1) Mr. Matthews was awarded 6,240 shares of stock for 1997, 4,914 shares for
1996 and 6,135 shares for 1995 and Mr. Kallet was awarded 2,500 shares for
1997, pursuant to the incentive plan based on three-year performance of the
Corporation's Common Stock, as described below on pages 11-12; shares are
valued at the market price on the date of allocation.
(2) Mssrs. Matthews and Kallet each were awarded 3,375 shares of Common Stock
for 1997 and 2,167 shares for 1996; Mr. Matthews was awarded 2,993 shares
for 1995, based on the Corporation's performance, pursuant to the incentive
plan for the chief executive and chief operating officers, which is
described below at pages 9-10.
(3) LTIP: Long-term Incentive Payments.
(4) This category included (i) allocation of shares to the Employee Stock
Ownership Plan as follows: for 1997, W. Matthews - 203; P. Kallet - 212; G.
Kelsey - 153; P. Fobare - 188; and E. Thoma - 165; for 1996, W. Mathews -
228; P. Kallet - 238; G. Kelsey - 171; P. Fobare - 213; and E. Thoma - 187;
and for 1995, W. Mathews - 258; P. Kallet - 273; G Kelsey - 194; P. Fobare
- 242; and E. Thoma - 210; shares are valued at the market price on the
dates of allocations; and (ii) the Corporation's matching contributions to
the executives' 401K savings plans: the Corporation's contributions for
Messrs. Mathews, Kallet, Kelsey, Fobare and Thoma for 1997 and 1996 were
$250 and for 1995 they were $125.
(5) Mr. Kelsey resigned as an officer and director of the Corporation as of
January 16, 1998.
7
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the Corporation's 1987 Stock Option Plan to the five most highly
compensated executive officers as of the end of the past fiscal year.
OPTION GRANTS IN PAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF
GRANTED TO EXERCISE STOCK PRICE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION APPRECIATION FOR
NAME GRANTED FISCAL YEAR PRICE (S/SH) DATE OPTION TERM
---- ------- ------------ ------------ ---------- ---------------------
5%($) 10%($)
---------- ----------
<S> <C> <C> <C> <C> <C> <C>
W. Matthews............. 15,000 8.3 $12.42 2007 117,200 296,900
P. Kallet............... 15,000 8.3 12.42 2007 117,200 296,900
G. Kelsey............... 10,500 5.8 12.42 2007 82,000 207,800
P. Fobare............... 9,000 5.0 12.42 2007 70,300 178,100
E. Thoma................ 7,500 4.2 12.42 2007 58,600 148,500
</TABLE>
NOTE: The 1987 Stock Option Plan provides for grants of common stock options to
executive officers and key employees of the Corporation and its subsidiaries.
The exercise price for shares granted is the market value of the shares on the
date of the grant. The exercise price may be paid by cash; from time to time
payment has been allowed in other forms, including by exchange of common stock
of the Corporation previously held by the executive. The vesting schedule as
well as the term during which an option may be exercised are established at
time of the grant.
The following table sets forth information with respect to the named
executives concerning the exercise of options during the past fiscal year and
unexercised options held at the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END(#) FY-END($)
------------- ---------------
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
W. Matthews........ 14,642 $130,022 1,596/24,005 $14,492/263,561
P. Kallet.......... 9,914 67,273 18,885/20,100 176,825/230,358
G. Kelsey.......... 25,060 263,445 2,100/16,500 19,068/182,190
P. Fobare.......... 4,578 55,517 21,372/14,100 196,884/155,838
E. Thoma........... 6,130 79,838 28,409/11,447 265,362/131,760
</TABLE>
8
<PAGE>
PENSION PLAN TABLE
The following table shows estimated annual retirement benefits payable at age
65 under the Corporation's qualified defined benefit plan.
<TABLE>
<CAPTION>
FINAL AVERAGE
ANNUAL EARNINGS 10 YEARS 20 YEARS 30 YEARS 40 YEARS
--------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$100,000............................... $ 8,876 $17,752 $ 26,629 $ 35,505
120,000............................... 10,776 21,552 32,328 43,104
150,000............................... 13,626 27,252 40,878 54,504
200,000............................... 18,375 36,751 55,126 73,502
300,000............................... 27,876 55,752 83,628 111,504
400,000............................... 37,376 74,752 112,129 149,505
500,000............................... 46,875 93,751 140,626 187,502
</TABLE>
Compensation covered by the plan includes base salary and cash incentives
reported in the Summary Compensation Table. The normal retirement benefit at
age 65 is based on years of service and the average annual compensation during
the three highest paid consecutive calendar years of the ten years of
employment preceding retirement. Years of service for the purpose of
determining benefits for the named executives are W. Matthews--28 years, P.
Kallet--30 years, G. Kelsey--17 years, P. Fobare--25 years, E. Thoma--19 years.
These named executives also participate in the Oneida Ltd. Employee Stock
Ownership Plan, a defined contribution plan. Allocations for the past fiscal
year are reported in the Summary Compensation Table.
Benefits are limited to the extent required by provisions of the Internal
Revenue Code and the Employee Retirement Income Security Act of 1974.
In addition to the retirement benefits described above, the Corporation
maintains a Supplemental Retirement Plan for senior officers. To date, only Mr.
Matthews has been designated to participate. The Supplemental Plan guarantees
an annual retirement allowance upon retirement at age 65 equalling 50% of the
participant's average annual final compensation (as defined), with declining
percentages down to 40% at age 55. These benefits are offset by the
participating officer's other retirement benefits.
CHANGE IN CONTROL AGREEMENTS
The Corporation has entered into an agreement with Mr. Matthews dated October
1, 1982 which will become effective for a limited period if there is a Change
in Control of the Corporation (as defined below). In such event, certain
additional benefits are payable (see below) if the officer is terminated after
a Change in Control (i) by the Corporation or its successor, other than for
cause or retirement, or (ii) by the officer if he determines that he has
suffered a material diminution in his position or that he is unable to carry
out the responsibilities of the position he held immediately prior to the
Change in Control.
The agreements, in general, provide that in the event of a Change in Control,
the officer will be entitled to continuation of salary, bonus or incentive
compensation and participation in benefit plans at the same rate which applied
to him in the fiscal year in which the Change in Control occurred. In the event
the officer is terminated, for certain reasons described above, following a
Change in Control, he will receive monthly payments equal to the highest
monthly rate of base salary paid to him during his term of employment with the
Corporation plus any applicable bonus or incentive compensation due him as
determined using the same basis and formula as in the fiscal year prior to a
Change in Control in which a bonus was paid. In addition to these payments, the
officer shall be entitled to participate and be included in any pension or
retirement plan, stock option plan, employee welfare benefit plan or executive
benefit plan in existence on the date of the Change in Control. The agreements
will terminate five years after the date of any Change in Control.
9
<PAGE>
The agreements define a Change in Control as a change in control of a nature
that would be required to be reported or disclosed by the Corporation in
response to the requirements of the rules and regulations of the Securities and
Exchange Commission as in effect on September 1, 1982; provided that such a
Change in Control will have occurred if and when (i) any person becomes a
beneficial owner, directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the Corporation's then
outstanding securities, or (ii) there is a change in the composition of the
Board of Directors during any consecutive twenty-four month period beginning
after September 1, 1982, such that the directors for whom the officer shall
have voted cease to constitute a majority of the Board.
The Corporation has entered into agreement with other executive officers as
follows: with Messrs. Kelsey, Thoma and one other executive officer dated, July
26, 1989; with one other executive officer dated March 29, 1995; with Mr.
Kallet and one other executive officer dated February 28, 1996 and with J.
Peter Fobare on February 28, 1998. The agreements, in general, provide that in
the event the officer's employment is terminated as a result of a Change in
Control, the officer will be entitled to a severance payment equal to 2.99
times his average annual compensation (as defined), health insurance for three
years following termination and a supplemental pension benefit.
These agreements define a "Change in Control" as an event where (A) any
"person," such as term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Corporation, any trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation, or any company owned,
directly or indirectly, by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the Corporation), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation'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 of Directors, and any new director (other than a
director designated by a person who has entered into an agreement with the
Corporation to effect a transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board of Directors or nomination for election by
the Corporation'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 Corporation approve a merger or
consolidation of the Corporation with any other company, other than (1) a
merger or consolidation which would result in the voting securities of the
Corporation 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 Corporation or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of the Corporation (or similar
transaction) in which no "person" (as hereinabove defined) acquires more than
20% of the combined voting power of the Corporation's then outstanding
securities; or (D) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation's
assets.
In 1989 the Board of Directors also approved an Employee Security Plan which
provides severance benefits for all eligible employees of the Corporation who
lose their jobs in the event of a Change in Control. Employees are eligible for
these benefits if they have one year or more of service. Executive officers who
are parties to the agreements described above are not eligible for the Employee
Security Plan benefits.
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BOARD COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Corporation's executives generally are made
by the Management Development and Executive Compensation Committee of the Board
of Directors ("Compensation Committee"). This committee consists of six of the
seven non-employee directors of the corporation. Mr. Pidot serves the committee
in the capacity of counsel. Mr. Matthews, as Chairman of the Board and Chief
Executive Officer, sits on the committee as well, but as a non-voting,
ex officio member.
This Compensation Committee report provides the policies and philosophy
underlying decisions regarding executive compensation for 1997 and how they
affected Mr. Matthews, in particular, and in general Messrs. Kallet, Kelsey,
Fobare and Thoma--the four executive officers other than Mr. Matthews who for
1997 were the Corporation's most highly paid executives.
ONEIDA'S EXECUTIVE COMPENSATION POLICIES
Oneida's executive compensation programs are designed to retain and reward
executives who are capable of leading the Corporation to achieve its business
objectives in an industrial and market environment characterized by growth,
complexity, competition and change.
Increasingly, compensation is provided in the form of cash or stock-based
incentive plans intended to integrate pay with the Corporation's annual and
long-term performance goals, recognizing both individual initiative and
achievements as well as contributions toward overall divisional and corporate
performance.
Executive officers other than the named senior executives are eligible for
selection as participants in the corporation's executive incentive plans.
Moreover, all employees of the Corporation's Oneida Silversmiths Division
participate in an annual profit sharing plan based on the performance of their
business unit. However, these employees typically receive a larger percentage
of their compensation in salary than do senior executives.
As a result of the emphasis on tying executive compensation to business
performance, compensation may fluctuate from year to year. Historically, in
successful years, a substantial portion of senior executives' total
compensation was earned through incentives. In less profitable years, no
incentive compensation is paid.
Annual compensation for Oneida's senior management consists of three
elements:
1.Salary -- In general, salaries are influenced by compensation paid
executives of corporations with similar revenues and scopes of operation.
Within that framework, individual salaries reflect personal contribution
and performance as well as experience and years of service. In evaluating
an executive's personal contribution and performance, the Corporation
considers the individual's contribution to the overall performance of the
Corporation or division; effectiveness in budget management; performance in
assigned special projects; and managerial ability.
2.Annual Cash Incentive -- These annual incentive payments are tied
directly to corporate or business unit performance:
a.Corporate -- For senior executives with corporate responsibilities,
their incentive measurements for 1997 were Return on Equity and Income
before Taxes. These two factors reflect the Corporation's relative
emphasis on return and growth;
b.Other -- For senior executives whose responsibilities are limited
to a division or subsidiary, incentives are based on their business
unit's operating income and cash flow.
3.Stock Awards and Options -- The Corporation believes its senior
executives should have a greater equity interest in the Corporation as a
way of aligning their interests with those of shareholders. Long-term
incentive programs have been designed with this interest in mind:
a.Stock option grants -- These provide an incentive that focuses
executives' attention on managing the Corporation from the perspective
of an owner with an equity stake in the business.
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Because the option price is the fair market value of a share at the
time of the grant, stock options are tied to the future performance of
stock and will provide value to the recipient only when the price of
stock rises above the option grant price;
b.Restricted stock awards -- The Corporation's plan is intended to
promote the growth and profitability of the Corporation by providing
long-term equity rewards to key employees who are expected to have a
significant impact on the performance of the Corporation. These awards
provide a long-term focus since, in general, the stock is restricted
from being sold, transferred or assigned and is forfeitable until it
vests.
THE CHIEF EXECUTIVE'S 1997 COMPENSATION
SEC regulations require the Compensation Committee to discuss its basis for
decisions affecting Mr. Matthews' 1997 compensation in relation to the
Corporation's performance during the past fiscal year.
The Compensation Committee's general approach in setting Mr. Matthews'
annual compensation seeks to reflect compensation levels of other companies
with similar revenues and scopes of operation, but to provide a large
percentage of his target compensation based on objective long-term performance
criteria. This provides an incentive to work toward clearly defined long-term
goals while providing stability by giving Mr. Matthews some certainty in the
level of his compensation through the non-performance based elements.
In 1993, the Compensation Committee took steps to bring the chief
executive's salary, as well as that of the chief operating officer, more in
line with their peers in other companies through the adoption of two
performance-based incentive programs--one based on the long-term performance
of the Corporation's stock and the other based on corporate performance during
the previous year.
In the stock performance-based plan, payouts are determined by the average
annual growth in earnings per share of the Corporation's Common Stock over the
prior three-year period. In years when the performance goals are met, the CEO
and COO may elect to receive their award in cash or stock or a combination of
both. A stock selection is encouraged by setting the election price at 80
percent of the average Common Stock prices on the last day of each of the
preceding four fiscal quarters.
Mr. Matthews' 1997 incentive under this plan was based on achieving 154
percent of the plan's performance goals.
The remainder of Mr. Matthews' performance-based compensation for 1997
derived from the plan for the chief executive officer and the chief operating
officer which provides for annual cash incentives as well as restricted stock
awards based on corporate performance during the preceding fiscal year. The
features of this plan are:
1.Payouts are based on a formula of 50 percent Return on Equity and 50
percent Income before Taxes, reflecting the Corporation's present relative
emphasis on return and growth;
2.The plan incorporates base or platform performance objectives which
must be met before any payments are made. These performance objectives are
set for a two-year period. They are based on goals for good performance,
rather than levels which happen to be attainable in a given year;
3.In years when performance goals are met, in addition to their cash
incentive, the CEO and COO will be considered for restricted stock awards.
The value of the stock award will be one-third of the profit sharing
payout, with the number of shares determined by market price.
Mr. Matthews' cash and stock incentives under this plan were based on
achieving 173 percent of the plan's target amount.
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In 1997, the chief executive's salary reflects an increase of less than 4
percent in comparison with the preceding year. The chief executive's overall
compensation for 1997, however, reflects the awards provided in his
performance-based incentives. As such, it is directly related to the
performance of continuing operations of the Corporation during the past fiscal
year, in which historically high performance levels were achieved.
Mr. Matthews, with other Corporation executives, participates in the stock
option program discussed above.
During the past fiscal year, Mr. Matthews exercised stock options granted him
in 1987, 1990, 1991, 1993 and 1994. The options had an exercise price equal to
the market price of the Corporation's stock on the date the options were
granted and vested on the basis of Mr. Matthews' continued employment with the
Corporation. Thus, the amount realized by Mr. Matthews upon exercise of the
options resulted directly from appreciation in the Corporation's stock price
during the period.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
David E. Harden, Chairman
William F. Allyn
R. Quintus Anderson
Georgia S. Derrico
Raymond T. Schuler
William M. Tuck
William D. Matthews, ex officio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Matthews, the Corporation's chief executive officer, sits on the
Compensation Committee as a non-voting, ex officio member. He does not
participate in discussions of matters which directly affect his compensation.
Mr. Pidot sits in on the Compensation Committee by invitation as counsel.
1993-1998 STOCKHOLDERS' RETURN GRAPH
The following line graph compares the cumulative total shareholder return of
the Corporation's Common Stock with returns for the Russell 2000 Index and a
"Housewares Peer Group" for the period covering the Corporation's last five
fiscal years. Proxy statement disclosure rules adopted by the Securities and
Exchange Commission ("SEC") require such a total shareholder return comparison
using both a broad-based stock price index and a line-of-business comparator
group. The composite of the Russell 2000 Index meets the broad-based stock
price index requirement, which permits market capitalization to be a factor.
The median market capitalization of the Russell 2000 Index companies was
slightly under $400 million as of the last reconstitution of the index. The
Corporation's average start-of-year market capitalization for each year in the
five-year performance period was $158 million.
The "Housewares Peer Group" is comprised of those companies, currently
included in the Investors Business Daily "Housewares" stock price index, which
had market capitalizations of less than $750 million at the start of each of
the fiscal years covered by the graph. These companies are: Decora Industries,
Ekco Group, General Housewares, Home Products Intl., Libbey, Lifetime Hoan and
Mikasa. The market capitalization maximum had been $500 million for this graph
in prior years. It has been raised to reflect general stock price trends. This
increase to $750 million had no impact on the composition of the peer group for
the purposes of this graph.
The return values set forth below and plotted on the graph are based on an
initial investment of $100 on January 31, 1993, in the Corporation's Common
Stock, and each of the two comparator investment groups, with all dividends
treated as reinvested, and each component company within an investment group
weighted by its start-of-year market capitalization.
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COMPARISON OF FIVE-YEAR
CUMULATIVE TOTAL RETURN AMONG ONEIDA,
RUSSELL 2000 AND HOUSEWARES PEER GROUP
--------------------------------------
----------------------------------------------
1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------
ONEIDA $100.0 $118.5 $117.2 $140.0 $161.8 $391.3
- ------------------------------------------------------------------------------
RUSSELL 2000 $100.0 $118.6 $111.5 $144.9 $172.3 $203.5
- ------------------------------------------------------------------------------
HOUSEWARES PEER GROUP $100.0 $76.7 $74.1 $70.1 $81.6 $99.7
- ------------------------------------------------------------------------------
ONEIDA LTD.
1998 STOCK OPTION PLAN
RECOMMENDATION
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ONEIDA LTD. 1998 STOCK
OPTION PLAN (THE "STOCK OPTION PLAN") AND THE RESERVATION OF 1,000,000 SHARES
FOR ISSUANCE UNDER THE STOCK OPTION PLAN AND RECOMMEND THAT SHAREHOLDERS VOTE
"FOR" THE STOCK OPTION PLAN AND THE RESERVATION OF SHARES FOR ISSUANCE
THEREUNDER.
DESCRIPTION OF THE STOCK OPTION PLAN
At its March 24, 1998 meeting, the Board of Directors unanimously adopted the
Stock Option Plan, subject to the approval thereof by the shareholders of the
Company at the 1998 Annual Meeting. A copy of the Stock Option Plan is attached
to this proxy statement as Exhibit A, and the description of the Stock Option
Plan herein is qualified by reference to the text of the attached Stock Option
Plan.
PURPOSES. The purposes of the Stock Option Plan are to attract, retain and
motivate officers and other key employees of the Company and its subsidiaries,
to compensate them for their contributions to the long-term growth and profits
of the Company and to encourage their ownership of Common Stock. The Stock
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Option Plan authorizes the issuance of both incentive stock options and
nonqualified stock options (the "Stock Options") to such individuals.
ELIGIBLE EMPLOYEES. The Compensation Committee of the Board of Directors (the
"Committee") intends to grant Stock Options under the Stock Option Plan to key
employees or officers of the Company or its subsidiaries with the potential to
contribute to the future success of the Company or its subsidiaries. Members of
the Committee are not eligible to receive awards under the Stock Option Plan.
SHARES AVAILABLE UNDER THE STOCK OPTION PLAN. An aggregate of 1,000,000
shares of Common Stock will be authorized for issuance under the Stock Option
Plan. The number of shares available for issuance under the Stock Option Plan
will be proportionately adjusted in the event of certain changes in the
Company's capitalization or a similar transaction. Shares issued pursuant to
the Stock Option Plan may be authorized but unissued shares, treasury shares or
any combination thereof. In addition to the overall share limit, some special
limits apply. In accordance with the requirements under the regulations
promulgated under Section 162(m) of the Internal Revenue Code (the "Code"), no
eligible individual may receive Stock Options with respect to an aggregate of
more than 25,000 shares of Common Stock in any one-year period. In accordance
with the requirements under Section 422 of the Code pertaining to incentive
stock options ("ISOs"), the fair market value of the number of shares of Common
Stock that may be issued pursuant to ISO's which are exercisable for the first
time by a participant under any Company plan may not exceed, in the aggregate,
$100,000 during any calendar year.
ADMINISTRATION. The Stock Option Plan will be administered by the Committee.
The Committee will have full authority to: administer the Stock Option Plan,
select participants from among eligible employees, make factual interpretations
in connection with the administration or interpretation of the Stock Option
Plan, determine the type of Stock Option and the number of shares pursuant to
each Stock Option and set forth the terms and conditions of such Stock Options,
including those related to vesting, forfeiture, payment and exercisability.
Subject to certain limitations, the Committee may from time to time delegate
some or all of its authority to one or more officers of the Company. The
Committee may also determine the effect, if any, that a participant's
termination of employment will have on the vesting, exercisability, payment or
lapse of restrictions applicable to a Stock Option.
AWARD DOCUMENT. Each Stock Option will be evidenced by an award document
issued by the Company. In addition to the terms defined in the Plan, such
documents may contain such other defined terms as the Committee shall
prescribe. Such additional terms may vary among award documents.
STOCK OPTION. An award may consist of either nonqualified stock options
("NSO's") or ISOs within the meaning of Section 422 of the Code. A Stock Option
entitles a participant to acquire a specified number of shares of Common Stock.
Under the terms of the Stock Option Plan, the per share exercise price of a
Stock Option shall be no less than 100% of the fair market value of the Common
Stock on the date of grant: provided, however, that ISO's granted to a
participant who owns more than ten percent of the Company's voting securities
will be priced at 110% of fair market value on the date of grant. The term of a
Stock Option will be fixed by the Committee upon grant: provided, however, that
the term of an ISO may exceed ten years. The vesting schedules of a Stock
Option grant will be determined by the Committee and will be governed by the
individual award documents. At the discretion of the Committee, the exercise
price of a Stock Option may be paid in cash by withholding shares of Common
Stock from the exercise, or in previously owned Common Stock or a combination
thereof.
AMENDMENT OF THE STOCK OPTION PLAN. The Board of Directors or the Committee
may amend, modify, suspend or terminate the Stock Option Plan at any time,
except that stockholder approval is required to increase the maximum number of
shares issuable under the Stock Option Plan or to reduce the exercise price of
any outstanding Stock Option. No amendment or termination may adversely affect
a participant's rights with respect to previously granted Stock Options without
his or her consent.
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EFFECT OF REORGANIZATION. In the event of termination of a participant's
employment by the Company without cause, a Change of Control or, in certain
cases, by a participant for Good Reason, as such terms may be defined in the
applicable award documents, the Committee may provide that all such
participant's outstanding Stock Options may become fully exercisable.
ADJUSTMENTS. In the event any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock spilt, combination or exchange of shares or any other
significant corporate event affecting the Common Stock, the Committee, in its
discretion, may make (i) such proportionate adjustments as it considers
appropriate (in the form determined by the Committee in its sole discretion) to
prevent diminution or enlargement of the rights of participants under the Stock
Option Plan with respect to the aggregate number of shares of Common Stock for
which Stock Options in respect thereof may be granted under the Stock Option
Plan, the number of shares of Common Stock covered by each outstanding Stock
Option and the exercise prices in respect thereof and/or (ii) such other
adjustment as it deems appropriate.
TERMINATION OF THE STOCK OPTION PLAN. By its terms, the Stock Option Plan
will remain in effect until terminated by the Board. No awards may be granted
under the Stock Option Plan after the fifth anniversary of its effective date.
NEW PLAN BENEFIT. Stock Options to be granted under the Stock Option Plan
will be authorized by the Committee in its sole discretion. It is not presently
possible to determine the benefits or amounts that will be received by any
particular employees or groups in the future. However, it is anticipated that
results will be similar to those reported in connection with grants under the
1987 Stock Option Plan.
U.S. FEDERAL INCOME TAX CONSEQUENCES.
INCENTIVE STOCK OPTIONS. Upon the grant or exercise of an ISO under Section
422 of the Code, no income will be realized by the participant for federal
income tax purposes and the Company will not be entitled to any deduction.
However, upon the exercise of an ISO, any excess in the fair market value of
the Common Stock as of the date of exercise over the option price constitutes a
tax preference item which may have alternative minimum tax consequences for a
participant. When the participant sells such shares of Common Stock more than
one year after the date of transfer of such shares and more than two years
after the date of grant of such ISO, the participant will normally recognize a
long-term capital gain or loss equal to the difference, if any, between the
sale prices of such shares and the option price and no deduction will be
allowed to the Company. If the participant does not hold such shares for the
required period, when the participant sells such shares, the participant will
recognize ordinary compensation income and possibly a capital gain or loss in
such amounts as are prescribed by the Code and the regulations thereunder and
the Company will generally be entitled to a federal income tax deduction in the
amount of such ordinary compensation income. Certain additional rules apply if
the exercise price for an ISO is paid in Common Stock previously owned by the
participant.
NONQUALIFIED STOCK OPTION. The grant of NSO will not result in the
recognition of taxable income by the participant or in a deduction to the
Company. Upon exercise of the NSO, the participant will recognize ordinary
compensation income equal to the difference, if any, between the exercise price
and the fair market value of the Common Stock purchased, as of the date of the
NSO's exercise. The Company is required to withhold tax on the amount of income
so recognized and a tax deduction is allowable equal to the amount of such
income (subject to the satisfaction of certain conditions in the case of NSO's
exercised by participants subject to Section 162(m) of the Code). Gain or loss
upon a subsequent sale of the Common Stock received upon the exercise of the
NSO would be taxed as a capital gain or loss (long-term or short-term,
depending upon the holding period of the Common Stock sold). Certain additional
rules apply if the exercise price for a NSO is paid in shares of Common Stock
previously owned by the participant.
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ONEIDA LTD.
1998 NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN
RECOMMENDATION
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ONEIDA LTD. 1998 NON-
EMPLOYEE DIRECTORS STOCK OPTION PLAN (THE "DIRECTORS PLAN") AND THE RESERVATION
OF 100,000 SHARES FOR ISSUANCE UNDER THE DIRECTORS PLAN AND RECOMMEND THAT
SHAREHOLDERS VOTE "FOR" THE DIRECTORS PLAN AND THE RESERVATION OF SHARES OF
ISSUANCE THEREUNDER.
DESCRIPTION OF THE PLAN
At its March 25, 1998 meeting, the Board of Directors unanimously adopted the
Directors Plan, subject to the approval thereof by the shareholders of the
Company at the Annual Meeting. A copy of the Directors Plan is attached to this
proxy statement as Exhibit B, and the description of the Directors Plan herein
is qualified by reference to the text of the attached Directors Plan.
PURPOSES. The purpose of the Directors Plan is to help the Company attract,
retain and compensate as directors highly qualified persons who are not
employees of the Company or its subsidiaries and to secure for the Company the
inherent benefit of increased stock ownership by such directors. Only directors
who are not employees of the Company or any of its subsidiaries may participate
in the Directors Plan.
SHARES AVAILABLE UNDER THE DIRECTORS PLAN. A total of 100,000 shares of
Common Stock will be reserved for issuance under the Directors Plan, which
amount will be proportionately adjusted in the event of certain changes in the
Company's capitalization, a merger, or a similar transaction. Shares issued
pursuant to the Directors Plan may be either authorized but unissued treasury
shares or a combination thereof.
ADMINISTRATION. The Directors Plan will be administered by a committee
consisting exclusively of members of the Board of Directors who are not non-
employee directors. The committee will have full and final authority to
construe and interpret the Directors Plan, adopt such rules and regulations as
it deems necessary to carry out the purposes of the Directors Plan and take any
other actions necessary or advisable for the administration of the Directors
Plan.
DIRECTOR OPTION GRANTS. The Directors Plan provides for automatic, non-
discretionary grants of nonqualified stock options ("Director Options") to non-
employee directors. Each non-employee director will receive, on the date of his
or her initial appointment to the Board (or reappointment after a period of at
least twelve months during which he or she did not serve on the Board), an
option to purchase 1,000 shares of Common Stock. At each annual meeting of
shareholders commencing with the annual meeting held in 1998, each non-employee
director who has served as a member of the board since the preceding annual
meeting and is reelected or will continue to serve on the board will receive an
additional option to purchase 1,000 shares of Common Stock. All Director
Options will have a per share exercise price equal to the fair market value of
the shares on the date of grant. Such exercise price may be paid in cash or
previously owned Common Stock or a combination thereof.
Director Options shall automatically vest and become exercisable upon the
earlier of (i) twelve months from the date of grant or (ii) the annual meeting
of shareholders which is immediately following the annual
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meeting of the grant of the applicable Director Option. Notwithstanding this
vesting schedule, a Director Option will become fully vested and exercisable
upon a non-employee director's termination of service due to death,
disability, retirement in accordance with the retirement policy for non-
employee directors then in effect or a Change of Control.
All Director Options expire ten years from the date of grant. If a non-
employee director's service as a member of the board terminates due to death,
disability, retirement or a Change of Control, all Director Options must be
exercised within one year following such termination. If a non-employee
director's service as a member of the Board terminates for any other reason,
such non-employee director must exercise any Director Options that have vested
as of the date of such termination within the six month period following such
termination and all Director Options that have not vested as of the date of
such termination will immediately expire.
CHANGE OF CONTROL. For purposes of the Directors Plan, a Change of Control
shall be deemed to have occurred upon the occurrence of any of the following:
(i)Any "persons" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 ("Act") becomes the
"beneficial owner" as defined in Rule 13d-3 under the Act of more than 20%
of the then outstanding voting securities of the Company;
(ii)Any "person" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Act acquires by proxy or otherwise the right to vote for
the election of directors, for any merger or consolidation of the Company
or for any other matter or question with respect to more than 20% of the
then outstanding voting securities of the Company;
(iii)During any period of twenty-four consecutive months, Present Directors
and/or New Directors cease for any reason to constitute a majority of the
Board.
For these purposes, "Present Directors" shall mean individuals who at the
beginning of such consecutive twenty-four month period were members of the
Board and "New Directors" shall mean any director whose election by the Board
or whose nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds of the Directors then still in office who were
Present Directors or New Directors;
(iv)the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company; or
(v)there shall be consummated:
(a) a reorganization, merger or consolidation of all or substantially all
of the assets of the Company (a "Business Combination"), unless, following
such Business Combination,
(1) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Common Stock of the
Company and outstanding voting securities of the Company immediately prior
to such Business Combination beneficially own, directly or indirectly, more
then 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the outstanding Common Stock of the Company and outstanding
voting securities of the Company, as the case may be.
(2) no person (excluding any company resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company
or such company resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination, and
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(3) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(b) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets
of the Company, provided that the divesture of less than substantially all
of the assets of the Company in one transaction or a series of related
transactions, whether effected by sale, lease, exchange, spin-off, sale of
the stock or merger of a subsidiary or otherwise, shall not constitute a
Change of Control.
Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur pursuant to subparagraph (i) and (ii) above, solely because twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding securities is acquired by one or more employee benefit plans
maintained by the Company.
AMENDMENT OF THE DIRECTORS PLAN. The Board may amend or terminate the
Directors Plan at any time, except that shareholder approval is required to
increase the maximum number of shares issuable under the Directors Plan. The
consent of a non-employee director is required to the extent that any amendment
or termination would adversely affect such non-employee director's right with
respect to any previously Director Option granted.
ADJUSTMENT. In the event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock split, combination or exchange of shares or any other
significant corporate event affecting the Common Stock, the committee, in its
discretion, may make (i) such proportionate adjustments as it considers
appropriate (in the form determined by the committee in its sole discretion) to
prevent diminution or enlargement of the rights of participants under the
Directors Plan with respect to the aggregate number of shares of Common Stock
for which Director Options in respect thereof may be granted under the
Directors Plan, the number of shares of Common Stock covered by each
outstanding Director Option and the exercise prices in respect thereof and/or
(ii) such other adjustments as it deems appropriate.
TERMINATION OF THE DIRECTORS PLAN. By its terms, the Directors Plan will
remain in effect until termination by the Board. No awards may be granted under
the Directors Plan after the annual meeting of shareholders to be held in 2003.
NEW PLAN BENEFITS.
It is not possible to determine the benefits or amounts that will be received
in the future since no options have been granted.
U.S. FEDERAL INCOME TAX CONSEQUENCES
DIRECTOR OPTION GRANTS. The grant of a Director Option will not result in the
recognition of taxable income by the non-employee director or in a deduction to
the Company. Upon exercise, a non-employee director will recognize ordinary
income in an amount equal to the excess of the fair market value of the Common
Stock purchased over the exercise price, and tax deduction is allowable to the
Company equal to the amount of such income. Gain or loss upon a subsequent sale
of any Common Stock received upon the exercise of Director Option generally
would be taxed as capital gain or loss (long-term or short-term, depending upon
the holding period of the Common Stock sold). Certain additional rules apply if
the exercise price for a Director Option is paid in shares of Common Stock
previously owned by the non-employee director.
19
<PAGE>
PROPOSAL TO INCREASE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS AUTHORIZE AN AMENDMENT TO
ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE TOTAL
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 24,000,000 SHARES TO
48,000,000 SHARES.
DESCRIPTION
There are presently 24,000,000 authorized shares of Common Stock of which
16,781,443 shares were issued and outstanding on March 15, 1998. On the same
date there were an additional 468,568 treasury shares, 837,359 shares reserved
for issuance under the Employee Stock Purchase Plan, and 526,630 reserved for
issuance under the 1980 and 1987 Stock Option Plans. The amount of authorized
but unissued and unreserved Common Stock as of March 15, 1998 was 4,000,612
shares. Assuming stockholders approve the above proposal, the amount of
authorized but unissued and unreserved Common Stock will be 28,000,612.
While the Board of Directors does not have any specific plans for the issue
or sale of any additional shares of Common Stock, other than shares to be
issued under the proposals described under the captions "Approval of the 1998
Non-Employee Directors Stock Option Plan" and "Approval of the 1998 Stock
Option Plan", the Board believes it only prudent to have a reasonable number of
shares available for issue in appropriate circumstances. Assuming the
recommendation of the Board of Directors is approved by the stockholders, no
further or additional vote of the stockholders of the Corporation will normally
be required for the directors to issue Common Stock.
Stockholders do not have any preemptive rights with respect to such
additional shares nor have they any right of appraisal if they dissent from the
proposed amendments.
The vote required to effect the amendments of the Certificate of
Incorporation will be the affirmative vote of the holders of the majority of
all the Common Stock of the Corporation issued and outstanding. The Board of
Directors recommends a vote FOR the proposed amendments to the Certificate of
Incorporation.
The text of the proposed amendment is set forth in Exhibit C to this proxy
statement.
20
<PAGE>
APPROVAL OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has recommended the appointment
of Coopers & Lybrand as independent certified public accountants. The Board of
Directors of the Corporation has appointed Coopers & Lybrand for the purpose of
auditing the Corporation's accounts for the fiscal year ending January 30, 1999
and stockholder approval of such appointment is requested.
The Board of Directors considers such auditors to be well qualified and
recommends a vote FOR the proposal to approve the appointment of Coopers &
Lybrand. In the event such appointment is not approved by stockholders, the
Board of Directors will appoint other auditors at the earliest feasible time.
Representatives from Coopers & Lybrand will attend the Annual Meeting with
the opportunity to make a statement and to answer questions from stockholders.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 1999 Annual Meeting
must be received by the Corporation no later than December 26, 1998, in order
to be included in the 1999 Proxy Statement and Proxy relating to that meeting.
OTHER MATTERS
Other than the foregoing, the Board of Directors knows of no matters which
will be presented at the Annual Meeting for action by stockholders. However, if
any other matters properly come before the meeting, or any adjournment thereof,
it is anticipated that the proxies will be voted according to the best judgment
of the persons acting by authorization of the proxies.
The Annual Report of the Corporation for the fiscal year ended January 31,
1998 including audited financial statements has been mailed to the
stockholders.
By Order of the Board of Directors
/s/ Catherine H. Suttmeier
Catherine H. Suttmeier
Secretary
Oneida, New York
April 24, 1998
21
<PAGE>
EXHIBIT A
ONEIDA LTD.
1998 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purposes of the Plan are to aid the Company and its Subsidiaries in (a)
promoting the long-term success of the Company and increasing stockholder value
by providing eligible key employees with incentives to contribute to the long-
term growth and profitability of the Company and (b) assisting the Company in
attracting, retaining and motivating highly qualified key employees.
2. DEFINITIONS AND RULES OF CONSTRUCTION
(a) Definitions. For purposes of this Plan, the following capitalized words
shall have the meanings set forth below:
"Award Document" means an agreement, certificate or other type or form of
document or documentation approved by the Committee which sets forth the
terms and conditions of an Option grant. An Award Document may be in
written, electronic or other media, may be limited to a notation on the
books and records of the Company and, unless the Committee requires
otherwise, need not be signed by a representative of the Company or a
Participant.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Management Development and Executive Compensation
Committee of the Board or such other committee appointed by the Board to
administer the Plan.
"Common Stock" means the common stock of the Company, par value $1.00 per
share, or such other class of share or other securities as may be
applicable under Section 9(b).
"Company" means Oneida Ltd., a New York corporation, or any successor to
substantially all of its business.
"Disability" means a medically determinable physical or mental impairment
rendering a Participant unable to engage in substantial gainful activity
and which can be expected to result in death or which has lasted or is
expected to last for a period of at least six consecutive months. Any
dispute as to whether a Participant is Disabled shall be resolved by a
physician mutually acceptable to the Participant and the Company, whose
decision shall be final and binding upon the Participant and the Company.
"Effective Date" means October 1, 1997.
"Eligible Individual" means an individual described in Section 4(a).
"Exchange Act" means the Securities and Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Fair Market Value" means, with respect to a share of Common Stock, the
fair market value thereof as of the relevant date of determination, as
determined in accordance with a valuation methodology approved by the
Committee. In the absence of any alternative valuation methodology approved
by the Committee, the Fair Market Value of a share of Common Stock shall
equal the closing price of a share of Common Stock as reported on the
composite tape for securities listed on the New York Stock Exchange, or
such other national securities exchange as may be designated by the
Committee, or, in the event that the Common Stock is not listed for trading
on a national securities exchange but is quoted on an automated system, on
such automated system, in any such case on the valuation date (or, if there
were no sales on the valuation date, the closing price as reported on said
composite tape or automated system for the most recent day during which a
sale occurred).
<PAGE>
"Incentive Stock Option" means an option that is intended to comply with
the requirements of Section 422 of the Code or any successor provision
thereto.
"Nonqualified Stock Option" means any Option which is not an Incentive
Stock Option.
"Option" means a stock option granted under Section 6 of the Plan,
including an Incentive Stock Option and a Nonqualified Stock Option.
"Participant" means an Eligible Individual who has been granted an Option
under the Plan.
"Plan" means this Oneida Ltd. 1998 Stock Option Plan as described herein.
"1987 Plan" means the Oneida Ltd. 1987 Stock Option Plan, as amended.
"Restoration Option" means an Option that is awarded upon the exercise of
an Option earlier awarded under the Plan or any other plan of the Company
(an "Underlying Option") for which the exercise price is paid in whole or
in part by tendering shares of Common Stock previously owned by the
Participant, where such Restoration Option (i) covers a number of shares of
Common Stock no greater than the number of previously owned shares tendered
in payment of the exercise price of the Underlying Option plus the number
of shares withheld to pay taxes arising upon such exercise, (ii) the
expiration date of the Restoration Option is no later than the expiration
date of the Underlying Option and (iii) the exercise price per share of the
Restoration Option is no less than the Fair Market Value per share of
Common Stock on the date of exercise of the Underlying Option.
"Subsidiary" means (i) a domestic or foreign corporation or other entity
with respect to which the Company, directly or indirectly, has the power,
whether through the ownership of voting securities, by contract or
otherwise, to elect at least a majority of the members of such
corporation's board of directors or analogous governing body, or (ii) any
other domestic or foreign corporation or other entity in which the Company,
directly or indirectly, has an equity or similar interest and which the
Committee designates as a Subsidiary for purposes of the Plan. For purposes
of determining eligibility for the grant of Incentive Stock Options under
the Plan, the term "Subsidiary" shall be defined in the manner required by
Section 424(f) of the Code.
(b) Rules of Construction. The masculine pronoun shall be deemed to include
the feminine pronoun and the singular form of a word shall be deemed to include
the plural form, unless the context requires otherwise. Unless the text
indicates otherwise, references to sections are to sections of the Plan.
3. ADMINISTRATION
(a) Committee. The Committee shall be responsible for administering the Plan,
no member of which shall be eligible to participate in the Plan.
(b) Powers and Responsibility. The Committee shall have full and final
authority, consistent with the provisions of the Plan, to: (i) select the
Participants; (ii) determine the number and types of Options to be made under
the Plan; (iii) select the Options to be made to Participants; (iv) set the
Option price, vesting, the number of options to be awarded, and the number of
shares to be awarded out of the total number of shares available for award; (v)
prescribe Award Documents (which need not be identical for each participant);
(vi) make factual determinations in connection with the administration or
interpretation of the Plan; (vii) delegate to the Chief Executive Officer of
the Company the right to allocate Options among Eligible Individuals who are
not executive officers or directors of the Company within the meaning of the
Exchange Act, such delegation to be subject to such terms and conditions as the
Committee in its discretion shall determine; (viii) establish administrative
regulations to further the purpose of the Plan; and (ix) take any other action
desirable or necessary to interpret, construe or implement properly the
provisions of the Plan. Any decision of the Committee in the administration of
the Plan shall be final and conclusive on all interested parties.
<PAGE>
(c) Delegation of Authority. The Committee may designate persons other than
its members to carry out its responsibilities under such conditions or
limitations as it may set, except that the Committee may not delegate (i) its
authority with regard to Options (including decisions concerning the timing,
pricing and amount of Options) granted to Eligible Individuals who are officers
or directors for purposes of Section 16(b) of the Exchange Act and (ii) its
authority pursuant to Section 16 to amend the Plan.
4. ELIGIBILITY
(a) Eligible Individuals. Only officers and key employees of the Company or
its Subsidiaries (or a division or operating unit thereof) or any individual
who has accepted an offer of employment with the Company or its Subsidiaries as
an officer or key employee shall be eligible to participate in the Plan and to
receive Options under the Plan.
(b) Grants to Participants. The Committee shall have no obligation to grant
any Eligible Individual an Option or to designate an Eligible Individual as a
Participant solely by reason of such Eligible Individual having received a
prior Option grant or having been previously designated as a Participant. The
Committee may grant more than one Option to a Participant and may designate an
Eligible Individual as a Participant for periods that cover overlapping periods
of time.
5. STOCK SUBJECT TO THE PROVISIONS OF THE PLAN
(a) Plan Limit. The Company is authorized to issue up to 1,000,000 shares of
Common Stock under the Plan (the "Plan Limit"). Such shares of Common Stock may
be newly issued shares of Common Stock or reacquired shares of Common Stock
held in the treasury of the Company.
(b) Rules Applicable to Determining Shares Available for Issuance. For
purposes of determining the number of shares of Common Stock that remain
available for issuance, the following shares shall be added back to the Plan
Limit and again be available for the grant of Options:
(i) The number of shares of Common Stock tendered to pay the exercise
price of an Option or to satisfy a Participant's tax withholding
obligations; and
(ii) The number of shares withheld from any Option to satisfy a
Participant's tax withholding obligations or, if applicable, to pay the
exercise price of an Option.
Solely for purposes of clauses (i) and (ii) in this Section 5(b), the term
"Options" shall include any options granted under the 1987 Plan.
(c) Special Limits. Anything to the contrary in Section 5(a) above
notwithstanding, but subject to Section 9(b), the following special limits
shall apply to shares of Common Stock available for Option grants under the
Plan:
(i) The maximum number of shares of Common Stock that may be subject to
Options granted to any Eligible Individual in any calendar year shall equal
25,000 shares, plus any shares which were available under this Section
5(c)(i) for Option grants to such Eligible Individual in any prior calendar
year but which were not covered by such Option grants.
(ii) In no event will the number of shares of Common Stock issued in
connection with the grant of Incentive Stock Options exceed the Plan Limit,
as in effect on the Effective Date.
6. TERMS AND CONDITIONS OF OPTIONS
(a) General. Option grants may be made in combination with or as alternatives
to grants or rights under any other compensation or benefit plan of the
Company, including the plan of any acquired entity. The terms and conditions of
each Option grant shall be set forth in an Award Document in a form approved
<PAGE>
by the Committee for such Option grant, which shall contain terms and
conditions not inconsistent with the Plan. Except in connection with a
transaction or event described in Section 9(b), nothing in the Plan shall be
construed as permitting the Company to reduce the exercise price of Options
previously granted under this Plan or options previously granted under any
other plan of the Company without stockholder approval.
(b) Form of Option. The Committee is authorized to grant Options to Eligible
Individuals. An Option shall entitle a Participant to purchase a specified
number of shares of Common Stock during a specified time at an exercise price
that is fixed at the time of grant or for which the method of determining the
exercise price is specified at the time of grant, all as the Committee may
determine; provided, however, that the exercise price per share shall be no
less than 100% of the Fair Market Value per share on the date of grant (or if
the exercise price is not fixed on the date of grant, then on such date as the
exercise price is fixed). An Option may be an Incentive Stock Option or a
Nonqualified Stock Option as determined by the Committee and set forth in the
applicable Award Document. Payment of the exercise price of an Option shall be
made in cash, or, to the extent provided by the Committee at or after the time
of grant, in shares of Common Stock already owned by the Participant or in any
combination of cash and shares of Common Stock. In addition to the exercise
methods described above, a Participant may exercise an Option through a
procedure whereby the Participant delivers to the Company an irrevocable notice
of exercise in exchange for the Company issuing the shares of Common Stock
subject to the Option to a broker previously designated or approved by the
Company, subject to such rules and procedures as the Committee may determine.
An Option shall be effective for such term as shall be determined by the
Committee and set forth in the Award Document relating to such Option, and the
Committee may extend the term of an Option after the time of grant; provided,
however, that the term of an Option may in no event extend beyond the tenth
anniversary of the date of grant of such Option. The Committee may also provide
at or after the time of grant that a Participant shall have the right to
receive a Restoration Option upon the exercise of an Option or an option
granted under another plan of the Company.
(c) Incentive Stock Options. Each Option granted pursuant to the Plan shall
be designated at the time of grant as either an Incentive Stock Option or as a
Nonqualified Stock Option. No Incentive Stock Option may be issued pursuant to
the Plan to any individual who, at the time the Option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, unless (A) the exercise price
determined as of the date of grant is at least 110% of the Fair Market Value on
the date of grant of the shares of Common Stock subject to such Option, and (B)
the Incentive Stock Option is not exercisable more than five years from the
date of grant thereof. No Incentive Stock Option may be granted under the Plan
after the fifth anniversary of the Effective Date.
(d) Option Exercisable Only by Participant. During the lifetime of a
Participant, an Option shall be exercisable only by the Participant. The grant
of an Option shall impose no obligation on a Participant to exercise the
Option.
(e) Rights of a Stockholder. A Participant shall have no rights as a
stockholder with respect to shares covered by an Option until the date the
Participant or his nominee becomes the holder of record of such shares. No
adjustment will be made for dividends or other rights for which the record date
is prior to such date, except as provided in Section 9(b).
(f) Limitation on Exercise. An Option may not be exercised, and no shares of
Common Stock may be issued in connection with an Option, unless the issuance of
such shares has been registered under the Securities Act of 1933, as amended,
and qualified under applicable state "blue sky" laws, or the Company has
determined that an exemption from registration and from qualification under
such state "blue sky" laws is available.
7. VESTING; FORFEITURE; TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
The Committee shall specify at or after the time of grant of an Option the
vesting, forfeiture and other conditions applicable to the Option and the
provisions governing the disposition of an Option in the event of a
Participant's termination of employment with the Company or its Subsidiary. In
connection with a
<PAGE>
Participant's termination of employment, the Committee may vary the vesting,
exercisability and settlement provisions of an Option relative to the
circumstances resulting in such termination of employment. The Committee shall
have the discretion to accelerate the vesting or exercisability of, eliminate
the restrictions and conditions applicable to, or extend the post-termination
exercise period of an outstanding Option. Similarly, the Committee shall have
full authority to determine the effect, if any, of a change in control of the
Company on the vesting, exercisability, payment or lapse of restrictions
applicable to an Option, which effect may be specified in the applicable Award
Document or determined at a subsequent time.
8. TAX WITHHOLDING
The Company or a Subsidiary, as appropriate, may require any individual
entitled to receive a payment in respect of an Option to remit to the Company,
prior to such payment, an amount sufficient to satisfy any Federal, state or
local tax withholding requirements. The Company or a Subsidiary, as
appropriate, shall also have the right to deduct from all cash payments made
pursuant to or in connection with any Option any Federal, state or local taxes
required to be withheld with respect to such payments. In addition, the Company
may permit any individual to whom an Option has been made to satisfy, in whole
or in part, such obligation to remit taxes, by directing the Company to
withhold shares of Common Stock that would otherwise be received by such
individual upon settlement or exercise of such Option or by delivering to the
Company shares of Common Stock owned by the individual prior to exercising the
option, subject to such rules as the Committee may establish from time to time.
9. NO RESTRICTION ON RIGHT OF COMPANY TO EFFECT CORPORATE CHANGES
(a) Authority of the Company and Stockholders. The existence of the Plan, the
Award Documents and the Options granted hereunder shall not affect or restrict
in any way the right or power of the Company or the stockholders of the Company
to make or authorize any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Common Stock or the rights
thereof or which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) Change in Capitalization. Notwithstanding any provision of the Plan or
any Award Document, the number and kind of shares authorized for issuance under
Section 5(a), including the maximum number of shares available under the
special limits provided for in Section 5(c), may be equitably adjusted in the
sole discretion of the Committee in the event of a stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, extraordinary
dividend, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price substantially below Fair
Market Value or other similar corporate event affecting the Common Stock in
order to preserve, but not increase, the benefits or potential benefits
intended to be made available under the Plan. In addition, upon the occurrence
of any of the foregoing events, the number of outstanding Options and the
number and kind of shares subject to any outstanding Option and the purchase
price per share, if any, under any outstanding Option may be equitably adjusted
(including by payment of cash to a Participant) in the sole discretion of the
Committee in order to preserve the benefits or potential benefits intended to
be made available to Participants granted Options. Such adjustments shall be
made by the Committee, in its sole discretion, whose determination as to what
adjustments shall be made, and the extent thereof, shall be final. Unless
otherwise determined by the Committee, such adjusted Options shall be subject
to the same vesting schedule and restrictions to which the underlying Option is
subject.
10. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock pursuant
to Options will be used for general corporate purposes.
<PAGE>
11. EXCHANGE ACT
Notwithstanding anything contained in the Plan or any agreement under the
Plan to the contrary, if the consummation of any transaction under the Plan, or
the taking of any action by the Committee in connection with a change of
control of the Company, would result in the possible imposition of liability on
a Participant pursuant to Section 16(b) of the Exchange Act, the Committee
shall have the right, in its sole discretion, but shall not be obligated, to
defer such transaction or the effectiveness of such action to the extent
necessary to avoid such liability, but in no event for a period longer than 180
days.
12. NO RIGHT TO EMPLOYMENT
No person shall have any claim or right to receive grants of Options under
the Plan. Neither the Plan, the grant of Options under the Plan, nor any action
taken or omitted to be taken under the Plan shall be deemed to create or confer
on any eligible individual any right to be retained in the employ of the
Company or any subsidiary or other affiliate thereof, or to interfere with or
to limit in any way the right of the Company or any subsidiary or other
affiliate thereof to terminate the employment of such eligible individual at
any time.
13. OPTIONS TO INDIVIDUALS SUBJECT TO NON-U.S. JURISDICTIONS
To the extent that Options under the Plan are awarded to individuals who are
domiciled or resident outside of the United States or to persons who are
domiciled or resident in the United States but who are subject to the tax laws
of a jurisdiction outside of the United States, the Committee may adjust the
terms of the Options granted hereunder to such person (i) to comply with the
laws of such jurisdiction and (ii) to permit the grant of the Option not to be
a taxable event to the Participant. The authority granted under the previous
sentence shall include the discretion for the Committee to adopt, on behalf of
the Company, one or more sub-plans applicable to separate classes of Eligible
Individuals who are subject to the laws of jurisdictions outside of the United
States
14. TERM OF THE PLAN
Unless earlier terminated pursuant to Section 16, the Plan shall terminate on
the fifth anniversary of the effective date provided for in Section 15, except
with respect to Options then outstanding.
15. EFFECTIVE DATE
The Plan shall become effective on the Effective Date, subject to subsequent
approval thereof by the Company's stockholders at the first annual meeting of
stockholders to occur after the Effective Date, and shall remain in effect
until it has been terminated pursuant to Section 16. If the Plan is not
approved by the stockholders at such annual meeting, the Plan and all interests
in the Plan awarded to Participants before the date of such annual meeting
shall be void ab initio and of no further force and effect.
16. AMENDMENT AND TERMINATION
Notwithstanding anything herein to the contrary, the Board or the Committee
may, at any time, terminate or, from time to time, amend, modify or suspend the
Plan; provided, however, that no amendment which (i) increases the limits set
forth in Section 5(c)(ii) allows for grants of Options at an exercise price
less than Fair Market Value at the time of grant or (ii) amends the last
sentence of Section 6(a) in a manner that would permit a reduction in the
exercise price of Options (or options granted under another plan of the
Company), under circumstances other than those stated in such sentence, shall
be effective without stockholder approval.
17. GOVERNING LAW
The Plan and all agreements entered into under the Plan shall be construed in
accordance with and governed by the laws of the state of New York and without
giving effect to principles of conflicts of laws.
<PAGE>
EXHIBIT B
ONEIDA LTD
1998 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSES
The purposes of the Plan are to attract, retain and compensate highly
qualified individuals who are not employees of the Company for service as
members of the Board of Directors of the Company and to provide them with an
ownership interest in the Company's Common Stock. The Plan will be beneficial
to the Company and its stockholders by allowing Non-Employee Directors to (i)
have a personal financial stake in the Company through an ownership interest in
the Company's Common Stock and (ii) underscore their common interest with
stockholders in increasing the value of the Company's Common Stock over the
long term.
2. DEFINITIONS AND RULES OF CONSTRUCTION
(a) Definitions. For purposes of this Plan, the following capitalized words
shall have the meanings set forth below:
"Annual Award" means an award of Options pursuant to Section 5(b) of the
Plan.
"Annual Meeting" means an annual meeting of the Company's stockholders.
"Board" means the Board of Directors of the Company.
"Change of Control of the Company" shall be deemed to occur if any of the
following circumstances shall occur:
(i) any "person" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 ("Act") becomes the
"beneficial owner" as defined in Rule 13d-3 under the Act of more than 20%
of the then outstanding voting securities of the Company;
(ii) any "person" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Act acquires by proxy or otherwise the right to vote for
the election of directors, for any merger or consolidation of the Company
or for any other matter or question with respect to more than 20% of the
then outstanding voting securities of the Company;
(iii) during any period of twenty-four consecutive months, Present
Directors and/or New Directors cease for any reason to constitute a
majority of the Board. For these purposes, "Present Directors" shall mean
individuals who at the beginning of such consecutive twenty-four month
period were members of the Board and "New Directors" shall mean any
director whose election by the Board or whose nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of
the Directors then still in office who were Present Directors or New
Directors;
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company; or
(v) there shall be consummated:
(a) a reorganization, merger or consolidation of all or substantially
all of the assets of the Company (a "Business Combination"), unless,
following such Business Combination,
(1) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the outstanding Common
Stock of the Company and outstanding voting securities of the
Company immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such
<PAGE>
Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of
the outstanding Common Stock of the Company and outstanding voting
securities of the Company, as the case may be,
(2) no person (excluding any company resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such company resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior
to the Business Combination and
(3) at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination were
members of the Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination; or
(b) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of
the assets of the Company, provided, that the divestiture of less than
substantially all of the assets of the Company in one transaction or a
series of related transactions, whether effected by sale, lease,
exchange, spin-off, sale of the stock or merger of a subsidiary or
otherwise, shall not constitute a Change of Control.
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur pursuant to subparagraphs (i) and (ii) above, solely because
twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities is acquired by one or more
employee benefit plans maintained by the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee designated by the Board pursuant to Section
3(c) of the Plan.
"Common Stock" means the Common Stock of the Company, par value $1.00 per
share, or such other class or kind of shares or other securities as may be
applicable under Section 12.
"Company" means Oneida Ltd, a New York corporation, or any successor to
substantially all its business.
"Effective Date" means January 1, 1998.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to a share of Common Stock, the fair
market value thereof as of the relevant date of determination, as determined in
accordance with a valuation methodology approved by the Committee. In the
absence of any alternative valuation methodology approved by the Committee, the
Fair Market Value of a share of Common Stock shall equal the closing price of a
share of Common Stock as reported on the composite tape for securities listed
on the New York Stock Exchange, or such other national securities exchange as
may be designated by the Committee, or, in the event that the Common Stock is
not listed for trading on a national securities exchange but is quoted on an
automated system, on such automated system, in any such case on the valuation
date (or, if there were no sales on the valuation date, the average of the
highest and the lowest quoted selling prices as reported on said composite tape
or automated system for the most recent day during which a sale occurred).
<PAGE>
"Initial Award" means an award of Options pursuant to Section 5(a) of the
Plan.
"Non-Employee Director" means a member of the Board who is not an employee of
the Company or a Subsidiary.
"Option" means an option to purchase shares of Common Stock awarded to a Non-
Employee Director pursuant to the Plan. Options awarded pursuant to this Plan
shall be non-statutory stock options
"Option Shares" means the shares of Common Stock issuable upon exercise of a
Option.
"Permanent Disability" means a medically determinable physical or mental
impairment rendering a Non-Employee Director substantially unable to function
as a member of the Board for any period of six consecutive months. Any dispute
as to whether a Non-Employee Director is Permanently Disabled shall be resolved
by a physician mutually acceptable to the Non-Employee Director and the
Company, whose decision shall be final and binding upon the Non-Employee
Director and the Company.
"Plan" means the Oneida Ltd 1998 Non-Employee Directors Stock Option Plan as
described herein.
"Retirement" means a Non-Employee Director ceasing to be a member of the
Board as a result of retirement from the Board in accordance with the
retirement policy then applicable to Board members.
"Subsidiary" means (i) a domestic or foreign corporation or other entity with
respect to which the Company, directly or indirectly, has the power, whether
through the ownership of voting securities, by contract or otherwise, to elect
at least a majority of the members of such corporation's board of directors or
analogous governing body, or (ii) any other domestic or foreign corporation or
other entity in which the Company, directly or indirectly, has an equity or
similar interest and which the Committee designates as a Subsidiary for
purposes of the Plan.
"1933 Act" means the Securities Act of 1933, as amended.
(b) Rules of Construction. The masculine pronoun shall be deemed to include
the feminine pronoun and the singular form of a word shall be deemed to include
the plural form, unless the context requires otherwise. Unless the text
indicates otherwise, references to sections are to sections of the Plan.
3. SHARES AVAILABLE; ADMINISTRATION
(a) Subject to the provisions of Section 10(b) of the Plan, the maximum
number of shares of Common Stock which may be issued under the Plan shall not
exceed 100,000 shares. Either authorized and unissued shares of Common Stock or
treasury shares may be delivered upon exercise of Options awarded pursuant to
the Plan.
(b) If Options have been forfeited to the Company as described in Section
6(c) or are terminated unexercised, the Options Shares underlying such Options
shall again be available for issuance in connection with future awards under
the Plan.
(c) The Plan will be administered by a committee designated by the Board and
composed exclusively of members of the Board who are not Non-Employee Directors
(the "Committee"). Subject to the provisions of this Plan, the Committee shall
have full and final authority to (i) interpret the Plan; (ii) establish, amend
and rescind any rules and regulations relating to the Plan; (iii) prescribe
award documentation; (iv) make factual determinations in connection with the
administration or interpretation of the Plan; and (v) take any other actions
necessary or advisable for the administration of the Plan. The Committee's
interpretation of the Plan, and all actions taken and determinations made by
the Committee pursuant to the powers vested in it hereunder, shall be
conclusive and binding upon all parties concerned including the Company, its
stockholders and persons granted Options under the Plan. The Chairman of the
Board of the Company shall be authorized to implement the Plan in accordance
with its terms and to take or cause to be taken such actions of a ministerial
nature as shall be necessary to effectuate the intent and purposes thereof.
<PAGE>
4. ELIGIBILITY
Options awarded pursuant to the Plan shall be granted only to active members
of the Board who are not, as of the date of any Option grants, employees of the
Company or any of its Subsidiaries or affiliates.
5. OPTION GRANT
(a) Initial Award. On the date of a Non-Employee Director's initial election
or appointment to the Board, such Non-Employee Director (including any Non-
Employee Director reelected or reappointed after a period of at least 12
calendar months during which he did not serve on the Board) shall be granted an
Initial Award consisting of an Option to purchase 1,000 shares of Common Stock.
Such Option shall have a per share exercise price equal to the Fair Market
Value of the Common Stock on the date of the award and shall be subject to the
vesting schedule provided for in Section 6(a) and the other terms and
conditions provided for herein.
(b) Annual Awards. At each Annual Meeting during the term of the Plan, each
person who has continuously served as a member of the Board since the
immediately preceding Annual Meeting [(or in the case of the Annual Meeting
held in 1998, each person who has served as a member of the Board since the
Effective Date)], and who is reelected at such Annual Meeting or who will
otherwise continue to serve on the Board following such Annual Meeting, will
receive an Annual Award consisting of an Option to purchase 1,000 shares of
Common Stock (or such lesser number determined by multiplying 1,000 by a
fraction, the numerator of which is the number of full or partial months since
the immediately preceding Annual Meeting during which such person served on the
Board in the capacity of a Non-Employee Director, and the denominator of which
is the number of full or partial months since the immediately preceding Annual
Meeting). Such Option shall have a per share exercise price equal to the Fair
Market Value of the Common Stock on the date of such award and shall be subject
to the vesting schedule provided for in Section 6(a) and the other terms and
conditions provided for herein.
6. VESTING
(a) Vesting. Options awarded pursuant to the Plan shall vest and become
exercisable upon the earlier of (i) twelve months from the date of the Option
grant or (ii) the Annual Meeting which is immediately following the Annual
Meeting of such Option grant.
(b) Accelerated Vesting. Notwithstanding anything to the contrary in Section
6(a), an Option shall become fully vested and exercisable upon the earlier to
occur of (i) a Non-Employee Director ceasing to be a member of the Board as a
result of death, Permanent Disability or Retirement, or (ii) a Change of
Control of the Company.
(c) Forfeiture. In the event of a Non-Employee Director's termination of
service as a member of the Board for any reason other than death, Permanent
Disability, Retirement or a Change of Control of the Company prior to the
satisfaction of the vesting period described in Section 6(a), the unvested
portion of any Options awarded to the Non-Employee Director shall be forfeited
to the Company as of the date of termination of service, and the Non-Employee
Director shall have no further rights or interest therein.
7. TERM OF OPTIONS
(a) Ten-Year Term. Each Option shall expire ten years from the date of its
grant, subject to earlier termination as provided herein.
(b) Exercise Following Certain Terminations of Service. If a Non-Employee
Director's service as a member of the Board terminates for any reason other
than death, Permanent Disability, Retirement or a Change of Control of the
Company, the Non-Employee Director shall have the right, subject to the terms
and conditions hereof, to exercise the Option, to the extent it has vested as
of the date of such termination of service, at any time within six months after
the date of such termination, subject to the earlier expiration of the Option
as provided in Section 7(a). At the end of such six-month period the Option
shall expire.
<PAGE>
(c) Exercise Following Termination of Service Due to Death, Permanent
Disability, Retirement or a Change of Control of the Company. If a Non-Employee
Director's service as a member of the Board terminates by reason of death,
Permanent Disability, Retirement or a Change of Control of the Company, all
Options awarded to such Non-Employee Director may be exercised by such Non-
Employee Director, or by his or her estate, personal representative or
beneficiary, as the case may be, at any time within one year after the date of
termination of service, subject to the earlier expiration of the Option as
provided in Section 7(a). At the end of such one-year period the Option shall
expire.
(d) Exercise Following Termination of Service Subject to Company Policies and
Procedures on Insider Trading. Any exercise of an Option pursuant to Section
7(b) or 7(c) following termination of a Non-Employee Director's service as a
member of the Board for any reason other than death shall be subject to, and
shall be permitted only to the extent such exercise complies with, the policies
and procedures of the Company concerning insider trading that were applicable
to the Non-Employee Director on the date of such termination of service (as
such policies and procedures may be amended by the Company during the period
provided in Section 7(b) or 7(c), as the case may be, for exercise of the
Option).
8. TIME AND MANNER OF EXERCISE
(a) Notice of Exercise. Subject to the other terms and conditions hereof, a
Non-Employee Director may exercise any Options (to the extent vested) by giving
written notice of exercise to the Company; provided, however, that no less than
100 Option Shares may be purchased upon any exercise of the Option unless the
number of Option Shares purchased at such time is the total number of Option
Shares in respect of which an Option is then exercisable, and provided,
further, that in no event shall an Option be exercisable for a fractional
share. The date of exercise of an Option shall be the later of (i) the date on
which the Company receives such written notice or (ii) the date on which the
conditions provided in Section 8(b) are satisfied. Notwithstanding any other
provision of the Plan or of the notice of award relating to an Option provided
for in Section 9, no Option may be exercised, whether in whole or in part, and
no Option Shares will be issued by the Company in respect of any such attempted
exercise, at any time when such exercise is prohibited by Company policy then
in effect concerning transactions by a Non-Employee Director in the Company's
securities. In the event that a Non-Employee Director gives written notice of
exercise to the Company at a time when such exercise is prohibited by such
policy, the Company in its sole discretion may disregard such notice of
exercise or may consider such notice to be delivered as of the first date that
the Non-Employee Director is permitted to exercise such Option in accordance
with such Company policy.
(b) Payment. Prior to the issuance of a certificate pursuant to Section 8(e)
hereof evidencing the Option Shares in respect of which all or a portion of an
Option shall have been exercised, a Non-Employee Director shall have paid to
the Company the exercise price for all Option Shares purchased pursuant to the
exercise of such Option. Payment shall be made on or within twenty business
days after the date of exercise, and such Option price shall be paid (i) by
personal check, bank draft or postal or express money order (such modes of
payment are collectively referred to as "cash") payable to the order of the
Company in U.S. dollars, (ii) in whole shares of Common Stock of the Company
owned by the Non-Employee Director prior to exercising the Option, or (iii) in
a combination of cash and delivery of shares of Common Stock as the Board in
its sole discretion may approve. In addition to the exercise methods described
above, a Non-Employee Director may exercise an Option through a procedure
whereby the Non-Employee Director delivers to the Company an irrevocable notice
of exercise in exchange for the Company issuing the shares of Common Stock
subject to the Option to a broker previously designated or approved by the
Company, subject to the rules and procedures as the Administrator may
determine.
(c) Stockholder Rights. A Non-Employee Director shall have no rights as a
stockholder with respect to any shares of Common Stock issuable upon exercise
of an Option until a certificate evidencing such shares shall have been issued
to the Non-Employee Director pursuant to Section 8(e), and no adjustment shall
be made for dividends or distributions or other rights in respect of any share
for which the record date is prior to the date upon which the Non-Employee
Director shall become the holder of record thereof.
<PAGE>
(d) Limitation on Exercise. No Option shall be exercisable unless the Common
Stock subject thereto has been registered under the Securities Act and
qualified under applicable state "blue sky" laws in connection with the offer
and sale thereof, or the Company has determined that an exemption from
registration under the Securities Act and from qualification under such state
"blue sky" laws is available.
(e) Issuance of Shares. Subject to the foregoing conditions, as soon as is
reasonably practicable after its receipt of a proper notice of exercise and
payment of the Option price for the number of shares with respect to which the
Option is exercised, the Company shall deliver to the Non-Employee Director (or
following the Non-Employee Director's death, such other person entitled to
exercise the Option), at the principal office of the Company or at such other
location as may be acceptable to the Company and the Non-Employee Director (or
such other person), one or more stock certificates for the appropriate number
of shares of Common Stock issued in connection with such exercise. Such shares
shall be fully paid and nonassessable and shall be issued in the name of the
Non-Employee Director (or such other person).
(f) Tax Withholding. The Company shall have the right, prior to the delivery
of any certificates evidencing shares of Common Stock to be issued upon full or
partial exercise of an Option, to require a Non-Employee Director to remit to
the Company any amount sufficient to satisfy any Federal, state or local tax
withholding requirements. The Company may permit the Non-Employee Director to
satisfy, in whole or in part, such obligation to remit taxes, by directing the
Company to withhold shares of Common Stock that would otherwise be received by
the Non-Employee Director, pursuant to such rules as the Committee may
establish from time to time, by delivering to the Company shares of Common
Stock owned by the Non-Employee Director prior to exercising the Option, or by
making a payment to the Company consisting of a combination of cash and such
shares of Common Stock. Such an election shall be subject to the following:
(i) the election shall be made in such manner as may be prescribed by the
Committee and the Committee shall have the right, in its discretion, to
disapprove such election; and
(ii) the election shall be made prior to the date to be used to determine
the tax to be withheld and shall be irrevocable.
The value of any share of Common Stock to be withheld by the Company or
delivered to the Company pursuant to this Section 8(f) shall be the Fair Market
Value of the Common Stock on the date to be used to determine the amount of tax
to be withheld.
The Company shall also have the right to deduct from all cash payments made
pursuant to or in connection with the Option any Federal, state or local taxes
required to be withheld with respect to such payments.
(g) Restrictions on Transfer. An Option may not be transferred, pledged,
assigned, or otherwise disposed of, except by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
in the Code or Title I of ERISA ("QDRO"). The Option shall be exercisable,
during the Non-Employee Director's lifetime, only by the Non-Employee Director
or by the person to whom the Option has been transferred pursuant to a QDRO. No
assignment or transfer of the Option, or of the rights represented thereby,
whether voluntary or involuntary, by operation of law or otherwise, except by
will or the laws of descent and distribution or pursuant to a QDRO, shall vest
in the assignee or transferee any interest or right in the Option, but
immediately upon any attempt to assign or transfer the Option the same shall
terminate and be of no force or effect.
(h) Non-qualified Status of Options. Options awarded under the Plan are not
intended to qualify, and shall not be treated, as an "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
<PAGE>
9. NOTICE OF AWARD
The terms and conditions of each award of Options shall be embodied in a
certificate which shall incorporate the Plan by reference. Each certificate
shall state the date on which the Options were granted, the number of shares
subject to such Option and the per share exercise price therefor.
10. NO RESTRICTION ON RIGHT OF COMPANY TO EFFECT CORPORATE CHANGES
(a) Authority of the Company and Stockholders. The existence of the Plan, any
award certificates and the Options granted hereunder shall not affect or
restrict in any way the right or power of the Company or the stockholders of
the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of stock or of
options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
(b) Change in Capitalization. Notwithstanding any provision of the Plan or
any award certificates, the number and kind of shares authorized for issuance
under Section 3(a) may be equitably adjusted in the sole discretion of the
Committee in the event of a stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, extraordinary dividend, split-up, spin-
off, combination, exchange of shares, warrants or rights offering to purchase
Common Stock at a price substantially below Fair Market Value or other similar
corporate event affecting the Common Stock in order to preserve, but not
increase, the benefits or potential benefits intended to be made available
under the Plan. In addition, upon the occurrence of any of the foregoing
events, the number of outstanding Options and the number and kind of shares
subject to any outstanding Option and the purchase price per share, if any,
under any outstanding Option may be equitably adjusted (including by payment of
cash to a Non-Employee Director) in the sole discretion of the Committee in
order to preserve the benefits or potential benefits intended to be made
available to Non-Employee Directors granted Options. Such adjustments shall be
made by the Committee, in its sole discretion, whose determination as to what
adjustments shall be made, and the extent thereof, shall be final. Unless
otherwise determined by the Committee, such adjusted Options shall be subject
to the same vesting schedule and restrictions to which the underlying Option is
subject.
11. EFFECTIVE DATE; TERM OF THE PLAN
Subject to approval by the majority of the shareholders of the Company at the
1998 Annual Meeting, the effective date of the Plan shall be January 1, 1998.
If the Plan is not approved by the stockholders at such Annual Meeting, the
Plan and all interests in the Plan awarded to Non-Employee Directors before the
date of such Annual Meeting shall be void ab initio and of no further force and
effect. Unless terminated earlier in accordance with Section 12 below, the Plan
shall terminate on the Annual Meeting of shareholders of the Company in 2003.
After such date, no further awards of Options may be made hereunder, but
previously granted awards shall remain outstanding subject to the terms hereof.
12. AMENDMENTS; TERMINATION
The Board may at any time and from time to time alter, amend, suspend or
terminate the Plan in whole or in part, provided, however, that in no event may
the provisions of the Plan respecting eligibility to participate or the timing
or amount of awards be amended more frequently than once every six months,
other than to comply with changes in the Code, ERISA or any rules or
regulations thereunder. Any amendment to the Plan, which under the requirements
of applicable law must be approved by the stockholders of the Company, shall
not be effective unless and until such stockholder approval has been obtained
in compliance with such law. Any amendment to the Plan that must be approved by
the stockholders of the Company in order to maintain the continued
qualification of the Plan under Rule 16b-3 under the Exchange Act, or any
<PAGE>
successor provision, shall not be effective unless and until such stockholder
approval has been obtained in compliance with such rule. No termination or
amendment of the Plan may, without the written consent of the Non-Employee
Director, affect any such person's rights under the provisions of the Plan with
respect to awards of Options which were made prior to such action.
13. NO RIGHT TO REELECTION
Nothing in the Plan shall be deemed to create any obligation on the part of
the Board to nominate any of its members for reelection by the Company's
stockholders, nor confer upon any Non-Employee Director the right to remain a
member of the Board for any period of time, or at any particular rate of
compensation.
14. GOVERNING LAW
The Plan and all award documents issued shall be construed in accordance with
and governed by the laws of the state of New York.
<PAGE>
EXHIBIT C
Proposed Amendment to the Certificate of Incorporation of Oneida Ltd. to
increase the Number of Shares of Common Stock.
The first paragraph of ARTICLE FOURTH will be amended to read as follows:
FOURTH. The said authorized Capital Stock of the Corporation shall consist of
forty-eight million (48,000,000) shares designated as Common Stock, with a par
value of $1 per share; ninety-five thousand six-hundred sixty (95,660) shares
designated as 6% Cumulative Preferred Stock, with a par value of $25 per share;
and one million shares designated as Series Preferred Stock, with a par value
of $1 per share. No holder of Common Stock shall have, as a matter of right as
such holder, any preemptive right to purchase any shares or other securities of
the Corporation.
<PAGE>
ONEIDA LTD.--ANNUAL MEETING MAY 27, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a holder of Common Stock of ONEIDA LTD., hereby appoints
WILLIAM D. MATTHEWS, WALTER A. STEWART, and DAVID E. HARDEN, as Proxies of the
undersigned with full power of substitution and revocation, to vote all shares
of the stock of Oneida Ltd. which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of Oneida Ltd. to be
held May 27, 1998, and at any adjournments thereof, hereby revoking any other
Proxy heretofore given. A majority of said Proxies or their substitutes as shall
be present and acting at the said meeting shall have and may exercise all the
powers of said Proxies hereunder. The said Proxies are instructed:
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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*FOLD AND DETACH HERE*
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
[ ]
1. ELECTION of the following nominees as directors For All
for the term indicated: W. Allyn, G. Harden and For Withheld Except
C. Suttmeier for a three-year term expiring [ ] [ ] [ ]
May 30, 2001 and J. P. Fobare for a one-year
term expiring May 26, 1999;
For Against Abstain
2. TO VOTE on the proposal to approve the 1998 [ ] [ ] [ ]
Stock Option Plan;
For Against Abstain
3. TO VOTE on the proposal to approve the 1998 [ ] [ ] [ ]
Non-Employee Directors Stock Option Plan;
4. TO VOTE on the proposal to amend the For Against Abstain
Certificate of Incorporation to increase [ ] [ ] [ ]
the number of shares of Common Stock;
5. TO Vote on the proposal to approve the For Against Abstain
appointment of Coopers & Lybrand as [ ] [ ] [ ]
independent auditors;
6. To act in their discretion on such other matters as may properly come before
said meeting or any adjournment thereof.
Shares will be voted as specified and
where no specification is made the vote
of the undersigned will be cast FOR the
election of directors and FOR the
proposals outlined in (2), (3), (4) and
(5).
Signature: Date:
------------ ---------
Signature: Date:
------------ ---------
NOTE: The signature should exactly IMPORTANT: Please sign, date, and return
correspond with the name or names in this Proxy promptly in the accompanying
which the stock is registered as envelope.
shown at the left. If jointly owned,
both signatures are required.
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*FOLD AND DETACH HERE*
