<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended January 30, 1999 Commission File Number 1-5452
ONEIDA LTD.
163-181 KENWOOD AVENUE
ONEIDA, NEW YORK 13421-2899
(315) 361-3636
NEW YORK 15-0405700
(State of Incorporation) (I.R.S. Employer Identification No.)
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange
Title of Class on which registered
Common Stock, par value $1.00 per share New York Stock Exchange
with attached Preferred Stock purchase rights
Securities registered pursuant to Section 12(g) of the Act:
6% Cumulative Preferred Stock, par value $25 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on a closing price of $21.3125 per share as reported on the New
York Stock Exchange Composite Index on April 16, 1999 was $342,509,585.
The number of shares of Common Stock ($1.00 par value) outstanding as of April
16, 1999, was 16,668,362.
Documents Incorporated by Reference
1. Portions of Oneida Ltd.'s Annual Report to Stockholders for the fiscal year
ended January 30, 1999 (Parts I and II of Form 10-K).
2. Portions of Oneida Ltd.'s Definitive Proxy Statement dated April 23, 1999
(Part III of Form 10-K).
Page 1 of 18. See list of Exhibits on pages 11-13.
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PART I
ITEM 1. BUSINESS.
a. General.
The Corporation (unless otherwise indicated by the context, the term
"Corporation" means Oneida Ltd. and its consolidated subsidiaries) was
incorporated in New York in 1880 under the name Oneida Community, Limited. In
1935, the Corporation's name was changed to Oneida Ltd. It maintains its
executive offices in Oneida, New York.
Since its inception, the Corporation has manufactured and marketed tableware -
initially sterling and later silverplated and stainless steel products. By
acquiring subsidiaries, entering into strategic distributorship arrangements and
expanding its own tableware lines, the Corporation has diversified into the
manufacture and import of commercial and retail china dinnerware and the
marketing of other tableware and gift items, most notably, crystal and glass
stemware, barware and giftware.
b. Industry Segments.
The Corporation's operations and assets are in one principal industry: tableware
products. The Corporation's principal industry segments are grouped around the
manufacture and distribution of three major product categories: metalware,
dinnerware and glassware. The Corporation also distributes a variety of other
tabletop accessories. Until early 1997, the Corporation operated in a second
principal industry, industrial wire products. On February 12, 1997, the
Corporation sold its Camden Wire subsidiary to International Wire Group, Inc.
of St. Louis, Missouri.
Information regarding the Corporation's operations by industry segment for the
years ended January 30, 1999, January 31, 1998 and January 25, 1997 is set forth
on pages 25 through 26 of the Corporation's Annual Report to Stockholders for
the year ended January 30, 1999, parts of which are incorporated herein by
reference.
c. Narrative Description of Business.
Principal Products.
Metalware:
Metalware is comprised of stainless steel, silverplated and sterling silver
flatware (forks, knives, spoons and serving pieces), stainless steel and
silverplated holloware (bowls, trays, and tea and coffee sets) and cutlery.
Consumer holloware is manufactured at the Corporation's facilities in Sherrill,
New York. The Corporation also imports consumer holloware products and almost
all of its foodservice holloware products from several international sources.
The majority of the Corporation's flatware is manufactured at the Corporation's
facilities in Sherrill, New York. In addition, the Corporation also utilizes
the facilities of Oneida Mexicana, S.A., located in Toluca, Mexico, to
manufacture flatware patterns which are not produced in Sherrill, New York.
Oneida Canada, Limited, a wholly-owned subsidiary located in Niagara Falls,
Ontario, had manufactured complementary flatware items in lines similar to those
produced in Sherrill, New York. On March 31, 1999, the Corporation announced
that Oneida Canada, Limited's manufacturing operations will be transferred to
the Corporation's facilities in Sherrill, New York and Toluca, Mexico. It is
anticipated that the transfers will be complete by mid-1999. The Corporation
also imports flatware and cutlery from several international sources.
Dinnerware:
Dinnerware includes domestic and imported china, porcelain and stoneware plates,
bowls, cups, mugs and a variety of serving pieces.
In late 1997, the Corporation entered the casual consumer dinnerware market. At
present, the Corporation offers 16 patterns of dinnerware grouped into 3
distinct lines ranging from elegant to basic restaurant style to mix and match.
The Restaurant Classics line is manufactured by the Corporation's Buffalo China,
Inc. subsidiary located in Buffalo, New York, while the Corporation imports its
other lines of consumer dinnerware from several international sources.
Buffalo China, Inc. is a leading manufacturer of vitreous china for the
foodservice industry. Buffalo China also operates a subsidiary located in
Juarez, Mexico. This subsidiary, Ceramica de Juarez, S.A., produces bisque
china which is finished in Buffalo, as well as finished, undecorated china
holloware items. THC Systems, Inc., another of the Corporation's wholly-owned
subsidiaries, is a leading importer and marketer of vitreous china and porcelain
dinnerware for the foodservice industry. THC does business under the Rego
tradename.
The Corporation is also the exclusive distributor of certain china dinnerware
products manufactured by Schowald and Noritake Co., Inc. for the United States
foodservice and institutional markets.
Glassware:
The Corporation's Glassware segment includes glass and crystal stemware,
barware, serveware, giftware and decorative pieces.
In September 1997, the Corporation began acting as the exclusive distributor of
Schott Zwiesel crystal products in the United States, Mexico and the Caribbean.
Schott Zwiesel is a German manufacturer of fine crystal stemware, barware and
decorative pieces. The Corporation markets Schott Zwiesel's crystal products
under both the Schott Zwiesel and Oneida names. In combination with this
exclusive distributorship, the Corporation purchased a 25.1% ownership interest
in Schott Zwiesel Glaswerke, AG, the German corporation responsible for the
production of Schott Zwiesel crystal tableware products.
In February 1999, the Corporation began acting as the exclusive Distributor of
the crystal products manufactured by Cristalleria Artistica La Piana, SpA, also
known as CALP, to the consumer and foodservice markets in the United States.
CALP is an Italian manufacturer of fine 24% lead crystal stemware, giftware and
decorative pieces. The Corporation will continue to market CALP's crystal
products under CALP's DA VINCI, PRIMA VERA and CRISTALLO trademarks, as well as
under the Oneida name.
In addition to the distribution of Schott and CALP crystal, the Corporation
significantly expanded its self-branded glassware lines in 1998 with the
introduction of Oneida glassware for both foodservice and consumer use. Oneida
glassware is supplied primarily by Pasabahce Cam Sanayii ve Ticaret A.S., a
Turkish glassware manufacturer.
The Corporation has and will continue to import other glass and crystal
stemware, barware, serveware, giftware and decorative pieces from several
international sources for sale under the Oneida name.
Other Tabletop Accessories:
The Corporation has recently begun to expand its product offerings beyond its
main metalware, dinnerware and glassware segments. These other products include
cookware, china and plastic serveware, kitchen, table and bath linens, picture
frames and decorative pieces distributed primarily by the Corporation's Encore
Promotions and Kenwood Silver subsidiaries.
The percentages of metalware, dinnerware, glassware and other tabletop
accessories sales to total consolidated sales for the fiscal years, which end in
January, are as follows:
1999 1998 1997
Metalware: 70% 77% 83%
Dinnerware: 20% 19% 13%
Glassware: 4% 3% 3%
Other Tabletop Accessories 6% 1% 1%
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Principal Markets.
Consumer:
Consumer marketing focuses on individual consumers, and the Corporation's wide-
ranging consumer marketing activities include both retail and direct operations.
The Corporation's retail accounts include national and regional department store
chains, mass merchandise and discount chains and stores, specialty shops,
catalog showrooms and small, local establishments. The Corporation's direct
accounts serve business customers in the premium, incentive, mail order and
direct selling markets. The Corporation also reaches consumers with its wholly-
owned Kenwood Silver Company, Inc. and Encore Promotions, Inc. subsidiaries,
both of which play a significant role in the marketing of the Corporation's
products. Kenwood Silver Company, Inc. operates a chain of 63 Oneida Factory
Stores in resort and destination shopping areas across the United States, while
Encore Promotions, Inc. runs supermarket redemption programs featuring a variety
of household items.
Most consumer orders are filled directly by the Corporation from its primary
distribution center located in Sherrill, New York. For some accounts, however,
orders are fulfilled by one of the Corporation's two other distribution centers
which are located in Ontario, California and Nashville, Tennessee.
Foodservice:
The Corporation serves foodservice and institutional accounts of all kinds,
including restaurants, hotels, resorts, convention centers, food distributors,
airlines, cruiselines, hospitals and educational institutions. While most
foodservice orders are filled directly by the Corporation from its primary
distribution center in Sherrill, New York, some orders are filled by the
Corporation's Buffalo China subsidiary from its Buffalo, New York facility or
one of the Corporation's other distribution centers which are located in
Ontario, California and Nashville, Tennessee. The Corporation also utilizes
third party warehouses located in Charlotte, North Carolina; Miami, Florida;
Fond du Lac, Wisconsin; and Toronto, Canada to service certain foodservice
customers.
International:
International activities span both the consumer and foodservice markets
described above, and include the marketing and sale of the Corporation's
domestically manufactured and internationally sourced products throughout the
world.
The Corporation owns 88% of Oneida International, Inc., a corporation formed to
market tabletop products of Italian design, some of which are manufactured in
Italy, while others are sourced internationally. Oneida International, Inc.
markets these products through its wholly-owned Italian subsidiary, Sant'Andrea
S.r.l., in the international foodservice market. Sant'Andrea, S.r.l.'s
subsidiary, Table Top Engineering & Design, S.r.l. ("TTE&D"), assists in the
development of various foodservice metalware products.
In June 1998, the Corporation acquired the assets of Badgin Nominees Pty. Ltd.
which operated two Australian-based businesses, Stanley Rogers & Son, a leading
importer and marketer of stainless steel and silverplated flatware to retail
customers in Australia and New Zealand, and Westminster China, a leading
importer and marketer of porcelain dinnerware to the foodservice, domestic
tourism and promotion industries in Australia and New Zealand. The Corporation
has consolidated the operations of these two business into a new wholly-owned
subsidiary, Oneida Australia, Pty. Ltd., with offices in Melbourne, Australia.
The acquisition of the assets of Badgin Nominees Pty. Ltd. was not material.
The Mexican and Central American markets are served by the Corporation's
subsidiary, Oneida Mexicana, S.A., while the markets in the United Kingdom are
served by Oneida U.K., a branch of the Corporation. In addition, the Corporation
also uses a network of independent distributors to market and sell the
Corporation's products in countries where the Corporation does not have offices
or employees of its own.
International orders for both foodservice and consumer products are filled by
the Corporation from a variety of locations, including the Corporation's United
States distribution centers in Sherrill, New York and Nashville, Tennessee, as
well as the Corporation's international facilities in Toluca, Mexico; Bangor,
Northern Ireland; and Vercelli, Italy. In addition, many orders are shipped
directly from the suppliers to the Corporation's international customers.
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Raw Materials.
The principal raw materials used by the Corporation in its manufacture of
metalware are stainless steel, brass, silver and gold. For china, they are
various clays, flint, aluminum oxide and glass frite. These materials are
purchased in the open market to meet current requirements and have historically
been available in adequate supply from multiple sources. The Corporation
experienced no significant or unusual problems in the purchase of raw materials
during fiscal 1999. Although the Corporation has successfully met its raw
materials requirements in the past, there may in the future be temporary
shortages or sharp increases in the prices of raw materials due to a number of
factors such as transportation disruptions or production or processing delays.
In particular, the price of stainless steel, the principal component of the
Corporation's metalware products, may rise in fiscal 2000 in response to
antidumping duties levied by the United States against foreign steel suppliers.
While it is impossible to predict the timing or impact of future shortages
and price increases, such shortages and increases have not in the past had any
material adverse effects on the Corporation's operations.
Intellectual Property.
The Corporation owns and maintains many design patents in the United States and
foreign countries. These patents, along with numerous copyrights, protect the
Corporation's product designs and decorations. In addition, the Corporation has
registered its most significant trademarks in the United States and many foreign
countries. The consumer, foodservice and international operations use a number
of trademarks and trade names which are advertised and promoted extensively
including ONEIDA, BUFFALO CHINA, COMMUNITY, DJ, HEIRLOOM, LTD, NORTHLAND, REGO,
THC, ROGERS and SANT'ANDREA. Taken as a whole, the Corporation's intellectual
property, especially the market recognition associated with the ONEIDA name, is
a material, although intangible, corporate asset.
Licenses.
The Corporation continues to explore opportunities to capitalize on the ONEIDA
name in new product categories. The Corporation maintains a license agreement
with Robinson Knife Manufacturing Co. whereby Robinson Knife manufactures and
markets two lines of specialty kitchen tools and accessories under the ONEIDA
name to mass market, department and specialty stores in the United States. In
1998, new license arrangements with Trendex, Inc., Aspen Marketing, Inc.,
International Masters Publishing, Inc. and Pour le Bebe, Inc. were added.
Trendex will manufacture and market a line of kitchen and table linens under the
ONEIDA name to mass market, department and specialty stores in the United
States and Canada. Sales of ONEIDA linens under the Trendex license are
expected to commence in the Fall of 1999. Aspen Marketing will import and
market various small gift items under the ONEIDA name for use as promotional
incentives primarily in the beauty industry in the United States. Sales of
ONEIDA gifts under the Aspen license are expected to commence in the Fall of
1999. International Masters will import and market porcelain dinnerware under
the ONEIDA name through mail order and direct response channels worldwide.
Sales of ONEIDA dinnerware under the International Masters license are expected
to commence in the Spring of 1999. Finally, the Pour le Bebe agreement allows
the Corporation to market a line of flatware, dinnerware and glassware under the
GUESS HOME COLLECTION name to department stores in the United States and Canada.
The Corporation plans to begin selling its GUESS HOME COLLECTION line in the
Summer of 1999. Neither the terms nor the effects of the Trendex, Aspen
Marketing, International Masters or Pour le Bebe license agreements are
material.
Seasonality of Business.
Although consumer operations normally do a greater volume of business during
October, November and December, primarily because of holiday-related orders for
metalware, dinnerware and glassware products, the total metalware, dinnerware
and glassware businesses are not considered seasonal.
Customer Dependence.
No material part of the Corporation's business is dependent upon a single
customer, the loss of which would have a materially adverse effect. Sufficient
inventories of metalware, dinnerware, glassware and other products are
maintained by the Corporation to respond promptly to orders.
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Backlog Orders.
Tableware operations had order backlogs of $15,500,000 as of April 14, 1999 and
$15,347,000 as of April 4, 1998. This backlog is expected to be filled during
the current fiscal year, principally in the first quarter. The amount of backlog
is reasonable for the tableware industry.
Market Conditions and Competition.
The Corporation is the only domestic manufacturer of a complete line of
stainless steel, silverplated and sterling flatware. The Corporation believes
that it is the largest producer of stainless steel and silverplated flatware in
the world. The recent additions of consumer dinnerware and a full crystal and
glass line make the Corporation a truly complete tableware supplier. The
Corporation faces competition from several domestic companies that market both
imported and domestically manufactured lines and from hundreds of importers
engaged exclusively in marketing foreign-made tableware products. In recent
years there is also competition from department and specialty stores and
foodservice establishments that import foreign-made tableware products under
their own private labels for their sale or use. The Corporation strives to
maintain its market position through product and design innovation and
diversity.
The metalware, dinnerware and glassware businesses are each highly competitive.
The principal factors affecting domestic consumer competition are design, price
and quality. Other factors that have an effect on consumer competition are
availability of replacement pieces and product warranties. In the opinion of the
Corporation, no one factor is dominant, and the significance of the different
competitive factors varies from customer to customer.
The principal factors affecting domestic foodservice competition are price,
service and quality. The Corporation's foodservice products and service are
highly regarded in this industry, and it is one of the largest sources of
commercial china dinnerware and stainless steel and silverplated tableware in
the United States.
The principal factor affecting international competition is brand recognition.
Other factors affecting the Corporation's participation in the international
market include competition with local suppliers and high import duties, both of
which increase the Corporation's costs relative to local producers.
Research and Development.
The Corporation places a considerable emphasis on excellence in development and
design. To achieve this end the Corporation maintains full time in-house design
and engineering departments which continuously develop, test and improve
products and manufacturing methods. During 1998, the Corporation significantly
expanded its in-house design department from 9 designers to 12. Independent
designers and collaborative efforts with other companies contribute to the
Corporation's emphasis on development and design. The Corporation's actual
expenditures on research and development activities during the past three fiscal
years, however, have not been material.
Environmental Compliance.
The Corporation does not anticipate that compliance with federal, state and
local environmental laws and regulations will have any material effect upon the
capital expenditures, earnings or competitive position of the Corporation. The
Corporation does not anticipate any material capital expenditures for
environmental control facilities for the remainder of the current fiscal year
or the succeeding fiscal year.
Employment.
The Corporation and its subsidiaries employed approximately 3,640 employees in
domestic operations and 1,370 employees in foreign operations as of March 1,
1999. The Corporation maintains positive relations with its domestic and
foreign employees. With the exception of its Buffalo China, Inc. subsidiary,
the Corporation's facilities are not unionized. The employees of Buffalo China
Inc.'s manufacturing facility in Buffalo, New York are represented by the Glass,
Molders, Pottery, Plastics & Allied Workers International Union AFL-CIO, CLC and
its local union No. 76A. The current collective bargaining agreement between
Buffalo China, Inc. and the Glass, Molders, Pottery, Plastics & Allied Workers
International Union AFL-CIO, CLC and its local union No. 76A expires on July 31,
2003. The Corporation has experienced no work stoppages or strikes in the past
five years.
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On January 4, 1999, the Corporation announced a restructuring program that
included a voluntary early retirement program for the Corporation's Silversmiths
Division as well as the elimination of approximately 60 positions throughout the
Corporation's Silversmiths Division and Kenwood Silver Company, Inc. subsidiary.
On March 31, 1999 this restructuring program was expanded to include the
elimination of approximately 200 additional positions worldwide, including 150
positions at the Corporation's Oneida Canada, Limited subsidiary by September
1999.
Year 2000.
Year 2000 issues relate to the ability of computer systems to distinguish data
which contains dates beyond December 31, 1999. The Corporation has created and
is in the process of implementing a comprehensive Year 2000 compliance plan. The
Corporation holds regular compliance meetings to receive information and input
from all of the Corporation's main operating areas.
As part of its compliance plan the Corporation has reviewed all of its software
and information processing systems and identified date sensitive functions. The
Corporation began testing those systems for Year 2000 compliance in January
1999. Testing is expected to be complete by mid-summer 1999. Any systems found
to be noncompliant will be modified to ensure that they operate properly prior
to the Year 2000. The Corporation's main accounting, logistics, warehouse
management and payroll systems have been Year 2000 compliant since their
installations over the past several years. The Corporation's other major
computer systems have been Year 2000 compliant since December 1998, having been
modified, upgraded or replaced during the past year. Finally, the Corporation's
more minor computer systems will be Year 2000 compliant by July 1999.
To date, the Corporation has identified and contacted its major customers,
suppliers, service providers and business partners. Each of these entities
received a letter informing them of the Corporation's plans and state of
readiness and asking that they in turn share their own Year 2000 plans by
returning a questionnaire to the Corporation. In addition to its compliance
plan, the Corporation will develop a contingency plan based upon the outcomes of
the systems tests that will be conducted during the first quarter of 1999.
The Corporation believes it is devoting appropriate resources to resolve its
Year 2000 issues in a timely manner and believes that its compliance program
will result in all internal systems being prepared for Year 2000 processing.
The compliance plan is proceeding on schedule and to date no unforeseen
difficulties have arisen. Based upon the work performed to date, the
Corporation presently believes that the likelihood of the Year 2000 having a
material result on its operations, liquidity or financial position is remote.
The Corporation estimates that its direct Year 2000 compliance costs will not
exceed $500,000, of which to date approximately $300,000 has been incurred and
expensed.
Notwithstanding the foregoing, the Corporation could be adversely affected if
its customers, suppliers, service providers, business partners and/or
governmental agencies continue to utilize systems that are not Year 2000
compliant. This could affect, among other things, the Corporation's ability to
purchase raw materials, receive orders for and ship its products and transact
business with is financial institutions, which could constitute a material and
immeasurable financial risk to the Corporation.
Forward Looking Information.
With the exception of historical data, the information contained in this Form
10-K, as well as those other documents incorporated by reference herein, is
forward-looking. For the purposes of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, the Corporation cautions readers that
changes in certain factors could affect the Corporation's future results and
could cause the Corporation's future consolidated results to differ materially
from those expressed herein. Such factors include, but are not limited to:
general economic conditions in the Corporation's markets; difficulties or delays
in the development, production and marketing of new products; the impact of
competitive products and pricing; certain assumptions related to consumer
purchasing patterns; significant increases in interest rates or the level of the
Corporation's indebtedness; major slowdowns in the retail, travel or
entertainment industries; the loss of several of the Corporation's major
consumer and/or foodservice customers; underutilization of the Corporation's
plants and factories; the amount and rate of growth of the Corporation's
selling, general and administrative expenses; and the inability of the
Corporation or its customers, suppliers, service providers or business partners,
as well as governmental agencies, to resolve Year 2000 issues in a timely
manner.
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ITEM 2. PROPERTIES.
The principal properties of the Corporation and its subsidiaries are situated at
the following locations and have the following characteristics:
Approximate Square Footage
Ontario, California Warehouse 206,240
Buffalo, New York Manufacturing China 257,000
Buffalo, New York Office, Warehouse and China
Decorating Facility 203,000
Buffalo, New York Office and Warehouse 82,000
Oneida, New York Executive Administrative Offices 95,000
Sherrill, New York Manufacturing Stainless Steel,
Silverplated and Sterling
Flatware and Holloware 1,082,000
Sherrill, New York Manufacturing Knives 135,000
Nashville, Tennessee Warehouse 157,930
Melbourne, Australia Office, Warehouse and China
Decorating and Silver Plating
Facility 60,000
Niagara Falls, Ontario, Manufacturing Stainless Steel and
Canada, Silverplated Flatware 120,000
Niagara Falls, Ontario,
Canada, Warehouse 28,475
Bangor, N. Ireland Office and Warehouse 32,000
Vercelli, Italy Office, Warehouse and Manufacturing
Stainless Steel Holloware 84,000
Juarez, Mexico Manufacturing Bisque China 65,000
Toluca, Mexico Manufacturing Stainless Steel
Flatware 75,000
All of these buildings are owned by the Corporation with the following
exceptions:
The Buffalo, New York manufacturing property is subject to a mortgage in the
principal amount of approximately $531,000 covering both real property and
equipment to secure a like amount of Industrial Revenue Bonds. Pursuant to the
terms of a Lease Agreement dated February 1, 1980, the real property is leased
by Buffalo China from the Erie County Industrial Development Agency for a term
of twenty years, upon the expiration of which the property will be conveyed back
to Buffalo China.
The offices and warehouses in Ontario, California; Nashville, Tennessee;
Melbourne, Australia; Niagara Falls, Canada; and Bangor, Northern Ireland are
leased.
In addition to the land primarily associated with its manufacturing operations,
the Corporation owns approximately 500 additional acres in the cities of
Sherrill and Oneida and the town of Vernon, New York.
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The Corporation leases sales offices and/or showrooms in New York City;
Melville, New York; Dallas; Atlanta; Miami; London, England; Vercelli, Italy;
and Sydney, Australia. The Corporation and its subsidiaries lease warehouse
space in various locations throughout the United States. The Corporation also
leases retail outlet space through its wholly-owned subsidiary, Kenwood Silver
Company, Inc., in various locations throughout the United States.
In March 1998, the Corporation's Buffalo China subsidiary began construction of
a $10 million, 203,000 square foot expansion adjacent to Buffalo China's
existing manufacturing facility. The expansion includes a 173,000 square foot
warehouse to headquarter the Corporation's foodservice dinnerware distribution
operations and a 30,000 square foot decorating center for custom and small-
order dinnerware patterns. The expansion is now fully operational.
In the Spring of 1999, the Corporation expects to begin construction of a $10
million, 206,000 square foot expansion on a site next to the Corporation's main
manufacturing facility in Sherrill, New York. The expansion will include the
Corporation's various distribution operations, warehousing and related office
space. The expansion is expected to be fully operational by February 2000.
All of the Corporation's buildings are located on sufficient property to
accommodate any further expansion or development planned over the next five
years. The properties are served adequately by transportation facilities, are
well maintained and are adequate for the purposes for which they are intended
and used.
ITEM 3. LEGAL PROCEEDINGS.
On December 8, 1998, the Oneida Indian Nation of New York, the Oneida Tribe of
Indians of Wisconsin and the Oneida of the Thames, as Plaintiffs, along with The
United States of America, as Intervenor, moved to amend their Complaint filed on
May 3, 1974 in the United States District Court for the Northern District of New
York against the Counties of Oneida and Madison, New York. The Amended
Complaint seeks to add the State of New York, New York State Thruway Authority,
Utica-Rome Motorsports, Inc., Niagara Mohawk Power Corporation and the Oneida
Valley National Bank, individually and as representatives of the class of
similarly situated private landowners in Madison and Oneida Counties. The
Complaint alleges that during the nineteenth century the Oneidas' lands were
improperly transferred. The Oneidas seek title to the property as well as
monetary damages. The Corporation's headquarters and main manufacturing and
distribution facilities are located within this land claim area. The
Corporation filed a motion to intervene with the United States District Court
for the Northern District of New York on February 26, 1999. The Judge's decision
on whether private landowners will be added as Defendants is expected in the
Spring of 1999.
In addition to the foregoing, the Corporation is involved in various routine
legal proceedings incidental to the operation of its business. Other than as
discussed herein, the Corporation's Management does not believe there is any
ongoing or pending litigation with a possible material effect on the financial
position of the Corporation.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF STOCKHOLDERS.
None.
PART II
Information required to be furnished under Items 5 through 9 of this Part is set
forth in, and incorporated by reference to, the Corporation's Annual Report to
Stockholders for the year ended January 30, 1999, at the respective pages
indicated.
ITEM 5. MARKET FOR THE CORPORATION'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS.
Page 30 of the Corporation's Annual Report.
ITEM 6. SELECTED FINANCIAL DATA.
Page 31 of the Corporation's Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Pages 28 through 30 of the Corporation's Annual Report.
ITEM 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.
Pages 13 through 31 of the Corporation's Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 13 through 31 of the Corporation's Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Information required to be furnished under Items 10 through 13 of this Part is
set forth in, and incorporated by reference to, the Corporation's definitive
Proxy Statement dated April 23, 1999 (File 1-5452), at the respective pages
indicated.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Pages 2 through 4 of the Corporation's definitive Proxy Statement.
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Executive Officers of the Registrant
As of March 26, 1999, the persons named below are the executive officers of the
Corporation and all have been elected to serve in the capacities indicated at
the pleasure of the Oneida Ltd. Board of Directors. No family relationships
exist among any of the executive officers named, nor is there any arrangement or
understanding pursuant to which any person was selected as an officer.
Name, Age and Positions Principal Business Affiliations
with Corporation During Past Five Years
Thomas A. Fetzner, 51 Mr. Fetzner has been Vice President
Vice President and and Corporate Controller for more than
Corporate Controller the past five years.
J. Peter Fobare, 49 Mr. Fobare has been Senior Vice President
Senior Vice President and General Manager of the Consumer
and General Manager Consumer Retail Division for more than the past
Retail Division and a five years. In April 1999, Mr. Fobare
Director assumed responsibility for the Consumer
Direct Division.
Peter J. Kallet, 52 Mr. Kallet was elected Chief Executive
President and Chief Officer in December 1998. Mr. Kallet had
Executive Officer and a been President and Chief Operating
Director Officer since January 1996. Prior to
1996, Mr. Kallet had been Senior Vice
President and General Manager of the
Oneida Foodservice Division.
William D. Matthews, 64 Mr. Matthews has been Chairman of the
Chairman of the Board Board for more than the past five years.
Catherine H. Suttmeier, 42 Ms. Suttmeier has been Vice President,
Vice President, Secretary Secretary and General Counsel for more
and General Counsel and a than the past five years.
Director
Edward W. Thoma, 53 Mr. Thoma has been Senior Vice President,
Senior Vice President, Finance for more than the past five
Finance years.
ITEM 11. EXECUTIVE COMPENSATION.
Pages 7 through 13 of the Corporation's definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Pages 1 and 5 of the Corporation's definitive Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Pages 1 through 5 of the Corporation's definitive Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. Financial statements incorporated by reference from the
Corporation's 1999 Annual Report to Stockholders and filed as
part of this Report:
Consolidated Statements of Operations for the fiscal years
ended 1999, 1998 and 1997 (page 13 of the Corporation's
Annual Report).
Consolidated Balance Sheets for the fiscal years ended
1999 and 1998 (pages 14 and 15 of the Corporation's Annual
Report).
Consolidated Statements of Changes in Stockholders' Equity
for the fiscal years ended 1999, 1998 and 1997 (page 16 of
the Corporation's Annual Report).
Consolidated Statements of Cash Flows for the fiscal years
ended 1999, 1998 and 1997 (page 17 of the Corporation's
Annual
Report).
Notes to Consolidated Financial Statements (pages 18 through
26 of the Corporation's Annual Report).
Independent Auditor's Report (page 27 of the Corporation's
Annual Report).
2. Financial Statement Schedule:
Schedule II, Valuation and Qualifying Accounts, for fiscal
years ended 1999, 1998 and 1997 (page 17 of this Report).
Independent Auditor's Report on Financial Statement Schedules
(page 16 of this Report).
All other schedules have been omitted because of the absence of conditions under
which they are required or because the required information is included in the
financial statements submitted.
3. Exhibits:
(3) The Corporation's Restated Certificate of
Incorporation, as amended, and By-Laws.
(4)(a) Note Agreement dated January 1, 1992, between
Oneida Ltd., Allstate Life Insurance and Pacific Mutual Life Insurance Company,
which is incorporated by reference to the Registrant's Annual Report on Form 10-
K for the year ended January 25, 1997.
Revolving Credit Agreement dated January 19, 1996
between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A., which is incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 27, 1996.
Amendment No. 1 to the January 19, 1996 Revolving
Credit Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical
Bank and NationsBank, N.A., which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 25, 1997.
Amendment No. 1 is dated September 25, 1996, and was executed by Oneida Ltd.,
The Chase Manhattan Bank (successor to The Chase Manhattan Bank, N.A. and
Chemical Bank), NationsBank, N.A. and Marine Midland Bank.
Amendment No. 2 to the January 19, 1996 Revolving
Credit Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical
Bank and NationsBank, N.A., which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 25, 1997.
Amendment No. 2 is dated November 1, 1996, and was executed by Oneida Ltd., The
Chase Manhattan Bank (successor to The Chase Manhattan Bank, N.A. and Chemical
Bank), NationsBank, N.A. and Marine Midland Bank.
Note Agreement dated November 15, 1996, between
Oneida Ltd., THC Systems, Inc., Allstate Life Insurance Company and Pacific
Mutual Life Insurance Company, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 25, 1997.
First Amendment to the January 1, 1992 Note Agreement
between Oneida Ltd., Allstate Life Insurance and Pacific Mutual Life Insurance
Company, which is incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended January 25, 1997. The First Amendment to Note
Agreement is dated November 26, 1996, and was executed by Oneida Ltd., Allstate
Life Insurance and Pacific Mutual Life Insurance Company.
Consent and Amendment No. 3 to the January 19,
1996 Revolving Credit Agreement between Oneida Ltd., The Chase Manhattan Bank,
N.A., Chemical Bank and NationsBank, N.A, which is incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended January 25, 1997.
The Consent and Amendment No.3 is dated January 24, 1997, and was executed by
Oneida Ltd., The Chase Manhattan Bank (successor to The Chase Manhattan Bank,
N.A. and Chemical Bank), NationsBank, N.A. and Marine Midland Bank.
Waiver and Amendment No. 4 to the January 19, 1996
Revolving Credit Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A.,
Chemical Bank and NationsBank, N.A. The Waiver and Amendment No.4 is dated
September 14, 1998, and was executed by Oneida Ltd., The Chase Manhattan Bank
(successor to The Chase Manhattan Bank, N.A. and Chemical Bank), NationsBank,
N.A. and Marine Midland Bank.
Waiver to the January 19, 1996 Revolving Credit
Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A. The Waiver is dated December 10, 1998, and was executed by
The Chase Manhattan Bank (successor to The Chase Manhattan Bank, N.A. and
Chemical Bank), NationsBank, N.A. and Marine Midland Bank.
Amendment No. 5 to the January 19, 1996 Revolving
Credit Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical
Bank and NationsBank, N.A. Amendment No.5 is dated February 19, 1999, and was
executed by Oneida Ltd., The Chase Manhattan Bank (successor to The Chase
Manhattan Bank, N.A. and Chemical Bank), NationsBank, N.A. and Marine Midland
Bank.
(b) Shareholder Rights Agreement dated December 13, 1989,
which is incorporated by reference to the Registrant's Annual Report on Form 10-
K for the year ended January 28, 1995. Assignment and Assumption Agreement
dated November 1, 1991, which is incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 28, 1995.
(10)(a) Employment Agreements with two executive employees of
the Corporation dated July 26, l989, which are incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 28, 1995.
Employment Agreement with one executive employee of the Corporation dated March
29, l995, which is incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 27, 1996. Employment agreements with
two executive employees of the Corporation dated February 28, 1996, which are
incorporated by reference to the Registrant's Annual Report on Form 10-K for the
year ended January 25, 1997. Employment Agreements with four executive
employees of the Corporation dated February 25, l998, which are incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 31, 1998.
(b) Oneida Ltd. Management Incentive Plan adopted by
the Board of Directors on February 24, 1988, as amended, which provides for the
payment of bonus awards to certain executive and management employees.
(c) Oneida Ltd. 1998 Stock Option Plan adopted by the
Board of Directors and approved by stockholders on May 27, 1998.
(d) Oneida Ltd. 1998 Non-Employee Director Stock Option
Plan adopted by the Board of Directors and approved by stockholders on May 27,
1998.
(e) Oneida Ltd. Employee Security Plan adopted by the
Board of Directors on July 26, 1989, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 28, 1995.
(f) Oneida Ltd. Restricted Stock Award Plan adopted by the
Board of Directors on November 29, 1989 and approved by stockholders on May 30,
1990, which is incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended January 27, 1996.
(g) Oneida Ltd. Deferred Compensation Plan for Key
Employees adopted by the Board of Directors on October 27, 1993 and restated
effective August 1, 1997.
(13) Portions of the Oneida Ltd. Annual Report to
Stockholders for the fiscal year ended January 30, 1999, which have been
incorporated by reference in this Form 10-K.
(22) Subsidiaries of the Registrant.
(b) During the quarter ended January 30, 1999 no Reports on Form 8-K were
filed by the Registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ONEIDA LTD.
By: /s/ PETER J. KALLET
Peter J. Kallet
President and Chief
Executive Officer
March 31, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
Principal Executive Officer
/s/ PETER J. KALLET President and Chief Executive March 31, 1999
Peter J. Kallet Officer
Principal Financial Officer
/S/ EDWARD W. THOMA Senior Vice President, Finance March 31, 1999
Edward W. Thoma
Principal Accounting Officer
/s/ THOMAS A. FETZNER Vice President and Corporate March 31, 199
Thomas A. Fetzner Controller
The Board of Directors
/s/ WILLIAM F. ALLYN Director March 31, 1999
William F. Allyn
/s/ R. QUINTUS ANDERSON Director March 31, 199
R. Quintus Anderson
/s/ GEORGIA S. DERRICO Director March 31, 1999
Georgia S. Derrico
/s/ J. PETER FOBARE Director March 31, 1999
J. Peter Fobare
/s/ GREGORY M. HARDEN Director March 31, 1999
Gregory M. Harden
/s/ PETER J. KALLET Director March 31, 1999
Peter J. Kallet
/s/ WILLIAM D. MATTHEWS Director March 31, 1999
William D. Matthews
/s/ WHITNEY D. PIDOT Director March 31, 1999
Whitney D. Pidot
/s/ RAYMOND T. SCHULER Director March 31, 1999
Raymond T. Schuler
/s/ CATHERINE H. SUTTMEIER Director March 31, 1999
Catherine H. Suttmeier
/s/ WILLIAM M. TUCK Director March 31, 1999
William M. Tuck
<PAGE>
INDEPENDENT AUDITOR'S REPORT
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of Oneida Ltd.
Our report on the consolidated financial statements of Oneida Ltd. has been
incorporated by reference in this Form 10-K from page 27 of the 1999 Annual
Report to Stockholders of Oneida Ltd. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule contained on page 17 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included herein.
PRICEWATERHOUSECOOPERS
/s/ PricewaterhouseCoopers LLP
Syracuse, New York
February 24, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Oneida Ltd. on Form S-8 (File Nos. 2-84304, 33-49462, 333-10795 and
333-66425) and Form S-3 (File No. 33-64608) our report dated February 24, 1999
on our audits of the consolidated financial statements and financial statement
schedules of Oneida Ltd. as of January 30, 1999 and January 31, 1998, and for
each of the three years in the period ended January 30, 1999 which reports are
either included or incorporated by reference in this Annual Report on Form 10-K.
PRICEWATERHOUSECOOPERS
/s/ PricewaterhouseCoopers LLP
Syracuse, New York
April 30, 1999
<PAGE>
SCHEDULE II
<TABLE>
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 1999, 1998 AND 1997
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance Charged Balance
at to at
Beginning Cost and End of
Description of Expenses Deduction Period
Period
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 30, 1999:
Reserves deducted from
assets to which they apply:
Doubtful accounts
receivable.......... $1,896 $1,238 $1,614<F1> $1,520
Inventory reserves.. $ 0 $1,466 $1,466
Other reserves:
Rebate program...... $ 365 $1,935 $2,300<F2> $ 0
YEAR ENDED JANUARY 31, 1998:
Reserves deducted from
assets to which they apply:
Doubtful accounts
receivable.......... $1,797 $1,751 $1,652<F1> $1,896
Other reserves:
Rebate program...... $ 358 $2,472 $2,465<F2> $ 365
YEAR ENDED JANUARY 25, 1997:
Reserves deducted from
assets to which they apply:
Doubtful accounts
receivable.......... $1,398 $1,087 $ 688<F1> $1,797
Other reserves:
Rebate program...... $ 434 $1,641 $1,717<F2> $ 358
<FN>
<F1> Adjustments and doubtful accounts written off.
<F2> Payments under rebate program.
</FN>
</TABLE>
<PAGE>
Index to Exhibits
Exhibits:
(3) The Corporation's Restated Certificate of Incorporation, as amended,
and By-Laws.
(4)(a) Note Agreement dated January 1, 1992, between Oneida Ltd., Allstate
Life Insurance and Pacific Mutual Life Insurance Company, which is incorporated
by reference to the Registrant's Annual Report on Form 10-K for the year ended
January 25, 1997.
Revolving Credit Agreement dated January 19, 1996 between Oneida
Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and NationsBank, N.A., which
is incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended January 27, 1996.
Amendment No. 1 to the January 19, 1996 Revolving Credit Agreement
between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A., which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 25, 1997. Amendment No. 1 is
dated September 25, 1996, and was executed by Oneida Ltd., The Chase Manhattan
Bank (successor to The Chase Manhattan Bank, N.A. and Chemical Bank),
NationsBank, N.A. and Marine Midland Bank.
Amendment No. 2 to the January 19, 1996 Revolving Credit Agreement
between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A., which is incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 25, 1997. Amendment No. 2
is dated November 1, 1996, and was executed by Oneida Ltd., The Chase Manhattan
Bank (successor to The Chase Manhattan Bank, N.A. and Chemical Bank),
NationsBank, N.A. and Marine Midland Bank.
Note Agreement dated November 15, 1996, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company and Pacific Mutual Life Insurance
Company, which is incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended January 25, 1997.
First Amendment to the January 1, 1992 Note Agreement between Oneida
Ltd., Allstate Life Insurance and Pacific Mutual Life Insurance Company, which
is incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended January 25, 1997. The First Amendment to Note Agreement is dated
November 26, 1996, and was executed by Oneida Ltd., Allstate Life Insurance and
Pacific Mutual Life Insurance Company.
Consent and Amendment No. 3 to the January 19, 1996 Revolving Credit
Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A, which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 25, 1997. The Consent and
Amendment No.3 is dated January 24, 1997, and was executed by Oneida Ltd., The
Chase Manhattan Bank (successor to The Chase Manhattan Bank, N.A. and Chemical
Bank), NationsBank, N.A. and Marine Midland Bank.
Waiver and Amendment No. 4 to the January 19, 1996 Revolving Credit
Agreement between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A. The Waiver and Amendment No.4 is dated September 14, 1998,
and was executed by Oneida Ltd., The Chase Manhattan Bank (successor to The
Chase Manhattan Bank, N.A. and Chemical Bank), NationsBank, N.A. and Marine
Midland Bank.
Waiver to the January 19, 1996 Revolving Credit Agreement between
Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and NationsBank, N.A.
The Waiver is dated December 10, 1998, and was executed by The Chase Manhattan
Bank (successor to The Chase Manhattan Bank, N.A. and Chemical Bank),
NationsBank, N.A. and Marine Midland Bank.
Amendment No. 5 to the January 19, 1996 Revolving Credit Agreement
between Oneida Ltd., The Chase Manhattan Bank, N.A., Chemical Bank and
NationsBank, N.A. Amendment No.5 is dated February 19, 1999, and was executed by
Oneida Ltd., The Chase Manhattan Bank (successor to The Chase Manhattan Bank,
N.A. and Chemical Bank), NationsBank, N.A. and Marine Midland Bank.
(b) Shareholder Rights Agreement dated December 13, 1989, which is
incorporated by reference to the Registrant's Annual Report on Form 10-K for the
year ended January 28, 1995. Assignment and Assumption Agreement dated November
1, 1991, which is incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended January 28, 1995.
<PAGE>
(10)(a) Employment Agreements with two executive employees of the Corporation
dated July 26, l989, which are incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 28, 1995. Employment
Agreement with one executive employee of the Corporation dated March 29, l995,
which is incorporated by reference to the Registrant's Annual Report on Form 10-
K for the year ended January 27, 1996. Employment agreements with two executive
employees of the Corporation dated February 28, 1996, which are incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 25, 1997. Employment Agreements with four executive employees of the
Corporation dated February 25, l998, which are incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 31, 1998.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board of
Directors on February 24, 1988, as amended, which provides for the payment of
bonus awards to certain executive and management employees.
(c) Oneida Ltd. 1998 Stock Option Plan adopted by the Board of Directors
and approved by stockholders on May 27, 1998.
(d) Oneida Ltd. 1998 Non-Employee Director Stock Option Plan adopted by
the Board of Directors and approved by stockholders on May 27, 1998.
(e) Oneida Ltd. Employee Security Plan adopted by the Board of Directors
on July 26, 1989, which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 28, 1995.
(f) Oneida Ltd. Restricted Stock Award Plan adopted by the Board of
Directors on November 29, 1989 and approved by stockholders on May 30, 1990,
which is incorporated by reference to the Registrant's Annual Report on Form 10-
K for the year ended January 27, 1996.
(g) Oneida Ltd. Deferred Compensation Plan for Key Employees adopted by
the Board of Directors on October 27, 1993 and restated effective August 1,
1997.
(13) Portions of the Oneida Ltd. Annual Report to Stockholders for the
fiscal year ended January 30, 1999, which have been incorporated by reference in
this Form 10-K.
(22) Subsidiaries of the Registrant.
<PAGE>
EXHIBIT 3
RESTATED CERTIFICATE OF INCORPORATION
OF
ONEIDA LTD.
Under Section 807 of the
Business Corporation Law
We, the undersigned, WILLIAM D. MATTHEWS and CATHERINE H. SUTTMEIER, being
respectively, the President and Secretary of ONEIDA LTD., in accordance with
Section 807 of the Business Corporation Law, do hereby certify that:
I. The name of the Corporation is ONEIDA LTD., the name under which it was
formed was Oneida Community, Limited.
II. The Certificate of Incorporation was filed in the office of the
Secretary of State of the State of New York on November 20, 1880.
III. The text of the Certificate of Incorporation as amended theretofore is
hereby restated without further amendment or change to read as herein set forth
in full:
FIRST:
The name of said Corporation is to be ONEIDA LTD.
SECOND:
The purposes for which the Corporation is to be formed are:
To purchase, manufacture, produce, construct, assemble, receive, lease or
otherwise acquire, and to manage, hold, own, use, operate, install, maintain,
service, repair, process, alter, improve, import, export, convey, sell, lease,
assign, transfer, mortgage, pledge, or trade and deal in and with, raw
materials, natural or manufactured articles or products, machinery, equipment,
devices, systems, parts, supplies, apparatus and personal property of every
kind, nature and description, tangible or intangible, used or capable of being
used for any purpose whatsoever, including, but not limited to, metals,
metalware, metal products and products which metal may be used, and to engage
and participate in any mercantile, manufacturing or trading business of any kind
or character.
To carry on the business of farming and horticulture and, without limiting
the generality of the foregoing, to purchase, product, grow, cultivate, harvest,
pick, receive or otherwise acquire, and to preserve, process, assort, box, pack,
store, alter, improve, import, export, convey, mortgage, pledge, sell, trade or
deal in and with each and every kind of farm, dairy, fruit, vegetable, grain,
livestock, poultry, seed and garden product, whether at wholesale or retail, and
to carry on all other businesses incident thereto.
To purchase, construct, receive, lease or otherwise acquire, and to manage,
hold, own, use, operate, maintain, service, repair, alter, improve, convey,
sell, lease, assign, transfer, mortgage, or otherwise trade and deal in and
with, lands, buildings and real property of every kind, nature and description,
or any interest therein, either legal or equitable.
To adopt, apply for, obtain, register, purchase, produce, assemble, receive,
lease or otherwise acquire, and to manage, hold, own, use, maintain, alter,
improve, protect, exercise, develop, manufacture under, operate and introduce,
and to sell, lease, assign, transfer, pledge, grant licenses or other rights
in respect of, or otherwise dispose of, turn to account, or in any manner deal
in and with and contract with reference to, any trademarks, trade names,
patents, patent rights, concessions, franchises, designs, copyrights and
distinctive marks and rights analogous thereto, and inventions, devices,
improvements, processes, recipes, formulae and the like, including, but without
limitation, such thereof as may be covered by, used in connection with, or
secured under, letters patent or otherwise, whether of the United States of
America or of any other government or country; and any licenses in respect
thereof and any or all rights connected therewith or appertaining thereto.
To acquire by purchase, exchange or otherwise, all, or any part of, or any
interest in, the properties, assets, business, good will and rights of any
corporation, association, partnership, firm, syndicate or individual to the
extent permitted by the Business Corporation Law of New York, and to pay for the
same in cash, property, or the shares, bonds, debentures, warrants, right,
scrip, notes, evidences of indebtedness, or other securities or obligations of
any kind of the Corporation or any other corporation, association, partnership,
firm, syndicate or individual; to hold, conduct, operate, reorganize, liquidate,
dissolve, mortgage, pledge, sell, exchange, or otherwise dispose of, the whole
or any part of the properties, assets, business, good will and rights so
acquired; and, in connection therewith, to assume or guarantee performance of
any liabilities, obligations or contracts or any corporation, association,
partnership, firm, syndicate or individual.
To acquire or become interested in, whether by subscription, purchase,
underwriting, loan, participation in syndicates or otherwise, and to own, hold,
sell, assign, transfer, or otherwise dispose of, and to trade and deal in or
with, shares, bonds, debentures, warrants, rights, scrip, notes, evidences of
indebtedness, or other securities or obligations of any kind by whomsoever
issued; to possess and exercise in respect thereof all the rights, powers and
privileges of ownership or interest therein, including, but without limitation,
the right to vote thereon for any and all purposes, to consent, or otherwise act
with respect thereto; and to issue in payment for exchange therefor the
Corporation's shares, bonds, debentures, warrants, rights, scrip, notes,
evidences of indebtedness, or other securities or obligations of any kind.
To borrow or raise moneys for any of the purposes of the Corporation and,
from time to time, without limit as to amount, to draw, make accept, endorse,
execute, issue, and deliver promissory notes, drafts, bills of exchange, bonds,
debentures, and other negotiable or non-negotiable instruments and evidences of
indebtedness, and to secure the payment of any thereof and of the interest
thereon by deed or trust, mortgage or pledge, of or upon the whole or any part
of the property of the Corporation, real or personal, whether at the time owned
or thereafter acquired, and to sell, pledge or otherwise dispose of such
promissory notes, drafts, bills of exchange, bonds, debentures, or other
negotiable or non-negotiable instruments and evidences of indebtedness of the
Corporation for its corporate purposes.
To lend any of its funds from time to time, to such extent, on such terms
and on such security, if any, as the Board of Directors of the Corporation may
determine.
To purchase or otherwise acquire, own, hold, sell, assign, transfer, or
otherwise dispose of, the shares of its own capital stock, redeem the redeemable
shares, if any, of its capital stock, out of surplus except when currently
insolvent or when it would thereby be made insolvent
To carry out all or any part of the foregoing purposes as principal,
factor, agent, broker, contractor or otherwise, either along or in conjunction
with any persons, firms, associations, corporations or others in any part of the
world.
For the accomplishment of the aforesaid purposes, and in furtherance
thereof, the Corporation shall have and may exercise each and every power
conferred by the Business Corporation Law of the State of New York, as now in
force or hereafter amended, upon corporations formed thereunder, subject to any
limitations contained in the said law or in any other statute of the State of
New York.
THIRD:
The amount of the Capital Stock of said Corporation is to be Twenty-Seven
Million, Three Hundred Ninety-One Thousand, Five Hundred Dollars ($27,391,500).
FOURTH:
The said authorized Capital Stock of the Corporation shall consist of
twenty-four million (24,000,000) shares designated as Common Stock, with a par
value of $1.00 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
$1.00 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.
A. The designations, preferences, privileges and voting powers of the
shares of 6% Cumulative Preferred Stock and the restrictions or qualification
thereof, are as follows:
I. The 6% Cumulative Preferred Stock shall be entitled to receive,
when and as declared from surplus or from net profits, dividends at the rate of
six per cent per annum, and no more, which dividends shall be cumulative from
the quarterly dividend date next preceding the date of issue (or from the date
of issue, if that be a dividend date), and shall be payable quarterly on the
fifteenth day of each of the months of March, June, September and December, in
each year, before any dividend shall be paid on any other class of stock;
provided, that whenever at any time full cumulative dividends at the said rate
for all past dividend periods and for the current dividend period shall have
been paid or declared and set apart for payment on the then outstanding 6%
Cumulative Preferred Stock, the Board of Directors may declare dividends on any
other class or classes of stock, subject to the respective terms and provisions
(if any) applying thereto, and the 6% Cumulative Preferred Stock shall not be
entitled to share therein.
II. Upon any distribution of capital assets, the 6% Cumulative
Preferred Stock shall be entitled to receive an amount equal to the par value
thereof, plus an amount equivalent to all unpaid accumulated dividends thereon,
before any distribution is made to any other class of stock; provided, that,
after distribution shall have been made in full to the 6% Cumulative Preferred
Stock as herein provided; the other class or classes of stock shall, subject to
the respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be distributed, and the 6% Cumulative
Preferred Stock shall not be entitled to share therein.
III. The Company shall have the right to redeem the 6% Cumulative
Preferred Stock on June 15, 1949, or any dividend payment date thereafter,
either in whole or in such portions as from time to time the Board of Directors
may determine, upon the payment of the sum of $30 a share and an amount
equivalent to all unpaid accumulated dividends thereon to the date fixed for
redemption. If less than the whole amount of 6% Cumulative Preferred Stock
outstanding shall be redeemed at any time, the shares to be so redeemed shall be
selected by lot in such manner as the Board of Directors may determine. At
least thirty days notice in advance of any such redemption shall be mailed to
each holder of the shares to be so redeemed at this address registered with the
Company, and, if less than all the outstanding shares of 6% Cumulative Preferred
Stock owned by such stockholder is then to be redeemed, such notice shall
specify the number of shares which are to be redeemed. On and after the date
fixed for such redemption (unless default made by the Company in the payment of
the redemption price of the shares then to be redeemed), the said shares shall
cease to be entitled to further dividends, and the respective owners thereof
shall have no other right or interest therein, or in the Company by reason
of the ownership of such shares, except to receive payment therefore at the said
redemption price upon presentation and surrender of the respective certificates
representing the same. In order to facilitate the redemption of the 6%
Cumulative Preferred Stock, the Board of Directors shall be authorized to
cause the transfer books of the Company to be closed as to any share or shares
designated for redemption as herein provided, and to make and enforce any and
all such reasonable regulations, not inconsistent herewith, governing the manner
of redemption, as the board of Directors in its discretion may deem advisable.
IV. Except as herein or by law otherwise expressly provided, the
holders of the 6% Cumulative Preferred Stock shall not be entitled to vote in
any proceeding for mortgaging the property and franchises of the Company or for
authorizing and guaranty by the Company, or for the sale of the franchises and
property of the company, or for consolidation of the Company with any one or
more other corporations, or for the voluntary dissolution of the Company, or for
the change of name of the Company, or for any other purpose.
B. The Series Preferred Stock may be issued in series, and each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series. Authority is hereby expressly granted to the Board of
Directors at any time and from time to time to issue series preferred Stock in
one or more series and for such consideration, not less than the part value
thereof, as may be fixed from time to time by the Board of Directors. The Board
of Directors is expressly empowered to fix, subject to the provisions herein set
forth, before the issuance of any shares of a particular series, the number of
shares to be included in such series, the dividend rates per annum, the
redemption price or prices; if any, and the terms and conditions of redemption,
any sinking-fund provisions for the redemption or purchase of the shares of the
series, the terms and conditions on which share are convertible, if they are
convertible, and any other rights, preferences and limitations pertaining to
such series. The relative rights, preferences and limitations of Series
Preferred Stock shall be subordinate to the rights and preferences of 6%
Cumulative Preferred Stock of the Company.
C. Series A Preferred Stock. The designation and amount, relative rights,
preferences and limitations of the shares of Series A Preferred Stock, of a par
value of $1.00 each, as fixed by the Board of Directors, are as follows:
(1) Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" and the number of shares constituting
such series shall be 150,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than that of the shares then outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Company.
(2) Dividends and Distributions. (a) Subject to the prior and
superior rights of the holders of any shares of any other series of preferred
stock or any other preferred stock of the Corporation ranking prior and superior
to the Series A Preferred Stock with respect to dividends, each holder of one
one-thousandth (1/1000) of a share (a "Unit") of Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for that purpose, (j) quarterly dividends payable in
cash on the 1st day of March, June, September and December in each year (each
such date being a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of such Unit of Series
A Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to
the greater of (A) $0.12 or (B) subject to the provision for adjustment
hereinafter set forth, the aggregate per share amount of all cash dividends
declared on shares of the Common Stock since the Immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of a Unit of Series A Preferred Stock, and (ii)
subject to the provision for adjustment hereinafter set forth, quarterly
distributions (payable in kind) on each Quarterly Dividend Payment Date in an
amount per Unit equal to the aggregate per share amount of all non-cash
dividends of other distributions (other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock, by
reclassification or otherwise) declared on shares of Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Preferred Stock. In the event that the Corporation shall at any time
after December 13, 1989 (the "Rights Declaration Date") (i) declare any dividend
on outstanding shares of Common Stock payable in shares of Common Stock, (ii)
combine outstanding shares of Common Stock or (iii) combine outstanding shares
of Common Stock into a smaller number of shares, then in each such case the
amount to which the holder of a Unit of Series A Preferred Stock was entitled
immediately prior to such event pursuant to the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
Units of Series A Preferred Stock as provided in paragraph (a) above immediately
after it declares a dividend or distribution on the shares of Common Stock
(other than a dividend payable in shares of Common Stock); provided, however,
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $0.12 per
Unit on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and shall be cumulative on
each outstanding Unit of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issuance of each Unit of
Series A Preferred Stock, unless the date of issuance of such Unit is prior to
the record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such Unit shall begin to accrue from the date of issuance of such
Unit, or unless the date of issuance is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of Units of
Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
Units of Series A Preferred Stock in an amount less than the aggregate amount of
all such dividends at the time accrued and payable on such Units shall be
allocated pro rata on a unit-by-unit basis among all Units of Series A
Preferred Stock at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of Units of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for payment thereof.
(3) Voting Rights. the holders of Units of Series A Preferred Stock
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock or (iii) combine the outstanding shares of common Stock into a
smaller number of shares, then in each such case the number of votes per Unit
to which holders of Units of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which shall be the number of shares of Common Stock
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) Except as otherwise provided herein or by law, the holders
of Units of Series A Preferred Stock and the holders of Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of
the Corporation.
(c) (i) If at any time dividends on any Units of Series A
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, then during the period (a "default period") from the
occurrence of such event until such time as all accrued and unpaid dividends
for all previous quarterly dividend periods and for the current quarterly
dividend period on all Units of Series A Preferred Stock then outstanding
shall have been declared and paid or set apart for payment, all holders of
Units of Series A Preferred Stock, voting separately as a class, shall have the
right to elect two Directors.
(ii) during any default period, such voting rights of the
holders of Units of Series A Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this section 3(c) or at
any annual meeting of shareholders, and thereafter at annual meetings of
shareholders, provided that neither such voting rights nor any right of the
holders of Units of Series A Preferred Stock to increase, in certain cases,
the authorized number of Directors may be exercised at any meeting unless one-
third of the outstanding Units of Preferred Stock shall be present at such
meeting in person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of Units of Series
A Preferred Stock of such rights. At any meeting at which the holders of Units
of Series A Preferred Stock shall exercise such voting right initially during
an existing default period, they shall have the right, voting separately as a
class, to elect Directors to fill up to two vacancies in the Board of
Directors, if any such vacancies may then exist, or, if such right is exercised
at an annual meeting, to elect two Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Series A Preferred Stock shall have the right to make such
increase in the number of Directors as shall be necessary to permit the
election by them of the required number. After the holders of Units of Series A
Preferred Stock shall have exercised their right to elect Directors during any
default period, the number of Directors shall not be increased or decreased
except as approved by a vote of the holders of Units of Series A Preferred Stock
as herein provided or pursuant to the rights of any equity securities ranking
senior to the Series A Preferred Stock.
(iii) Unless the holders of Series A Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any shareholder of
shareholders owning in the aggregate not less then 25% of the total number of
Units of Series A Preferred Stock outstanding may request, the calling of a
special meeting of the holders of Units of Series A Preferred Stock, which
meeting shall thereupon be called by the Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which holders of Units of Series
A Preferred Stock are entitled to vote pursuant to this subparagraph (c)(iii)
shall be given to each holder of record of Units of Series A Preferred Stock by
mailing a copy of such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called for a time not
earlier than 10 days and not later than 50 days after such order to request or
in default of the calling of such meeting within 50 days after such order or
request, such meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than 25% of the total number of
outstanding Units of Series A Preferred Stock. Notwithstanding the
provisions of this paragraph (c)(iii), no such special meeting shall be called
during the 60 days immediately preceding the date fixed for the next annual
meeting of the shareholders.
(iv) During any default period, the holders of shares of
Common Stock and Units of Series A Preferred Stock, and other classes or series
of stock of the Corporation, if applicable, shall continue to be entitled to
elect all the Directors until the holders of Units of Series A Preferred Stock
shall have exercised their right to elect two Directors voting as a separate
class, after the exercise of which right (x) the Directors so elected by the
holders of Units of Series A Preferred Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of Directors
may (except as provided in subparagraph (c)(ii) of this Section (3) be filled by
vote of a majority of the remaining Directors theretofore elected by the
holders of the class of capital stock which elected the Director whose office
shall have become vacant. References in this paragraph (c) to Directors elected
by the holders of a particular class of capital stock shall include Directors
elected by such Directors to fill vacancies as provided in clause (y) of
the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Units of Series A Preferred Stock as a separate
class to elect Directors shall cease, (y) the term of any Directors elected by
the holders of Units of Series A Preferred Stock as a separate class shall
terminate, and (z) the number of Directors shall be such number as may be
provided for in the Certificate or by laws irrespective of any increase made
pursuant to the provisions of subparagraph (c)(ii) of this Section 3 (such
number being subject, however, to change thereafter in any manner provided by
law or in the Certificate or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.
(vi) The provisions of this subparagraph (c) shall govern the
election of Directors by holders of Units of Series A Preferred Stock during any
default period notwithstanding any provisions of the Certificate or by-laws to
the contrary.
(d) Except as set forth herein, holders of Units of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
shares of Common Stock as set forth herein) for taking any corporate action.
(4) Certain Restrictions. (a) Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Preferred Stock
as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on outstanding
Units of Series A Preferred Stock shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any junior shares;
(ii) declare or pay dividends on or make any other
distributions on any parity shares, except dividends paid ratably on Units
of Series A Preferred Stock and shares of all such parity shares on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any parity shares, provided, however, that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such parity shares in
exchange for any junior shares.
(iv) purchase or otherwise acquire for consideration any
Units of Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such Units.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
(5) Reacquired Shares. Any Units of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such Units shall, upon their cancellation, become authorized but
unissued preferred stock and may be reissued as part of a new series of
preferred stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
(6) Liquidation Dissolution or Winding Up. (a) Upon any voluntary or
in-voluntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of Junior shares unless
the holders of Units of Series A Preferred Stock shall have received, subject
to adjustment as hereinafter provided in paragraph (b), the greater of
either (x) $0.01 per Unit plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, or (y) the amount equal to the aggregate per share amount
to be distributed to holders of shares of Stock, or (ii) to the holders
of shares of parity shares, unless simultaneously therewith distributions
are made ratably on Units of Series A Preferred Stock and all other shares of
such parity shares in proportion to the total amounts to which the holders of
Units of Series A Preferred Stock are entitled under clause (i)(x) of this
sentence and to which the holders of such parity shares are entitled, in each
case upon such liquidation, dissolution or winding up.
(b) In the event the Corporation shall at any time after the
Rights Declaration Date (1) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock, or (iii) combine outstanding shares of Common Stock
into a smaller number of shares, then in each such case the aggregate amount to
which holders of Units of Series A Preferred Stock were entitled immediately
prior to such event pursuant to Clause (i)(y) of paragraph (a) of this
Section 6 shall be adjusted by multiplying such amount by a fraction the
numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior
to such event.
(7) Consolidation, Merger, Etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which
the share of Common Stock are exchanged for or converted into other shares or
securities, cash and/or any other property, then in any such case Units of
Series A Preferred Stock shall at the same time be similarly exchanged for
or converted into an amount per Unit (subject to the provision for
adjustment hereinafter set forth) equal to the aggregate amount of shares,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in the immediately
preceding sentence with respect to the exchange or conversion of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.
(8) Redemption. The Units of Series A Preferred Stock shall not be
redeemable.
(9) Ranking. The Units of Series A Preferred Stock shall rank
junior to all other series of preferred stock and to any other class of
preferred stock that hereafter may be issued by the Corporation as to the
payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.
(10) Amendment. The Certificate, including without limitation, this
resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with another corporation, in any manner
that would alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding units
of Series A Preferred Stock, voting separately as a class.
(11) Fractional Shares. The Series A Preferred Stock may be issued,
in Units or other fractions of a share, which Units or fractions shall entitle
the holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.
(12) Certain Definitions. As used herein with respect to the Series A
Preferred Stock, the following terms shall have the following meanings:
(a) The term "Common Stock" shall mean the class of shares
designated as the Common Stock, par value $6.25 per share, of the Corporation
at the date hereof or any other class of shares resulting from successive
changes or reclassification of the common stock.
(b) The term "junior shares" (i) as used in Section 4, shall
mean the Common Stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series A Preferred
Stock has preference or priority as to the payment of dividends and (ii) as used
in Section 6, shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the Series A Preferred Stock has
preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
(c) The term "parity shares" (i) as used in section 4, shall
mean any class or series of capital stock of the Corporation hereafter
authorized or issued ranking pari passu with the Series A Preferred Stock as to
dividends and (ii) as used in Section 6, shall mean any class or series of
capital stock ranking pari passu with the Series A Preferred Stock in the
distribution of assets or any liquidation, dissolution or winding up.
FIFTH:
The office of said Corporation in the State of New York shall be located
in the City of Oneida and the County of Madison.
SIXTH:
The duration of said Corporation is to be perpetual.
SEVENTH:
The Secretary of State is designated as the agent of the corporation for
service of process and he shall mail a copy thereof to Oneida, New York.
EIGHTH:
SECTION 1. Higher Vote for Certain Business Combination. In addition to
any affirmative vote required by law or by this Certificate of Incorporation,
and except as otherwise expressly provided in Section 3 of this Article EIGHTH:
(i) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (a) any Interested Stockholder
(as hereinafter defined) or (b) any other corporation (whether or not itself
an Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder or any Affiliate of any Interested Stockholder of
any assets of the Corporation or any Subsidiary having an aggregate Fair
Market Value (as hereinafter defined) of $10,000,000 or more; or
(iii) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in exchange for
cash, securities or other property (or a combination thereof) having an
aggregate Fair Market Value of $10,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
(v) any reclassification of securities (including any reverse
stock split) or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate shares of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is
directly or indirectly owned by any Interested Stockholder or any
Affiliate of any Interested Stockholder; shall require the affirmative vote
of the holders of at least 80% of the voting power of the then outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), voting together, as a single class.
Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
SECTION 2. Definition of "Business Combination". The term "Business
Combination" as used in this Article EIGHTH shall mean any transaction which is
referred to in any one or more of clauses (i) through (v) of Section 1 of this
Article EIGHTH.
SECTION 3. When Higher Vote is Not Required. The provisions of
Section 1 of this Article EIGHTH shall not be applicable to any particular
Business Combination, and such Business Combination shall require only such
affirmative vote as is required by law and any other provision of this
Certificate of Incorporation, if all of the conditions specified in either of
the following paragraphs A and B are met:
A. Approval by Continuing Directors. The Business
combination shall have been approved by a majority of the Continuing
Directors (as hereinafter defined).
B. Form of Consideration, Price and Procedure
Requirements. All of the following conditions shall have been
met:
(i) the aggregate amount of the cash and the
Fair Market Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall be at least equal
to the highest of the following:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Stockholder for any shares of Common Stock acquired
by it (1) within the two-year period immediately prior to the first public
announcement of the proposal of the Business Combination (the "Announcement
Date") or (2) in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such latter date is referred to
in this Article EIGHTH as the "Determination Date"), whichever is higher; and
(c) (if applicable) the price per share equal to
the Fair Market Value per share of Common Stock determined pursuant to
paragraph (B)(i)(b) above, multiplied by the ratio of (1) the highest per share
price (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for any shares of Common
Stock acquired by it within the two-year period immediately prior to the
Announcement Date to (2) the Fair Market Value per share of Common Stock on the
first day in such two-year period upon which the Interested Stockholder
acquired any shares of Common Stock.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business Combination
of consideration other than cash to be received per share by holders of
shares of any other class of outstanding Voting Stock shall be at least equal
to the highest of the following (it being intended that the requirements of
this paragraph B(ii) shall be required to be met with respect to every class of
outstanding Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of a particular class of voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Stockholder for any shares of such class of Voting
Stock acquired by it (i) within the two-year period immediately prior to the
Announcement Date or (2) in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) (if applicable) the highest preferential amount
per share to which the holders of shares of such class of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation;
(c) the Fair Market Value per share of such class
of Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher; and
(d) (if applicable) the price per share equal to
the Fair Market Value per share of such class of Voting Stock determined
pursuant to paragraph B(ii)(c) above, multiplied by the ratio of (1) the highest
per share price (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested Stockholder for any shares of
such class of Voting Stock acquired by it within the two-year period immediately
prior to the Announcement Date to (2) the Fair Market Value per share of such
class of Voting Stock on the first day in such two-year period upon which the
Interested Stockholder acquired any shares of such class of Voting Stock.
(iii) The consideration to be received by holders of
a particular class of outstanding voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested Stockholder has
previously paid for shares of such class of Voting Stock. If the Interested
Stockholder has paid for shares of any class of Voting Stock with varying forms
of consideration, the form of consideration for such class of Voting Stock shall
be either cash or the form used to acquire the largest number of shares of
such class of Voting Stock previously acquired by it.
(iv) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such Business
Combination: (a) except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date therefor
any full quarterly dividends (whether or not cumulative) on the outstanding
Preferred Stock; (b) there shall have been (1) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Continuing Directors, and (2) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the
effect of reducing the number of outstanding shares of the Common Stock, unless
the failure so to increase such annual rate is approved by a majority of the
Continuing Directors; and (c) such Interested Stockholder shall have not become
the beneficial owner of any additional shares of Voting Stock except as part
of the transaction which results in such Interested Stockholder becoming an
Interested Stockholder.
(v) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not have received
the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by the
Corporation, whether in anticipation of or in connection with such Business
Combination or otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations thereunder (or
any subsequent provisions replacing such Act, rules or regulations) shall be
mailed to public stock holders of the Corporation at least 30 days prior
to the consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
SECTION 4. Certain Definitions. For the purpose of this Article EIGHTH:
A. A "person" shall mean any individual, firm,
corporation or other entity.
B. "Interested Stockholder" shall mean any person
(other than the Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 10% or more of the voting power of
the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded
to any shares of Voting Stock which were at any time within the two-year
period immediately prior to the date in question beneficially owned by any
Interested Stockholder, if such assignment or succession shall have occurred
in the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended.
C. A person shall be a "beneficial owner" of any
Voting Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or indirectly;
or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (b) the right to vote pursuant to
any agreement, arrangement or understanding; or
(iii) which is beneficially owned, directly or
indirectly, by any other person with which such person or any of its Affiliates
or Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting Stock.
D. For the purposes of determining whether a person is an
Interested Stockholder pursuant to paragraph B of this Section 4, the number
of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of paragraph C of this Section 4 but shall not
include any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
October 13, 1983.
F. "Subsidiary" means any corporation of which a majority
of any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in paragraph B of this Section 4, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
G. "Continuing Director" means any member of the Board
of Directors of the Corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the time that the
Interested Stockholder became an Interested Stockholder, and any successor of a
Continuing Director who is unaffiliated with the Interested stockholder
and is recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board.
H. "Fair Market Value" means: (i) in the case of stock,
the highest closing sale price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape for New
York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not listed
on such Exchange, on the principal United States securities exchange registered
under the Securities and Exchange Act of 1934 on which such stock is listed, or,
if such stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations system or any system then in use, or if no
such quotations are available, the fair market value on the date in questions
of a share of such stock as determined by the Board in good faith; and (ii) in
the case of property other than cash or stock, the fair market value of such
property on the date in questions as determined by the Board in good faith.
I. In the event of any Business Combination in which the
Corporation survives, the phrase "other consideration to be received" as used
in paragraphs B (i) and (ii) of Section 3 of this Article EIGHTH shall include
the shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
SECTION 5. Powers of the Board of Directors. A majority of the
directors of the Corporation shall have the power and duty to determine for the
purposes of this Article EIGHTH, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with this
Article EIGHTH, including, without limitation, (A) whether a person is a
Interested Stockholder, (B) the number of shares of Voting Stock beneficially
owned by any person, (C) whether a person is an Affiliate or Associate of
another, (D) whether the requirements of paragraph B of Section 3 have been met
with respect to any Business Combination, and (E) whether the assets which are
the subject of any Business Combination have, or the consideration to
be received for the issuance or transfer of securities by the Corporation or
any Subsidiary in any Business Combination has, an aggregate Fair Market Value
of $10,000,000 or more.
SECTION 6. No Effect on Fiduciary Obligations of Interested
Stockholders. Nothing contained in this Article EIGHTH shall be construed
to relieve the Board or any Interested Stockholder from any fiduciary obligation
imposed by law.
SECTION 7. Amendment, Repeal, Etc. Notwithstanding any other provisions
of this Certificate of Incorporation or the Bylaws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law,
this Certificate of Incorporation or the Bylaws of the Corporation), the
affirmative vote of the holders of at least 80% of the voting power of the
Voting Stock, voting together as a single class, shall be required to
amend or repeal, or adopt any provisions inconsistent with, this Article EIGHTH.
NINTH:
SECTION 1. Number, Election and Terms of Directors. The business and
affairs of the Corporation shall be managed by a Board of Directors consisting
of not less than nine or more than fifteen persons. The exact number of
directors within the minimum and maximum limitations specified in the
preceding sentence shall be fixed from time to time by the Board of Directors
pursuant to a resolution adopted by a majority of the entire Board of
Directors. At the 1984 Annual Meeting of Stockholders, the directors shall
be divided into three classes, as nearly equal in number as possible, with the
term of office of the first class to expire at the 1985 Annual Meeting of
Stockholders, the term of office of the second class to expire at the 1986
Annual Meeting of Stockholders and the term of office of the third class to
expire at the 1987 Annual Meeting of Stockholders. Commencing with the
1985 Annual Meeting of Stockholders, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to expire at
the third succeeding Annual Meeting of Stockholders after their election.
SECTION 2. Calling Special Meetings of Stockholders. A special meeting
of the stockholders may be called at any time and for any purpose or purposes by
the Board of Directors, and shall be called by the Secretary upon the written
request of the holders of record of at least 80% of the voting power of the
voting Stock. Every such request shall state the purpose or purposes of
each meeting.
SECTION 3. Newly-Created Directorships and Vacancies on the Board of
Directors. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly-created directorships resulting from any increase
in the authorized number of directors or any vacancies on the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause shall be filled by a majority vote of the
directors then in office, although less than a quorum; and any director so
chosen shall hold office until the next Annual Meeting of Stockholders. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
SECTION 4. Removal of Directors. Subject to the rights of the holders
of any series of Preferred Stock then outstanding, any director, or the entire
Board of Directors, may be removed by the stockholders from office at any time
but only for cause and only by the affirmative vote of the holders of at least
80% of the voting power of the Voting Stock, voting together as a single
class. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any director may be removed form office at any time,
but only for cause, by the vote of a majority of the entire Board of Directors.
SECTION 5. Amendment of By-Laws or Certificate of Incorporation.
Notwithstanding any other provisions of this Certificate of Incorporation or
the By-Laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of Incorporation or the
By-Laws of the Corporation), the affirmative vote of the holders of at least 80%
of the voting power of the Voting Stock, voting together as a single class,
shall be required for the stockholders of the Corporation to amend, repeal
or adopt any By-Laws of the Corporation or to adopt any amendment to this
Certificate of Incorporation inconsistent with the By-Laws of the Corporation.
SECTION 6. Amendment, Repeal, Etc. Notwithstanding any other provisions
of this Certificate of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law,
this Certificate of Incorporation or the By-Laws of the Corporation), the
affirmative vote of the holders of at least 80% of the voting power of the
Voting Stock, voting together as a single class, shall be required to
amend or repeal, or to adopt any provision inconsistent with, this
Article NINTH.
TENTH:
To the fullest extend now or hereafter not expressly prohibited by
the Business Corporation Law of the State of New York as currently in effect
or as the same may hereafter be amended, no Director of the Corporation shall
be personally liable to the Corporation or its stockholders for damages for any
breach of duty in such capacity. No amendment, modification, repeal of this
Article TENTH, nor the adoption of any provision of this Restated Certificate of
Incorporation inconsistent with this Article TENTH shall adversely affect any
right or protection of any Director that exists at the time of such amendment,
modification, repeal or the adoption of any inconsistent provision.
IV. This restatement of the Certificate of Incorporation was
authorized by the Board of Directors.
IN WITNESS WHEREOF, we have made, subscribed and acknowledged this
Certificate this 13th day of April, 1994.
/s/ WILLIAM D. MATTHEWS
William D. Matthews
Chairman of the Board
and Chief Executive Officer
/s/ CATHERINE H. SUTTMEIER
Catherine H. Suttmeier
Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF
ONEIDA LTD. UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
(1) The name of this corporation is and henceforth shall be Oneida Ltd.
The name under which it was originally formed was Oneida Community, Limited.
(2) Its Certificate of Incorporation was filed by the Department of State
on the 20th day of November, 1880.
(3) The amendment effected by this Certificate of Amendment is as follows:
(A) Article Fourth of the Certificate of Incorporation, dealing with
the authorized Capital Stock of the Corporation and providing generally that
the authorized Capital Stock of the Corporation shall consist of 24,000,000
shares of Common Stock, is hereby 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 $1.00 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 $1.00 per share. No holder of Common Stock shall have,
as a matter of right as such holder, any preemptive right
to purchase any shares of other securities of the
Corporation.
(4) The above and foregoing amendment to the Certificate of Incorporation
was authorized by vote of the board, followed by a vote of the holders of a
majority of all outstanding shares entitled to vote at the Annual Meeting of
the shareholders held on the 27th day of May, 1998.
IN WITNESS WHEREOF we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 13th day
of July, 1998.
By: /s/ PETER J. KALLET
Name: Peter J. Kallet
Title: President & Chief Operating Officer
By: /s/ CATHERINE H. SUTTMEIER
Name: Catherine H. Suttmeier
Title: Vice President, Secretary
& General Counsel
<PAGE>
BY-LAWS OF ONEIDA LTD.
Article I
Meetings of Shareholders
Section 1.01. Place of Meetings. Annual and special meetings of the
shareholders shall be held at the Hall of the Corporation in Kenwood, in the
City of Oneida, State of New York, or at such other place within or without
the State of New York as may be fixed from time to time by the Board of
Directors and stated in the notice of meeting.
Section 1.02. Annual Meeting. The annual meetings of shareholders
shall be held the last Wednesday in May of each year at 2:00 o'clock in the
afternoon or, if that day be a legal holiday, on the next succeeding day not a
legal holiday at 2:00 o'clock in the afternoon for the election of directors
and the transaction of such other business as may properly come before
the meeting.
Section 1.03. Special Meetings. A special meeting of the shareholders may
be called at any time and for any purpose or purposes by the Board of Directors,
and shall be called by the Secretary upon the written request of the holders
of record of at least 80% of the voting power of the then outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors. Every such request shall state the purpose or purposes of such
meeting.
Section 1.04. Notice of Meetings. Except when otherwise permitted by
statute, a written notice of the place, date and hour of each meeting, whether
annual or special, shall be given personally or by mail to each shareholder
entitled to vote thereat, not less than 10 nor more than 50 days prior to the
meeting. The notice of any special meeting shall also state the purpose or
purposes for which the meeting is called and by or at whose direction it is
being issued. If, at any meeting, whether annual or special, action is proposed
to be taken which would, if taken, entitle shareholders fulfilling requirements
of law to receive payment for their shares, the notice of such meeting shall
include a statement of that purpose and to that effect. If such notice is
mailed, it shall be directed to the shareholder in a postage-prepaid envelope at
his address as it appears on the record of shareholders, or, if he shall have
filed with the Secretary a written request that notices to him be mailed to some
other address, then directed to him at such other address.
Section 1.05. Waiver of Notice. Notice of meeting need not be given to any
shareholder who submits a waiver of notice, signed in person or by proxy,
whether before or after the meeting. The attendance of any shareholder at a
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute a waiver
of notice by him.
Section 1.06. Inspectors of Election. The Board of Directors, or any
officer or officers duly authorized by the Board of Directors, in advance of
any meeting of shareholders, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so appointed, the
person presiding at the meeting may, and on the request of any shareholder
entitled to vote thereat shall, appoint one or more inspectors. In case any
person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board of Directors or any officer or officers duly
authorized by the Board of Directors, in advance of the meeting or at the
meeting by the chairman of the meeting. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability. The inspectors shall determine the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do such acts as are proper
to conduct the election or vote with fairness to all shareholders. On request
of the person presiding at the meeting or any shareholder entitled to vote
thereat, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and execute a certificate of any fact
found by them.
Section 1.07. Quorum and Adjournment. At all meetings of shareholders,
except as otherwise provided by statute or the Certificate of Incorporation,
the holders of a majority of the shares entitled to vote thereat, present in
person or by proxy, shall be requisite for and shall constitute a quorum for the
transaction of business. In the absence of a quorum, a majority of the votes
cast by the holders of shares entitled to vote may adjourn the meeting from time
to time. At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally called. No notice of an adjourned meeting need be given if the
time and place to which the meeting is adjourned are announced at the meeting
at which the adjournment is taken. However, if after the adjournment, the Board
of Directors shall fix a new record date for the adjourned meeting, notice of
the adjourned meeting shall be given to each shareholder of record on the new
record date entitled notice specified herein.
Section 1.08. Vote of Shareholders. Each shareholder having the right
to vote shall be entitled at every meeting of shareholders to one vote for
every share standing in his name on the record of shareholders. Directors shall
be elected by the vote prescribed in Section 3.02 hereof, and whenever any
other corporate action is to be taken by vote of the shareholders, it shall,
except as otherwise required by statute, by the Certificate of
Incorporation, or in the By-Laws, be authorized by a majority of the votes cast
by such holders.
Section 1.09. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy. Every proxy must be in
writing and signed by the shareholder or his attorney-in-fact. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the shareholder executing it, except in those cases where an irrevocable
proxy is permitted by law.
Article II
Determination of Voting, Dividend and Other Rights
Section 2.01. For the purpose of determining the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the Board of Directors may fix, in advance, a date
as the record date for any such determination of shareholders. Such date shall
not be more than 50 nor less than 10 days before the date of any such meeting,
nor more than 50 days prior to any other action. If a record date is so fixed,
such shareholders and only such shareholders as shall be shareholders of
record on the date so fixed shall be entitled to notice of, and to vote at, such
meeting and any adjournment thereof, or to express such consent or dissent, or
to receive payment of such dividend or such allotment of rights, or otherwise
to be recognized as shareholders for the purpose of any other action,
notwithstanding any transfer of any shares on the books of the Corporation
after any such record date so fixed.
Article III
Directors
Section 3.01. Number, Qualification and Term of Office. The number of
directors, each of whom shall be at least 21 years of age, shall not be less
than 9 nor more than 15, the exact number to be determined from time to time by
resolution adopted by a majority of the entire Board of Directors, and such
exact number shall be 14 until otherwise determined by resolution adopted by
a majority of the entire Board of Directors. The directors shall be elected as
provided by the By-Laws at the annual meeting of shareholders and shall hold
office until their respective successors shall have been elected and
qualified. Each director shall be the beneficial owner of 200 shares of Common
Stock of the Corporation.
Section 3.02. Election. The directors shall be divided into three classes as
nearly equal in number as possible, with the term of office of one class
expiring each year, and at the 1989 annual meeting of shareholders, directors of
the first class shall be elected to hold office for a term expiring at the 1985
annual meeting of shareholders; directors of the second class shall be elected
to hold office for a term expiring at the 1986 annual meeting of shareholders;
and directors of the third class shall be elected to hold office for a term
expiring at the 1987 annual meeting of shareholders. Commencing with the 1985
meeting of shareholders, at each annual election the successors to the class of
directors whose terms shall expire that year shall be elected for a term of
office to expire at the third succeeding annual meeting of shareholders after
their election. At each meeting of shareholders for the election of directors,
at which a quorum is present, the persons receiving a plurality of the votes
cast shall be the directors. Such election shall be by ballot wherever
requested by any person entitled to vote at such meeting; but unless so
requested, such election may be conducted in any manner approved at such
meeting.
Section 3.03. Place of Meetings. Meetings of the Board of Directors, regular
or special, shall be held at any place within or without New York, as may from
time to time be determined by the Board of Directors.
Section 3.04. Organization Meeting. Without notice of such meeting, a newly
elected Board of Directors may meet and organize as soon as practicable after
and at the place where the annual meeting is held; or the Board may meet at such
place and time as shall be specified in a notice given as hereinafter provided
for special meetings of the Board of Directors, or as shall be specified in a
duly executed waiver of notice.
Section 3.05. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by resolution of the Board. In case the day
so determined shall be a legal holiday, such meeting shall be held on the next
succeeding day, not a legal holiday, at the same hour.
Section 3.06. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, the President, or
by any two directors. Notice of any special meeting, stating the place, date
and hour of the meeting, shall be mailed to each director, addressed to him at
his residence or usual place of business, not later than the second day before
the day on which the meeting is to be held, or shall be sent to him at such
place by telegraph, or be delivered personally, or by telephone, not later than
the day before the day on which such meeting is to be held. Notice of any
meeting of the Board of Directors need not be given to any director who submits
a signed waiver of notice before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to him. Unless limited by statute, the Certificate of Incorporation, the
By-Laws, or the terms of the notice thereof, any and all business may be
transacted at any special meeting.
Section 3.07. Quorum and Manner of Acting. A majority of the directors in
office at the time of any regular or special meeting of the Board of Directors,
but not less than one-third of the entire Board, shall be present in person to
constitute a quorum for the transaction of business. The vote of a majority of
the directors present at the time of such vote, if a quorum is present at such
time, shall be the act of the Board of Directors, except as otherwise
required by statute or the Certificate of Incorporation. A majority of the
directors present, whether or not a quorum is present, may adjourn any meeting
to another time and place; and no notice of an adjourned meeting need be given.
Section 3.08. Telephonic Meetings. Any one or more members of the
Board of Directors, or of any committee thereof, may participate in a meeting of
such board or committee by means of a conference telephone or similar equipment
which allows all persons participating in the meeting to hear each other at the
same time. Participation by such means shall constitute presence in person at
such a meeting.
Section 3.09. Directors' Fees. In consideration of his serving in such
capacity, each director of the Corporation, other than directors who are
officers of the Corporation or of any of its subsidiary companies, may be paid
an annual fee in such amount and payable in such installments as the Board of
Directors may from time to time determine. The Board of Directors shall
also have authority to determine, from time to time, the amount of
compensation which may be paid to its members, other than those who are
officers of the Corporation or any of its subsidiary companies, for attendance
at meetings the Board or of any committee of the Board, as well as to any
directors rendering special services to the Corporation.
Section 3.10. Removal of Directors. Subject to the rights of the holders
of any series of Preferred Stock then outstanding, any director, or the entire
Board of Directors, may be removed from office at any time by the shareholders,
but only for cause and only by the affirmative vote of at least 80% of the
voting power of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class. Any such vote shall be taken at any regular or special meeting
of the shareholders, provided that notice of such proposed action shall be
given in the manner provided herein for special meetings of the shareholder.
Subject to the rights of the holders of any series of Preferred Stock then
outstanding, any director may be removed for cause by the vote of a majority of
the entire Board of Directors.
Section 3.11. Resignations. Any director may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary of the
Corporation. Such resignation shall take effect at the specified therein; and
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 3.12. Newly-Created Directorships and Vacancies. Subject to
the rights of the holders of any series of Preferred Stock then outstanding,
newly-created directorships resulting from any increase in the authorized
number of directors or any vacancies on the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or other
cause shall be filled by a majority vote of the directors then in office,
although less than a quorum, and any director elected by the Board of Directors
to fill a vacancy or a newly-created directorship shall hold office until the
next annual meeting of shareholders. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
Section 3.13. Mandatory Retirement Age. A Director who is an officer or
employee of the Corporation or a subsidiary, except present or former corporate
chief executive officers, shall not stand for reelection to the Board of
Directors, after reaching age 65 or retirement, if retirement occurs before age
65. A director who is a present or former corporate chief executive
officer of the Corporation, and directors who are not officers or employees of
the Corporation or a subsidiary, shall not stand for reelection to the Board
after reaching age 70.
Article IV
Executive Committee
Section 4.01. Constitution and Powers. The Board of Directors, by
resolution adopted by a majority of the entire Board, may designate from among
its members an Executive Committee consisting of the President and three or
more directors which shall have all the authority of the Board of Directors,
including authority to take all action provided in the By-Laws to be taken by
the Board, except as to each of the following matters:
(1) the submission to shareholders of any action as to which
shareholders authorization is required by statute;
(2) the filling of vacancies in the Board of Directors or in any
Committee of the Board of Directors;
(3) the fixing of compensation of the directors for serving on the
Board of Directors or on any Committee of the Board of Directors;
(4) the amendment or repeal of the By-Laws, or the adoption of
new By-Laws; and
(5) the amendment or repeal of any resolution of the Board of
Directors which by its terms shall not be so amenable or repealable.
So far as practicable, members of the Executive Committee shall be so
designated at the organization meeting of the Board of Directors in each year
and, unless sooner discharged by affirmative vote of a majority of the
entire Board, shall hold office until the next annual meeting of shareholders
and until their respective successors have been designated.
Section 4.02. Regular Meetings. Regular meetings of the Executive Committee
shall be held without notice at such time and at such place as shall from time
to time be determined by resolution of the Executive Committee. In case the
day so determined shall be a legal holiday, such meeting shall be held on the
next succeeding day, not a legal holiday, at the same hour.
Section 4.03. Special Meetings. Special meetings of the Executive
Committee shall be held whenever called by the Chairman of the Executive
Committee. Notice of any special meeting shall be mailed to each member,
addressed to him at his residence or usual place of business, not later than
the second day before the day on which the meeting is to be held, or shall
be sent to him at such place by telegraph, or be delivered personally, or
by telephone, not later than the day on which such meeting is to be held.
Notice of any meeting of the Executive Committee need not be given to any
member who submits a signed waiver of notice before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him. Unless limited by statute, the
Certificate of Incorporation, the By-Laws, or the terms of the notice thereof,
any and all business may be transacted at any special meeting of the
Executive Committee.
Section 4.04. Quorum and Manner of Acting. A majority of the members of the
Executive Committee in office at the time of any regular or special meeting of
the Executive Committee shall be present in person to constitute a quorum for
the transaction of business. The vote of a majority of the members present at
the time of such vote, if a quorum is present at such time, shall be the act of
the Executive Committee. A majority of the members present, whether or not a
quorum is present, may adjourn any meeting to another time and place; and no
notice of an adjourned meeting need be given.
Section 4.05. Records. The Executive Committee shall keep minutes of the
proceedings and shall make the same available to the Board of Directors.
The Secretary of the Corporation, or in his absence an Assistant Secretary,
shall act as secretary to the Executive Committee; or the Executive Committee
may in its discretion appoint its own secretary.
Section 4.06. Vacancies. Any newly created memberships and vacancies
occurring in the Executive Committee shall be filed by resolution adopted by
a majority of the entire Board of Directors.
Article V
Other Committees
Section 5.01. The Board of Directors by resolution adopted by a majority
of the entire Board, may designate from among its members committees other than
an Executive Committee, each of which shall consist of three or more directors,
and each of which shall have authority to the extent provided in the resolution
authorizing such committee, but in no case shall any such committee have
authority with respect to any of the matters enumerated in Section 4.01 of these
By-Laws.
Article VI
Officers
Section 6.01. Officers. The elected officers of the Corporation shall be a
Chairman, a Chief Executive Officer, a President, one or more Vice Presidents,
a Controller, a Secretary and a Treasurer. The elected officers shall be
elected by the Board of Directors, and the Chairman, the Chief Executive Officer
and the President shall be selected from the directors. The Board of Directors
may also appoint a General Manager, one or more Assistant Secretaries, one or
more Assistant Treasurers, and such other officers and agents as may from time
to time appear to be necessary or advisable in the conduct of the affairs of
the Corporation. Any two or more offices, whether elective or appointive, may
be held by the same person, except the offices of President and Secretary.
Section 6.02. Term of Office. So far as practicable, all elected officers
shall be elected at the first meeting of the Board of Directors following the
annual meeting of shareholders in each year and, except as otherwise
hereinafter provided, shall hold office until the first meeting of the Board of
Directors following the next annual meeting of shareholders and until their
respective successors shall have been elected or appointed and qualified. All
other officers shall hold office during the pleasure of the Board of
Directors.
Section 6.03. Removal of Elected Officers. Any elected officer may be
removed at any time, for or without cause, by vote of the Board of Directors
at any meeting.
Section 6.04. Vacancies. If any vacancy shall occur in any office for any
reason, the Board of Directors may elect or appoint a successor to fill such
vacancy for the remainder of the term.
Section 6.05. Compensation. The compensation of all elected officers shall
be fixed by the Board of Directors. The compensation of all appointed officers
shall be fixed by the Board of Directors or by such person or persons as shall
be designated by the Board of Directors.
Section 6.06. The Chairman of the Board of Directors. The Chairman of the
Board shall preside, when present, at all meetings of the Board of Directors
and the Shareholders and shall act in an advisory capacity to the Chief
Executive Officer.
Section 6.07. Chief Executive Officer. Subject to the direction of the
Board of Directors, the Chief Executive Officer shall exercise general direction
and supervision of the business and affairs of the Corporation and shall perform
such other duties as from time to time may be assigned to him by the Board of
Directors. In the absence of the Chairman, he shall preside at all meetings of
the Board of Directors and the Shareholders.
Section 6.08. The President. The President shall be the Chief
Operating Officer of the Corporation. Subject to the direction of the Chief
Executive Officer, he shall direct and supervise the operations of the
Corporation and perform such other duties as may be assigned to him from time
to time by the Chief Executive Officer. The President shall have general
authority to execute bonds, deeds, mortgages and contracts in the name and on
behalf of the Corporation; to sign stock certificates; to cause the
employment or appointment of such employees and agents of the Corporation
(other than officers) as the conduct of the business of the Corporation may
require, and to fix their compensation; to remove or suspend any employee or
agent who shall not have been appointed by the Board of Directors or
the Executive Committee; to suspend for cause, pending final action by the
authority which shall have elected or appointed him, any officer or any
employee or agent who shall have been elected or appointed either by the Board
of Directors or the Executive Committee; and, in general, to exercise all the
powers generally appertaining to the president of a corporation.
Section 6.09. The Vice Presidents. The several Vice Presidents shall
perform such duties and have such powers as may from time to time be assigned to
them by the Board of Directors or the President. In the absence or disability
of the President, his duties shall be performed and his powers may be exercised
by such vice-president as shall be designated by the President or, failing such
designation, such duties shall be performed and such powers may be exercised
by the Vice Presidents in the order of their last election to that office;
subject in any case to review and superseding action by the Board of
Directors.
Section 6.10. The Secretary. The Secretary shall attend all meetings of
the Board of Directors and the shareholders and shall record all votes and
the minutes of all proceedings in a book to be kept for that purpose and
shall, when requested, perform like duties for all committees of the Board of
Directors. He shall attend to the giving of notice of all meetings of the
shareholders, and special meetings of the Board of Directors and committees
thereof; he shall have custody of the corporate seal and, when authorized by the
Board of Directors, shall have authority to affix the same to any instrument
and, when so affixed, it shall be attested by his signature or by the
signature of the Treasurer or an Assistant Secretary or an Assistant Treasurer.
He shall keep an account for all books, documents, papers and records of the
Corporation, except those for which some other officer or agent is properly
accountable. He shall have authority to sign stock certificates, and shall
generally perform all the duties usually appertaining to the office of secretary
of a corporation. In the absence of the Secretary, such person as shall be
designated by the President shall perform his duties.
Section 6.11. The Treasurer. The Treasurer shall have the care and custody
of all the funds of the Corporation and shall deposit the same in such banks or
other depositories as the Board of Directors, or any officer of officers, or
any officer and agent jointly, duly authorized by the Board of Directors, shall
from time to time direct or approve. He shall keep a full and accurate account
of all funds received and paid on account of the Corporation, and shall render a
statement of his accounts whenever the Board of Directors or the President
shall require. He shall perform all other necessary acts and duties in
connection with the administration of the financial affairs of the Corporation,
and shall generally perform all the duties usually appertaining to the office
of treasurer of the corporation. When required by the Board of Directors, he
shall give bonds for the faithful discharge of his duties in such sums and with
such sureties as the Board of Directors shall approve. In the absence of the
Treasurer, such person as shall be designated by the President shall perform
his duties.
Section 6.12. The Controller. The Controller shall be the chief accounting
officer of the Corporation, and shall have active control of and shall be
responsible for all matters pertaining to the accounts of the Corporation and
its subsidiaries. He shall supervise the auditing of all payrolls and vouchers
of the Corporation and its subsidiaries and shall direct the manner of
certifying the same; shall supervise the manner of keeping all vouchers for
payments by the Corporation and its subsidiaries and all other documents
relating to such payments; shall receive, audit and consolidate all operating
and financial statements of the Corporation, its various departments, divisions
and subsidiaries; shall have supervision of the books of account of the
Corporation and its subsidiaries, their arrangement and classification; shall
supervise the accounting and auditing practices of the Corporation and its
subsidiaries; and shall prepare and execute all tax returns, statements and
other documents relating thereto. In the absence of the Controller such person
as shall be designated by the President shall perform his duties.
Article VII
Indemnification
Section 7.01. Indemnification. Except to the extent expressly prohibited
by New York Business Corporation Law, the Corporation shall indemnify any
person (each an "Indemnified Person") made, or threatened to be made, a party
to an action or proceeding, whether civil or criminal, by reason of the fact
that he, his testator or intestate, is or was a Director, officer or
employee of the Corporation, or serves or served at the request of the
Corporation as a Director, officer or employee of any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise (any such other enterprise being an
"Other Entity") against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily incurred
as a result of such action or proceeding, or any appeal therein; provided that,
no such indemnification shall be made to any such person if his acts were
committed in bad faith or were the result of active and deliberate dishonesty
and were material to the cause of action on which such action or proceeding
was based, or if he personally gained in fact a financial profit or other
advantage to which he was not legally entitled, and provided further that no
such indemnification shall be required with respect to any settlement or other
nonadjudicated disposition of any threatened or pending action or proceeding
unless the Corporation has given its prior consent thereto.
Section 7.02. Serving an Employee Benefit Plan. For the purpose of this
Article VII, the Corporation shall be deemed to have requested a person to serve
an employee benefit plan where the performance by such person of his duties to
the Corporation also imposes duties on, or otherwise involves services by, such
person to the plan or participants or beneficiaries of the plan; and
excise taxes assessed on a person with respect to an employee benefit plan
pursuant to applicable law shall be considered fines.
Section 7.03. Advance Payment of Expenses. Expenses incurred by an
Indemnified Person in defending a civil or criminal action, suit or
proceeding shall be paid by the Corporation in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by or
on behalf of such Indemnified Person to repay such amount if, or to the extent
that, he is not entitled to be indemnified by the Corporation pursuant to
this Article VII or as otherwise authorized by law; provided, however, that
such Indemnified Person shall cooperate in good faith with any request of the
Corporation that common counsel be utilized by the parties to an action or
proceeding who are similarly situated unless to do so would be inappropriate
due to actual or potential differing interests between or among such parties.
Section 7.04. Insurance. Except to the extent expressly prohibited by
New York Business Corporation Law, the Corporation, at its expense, may
purchase and maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a Director, officer, employee or agent of
any Other Entity, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such.
Section 7.05. Continuation of Rights. The indemnification and advancement
of expenses provided by, or granted pursuant to, this Article VII shall continue
as to an Indemnified Person who has ceased to be a Director, officer or
employee of the Corporation or any Other Entity, and shall inure to the benefit
of the heirs, executors and administrators of such Indemnified Person.
Section 7.06. Contractual Provision For Indemnification. All rights to
indemnification and advancement of expenses under this Article VII shall be
deemed to be provided by contract between the Corporation and each Indemnified
Person, and each such Indemnified Person shall be deemed to have acted and
served in reliance thereon.
Section 7.07. Authority for other Indemnification; Non-Exclusivity The
Corporation is authorized to enter into agreements with, and the Board of
Directors is authorized to adopt resolutions for the benefit of, any person
who is or was a Director, officer, employee or agent of the Corporation or
serves or served in any such capacity for any Other Entity at the request of
the Corporation, extending rights to indemnification and advancement of
expenses to such person to the fullest extent permitted by applicable law,
but the failure to enter into any such agreement or to adopt any such resolution
shall not affect or limit any rights of such person pursuant to the provisions
of this Article VII. Nothing in this Article VII shall limit or affect any right
of any person otherwise than hereunder to indemnification or expenses,
including attorneys' fees, under any statute, rule, regulation, certificate of
incorporation, by-law, resolution, agreement, insurance policy, contract or
otherwise.
Section 7.08. Retroactivity; Rescission. The right to be indemnified or to
the reimbursement or advancement of expenses pursuant to this Article VII is
intended to be retroactive and shall be available with respect to events or
acts occurring prior to the adoption hereof, and any repeal or modification of
any provision of this Article VII shall not diminish or adversely
affect any such right of any Indemnified Person with respect to any events or
acts occurring prior to such repeal or modification whether or not any action
or proceeding based thereon or resulting therefrom has been commenced or
threatened against such Indemnified Person prior to such repeal or modification.
Section 7.09. Legal Successors to the Corporation. For purposes of this
Article VII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify
its Directors, officers or employees, so that any person who is or was a
Director, officer or employee of such constituent corporation, or is or was
serving at the request of such constituent corporation as a Director, officer
or employee of any Other Entity, shall stand in the same position under
the provisions of this Article VII with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
Section 7.10. Savings Clause. If this Article VII or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify each Indemnified Person as
provided above to the full extent permitted by any applicable portion of this
Article VII that shall not have been so invalidated or by any other
applicable law.
Article VIII
Share Certificates
Section 8.01. Form: Signature. The shares of the Corporation shall be
represented by certificates in such form as shall be determined by the Board of
Directors and shall be signed by the Chairman of the Board or the President
and the Secretary or the Treasurer of the Corporation, and shall be sealed with
the seal of the Corporation or a facsimile thereof. The signatures of the
officers upon a certificate may be facsimiles if the certificate is
countersigned by a Transfer Agent or registered by a Registrar other than the
Corporation or its employee. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of
issue.
Section 8.02. Transfer Agents and Registrars. The Board of Directors
may, in its discretion, appoint one or more banks or trust companies in such
city or cities as the Board of Directors may deem advisable, from time to time,
to act as Transfer Agents and Registrars of the shares of the Corporation;
and upon such appointments being made therefore, no certificate representing
shares shall be valid until countersigned by one of such Transfer Agents and
registered by one of such Registrars.
Section 8.03. Transfer of Shares. Transfers of shares shall be made on
the books of the Corporation only by the person named in the certificate, or by
attorney lawfully constituted in writing, and upon surrender and cancellation of
a certificate or certificate for a like number of shares of the same class, with
duly executed assignment and power of transfer endorsed thereon or attached
thereto, and with such proof of the authenticity of the signatures as the
Corporation or its agents may reasonably require.
Section 8.04. Registered Shareholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and other distributions, and to vote as such
owner, and to hold liable for calls and assessments the person registered on its
books as the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
Section 8.05. Lost Certificates. In case any certificate representing
shares shall be lost, stolen or destroyed, the Board of Directors, or any
officer or officers duly authorized by the Board of Directors, may authorize
the issue of a substitute certificate in place of the certificate so lost,
stolen or destroyed, and may cause or authorize such substitute certificate
to be countersigned by the appropriate Transfer Agent and registered by the
appropriate Registrar. In each such case, the applicant for a substitute
certificate shall furnish to the Corporation and to such of its Transfer Agents
and Registrars as may require the same, evidence to their satisfaction,
in their discretion, of the loss, theft or destruction of such certificate
and of the ownership thereof, and also such security or indemnity as may by
them be required.
Article IX
Miscellaneous
Section 9.01. Fiscal Year. The fiscal year of the Corporation shall
end on the last Saturday of January in each year.
Section 9.02. Signatures on Negotiable Instruments. All bills, notes,
checks or other instruments for the payment of money shall be signed or
countersigned by such officers or agents and in such manner as from time to
time may be prescribed by resolution of the Board of Directors, or may be
prescribed by any officer or officers, or any officer and agent jointly, duly
authorized by the Board of Directors.
Section 9.03. Dividends. Except as otherwise provided in the Certificate of
Incorporation, dividends upon the shares of the Corporation may be declared and
paid out of surplus in such amounts as the Board of Directors may determine at
any regular or special meeting.
Section 9.04. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in its discretion, deems
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors deems conducive to the interest
of the Corporation; and in its discretion the Board of Directors may decrease
or abolish any such reserve.
Article X
Amendments
Section 10.01. Power to Amend By-Laws. Notwithstanding any provisions of the
Certificate of Incorporation or any other provisions contained in the By-Laws,
and notwithstanding the fact that a lesser percentage may be specified by law,
the affirmative vote of the holders of at least 80% of the voting power of the
then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class,
shall be required for the shareholders to amend, repeal or adopt any By-Laws of
the Corporation. Any By-Laws of the Corporation may be amended, repealed or
adopted by the Board of Directors, except that the Board of Directors shall not
have power to adopt any By-Law, or expand the authorization conferred by any
By-Law, which by statute only the shareholders have the power to so adopt or
expand. Any By-Law adopted by the Board of Directors may be amended or
repealed by shareholders entitled to vote thereon only as herein provided; and
any By-Law adopted by the shareholders may be amended or repealed by the
Board of Directors, except as limited by statute as above provided, and except
when the shareholders have expressly provided otherwise with respect to any
particular By-Law or By-Laws. The notice of any special meeting of the Board of
Directors or the shareholders, as the case may be, at which action to
amend, repeal or adopt any By-Law or By-Laws is proposed to be taken, shall
include the text or a summary of each By-Law proposed to be repealed or adopted
or as it is proposed to be amended.
Section 10.02. Amendment Affecting Election of Directors; Notice. If
any By-Law regulating an impending election of directors is adopted,
amended or repealed by the Board of Directors, there shall be set forth in the
notice of the next meeting of shareholders for the election of directors the
By-Law so adopted, amended, or repealed, together with a concise statement of
the changes made.
<PAGE>
EXHIBIT 4(a)
WAIVER AND AMENDMENT NO. 4
This Waiver and Amendment No. 4 ("Amendment"), dated as of September 14,
1998, is among ONEIDA LTD., a New York corporation (the "Borrower"), THE CHASE
MANHATTAN BANK (successor by merger to The Chase Manhattan Bank, N.A. and
Chemical Bank), as agent under the Credit Agreement referred to below
("Agent"), and the Banks which are of have become parties to the Credit
Agreement referred to below ("Banks").
RECITALS
A. The Borrower, the Agent and the Banks are or have become parties to
a Credit Agreement dated as of January 19, 1996 which has been amended by
Amendment No. 1 dated as of September 25, 1996, Amendment No. 2 dated as of
November 1, 1996, and Amendment No. 3 dated as of January 24, 1997 (as
amended, hereafter referred to as the "Credit Agreement").
B. Borrower has advised the Agent and Banks that its ratio of Total Funded
Debt to Consolidated Adjusted Tangible Net Worth for the fiscal quarter ending
August 1, 1998 was 1.51 to 1.0, in violation of Section 6.17(a) of the Credit
Agreement.
C. Borrower has requested that the Agent and Banks waive the Event of
Default arising out of Borrower's failure to comply with Section 6.17(a) at
August 1, 1998, and to amend Section 6.17(a) of the Credit Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. all capitalized terms used in this Amendment which
are not otherwise defined shall have the meanings given to those terms in the
Credit Agreement.
2. Waiver. The Banks hereby waive the Event of Default created as a
result of Borrowers' failure to comply with Section 6.17(a) of the Credit
Agreement at August 1, 1998. This waiver is limited to the failure to comply
with Section 6.17(a) at August 1, 1998 and shall not be construed as a waiver
of any other presently existing or future Events of Default.
3. Amendment of Credit Agreement.
(a) Section 6.17(a) of the Credit Agreement is amended to read as
follows:
The ratio of Total Funded Debt of the Borrower and its Restricted
Subsidiaries to Consolidated Adjusted Tangible Net Worth shall not exceed the
following amounts at the end of any fiscal quarter:
1.60 to 1.0 at the end of the fiscal quarter ending
October 31, 1998; and
1.35 to 1.0 at the end of the fiscal quarter ending
January 30, 1999 and at the end of each subsequent fiscal quarter.
4. Representations and Warranties. The Borrower represents and warrants
to the Agent and the Banks that:
(a) Each of the representations and warranties made by the Borrower in
the Credit Agreement is true and correct on and as of the date of this
Amendment (except that Schedule E thereto does not reflect additional liens,
permitted under the Credit Agreement, which were created after the date
thereof).
(b) No Default or Event of Default has occurred and is continuing
except for the Event of Default referenced in Paragraph 2 above.
(c) This Amendment has been duly and validly executed and delivered by
the Borrower and constitutes its legal, valid and binding obligation,
enforceable against the Borrower in accordance with its terms.
5. Effectiveness. This Amendment shall become effective as of the date
set forth above upon the Agent's receipt of a counterpart of this Amendment
duly executed and delivered by the Borrower, the Agent, and each of the Banks.
6. Confirmation of Credit Agreement. Except as amended by this Amendment,
all the provisions of the Credit Agreement remain in full force and effect from
and after the date hereof, and the Borrower hereby ratifies and confirms the
Credit Agreement and each of the documents executed in connection therewith.
From and after the date hereof, all references in the Credit Agreement to "this
Agreement", "hereof", "herein", or similar terms, shall refer to the Credit
Agreement as amended by this Amendment.
7. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. Delivery of an
executed signature page to this Amendment by facsimile transmission shall be as
effective as delivery of a manually signed counterpart.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
THE CHASE MANHATTAN BANK
(as Agent and as Bank)
By: /s/ JOSEPH H. ODO JR. V.P.
Joseph H. Oddo, Jr.
Vice President
NATIONSBANK,N.A.
By:/s/ JAMES T. GILLAND
James T. Gilland
Senior Vice President
MARINE MIDLAND BANK
By: /s/ JOHN R. PENNISI
John R. Pennisi
Vice President
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward W. Thoma
Senior Vice President
<PAGE>
WAIVER
This Waiver ("Waiver"), dated as of December 140 1998, is among The Chase
Manhattan Bank (successor by merger to The Chase Manhattan Bank, N.A. and
Chemical Bank), as agent under the Credit Agreement referred to below
("Agent"), and the Banks which are of have become parties to the Credit
Agreement referred to below ("Banks") in favor of ONEIDA LTD., a New York
corporation ("Borrower").
RECITALS
A. The Borrower, the Agent and the Banks are or have become parties to
a Credit Agreement dated as of January 19, 1996 which has been amended by
Amendment No. 1 dated as of September 25, 1996, Amendment No. 2 dated as of
November 1, 1996, Amendment No. 3 dated as of January 24, 1997, and a Waiver
and Amendment No. 4 dated as of September 14, 1998 (as amended, hereafter
referred to as the "Credit Agreement").
B. Borrower has advised the Agent and Banks that its ratio of Total Funded
Debt to Consolidated Adjusted Tangible Net Worth for the fiscal quarter ending
October 31, 1998 was 1.68 to 1.0, in violation of Section 6.17(a) of the Credit
Agreement.
C. Borrower has requested that the Agent and Banks waive the Event of
Default arising out of Borrower's failure to comply with Section 6.17(a) at
October 31, 1998.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. all capitalized terms used in this Amendment which
are not otherwise defined shall have the meanings given to those terms in the
Credit Agreement.
2. Waiver. The Banks hereby waive the Event of Default created as a
result of Borrowers' failure to comply with Section 6.17(a) of the Credit
Agreement at October 31, 1998. This waiver is limited to the failure to comply
with Section 6.17(a) at October 31, 1998 and shall not be construed as a
waiver of any other presently existing or future Events of Default.
3. Effectiveness. This Waiver shall become effective as of the date set
forth above upon the Agent's receipt of a counterpart of this Waiver duly
executed and delivered by the Agent and each of the Banks.
4. Confirmation of Credit Agreement. Except as waived hereby, all the
provisions of the Credit Agreement remain in full force and effect from and
after the date hereof.
5. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. Delivery of an
executed signature page to this Amendment by facsimile transmission shall be as
effective as delivery of a manually signed counterpart.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
THE CHASE MANHATTAN BANK
(as Agent and as Bank)
By: /s/ JOSEPH H. ODO JR. V.P.
Joseph H. Oddo, Jr.
Vice President
NATIONSBANK,N.A.
By:/s/ W. L. HESS
W. L. Hess
Managing Director
MARINE MIDLAND BANK
By: /s/ JOHN R. PENNISI
John R. Pennisi
Vice President
<PAGE>
AMENDMENT NO. 5
TO
CREDIT AGREEMENT
This Amendment No. 5 ("Amendment"), dated as of February 19, 1999, is among
ONEIDA LTD., a New York corporation (the "Borrower"), THE CHASE MANHATTAN
BANK (successor by merger to The Chase Manhattan Bank, N.A. and Chemical Bank),
as agent under the Credit Agreement referred to below ("Agent"), and the Banks
which are or have become parties to the Credit Agreement referred to
below ("Banks").
RECITALS
A. The Borrower, the Agent and the Banks are or have become parties to
a Credit Agreement dated as of January 19, 1996 which has been amended by
Amendment No. 1 dated as of September 25, 1996, Amendment No. 2 dated as of
November 1, 1996, Amendment No. 3 dated as of January 24, 1997, and a Waiver
and Amendment No. 4 dated as of September 14, 1998 (as amended, hereafter
referred to as the "Credit Agreement").
B. Borrower has requested that the Agent and Banks amend Section 6.17(a)
of the Credit Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Amendment which
are not otherwise defined shall have the meanings given to those terms in the
Credit Agreement.
2. Amendment of Credit Agreement.
(a) Section 6.17(a) of the Credit Agreement is amended to read as
follows:
The ratio of Total Funded Debt of the Borrower and its Restricted
Subsidiaries to Consolidated Adjusted Tangible Net Worth shall not exceed the
following amounts at the end of any fiscal quarter:
1.60 to 1.0 at the end of the fiscal quarter ending
January 30, 1999; and
1.75 to 1.0 at the end of the fiscal quarter ending
May 1, 1999; and
1.65 to 1.0 at the end of the fiscal quarter ending
July 31, 1999; and
1.50 to 1.0 at the end of the fiscal quarter ending
October 30, 1999; and
1.35 to 1.0 at the end of the fiscal quarter ending
January 29, 2000 and at the end of each subsequent fiscal quarter
thereafter.
4. Representations and Warranties. The Borrower represents and
warrants to the Agent and the Banks that:
(a) Each of the representations and warranties made by the Borrower in
the Credit Agreement is true and correct on and as of the date of this
Amendment (except that Schedule E thereto does not reflect additional liens,
permitted under the Credit Agreement, which were created after the date
thereof).
(b) No Default or Event of Default has occurred and is continuing.
(c) This Amendment has been duly and validly executed and delivered by
the Borrower and constitutes its legal, valid and binding obligation,
enforceable against the Borrower in accordance with its terms.
5. Effectiveness. This Amendment shall become effective as of the date
set forth above upon the Agent's receipt of a counterpart of this Amendment
duly executed and delivered by the Borrower, the Agent, and each of the Banks.
6. Confirmation of Credit Agreement. Except as amended by this Amendment,
all the provisions of the Credit Agreement remain in full force and effect from
and after the date hereof, and the Borrower hereby ratifies and confirms the
Credit Agreement and each of the documents executed in connection therewith.
From and after the date hereof, all references in the Credit Agreement to "this
Agreement", "hereof", "herein", or similar terms, shall refer to the Credit
Agreement as amended by this Amendment.
7. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. Delivery of an
executed signature page to this Amendment by facsimile transmission shall be as
effective as delivery of a manually signed counterpart.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
THE CHASE MANHATTAN BANK
(as Agent and as Bank)
By: /s/ JOSEPH H. ODO JR. V.P.
Joseph H. Oddo, Jr.
Vice President
NATIONSBANK,N.A.
By:/s/ W. LAWRENCE HESS
W. Lawrence Hess
Managing Director
MARINE MIDLAND BANK
By: /s/ JOHN R. PENNISI
John R. Pennisi
Vice President
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward W. Thoma
Senior Vice President
<PAGE>
EXHIBIT 10(b)
ONEIDA SILVERSMITHS DIVISION MANAGEMENT INCENTIVE PLAN
- - Approximately 73 key Senior Executive, Senior Managers and Managers from
the Oneida Silversmiths Division participate in the Management Incentive Plan.
The eligibility criteria for the Plan are listed on the table below.
- - Each executive and managers' incentive target payout is based upon his or
her location within the following three ranges:
RANGE INCENTIVE TARGETS
1. Senior Executive $30,000 - $90,000
2. Senior Manager $20,000 - $30,000
3. Manager $ 6,000 - $20,000
- - The plan target for fiscal 2000 is:
Measure Weighting FY 2000 Goal
Operating Income 100% $37,500,000
- - A minimum of 50% of each executive and manager's target amount is paid if 50%
of the FY Goal is achieved. A maximum of 150% of each executive and manager's
target amount is paid if 150% of the FY Goal is achieved. Points in between are
determined arithmetically.
- - Division management, with the approval of the Corporate CEO and COO, has the
discretion to increase or decrease an individual executive or manager's final
payout based upon personal performance.
- - The Corporate CEO and COO have the authority to adjust the calculation of
Operating Income in recognition of extraordinary or non-recurring events or
because of changes in methods of accounting during the fiscal year.
- - Executives and managers in the Management Incentive Plan do not participate in
Oneida Ltd.'s Profit Sharing Plan.
- - The fiscal 2000 management incentive will be paid in March 2000, and
participants must be on the active payroll on the last day of the Fiscal Year
in order to receive payment. In the event of illness, death or retirement during
the fiscal year, the incentive will be paid on a pro-rata basis based on W-2
earnings for that year.
MANAGEMENT INCENTIVE PLAN ELIGIBILITY
QUALIFICATIONS REQUIRE 1000 HRS MUST BE ON ACTIVE
AT WORK PAYROLL LAST DAY OF FY
_________________________________________________________________
Active Employee: YES YES
- -----------------------------------------------------------------
Retiree: NO NO
- -----------------------------------------------------------------
Active Employee dies
during FY: NO NO
- -----------------------------------------------------------------
Active Employee disabled
during FY and dies before
end of FY: NO NO
- -----------------------------------------------------------------
Active Employee on short-
term disability (less
than 6 mo.) YES, but* NO
*salary continuation counts as time worked
- -----------------------------------------------------------------
Active Employee goes to
LTD during FY: YES* NO
*if salary continuation + time worked = 6 months
- -----------------------------------------------------------------
Disabled all year: YES YES
- -----------------------------------------------------------------
Workers' Comp: NO NO
- -----------------------------------------------------------------
<PAGE>
EXHIBIT 10(c)
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).
"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.
(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 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 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 pric 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.
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 (iii) 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 10(d)
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 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 closing price as reported on said composite tape or automated system
for the most recent day during which a sale occurred).
"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.
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). The Option shall have a per share exercise price
equal to the Fair Market Value of the Common Stock on the date such Option is
granted 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.
(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.
(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.
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 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 10(g)
ONEIDA LTD.
DEFERRED COMPENSATION PLAN
FOR
KEY EMPLOYEES
Restated Effective August 1, 1997
PREAMBLE
The purpose of this plan is to provide supplemental retirement income to
a select group of management and highly compensated employees. The plan
permits eligible employees to defer receipt of future compensation and have the
deferred compensation paid upon the retirement or termination of the employee's
employment.
This is a complete restatement of the plan. The plan became effective on
November 1, 1993. This restatement is effective August 1, 1997.
1. DEFINITIONS
When used herein, the following words shall have the meanings set
forth below, unless the context clearly indicates otherwise:
"Account" shall mean the memorandum account established for each Participant
pursuant to paragraph 10.
"Additional Deferred Compensation" shall mean the amounts paid by the Company
in accordance with paragraph 3.
"Beneficiary" shall mean the person(s) designated by a Participant in
accordance with paragraph 7 to receive the unpaid balance of the Participant's
benefit following the Participant's death.
"Board of Directors" shall mean the Board of Directors of Oneida Ltd., elected
annually by shareholders.
"Bonus" shall mean any profit-sharing bonus that will be paid in cash by the
Company for a Plan Year.
"Committee" shall mean the Management Development and Executive
Compensation Committee periodically appointed by the Board of Directors.
"Company" shall mean Oneida Ltd. and any subsidiary designated to
participate by the Executive Committee except for the purpose of paragraphs 10,
12, 15 and 17 where it shall mean Oneida Ltd. alone.
"Deferred Compensation" shall mean the amount deferred by a Participant in
accordance with paragraph 2.
"Participant" shall mean an employee of the Company who is selected by the
Company to participate in the Plan and who timely executes and returns to the
Plan Administrator a Participation Agreement.
Participation Agreement" shall mean the written agreement between the Company
and a Participant, in the form attached as Exhibit A of the Plan, which sets
forth the Participant's election to participate in the Plan, the Salary or
Bonus the Participant elects to defer for a Plan Year, and such other terms
and conditions determined by the Plan Administrator to be appropriate
and consistent with the terms of the Plan.
"Plan" shall mean the Oneida Ltd. Deferred Compensation Plan For Key Employees.
"Plan Year" shall mean the twelve months ending December 31; provided, however,
that the first Plan Year will be a "short year" and shall run from November
1, 1993 through December 31, 1993.
"Plan Administrator" shall mean the Executive Committee and its designee(s).
"Salary" shall mean a Participant's regular base salary during a Plan Year,
exclusive of bonuses or any other form of extra or special remuneration.
2. AMOUNT OF DEFERRED COMPENSATION
Pursuant to a duly executed Participation Agreement, a Participant may
elect to defer in any Plan Year any fixed percentage or amount of the
Participant's Salary and of the Participant's Bonus which may be payable for
any such Plan Year. The foregoing shall be subject to a minimum weekly deferral
of $50.00. Participation Agreements must be executed and returned to the Plan
Administrator prior to the first day of the Plan Year to which the Participation
Agreement relates; provided, however, employees who were not eligible to
participate prior to the beginning of a Plan Year, may commence deferrals upon
20 days notice by executing and delivering a Participation Agreement to the Plan
Administrator within 30 days of becoming eligible. A Participation Agreement
shall apply only to Salary or Bonus earned after the Participation Agreement
is signed. A Participant may modify or revoke a Participation Agreement (a)
with respect to subsequent Salary and/or Bonus earned at least 20 days prior to
the beginning of any Plan Year, and (b) with respect to subsequent Salary
earned, one time during any Plan year upon 20 days notice by delivery of a new
Participation Agreement to the Plan Administrator. A Participant's Salary and
Bonus deferred under this paragraph will be credited to the Account
maintained by the Company on behalf of the Participant.
3. ADDITIONAL DEFERRED COMPENSATION
The Company shall credit the Account of the Participant, as Additional
Deferred Compensation, an amount calculated by applying a periodic
"Investment Rate" to all amounts of Deferred Compensation credited hereunder by
remaining unpaid (and of any amounts of Additional Deferred Compensation
previously earned with respect to such Deferred Compensation and remaining
unpaid under the Plan). Additional Deferred Compensation will start being
credited on the first day of the month following the month in which the Deferred
Compensation is credited hereunder and continue with respect to all remaining
unpaid sums of Deferred Compensation and Additional Deferred Compensation
during any payout period, until all such sums are paid out in accordance with
this Plan. The "Investment Rate" will be defined as Moody's Baa Corporate Bond
rate, compounded monthly (e.g., if the Baa rate if 7% and if a Participant's
Account begins a month with a $10,000 balance, Additional Deferred Compensation
for that month would be $58.33). The Investment Rate will be adjusted at the
beginning of each calendar quarter based on the data contained in the Federal
Reserve's statistical release #H.15, Selected Interest Rates.
4. PAYMENT FOR REASONS OTHER THAN DEATH
(a) Upon a Participant's attainment of age 62, or, if later, upon the
Participant's termination of employment that occurs for any reason other than
the Participant's death, and provided the Participant has not made an election
permitted under sections (b) or (c) of this paragraph, the Company will make
monthly payments to the Participant for a period of 10 years commencing on
the first day of the month coincident with or next following the Participant's
attainment of age 62 or, if later, the Participant's termination of employment.
(b) Rather than receive payments as provided in section (a) of this
paragraph, and provided that payments to the Participant have not already
commenced, a Participant may elect to receive payments in an alternative
manner. A participant may elect to have payments commence at the beginning of
any specified Plan Year following the Participant's termination of employment
but in no event later than the beginning of the Plan Year following the year in
which the Participant turns 70 1/2 to be effective, a notice under this
section (b) must be in writing and must be received by the Plan Administrator
at least 12 months prior to the Participant's termination of employment. An
election made and filed with the Plan Administrator within the 12-month period
prior to the participant's termination of employment will have no effect unless
it is approved by the Committee.
(c) If payments to a Participant have not commenced, a Participant may
revoke and modify a previous election that was made under section (b) of this
paragraph or under this section (c). To be effective, a modification under
this section (c) must be in writing and must be received by the Plan
Administrator at least 12 months prior to the Participant's termination of
employment. A modification election made and filed with the Plan Administrator
within the 12-month period prior to the participant's termination of
employment will have no effect unless it is approved by the Committee.
(d) The foregoing notwithstanding, the Committee, in its sole discretion,
may cause payments to commence sooner than payments would otherwise commence
under this paragraph, and, even if payments to a Participant under the Plan have
already commenced, cause the amount of the Participant's Account to be paid over
a period of time that is shorter than the period payments would otherwise
be paid, but not for a period of less than 3 years. Furthermore, upon receipt
of a Participant's written request, the Committee, in its sole discretion may
delay the commencement of payments to the Participant to a date that is later
than the date payments would otherwise commence but in no event later than the
beginning of the Plan year following the year in which the Participant turns
70 1/2, and even if payments have already commenced, cause payments to be made
over a period of time that is longer than the period payments would otherwise
be paid, but in no event for a period longer than 10 years.
(e) Amounts paid to a participant in more than one payment are to be paid
in installments that are approximately equal and calculated to fully disburse
the Participant's Account. However, the Committee, in its sole discretion, will
determine the amount of each payment, and may adjust the amount of any payment
for changes in the Investment rate, the period of time over which payments are
to be paid, or for any other reasonable purpose.
5. PAYMENT UPON DEATH
(a) If the Participant's employment is terminated by reason of the
Participant's death, and provided payments to the Participant have not
already commenced, the Company will commence payments to the Participant's
Beneficiary from the Participant's Account as of the first of the month next
following the date of the Participant's death. These payments will be made
monthly, and will be made over a period of 10 years.
(b) If a Participant dies after payments have commenced, payments will be
paid to the Participant's Beneficiary in the same manner as if the Beneficiary
were the Participant.
(c) The foregoing notwithstanding, the Committee, in its sole discretion,
may cause payments to be paid over a period of time that is shorter than the
period payments would otherwise be paid, even if payments have already
commenced, but not for a period less than 3 years. Furthermore, upon receipt
of a Beneficiary's written request, the Committee, in its sole discretion, may
delay the commencement of payments to the Beneficiary to a date that is later
than the date payments would otherwise commence, and even if payments have
already commenced, cause payments to be made over a period of time that is
longer than the period payments would otherwise be paid, but not for a
period more than 10 years.
(d) If the Beneficiary should die before the payment of all installments
due, the Plan Administrator shall pay the remaining amount of the Participant's
Account in a lump sum to the estate of the Beneficiary.
6. GENUINE HARDSHIP
Upon the written application of the Participant in the case of "genuine
hardship", the Committee may permit payment to the Participant of all or a
portion of the Participant's Account, as the Committee shall determine is
necessary to alleviate the hardship. Such hardship must be proved by
positive evidence submitted to the Committee. The Committee shall have sole
discretion, exercisable in conformance with nondiscriminatory policy applicable
to Participants to determine whether such genuine hardship exists and, if
so, the amount necessary to alleviate such hardship and the manner in which
such payments shall be made. Any such determination of the Committee shall be
final, conclusive and binding on Participants and all other interested
persons.
For purposes of this paragraph 6, "genuine hardship" shall mean financial
hardship resulting from an accident to or sickness of the Participant, his/her
spouse, his/her dependents or other unanticipated emergency that is caused by
an event beyond the control of the Participant, and that would result in
severe financial hardship to the Participant if early payment were not
permitted.
7. DESIGNATION OF BENEFICIARY
The Participant may designate a Beneficiary to receive any amount due
hereunder by executing a written notice thereof to the Plan Administrator at any
time prior to his/her death and may revoke or change the Beneficiary
designated therein without the Beneficiary's consent by written notice
delivered to the Plan Administrator at any time and from time to time prior
to the Participant's death. If the Participant shall have failed to designate
a Beneficiary, or if no such Beneficiary shall survive Participant, then such
amount shall be paid to the Participant's estate.
8. NO RIGHT TO EMPLOYMENT
Nothing contained herein shall be construed as conferring upon the
Participant the right to continue in the employ of the Company as an executive
or in any other capacity.
9. OTHER EMPLOYEE BENEFITS
Any amounts payable under this Plan shall not be deemed salary or other
compensation to the Participant for the purpose of computing benefits to which
he/she may be entitled under any pension plan, profit-sharing plan, stock bonus
plan or other plan or arrangement of the Company for the benefit of its
employees, unless specifically allowed under such plan.
10. DEFERRED COMPENSATION AS AN UNSECURED PROMISE
The Company shall establish a memorandum "Account" on its books for each
Participant as a bookkeeping convenience for the purpose of accounting for
Participants' Deferred Compensation or Additional deferred Compensation
hereunder. However, the Company shall not be required to segregate any funds
representing such Deferred Compensation or Additional Deferred Compensation
payments, and nothing in this Plan shall be construed as providing for
such segregation. In addition, the Company shall not be deemed to be a trustee
for the Participant of any Deferred Compensation or Additional Deferred
Compensation payments hereunder, and the Participant, his/her Beneficiary and
any other person or persons having or claiming a right to payments hereunder or
to any interest in this Plan shall rely solely on the unsecured promise of the
Company to make the payments required hereunder. Nothing herein shall be
construed to give the Participant, his/her Beneficiary or any other person or
persons any right, title, interest or claim in or to any specific asset, fund,
reserve, account or property of any kind whatsoever owned by the Company or in
which it may have any right, title or interest now or in the future, but the
Participant shall have the right to enforce his claim against the Company in the
same manner as any unsecured creditor.
11. WITHHOLDING
The Company retains the right to deduct and withhold from any payments due
hereunder all sums which it may be required to deduct or withhold pursuant to
any applicable statute, law, regulation or order of any jurisdiction
whatsoever.
12. CHANGE OF CONTROL
(a) Subject to the limitation described in paragraph 12(a)(ii), if
Participant's employment by the Company is terminated for reasons other
than gross misconduct within 24 months following a "Change in Control", the
Company shall:
(i) Pay to Participant as of the first day of the month following
the Participant's termination of employment a single lump sum an amount equal
to 2.99 times the highest amount of deferred Compensation deferred by a
Participant in any one of the five years preceding the year of termination.
(ii) Pay to the Participant, as of the first day of the month following
the Participant's termination of employment in a single lump sum the full
amount of the Participant's Account.
(iii) In no event shall the aggregate of all amounts paid to, or
value received by, Participant following a "Change of Control" (whether paid
or received pursuant to this paragraph 12 or otherwise) exceed the maximum
aggregate amount or value that could be paid to, or received by, Participant
without such aggregate amount being treated as a "parachute payment" within the
meaning of Internal Revenue Code Section 280G.
(b) For purposes of paragraph 12(a), a "Change of Control" shall be deemed
to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities;
(ii) 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
Company to effect a transaction described in clause (i), (iii) or (iv) of
this paragraph) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cause for any reason to constitute at least a majority
of the Board of Directors;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other company, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or (B) a merger or consolidation effected
to implement a recapitalization of the Company (or similar transaction) in
which no "person" (as hereinabove defined) acquires more than 20% of
the combined voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
13. NO ASSIGNMENT
Neither the Participant, nor his/her Beneficiary, nor any other person
entitled to any payment hereunder shall have power to transfer, assign,
anticipate, mortgage or otherwise encumber any right to receive a payment in
advance of any of such payment, and any attempted transfer, assignment,
anticipation, mortgage or encumbrance shall be void. No payment shall be
subject to seizure for the payment of public or private debts, judgments,
alimony or separate maintenance, or be transferable by operation of law in
event of bankruptcy, insolvency or otherwise.
14. SUCCESSORS AND ASSIGNS
The Plan shall inure to the benefit, of and shall be binding upon the
Participant, his/her Beneficiaries, and their legal representatives, and the
Company, its successors and assigns. For purposes of this Plan, the term
"successors shall mean any person, firm, corporation or business entity which
by merger, consolidation, purchase of assets or otherwise, succeeds to or
acquires all or substantially all of the assets or business of the Company.
15. AMENDMENT AND TERMINATION
The Company intends to maintain the Plan until all benefit payments are
made pursuant to the Plan. However, the Company reserves the right to amend
or terminate the Plan at any time. Any such amendment or termination shall be
made pursuant to appropriate action of the Committee. Unless each affected
Participant or Beneficiary provides written consent, no amendment or termination
of the Plan shall directly or indirectly affect the timing or deprive any
Participant of any portion of any amount which would otherwise be payable to
a Participant. Notwithstanding any other provision in the Plan to the
contrary, the Plan shall terminate automatically upon the final payment of
all amounts payable hereunder.
16. CLAIMS PROCEDURE
16.01 Notice of Denial. If a request for benefits is wholly or partially
denied, notice of the denial, prepared in accordance with paragraph 16.02, shall
be furnished to the claimant within a reasonable period of time, not to exceed
60 days, after receipt of the request by the Plan Administrator, unless special
circumstances require an extension of time for processing the request. If such
an extension of time is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 60-day period.
In no event shall such extension exceed a period of 60 days from the end of
such initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date on which the Plan
Administrator expects to communicate a decision.
16.02 Content of Notice. The Plan Administrator shall provide every
claimant whose request for benefits is denied a written notice setting
forth, in a manner calculated to be understood by the claimant, the
following:
(a) a specific reason or reasons for the denial;
(b) specific references to the pertinent Plan provisions upon
which the denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the request and an explanation of why such
material or information is necessary; and
(d) an explanation of the Plan's review procedure, as set forth in
paragraphs 16.03 and 16.04.
16.03 Review Procedure. The purpose of the review procedure set forth in
this paragraph and paragraph 16.04 is to provide a procedure by which a
claimant under the Plan may have reasonable opportunity to appeal a denial of
a request for benefits to the Plan Administrator for a full and fair review.
To accomplish that purpose, the claimant (or the claimant's duly authorized
representative) may:
(a) review pertinent Plan documents; and
(b) submit issues and comments in writing.
A claimant (or the claimant's duly authorized representative) shall
request a review by filing a written application for review with the Plan
Administrator at any time within 60 days after receipt by the claimant of
written notice of the denial of the claimant's request for benefits.
16.04 Decision on Review. A decision on review of a denial request for
benefits shall be made in the following manner:
(a) the decision on review shall be made by the Plan Administrator.
The Plan Administrator shall make a decision promptly, but not later than 60
days after receipt of the request for review, unless special circumstances
require an extension of time for processing, in which case a decision shall be
rendered as soon as possible, but not later than 90 days after receipt of the
request for review. If such an extension of time for review is required,
written notice of the extension shall be furnished by the Plan Administrator to
the claimant prior to the commencement of the extension.
(b) the decision on review shall be in writing from the Plan
Administrator, shall be written in a manner calculated to be understood by the
claimant, and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions upon which the decision is based.
17. INTERPRETATION
The Committee shall have full power and authority to interpret,
construe and administer this Plan and the Company's interpretation and
construction thereof, and actions thereunder, shall be binding and conclusive
on all persons for all purposes.
18. GOVERNING LAW
The Plan is established under, and shall be governed and construed
according to, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and regulations promulgated thereunder. The laws of the State of
New York also shall apply to the extent such laws are not preempted by ERISA.
19. JURISDICTION AND VENUE
The jurisdiction of any proceeding arising out of or with respect to this
Agreement shall be in a court of competent jurisdiction in the State of New
York. The parties to any such proceeding shall be subject to personal
jurisdiction in the State of New York. Venue of any proceeding shall lie in
Madison County, New York, if a state court action, and in the United States
District Court, Northern District, if a federal court action.
20. SEVERABILITY
If one or more provisions of the Plan, or any part thereof, shall be
determined by a court of competent jurisdiction to be invalid or
unenforceable, then the Plan shall be administered as if such invalid or
unenforceable provision had not been contained in the Plan.
The invalidity or unenforceability of any Plan provision, or any part
thereof, shall not affect the validity and enforceability of any Plan
provision or any part thereof.
The Company caused the Plan to be executed by a duly authorized
officer to be effective as of August 1, 1997, and Buffalo China, Inc. and
THC Systems, Inc. by execution by a duly authorized officer hereby adopt the
restatement of the Plan effective as of August 1, 1997.
ONEIDA LTD.
BY:_____________________
BUFFALO CHINA, INC.
BY:_________________________
THC SYSTEMS, INC.
BY:_________________________
<PAGE>
EXHIBIT A
ONEIDA LTD.
DEFERRED COMPENSATION PLAN
FOR
KEY EMPLOYEES
PARTICIPATION AGREEMENT
This sets forth the Participation Agreement entered into between the
Company and __________________("Participant") pursuant to the Oneida Ltd.
Deferred compensation Plan for Key Employees ("Plan").
RECITALS
A. The Company established the Plan effective as of November 1, 1993.
B. The Company selected Participant to participate in the Plan.
C. The Plan provides that, to become a Participant in the Plan, Participant
must enter into this Participation Agreement.
TERMS
1. Company's Duties. the Company hereby acknowledges that it has selected
Participant to participate in the Plan, and agrees to pay to (or on behalf of)
Participant the benefits provided under the Plan, subject to all the terms and
conditions of the Plan.
2. Deferral Election. Until revoked or modified by the Participant, the
Participant hereby elects to participate in the Plan and to defer future
compensation otherwise payable to the Participant for services rendered to the
Company as follows (subject to a minimum weekly deferral of $50.00).
Amount per Plan Year $___________.
OR
Percentage of Salary per Plan Year
AND/OR
Percentage of Bonus per Plan Year
3. Participant's Duties. Participant hereby acknowledges that he/she has read
and understands the terms and conditions of the Plan, and agrees to be bound
by, and subject to, all the terms and conditions of the Plan.
______________________________
Company
________________
Date
______________________________
Participant
________________
Date
I DO NOT wish to participate in ______. [ ]
<PAGE>
DESIGNATION OF BENEFICIARY
I, hereby designate ______________________ to be the beneficiary of
any amount which may become payable upon my death under a Deferred Compensation
Participation Agreement dated as of _______________________ between me and the
Company and I hereby revoke any prior designations made by me under such
agreement.
______________________________
Date Received ___________________
BY:____________________________
<PAGE>
EXHIBIT 13
CONSOLIDATED STATEMENTS OF OPERATIONS
ONEIDA LTD.
For the years ended January 1999, 1998 and 1997
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Year ended in January 1999 1998 1997
<S> <C> <C> <C>
NET SALES $465,913 $442,866 $376,923
COST OF SALES 292,898 274,808 243,934
GROSS MARGIN 173,015 168,058 132,989
OPERATING REVENUES 825
173,840 168,058 132,989
OPERATING EXPENSES:
Selling, advertising
and distribution 91,789 78,467 67,868
General and administrative 36,993 38,890 29,231
Restructuring costs 4,980
Total 133,762 117,357 97,099
INCOME FROM OPERATIONS 40,078 50,701 35,890
OTHER INCOME (EXPENSE) 837 (1,554) (832)
INTEREST EXPENSE 8,963 6,823 6,503
INCOME FROM CONTINUING OPREATIONS
BEFORE INCOME TAXES 31,952 42,324 28,555
PROVISION FOR INCOME TAXES 12,202 16,189 11,279
INCOME FROM CONTINUING
OPERATIONS 19,750 26,135 17,276
LOSS FROM DISCONTINUED
OPERATIONS 304
GAIN ON DISPOSAL OF DISCONTINUED
OPERATIONS 2,566
NET INCOME $ 19,750 $28,701 $16,972
EARNINGS PER SHARE OF COMMON STOCK:
Continuing operations:
Basic $1.18 $1.57 $1.04
Diluted 1.16 1.55 1.02
Net income:
Basic 1.18 1.73 1.02
Diluted 1.16 1.71 1.00
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED BALANCE SHEETS
ONEIDA LTD.
<TABLE>
<CAPTION>
(Thousands)
ASSETS January 30, January 31,
1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash $1,913 $3,095
Receivables 75,696 63,922
Inventories 190,112 133,419
Other current assets 8,217 9,408
Total current assets 275,938 209,844
PROPERTY, PLANT AND EQUIPMENT:
Land and buildings 56,378 49,505
Machinery and equipment 161,660 156,767
Total 218,038 206,272
Less accumulated depreciation 123,010 121,460
Property, plant and
equipment - net 95,028 84,812
OTHER ASSETS:
Intangible assets - net
of accumulated amortization
of $7,156,000 and $3,051,000 39,202 38,885
Deferred income taxes 19,004 18,820
Other 12,896 11,225
TOTAL $442,068 $363,586
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY January 30, January 31,
1999 1998
<S> <C> <C>
CURRENT LIABILITIES:
Short-term debt $56,060 $12,717
Accounts payable 26,638 21,735
Accrued liabilities 48,384 51,347
Current installments of long-term debt 4,790 4,711
Total current liabilities 135,872 90,510
LONG-TERM DEBT 89,605 69,415
OTHER LIABILITIES:
Accrued postretirement liability 54,264 53,114
Accrued pension liability 9,584 5,317
Other liabilities 12,495 9,973
Total 76,343 68,404
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock--
$25 par value; authorized 95,660
shares, issued 87,411 and 88,001
shares, respectively; callable
at $30 per share 2,185 2,200
Common stock--$l.00 par value; authorized
48,000,000 shares, issued 17,423,478
and 17,091,509 shares, respectively 17,423 17,091
Additional paid-in capital 79,737 76,007
Retained earnings 65,870 54,620
Accumulated other comprehensive income (11,079) (8,669)
Less cost of common stock held in
treasury; 816,284 and 468,568
shares, respectively (13,888) (5,632)
Less unallocated ESOP shares of
common stock of 13,866 (360)
Stockholders' equity 140,248 135,257
TOTAL $442,068 $363,586
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
ONEIDA LTD.
for the years ended January 1999, 1998 and 1997
<TABLE>
<CAPTION>
(Thousands)
Accumulated
Additional Other Unallocated
Comp Common Common Preferred Paid-in Retained Comp Treasury ESOP
Income Shares Stock Stock Capital Earnings Income Stock Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance January 1996 11,706 $11,706 $2,225 $81,150 $28,936 $(8,614) $(8,563) $(540)
Stock plan
activity, net 162 162 2,144 248
Purchase/retirement
of treasury stock,
net (9) (191) (1,841)
Cash dividends
declared ($.35
per share) (6,015)
Net income 16,972 16,972
Other comprehensive
income 146 146
Comprehensive income $17,118
ESOP activity, net 402
Balance January 1997 11,868 11,868 2,216 83,103 39,893 (8,468) (10,156) (138)
Stock plan
activity, net 536 536 9,449 221
Purchase/retirement
of treasury stock, net (940) (940) (16) (16,545) 4,303
Cash dividends
declared ($.45 per
share) (7,765)
Net income $28,701 28,701
Other comprehensive
income (201) (201)
Comprehensive income $28,500
Effect of three-for-
two stock split 5,627 5,627 (6,209)
ESOP activity, net (222)
Balance January 1998 17,091 17,019 2,200 76,007 54,620 (8,669) (5,632) (360)
Stock plan activity, net 369 369 3,729
Purchase/retirement of
treasury stock, net (16) (16) (8,503)
Cancelled stock (21) (21) (15) 1 247
Cash dividends declared
($.50 per share) (8,500)
Net income $19,750 19,750
Other comprehensive
income (2,410) (2,410)
Comprehensive income $17,340
ESOP activity net 360
Balance January 1999 17,423 $17,423 $2,185 $79,737 $65,870 $(11,079) $(13,888)
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
ONEIDA LTD.
for the years ended January 1999, 1998 and 1997
<TABLE>
(Thousands)
Year ended in January 1999 1998 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $19,750 $28,701 $16,972
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 11,717 11,275 11,455
Amortization of intangibles 4,105 2,490 561
Deferred taxes and other
non-cash charges 2,915 (8,959) 1,460
Decrease (increase) in operating
assets:
Receivables (12,040) (13,910) (909)
Inventories (55,175) (7,863) 11,276
Other current assets 1,164 5,424 (2,452)
Other assets 1,210 414 582
Increase (decrease) in accounts
payable 5,432 6,362 (1,383)
Increase (decrease) in accrued
liabilities (3,615) 14,032 7,452
Discontinued operations 3,228
Net cash provided by (used
in) operating activities (24,537) 37,966 48,242
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of subsidiaries and
minority interest (5,137) (19,433) (48,100)
Property, plant and equipment
expenditures--net (21,774) (13,612) (10,895)
Other, net (937) (105) (528)
Proceeds from sale of discontinued
operations 33,762
Discontinued operations (11,319)
Net cash provided by (used
in) investing activities (27,848) 612 (70,842)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock 4,098 10,206 2,553
Purchase of treasury stock (8,306) (13,780) (2,041)
Purchase/allocation of
ESOP Shares--net 360 (222) 402
Payments of short-term
debt--net 43,343 (3,182) (8,474)
Proceeds from issuance
of long-term debt 24,928 6,000 35,388
Payment of long-term debt (4,738) (29,704) (5,436)
Dividends paid (8,500) (7,765) (6,015)
Borrowings by discontinued
operations 6,500
Net cash provided by (used)
in financing activities 51,185 (38,447) 22,877
EFFECT OF EXCHANGE RATE CHANGES ON CASH 18 (219) 59
NET INCREASE (DECREASE) IN CASH (1,182) (88) 336
CASH AT BEGINNING OF YEAR 3,095 3,183 2,847
CASH AT END OF YEAR $1,913 $3,095 $3,183
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $8,562 $7,184 $6,575
Income taxes paid 14,771 15,516 11,285
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. The Company uses a 52-53 week fiscal year ending on the
last Saturday in January. Results of operations include 53 weeks in 1998. The
financial statements of certain foreign subsidiaries are consolidated with those
of the parent on the basis of years ending in December. The financial
statements reflect the acquisition of THC Systems, Inc. as of November 4,
1996. The financial statements also reflect the operations of Camden Wire
Co., Inc. which have been shown as discontinued operations as of October 26,
1996. Camden was sold on February 12, 1997. The notes to the financial
statements contain information pertaining to the continuing operations of
the Company. See Note 2 for information pertaining to the acquisition
and disposition of these subsidiaries. Certain reclassifications have been
made to the financial statements for prior years to conform to the presentation
for 1999.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
dates of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from
those estimates.
Foreign Currency Translation
Assets and liabilities of certain non-U.S. subsidiaries, operating
under normal economic conditions, are translated at current exchange rates,
and related revenues and expenses are translated at average exchange rates in
effect during the period. Resulting translation adjustments are recorded as a
component of accumulated other comprehensive income. Financial results of non-
U.S. subsidiaries in highly inflationary economies are translated using a
combination of current and historical exchange rates and any translation
adjustments are included in net earnings, along with all transaction gains and
losses for the period.
Earnings Per Share
Basic and diluted earnings per share are presented for each period in
which a statement of operations is presented. Basic earnings per share is
computed by dividing income less preferred stock dividends by the weighted
average shares actually outstanding for the period. Diluted earnings per
share includes the potentially dilutive effect of shares issuable under the
employee stock purchase and incentive stock option plans.
Inventories
Inventories are valued at the lower of cost or market. Approximately
26% of inventories are valued under the last-in, first-out (LIFO) method, with
the remainder valued under the first-in, first-out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is provided over
the estimated useful lives of the related assets, generally using the straight-
line method.
Interest relating to the cost of acquiring certain fixed assets is capitalized
and amortized over the asset's estimated useful life.
Intangible Assets
Intangible assets resulted from the allocation of the purchase price of the
acquisition of certain businesses. These assets are amortized using the
straight-line method over 15 years. The Company assesses the recoverability
of its intangible assets by determining whether the amortization over the
remaining life of its intangible assets can be recovered through undiscounted
future operating cash flows and reviews for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be fully recoverable.
Fair Value of Financial Instruments
The estimated fair market values of the Company's financial instruments,
principally long-term debt, are estimated using discounted cash flows, based
on current market rates for similar borrowings. The carrying amounts for
short-term borrowings approximate their fair values.
Revenue Recognition
Sales are recorded when goods are shipped. The Company's general policy is not
to allow customer returns unless they are specifically preauthorized.
Treasury Stock
Treasury stock purchases are recorded at cost. During 1999, 1998, and 1997
the Company purchased 363,900, and on a pre-split basis, 560,400 and 112,671
shares of treasury stock at an average cost of $23.37, $24.52 and $16.34,
respectively. The Company purchases treasury stock primarily to improve
shareholder value. During January 1998, 1,500,000 shares of treasury stock were
retired at an average cost of $12.03. As of January 1999, the Company has
been authorized by the Board of Directors to repurchase up to 377,200
additional shares.
Advertising Costs
Advertising costs are expensed as incurred. Advertising expenses amounted to
$3,867,000, $3,837,000 and $3,577,000 during 1999, 1998 and 1997, respectively.
Restructuring Costs
Included in the year ended January 1999 is a charge totaling $4,980,000
related to a restructuring program that was announced on January 4, 1999. The
program to lower annual overhead costs included a voluntary early retirement
offer that was accepted by 60 eligible employees as well as the elimination of
approximately 60 overhead positions. The costs incurred were primarily the
accrual of severance and retirement benefits. The restructuring charge
decreased diluted earnings by $.19 per share.
Comprehensive Income
Effective February 1, 1998, the Company adopted Statements of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income." This
pronouncement requires the Company to report the effects of foreign currency
translation adjustments on comprehensive income. See the Consolidated
Statement of Changes in Stockholders' Equity for a summary of Comprehensive
Income.
2. ACQUISITION AND DISPOSITION
Acquisition of THC Systems, Inc.
On November 4, 1996, the Company purchased the net assets of THC Systems, Inc.
(Rego China), a leading importer of institutional china for the foodservice
industry.
The acquisition has been accounted for as a purchase and, accordingly,
the purchase price was allocated to the net assets acquired based upon their
fair values at the date of acquisition. Allocation of the cost to acquire Rego
China is summarized as
follows:
<TABLE>
<CAPTION>
(Thousands)
<S> <C>
Working Capital $12,800
Cost in excess of net assets acquired 35,300
Total costs to acquire Rego China $48,100
</TABLE>
The financial statements include the results of operations of Rego from the
date of acquisition. On a pro forma basis, assuming the acquisition had
occurred at the beginning of 1997 and based on unaudited amounts for Rego for
the periods involved, the consolidated results of operations of the Company for
1997 would have been as follows:
<TABLE>
<CAPTION>
(Thousands except per share amounts)
1997
<S> <C>
Net sales $402,867
Net income 16,194
Net income per share of common stock:
Basic .97
Diluted .96
</TABLE>
Other Acquisitions and Investments
On July 1, 1998, the Company purchased substantially all of the net assets of
Badgin Nominees Pty, Ltd for $5,000,000. Badgin operated two Australian-based
businesses known as Stanley Rogers & Son and Westminster China, which were
involved in the distribution of flatware and dinnerware in Australia and New
Zealand. This business has been merged with Oneida's existing distribution
efforts in the region to form a new subsidiary, Oneida Australia.
On January 8, 1998, the Company, through its Italian subsidiary, Sant'Andrea,
S.r.l., acquired Table Top Engineering and Design, S.r.l., (TTE&D) of Vercelli,
Italy for $13,000,000. TTE&D has been the primary product development and
manufacturing source used by Sant'Andrea since its formation approximately 10
years ago.
On September 30, 1997, the Company acquired a 25.1% interest in Schott Zwiesel
Glaswerke AG, a subsidiary of Schott Glaswerke, for a total cost of $9,000,000.
Schott Zwiesel, a German Corporation, is a manufacturer of tabletop glassware.
Prior to this transaction, Oneida had become the North American distributor of
Schott Zwiesel Products. The investment is accounted for under the equity
method.
Disposition of Camden Wire Co., Inc.
In October 1996, the Company adopted a plan of disposal of its Camden Wire
Co., Inc. subsidiary (Camden). Accordingly, the Company reflected the
operating results of Camden prior to the adoption of the plan as a
discontinued operation.
On February 12, 1997, Camden was sold to an unrelated third party for
$43,500,000 in cash. The sale resulted in an after tax gain of $2,566,000 (net
of applicable income taxes of $3,716,000), or $.16 per share. Operating losses
of Camden for the fourth quarter of fiscal 1997 and first quarter of 1998
(subsequent to the plan of disposal) totaling $1,200,000 were deferred and
deducted from the gain for financial statement purposes.
Revenues from Camden for 1997 were $137,960,000. Both basic and diluted
earnings per share for discontinued operations were $.16 and $(.02) in 1998 and
1997, respectively.
3. INCOME TAXES
The Company accounts for taxes in accordance with Statement of Financial
Accounting Standards (FAS) No. 109, "Accounting for Income Taxes," which
requires the use of the liability method of computing deferred income taxes.
Under the liability method, deferred income taxes are based on the tax effect
of temporary differences between the financial statement and tax bases of
assets and liabilities and are adjusted for tax rate changes as they occur.
The components of the deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998
<S> <C> <C>
Deferred Income Taxes:
Postretirement benefits $ 20,818 $20,392
Employee benefits 10,837 8,432
Other 744 1,420
Total deferred tax assets 32,399 30,244
Depreciation 9,415 10,136
Total 22,984 20,108
Current Deferred 3,980 1,288
Non-Current Deferred $19,004 $ 18,820
</TABLE>
The provision for income taxes, in continuing operations, consists of
the following:
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
Current tax expense:
U.S. Federal $11,106 $13,718 $10,097
Foreign 2,945 2,584 2,621
State 1,027 1,022 641
15,078 17,324 13,359
Deferred tax benefit 2,876 1,135 2,080
Total $12,202 $16,189 $11,279
</TABLE>
The income tax provision from continuing operations differed from the total
income tax expense as computed by applying the statutory U.S. Federal
income tax rate to income before income taxes. The reasons for the
differences are as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
Statutory U.S. Federal taxes $ 11,183 $14,813 $ 9,994
Difference due to:
Foreign taxes (154) 216 153
State taxes 1,027 287 354
Other 146 873 778
Provision for taxes $12,202 $16,189 $11,279
</TABLE>
The following presents the U.S. and non-U.S. components of income before income
taxes.
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
U.S. income $23,314 $34,128 $21,682
Non-U.S. income 8,638 8,196 6,873
Income from continuing operations $31,952 $42,324 $28,555
</TABLE>
Discontinued operations are shown net of income tax (benefit) expense of
$3,716,000 and $(280,000) for 1998 and 1997, respectively.
4. RECEIVABLES
Receivables by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998
<S> <C> <C>
Accounts receivable $74,439 $61,788
Other accounts and notes receivable 2,777 4,030
Less allowance for doubtful accounts (1,520) (1,896)
Receivables $75,696 $63,922
</TABLE>
5. INVENTORIES
Inventories by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998
<S> <C> <C>
Finished goods $160,888 $101,293
Goods in process 14,339 15,797
Raw materials and supplies 14,885 16,329
Total $190,112 $133,419
Excess of replacement cost over LIFO
value of inventories $ 20,000 $ 24,000
</TABLE>
<PAGE>
6. LEASES
The Company leases numerous factory stores, warehouses and office facilities.
Lease expense charged to operations was $6,193,000, $5,806,000, and $5,973,000
for 1999, 1998 and 1997, respectively.
Future minimum lease payments for all non-cancelable operating leases having
a remaining term in excess of one year at January 1999 are as follows:
<TABLE>
<CAPTION>
(Thousands)
Lease
Commitment
<S> <C>
2000 $ 5,320
2001 3,534
2002 2,650
2003 2,069
2004 1,440
Remainder 838
Total $15,851
</TABLE>
Under the provisions of some leases, the Company pays taxes, maintenance,
insurance and other operating expenses related to leased premises.
7. SHORT-TERM DEBT AND COMPENSATING BALANCES
The Company has been granted lines of credit to borrow at interest rates
up to the prime rate from various banks. Certain credit lines call for the
maintenance of compensating balances of up to 1.14% of the credit line or fees
in lieu thereof. Fees paid in 1999 totaled approximately $20,000. At January
1999, the Company had lines of credit of $99,067,000 of which $43,007,000 was
available.
The weighted average outstanding balances of short-term debt for the fiscal
years ending January 1999 and 1998 were $51,848,000 and $10,295,000; the
weighted interest rate was 6.0% for both years.
8. ACCRUED LIABILITIES
Accrued liabilities by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998
<S> <C> <C>
Accrued vacation pay $ 6,316 $ 6,453
Accrued wage incentive 8,510 9,609
Accrued wages and commissions 4,316 6,736
Accrued income taxes 6,388 7,966
Accrued workers' compensation 11,043 9,953
Dividends payable 1,701 1,695
Other accruals 10,110 8,935
Total $48,384 $51,347
</TABLE>
9. LONG-TERM DEBT
Long-term debt at January 1999 and 1998 consisted of the
following:
<TABLE>
<CAPTION>
(Thousands)
1999 1998
<S> <C> <C>
Senior notes, 8.52% due January 15, 2002,
payable $4,286,000 annually $12,857 $17,143
Senior notes, 7.49% due November 1, 2008,
payable $3,890,000 annually beginning
November 1, 2000 35,000 35,000
Notes payable at various interest rates
(5.63%-6.32%), due February 20, 2001 41,000 21,000
Note payable, 5% due September 30, 2000 4,534
Other debt at various interest rates
(6.50%-9.25%) due through 2001 1,004 983
Total 94,395 74,126
Less current portion 4,790 4,711
Long-term debt $89,605 $69,415
</TABLE>
Certain note agreements restrict borrowings, business investments,
acquisition of the Company's stock and payment of cash dividends. In
addition, the agreements include certain covenants, the most restrictive of
which requires the Company to maintain specific quarterly levels of funded debt
to tangible net worth. The estimated fair value of the Company's long-term debt
at January 1999 approximates $97,225,000. The fair value estimate is
based on borrowing rates available to the Company ranging from 5.87% to 6.45%.
At January 1998, the carrying value of the Company's long-term debt approximated
fair value.
The aggregate amounts of long-term maturities due each fiscal year are as
follows:
<TABLE>
<CAPTION>
(Thousands)
<S> <C>
2000 $ 4,790
2001 13,183
2002 49,202
2003 3,890
2004 3,890
After 19,440
Total $94,395
</TABLE>
Total interest costs incurred by the Company are presented net of capitalized
interest of $1,037,000, $412,000 and $276,000 for 1999, 1998 and 1997,
respectively.
10. RETIREMENT BENEFIT AND EMPLOYEE SECURITY PLANS
Pension Plans
The Company maintains defined benefit plans covering the majority of employees
in the United States and Canada. Employees of the Silversmiths Division are
covered by both an Employee Stock Ownership Plan (ESOP), and a defined
benefit floor plan.
Dividends on all ESOP shares are added to participant
<PAGE>
accounts. Future contributions to the ESOP will be primarily in the form of
either cash or treasury shares. The Company also maintains a salary
deferral 401(k) plan covering substantially all employees.
The net periodic pension cost for the Company's various defined benefit plans
for 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
Service cost $1,934 $1,892 $1,913
Interest cost 2,499 2,680 2,537
Expected return on plan assets (2,513) (2,133) (1,859)
Net amortization (291) (113) 45
Net periodic pension cost $1,629 $2,326 $2,636
</TABLE>
Plan assets consist primarily of stocks, bonds, and cash equivalents.
The following table presents a reconciliation of the funded status of the plans
and assumptions used at January 1999 and 1998.
<TABLE>
<CAPTION>
(Thousands)
U.S. PLANS FOREIGN PLAN
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Change in benefit obligation
Benefit obligation -
beginning of year $(28,414) $(30,396) $(6,524) $(6,351)
Service cost (1,724) (1,692) (210) (200)
Interest cost (2,083) (2,270) (416) (411)
Benefits paid 640 841 433 438
Plan amendments (314)
Employee contributions (12)
One-time charge--early
retirement (3,326)
Actuarial gain (loss) (10,049) 5,103 137
Benefit obligation - end
of year (45,270) (28,414) (6,592) (6,524)
Change in plan assets
Fair value of plan assets-
beginning of year 23,471 18,622 6,866 6,327
Actual return on plan
assets 3,906 3,984 250 943
Employer contribution 691 1,706 190 34
Employee contribution 12
Benefits paid (640) (841) (433) (438)
Fair value of plan assets-
end of year 27,428 23,471 6,885 6,866
Funded status (17,842) (4,943) 293 342
Unrecognized net (gains)
losses 6,896 (1,149) 830 814
Unrecognized prior service cost 1,268 888 1 3
Unrecognized net asset (948) (1,099) (82) (173)
Prepaid (accrued) benefit cost $(10,626) $(6,303) $1,042 $986
Weighted average assumptions
as of January 30
Discount rate 6.4% 7.0% 6.5% 6.5%
Expected return on plan assets 8.4% 8.4% 8.5% 8.5%
Rate of compensation increase 3.5% 3.3% 5.0% 5.0%
</TABLE>
The net pension cost associated with the Company's defined contribution
plans was $2,660,000, $1,881,000 and $1,946,000, for 1999, 1998 and 1997,
respectively.
Postretirement Health Care and Life Insurance Benefits
The Company reimburses a portion of the health care and life insurance
benefits for the majority of its retired employees who have attained specified
age and service requirements.
Net periodic postretirement benefit cost for 1999, 1998 and 1997 included the
following components:
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
Service cost $1,273 $1,103 $1,124
Interest cost 3,309 3,216 3,048
Net amortization (666) (706) (681)
Net periodic postretirement
benefit cost $3,916 $3,613 $3,491
</TABLE>
The following table sets forth the status of the Company's postretirement
plans, which are unfunded, at January 1999 and 1998:
<TABLE>
<CAPTION>
(Thousands)
1999 1998
<S> <C> <C>
Change in benefit obligation
Benefit obligation - beginning
of year $(48,653) $(43,210)
Service cost (1,273) (1,104)
Interest cost (3,309) (3,216)
Benefits paid 3,208 3,119
Employee contributions (414) (384)
Amendments 25
Actuarial loss (3,187) (3,883)
Benefit obligation - end of
year (53,628) (48,653)
Funded status (53,628) (48,653)
Unrecognized net (gains) losses 3,290 (67)
Unrecognized prior service
cost (5,926) (6,394)
Accrued postretirement benefit cost (56,264) (55,114)
Less current portion 2,000 2,000
Accrued postretirement benefit cost $(54,264) $(53,114)
Weighted average assumptions as
of January 30
Discount rate 6.5% 7.0%
Healthcare inflation rate 7.5% 8.0%
</TABLE>
The 1999 health care inflation rate was assumed to decrease gradually to
5% by the year 2003 and remain at that level thereafter. A 1% variation
in the assumed health care inflation rates would cause the accumulated
postretirement benefit obligation at January 1999 to increase by $5,890,000 and
decrease by $5,641,000. Additionally, this would increase and decrease the net
periodic postretirement benefit cost for 1999 by $571,000 and $542,000
respectively.
<PAGE>
Employee Security Plan
The Company maintains an employee security plan which provides severance
benefits for all eligible employees of the Company and its subsidiaries who
lose their jobs in the event of a change in control as defined by the plan.
Employees are eligible if they have one year or more of service and are not
covered by a collective bargaining agreement. The plan provides two and one
half months of pay for each year of service, up to twenty-four months
maximum, and a continuation of health care and life insurance benefits on
the same basis.
11. STOCK PLANS
Stock Purchase Plan
At January 1999, under the terms of a stock purchase plan, the Company has
reserved 636,239 shares of common stock for issuance to its employees. The
purchase price of the stock is the lower of 90% of the market price at the time
of grant or at the time of exercise. The option price for the shares
outstanding at January 30, 1999 is $12.94 based on 90% of the current market
price at that date.
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Outstanding at beginning of year 326,912 465,571 449,413
Exercised during the year (201,120) (392,912) (123,353)
Expired during the year (176,201) (269,588) (355,039)
Granted during the year 447,230 405,565 494,550
Adjustment for stock split 118,276
Outstanding at end of year 396,821 326,912 465,571
Average per share price of
rights exercised $15.35 $19.99 $13.50
</TABLE>
Rights to purchase are exercisable on date of grant. Unexercised rights expire
on June 30 of each year and become available for future grants. Employees are
entitled to purchase one share of common stock for each $250 of their earnings
for the calendar year preceding July 1.
The consolidated statement of operations does not contain any charges as a
result of accounting for this plan.
Stock Option Plan
At January 1999, under the terms of its incentive stock option plans, the
Company has reserved shares of common stock for issuance to selected key
employees and non-employee outside directors.
Options were granted at prices equal to the fair market value on the date of
the grant and may be paid for in cash or by tendering previously held common
stock of the Company at the time the option is exercised. Stock options are
non-transferable other than on death, vest over five years from date of grant
and expire ten years from date of grant.
<TABLE>
<CAPTION>
Option Price
No. of Per (Thousands)
Shares Share Total
<S> <C> <C> <C>
Outstanding at
January 1996 631,793 $9.00-15.00 $8,326
Exercised (56,531) 9.00-15.00 (709)
Expired (29,987) 9.00-15.00 (378)
Outstanding at
January 1997 545,275 9.00-15.00 7,239
Granted 120,000 18.63 2,236
Exercised (187,604) 9.00-15.00 (2,404)
Expired (126,951) (1,765)
Adjustment for
stock split 175,910
Outstanding at
January 1998 526,630 6.00-12.42 5,306
Granted 346,000 21.88-28.13 7,642
Exercised (140,337) 6.00-12.42 (1,271)
Outstanding at
January 1999 732,293 6.00-28.13 $11,677
</TABLE>
Options exercisable under the plan at January 1999, 1998 and 1997 amounted to
210,538, 286,490 and 615,142, respectively. The weighted average exercise
price of options exercisable at January 1999, 1998 and 1997 were $9.60, $8.88
and $8.97, respectively.
<TABLE>
<CAPTION>
Options Outstanding
Weighted
Average Weighted
Range of Options Remaining Life Average
Exercise Prices Outstanding In Years Exercise Price
<S> <C> <C> <C>
$ 6.00- 7.58 52,865 3.98 $ 7.40
9.08-12.42 333,428 6.10 10.79
21.88-28.13 346,000 9.49 22.09
732,293
</TABLE>
<TABLE>
<CAPTION>
Options Exercisable
Weighted
Average Weighted
Range of Number Average
Exercise Prices Exercisable Exercise Price
<S> <C> <C>
$ 6.00- 7.58 52,865 $ 7.40
9.08-12.42 149,423 9.67
21.88-28.13 8,250 22.58
210,538
</TABLE>
At the time options are exercised, the proceeds of the shares issued are
credited to the related stockholders' equity accounts. There are no charges to
income in connection with these options.
<PAGE>
Restricted Stock Award Plan
The Company has a restricted stock award plan for key employees who are
expected to have a significant impact on the performance of the Company. The
stock is restricted from being sold, transferred or assigned and is
forfeitable until it vests, generally over a three year period. Amounts of
awards are determined by the Management Development and Executive Compensation
Committee of the Company's Board of Directors. Compensation expense relating
to awards of restricted stock are recognized over the vesting period.
Stockholder Rights Plan
The Company maintains a stockholder rights plan. The rights were distributed to
shareholders at the rate of one right per share. The rights entitle the holder
to purchase one additional share of voting common stock at a substantial
discount and are exercisable only in the event of the acquisition of 20% or more
of the Company's voting common stock, or the commencement of a tender or
exchange offer under which the offeror would own 30% or more of the Company's
voting common stock. The rights will expire on December 13, 1999.
Accounting for Stock Plans
The Company has elected to continue following APB No. 25 in accounting for its
stock-based compensation plans.
Application of the fair-value-based accounting provision of Statement No.
123 results in the following pro forma amounts of net income and earnings per
share:
<TABLE>
<CAPTION>
(Thousands Except Per Share Amounts)
1999 1998 1997
<S> <C> <C> <C>
Net Income from Continuing
Operations:
As reported $19,750 $26,135 $17,276
Pro forma 17,965 24,585 16,005
Net Income:
As reported 19,750 28,701 16,972
Pro forma 17,965 27,151 15,701
Earnings Per Share from
Continuing Operations:
As reported: Basic 1.18 1.57 1.04
Diluted 1.16 1.55 1.02
Pro forma: Basic 1.07 1.46 .96
Diluted 1.06 1.44 .95
Earnings Per Share:
As reported: Basic 1.18 1.73 1.02
Diluted 1.16 1.71 1.00
Pro forma: Basic 1.07 1.62 .94
Diluted 1.06 1.59 .93
</TABLE>
The fair value for both the Stock Purchase Plan and Stock Option Plan was
estimated at the date of grant using a Black-Scholes options pricing model.
The valuation of the Stock Purchase Plan used the following weighted
average assumptions for 1999, 1998 and 1997: risk-free interest rates of 5.13%,
6.03% and 5.63%; dividend yields of 1.64%, 2.51% and 2.77%; volatility factors
of the expected market price of the Company's common stock of 25.9%, 29.7% and
23.7% and a weighted average expected life of the option of 9 months. The fair
value per share for the options granted during 1999, 1998 and 1997 was $7.31,
$4.40 and $2.87, respectively. The estimated fair value of the options is
expensed in the year of issue in calculating pro forma amounts.
The valuation of the Stock Option Plan used the following weighted
average assumptions for 1999 and 1998, respectively: risk free interest rate
of 5.18% and 6.42%, dividend yield of 2.0% and 3.33%, volatility factor of the
expected price of the Company's common stock of 29.6% and 26.2% and an
expected life of 5.99 and 6.50 years. The fair value per share for the options
granted during 1999 and 1998 was $7.37 and $5.30. The estimated fair value of
the options is expensed over the five-year vesting period in calculating pro
forma amounts.
<PAGE>
12. EARNINGS PER SHARE
The following is a reconciliation of basic earnings per share to diluted
earnings per share for 1999, 1998 and 1997.
<TABLE>
<CAPTION>
Preferred
Net Stock Adjusted Average Earnings
Income Dividends Net Income Shares Per
Share
<S> <C> <C> <C> <C> <C>
1999: Basic earnings per share $19,750 (132) $19,618 16,670 $1.18<F1>
Effect of stock options 218
Diluted earnings per share 19,750 (132) 19,618 16,888 1.16<F1>
1998: Basic earnings per share 28,701 (132) 28,569 16,507 1.73<F2>
Effect of stock options 233
Diluted earnings per share 28,701 (132) 28,569 16,740 1.71<F2>
1997: Basic earnings per share 16,972 (133) 16,839 16,557 1.02
Effect of stock options 218
Diluted earnings per share 16,972 (133) 16,839 16,775 1.00
<FN>
<F1> The year ended January 1999 includes a restructuring charge totaling
$4,980,000 or $.19 per share. See Note 1 of Notes to Consolidated Financial
Statements.
<F2> In the year ended January 1998, the Company recognized a gain on the
sale of its Camden Wire subsidiary equal to $2,566,000 or $.16 per share.
See Note 2 of Notes to Consolidated Financial Statements.
</FN>
</TABLE>
13. OPERATIONS BY INDUSTRY SEGMENT
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
131, "Disclosures about Segments of an Enterprise and Related Information" in
1999. The information for 1998 and 1997 has been restated to conform to the
current year presentation.
The Company's operations and assets are in one principal industry:
tableware products. The Company's reportable segments are grouped around the
manufacture and distribution of three major product categories: metal
tableware, china dinnerware and glass tabletop products. The Company also
distributes a variety of other tabletop accessories. These products are sold
directly to a broad base of retail outlets including department stores, mass
merchandisers, Oneida factory stores and chain stores. Additionally, these
products are sold to special sales markets, which include customer who use them
as premiums, incentives and business gifts. The Company also sells directly or
through distributors to foodservice operations worldwide, including hotels,
restaurants, airlines, schools and healthcare facilities. The Company's
tableware operations are located in the United States, Canada, Mexico, Italy,
Australia and the United Kingdom.
The accounting policies of the reportable segments are the same as those
described in Note 1 of Notes to Consolidated Financial Statements. The Company
evaluates the performance of its segments based upon operating income excluding
interest, miscellaneous income/expenses, corporate expenses and income taxes.
The Company does not derive more than 10% of its total revenues from any
individual customer, government agency or export sales.
Segment information for the three years ended January 1999, 1998 and 1997 are
as follows:
<TABLE>
<CAPTION>
1999 (thousands)
Metal Dinnerware Glass Other Total
<S> <C> <C> <C> <C> <C>
Net Sales $326,375 $93,088 $17,466 $28,984 $465,913
Operating income 33,290 8,843 1,310 2,416 45,859
Depreciation and amortization 11,618 4,204 15,822
1998 (thousands)
Metal Dinnerware Glass Other Total
Net Sales $338,836 $84,744 $13,966 $5,320 $442,866
Operating income 46,383 8,500 1,300 400 56,583
Depreciation and amortization 9,418 4,347 13,765
1997 (thousands)
Metal Dinnerware Glass Other Total
Net Sales $312,389 $48,613 $10,911 $5,010 $376,923
Operating income 37,313 3,000 1,050 350 41,713
Depreciation and amortization 9,604 2,412 12,016
</TABLE>
<PAGE>
The following table reconciles segment operating income to pretax income:
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
Total segment operating income $45,859 $56,583 $41,713
Corporate expenses 5,781 5,882 5,823
Consolidated operating income 40,078 50,701 35,890
Interest expense 8,963 6,823 6,503
Miscellaneous income (expense) 837 (1,554) (832)
Pretax income $31,952 $42,324 $28,555
</TABLE>
Financial information relating to the Company's sales and long-lived assets by
geographic area is as follows:
<TABLE>
<CAPTION>
(Thousands)
1999 1998 1997
<S> <C> <C> <C>
Net sales:
Domestic $406,518 $389,598 $329,068
Foreign operations 59,395 53,268 47,855
Total $465,913 $442,866 $376,923
Long-lived assets:
Domestic $137,883 $129,347 $114,089
Foreign operations 28,247 24,395 11,364
Total $166,130 $153,742 $125,453
</TABLE>
14. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Quarter Ended
1999 May 2, August 1, October 31, January 30,
1998 1998 1998 1999
<S> <C> <C> <C> <C>
Net sales $107,055 $104,216 $128,787 $125,855
Gross margin 41,619 39,254 45,683 46,459
Net income<F1> 5,555 5,087 5,694 3,414
Earnings per share:
Net income<F1>:
Basic .33 .30 .34 .20
Diluted .32 .30 .34 .20
Quarter Ended
1998<F2><F3> April 26, July 26, October 25, January 31,
1997 1997 1997 1998
Net sales $96,977 $102,581 $116,559 $126,749
Gross margin 35,396 39,047 44,507 49,108
Income from continuing
operations 4,412 5,519 7,657 8,547
Net income 6,978 5,519 7,657 8,547
Earnings per share:
Continuing operations:
Basic .26 .34 .46 .51
Diluted .26 .34 .45 .50
Net income:
Basic .42 .34 .46 .51
Diluted .42 .34 .45 .50
<FN>
<F1> The quarter ended January 30, 1999 includes a restructuring charge
totaling $4,980,000 or $.19 per share related to a workforce reduction
plan. See Note 1 of Notes to Consolidated Financial Statements.
<F2> The quarter and year ended January 31, 1998 includes 14 and 53 weeks,
respectively, versus 13 and 52 weeks in the year ended January 30, 1999.
<F3> The first quarter of the year ended January 1998 includes a gain on the
sale of the Company's Camden Wire subsidiary equal to $2,566,000 or $.16 per
share. See Note 2 of Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of Oneida Ltd.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity and cash flows
present fairly, in all material respects, the financial position of Oneida Ltd.
at January 30, 1999 and January 31, 1998, and the results of their operations
and their cash flows for each of the three years in the period ended January
30, 1999, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes, examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion
expressed above.
/s/ PricewaterhouseCoopers LLP PRICEWATERHOUSECOOPERS
Syracuse, New York
February 24, 1999
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Thousands)
<TABLE>
<CAPTION>
1999 1998<F1> 1997
<S>
Net sales: <C> <C> <C>
Metal products $326,375 $338,836 $312,389
Dinnerware products 93,088 84,744 48,613
Glass products 17,466 13,966 10,911
Other products 28,984 5,320 5,010
Total 465,913 442,866 376,923
Gross margin 173,015 168,058 132,989
% Net sales 37.1% 38.0% 35.3%
Operating expenses - recurring 128,782 117,357 97,099
% Net sales 27.6% 26.5% 25.8%
<FN>
<F1> 53 week fiscal year
</FN>
</TABLE>
Fiscal year ended January 1999 compared with fiscal year ended January 1998
Operations
1999 consolidated net sales were $23,047 or 5.2% higher than in the previous
year. Sales of the Company's metal tableware products decreased by 3.7%
from 1998. Much of the decrease is attributable to reduced domestic sales, as
several major retailers adjusted inventory levels downward. Other factors
include stiffer price competition on imported tableware and reduced sales
into Asian markets. Sales of dinnerware (both domestically produced and
imported) grew in the already strong foodservice market, as well as with the
introduction of casual consumer dinnerware. The Company's alliance with
Schott Zwiesel glass is the major factor in the 25% growth of the glass segment
in 1999. The majority of the increase in other product lines is attributable
to the Company's entry into the grocery store sales channel.
Gross margin as a percent of net sales decreased to 37.1% from 38.0% in 1998.
The decline is primarily attributable to product mix changes, due to the
Company's entry into new product lines.
Operating expenses (net of restructuring costs) increased by $11,425 or 9.7%
over 1998, due to growing sales volume, the acquisition of TTE&D and Badgin,
and the start-up of new product lines. Selling, distribution and advertising
expenses increased by $13,322. General and administrative expenses were down
$1,897 compared to 1998 levels, primarily due to decreases in employee benefit
and profit sharing costs. As a percentage net sales, total operating (net of
restructuring) costs increased to 27.6% from 26.5% in 1998.
In 1999, the Company incurred restructuring costs equal to $4,980 related to a
workforce reduction plan. The Company anticipates the future annual savings
from the restructuring program will approximate $4,000 per year.
The Company had non-recurring net miscellaneous income resulting primarily from
a one-time sale of marketable securities and the termination of three
contracts including a long-term energy supply contract, a lease on an office
building in Redmond, Washington and a long-term distribution agreement.
1999 interest expense (prior to capitalized interest) increased by $2,765 or
38.2%. This was principally due to higher debt levels. These borrowings were
incurred to finance working capital needs as well as business acquisitions
and construction of the Company's new dinnerware distribution facility in
Buffalo, New York.
Year 2000.
Year 2000 issues relate to the ability of computer systems to distinguish data
which contains dates beyond December 31, 1999. The Company has created and is in
the process of implementing a comprehensive Year 2000 compliance plan. The
Company holds regular compliance meetings to receive information and input from
all of the Company's main operating areas.
As part of its compliance plan the Company has reviewed all of its software
and information processing systems and identified date sensitive functions.
The Company began testing those systems for Year 2000 compliance in January
1999. Testing is expected to be complete by mid-summer 1999. Any systems
found to be noncompliant will be modified to ensure that they operate properly
prior to the Year 2000. The Company's main accounting, logistics, warehouse
management and payroll systems have been Year 2000 compliant since their
installations over the past several years. The Company's other major
computer systems have been Year 2000 compliant since December 1998, having been
modified, upgraded or replaced during the past year. Finally, the Company's
more minor computer systems will be Year 2000 compliant by July 1999.
To date, the Company has identified and contacted its major customers,
suppliers, service providers and business partners. Each of these entities
received a letter informing them of the Company's plans and state of readiness
and asking that they in turn share their own Year 2000 plans by returning a
questionnaire to the Company. In addition to its compliance plan, the Company
will develop a contingency plan based upon the outcomes of the systems tests
that will be conducted during the first quarter of 1999.
<PAGE>
The Company believes it is devoting appropriate resources to resolve its
Year 2000 issues in a timely manner and believes that its compliance program
will result in all internal systems being prepared for Year 2000 processing.
The compliance plan is proceeding on schedule and to date no unforeseen
difficulties have arisen. Based upon the work performed to date, the Company
presently believes that the likelihood of the Year 2000 having a material
result on its operations, liquidity or financial position is remote. The
Company estimates that its direct Year 2000 compliance costs will not exceed
$500, of which to date approximately $300 has been incurred and expensed.
Notwithstanding the foregoing, the Company could be adversely affected if
its customers, suppliers, service providers, business partners and/or
governmental agencies continue to utilize systems that are not Year 2000
compliant. This could affect, among other things, the Company's ability to
purchase raw materials, receive orders for and ship its products and transact
business with its financial institutions, which could constitute a material and
immeasurable financial risk to the Company.
Contingencies-Legal Proceedings
On December 8, 1998 the Oneida Indian Nation of New York, the Oneida Tribe
of Indians of Wisconsin and the Oneida of the Thames, as Plaintiffs, along
with The United States of America, as Intervenor, moved to amend their
Complaint filed on May 3, 1974 in the United States District Court for the
Northern District of New York against the Counties of Oneida and Madison, New
York. The Amended Complaint seeks to add the State of New York, New York
State Thruway Authority, Utica-Rome Motorsports, Inc., Niagara Mohawk Power
Corporation and the Oneida Valley National Bank, individually and as
representatives of the class of similarly situated private landowners in
Madison and Oneida Counties. The Complaint alleges that during the nineteenth
century the Oneidas' lands were improperly transferred. The Oneidas seek
title to the property as well as monetary damages. The Corporation's
headquarters and main manufacturing and distribution facilities are located
within this land claim area. The Corporation filed a motion to intervene with
the United States District Court for the Northern District of New York on
February 26, 1999. The Judge's decision on whether private landowners
will be added as Defendants is expected in the Spring of 1999.
Liquidity and Financial Resources
During the current year, the Company invested approximately $22,000 in
capital additions, primarily in its manufacturing facilities. Construction
of the new 206,000 square foot warehouse and china decorating facility in
Buffalo, New York was completed in March 1999. The total cost of this project
amounted to $10,000, the majority of which was spent in 1999. Overall, the
Company plans to spend $27,000 on capital projects in the upcoming year. Of
this capital budget total, approximately one-third is appropriated for the
construction of a new tableware distribution facility and $7,000 will be spent
to complete major projects begun in 1999. When constructed, the new warehouse
is expected to yield significant logistical efficiencies and savings.
Inventories increased $57,000 over 1998 levels. The majority of this was due
to a build up of inventories related to new product categories, international
expansion and reduction of consumer inventory levels.
In recognition of the Company's 250th consecutive dividend, the Board of
Directors, at its May 27, 1998 meeting, authorized the payment of a special one
time dividend equal to ten cents per common share outstanding at June 10, 1998
at a cost of approximately $1,700. At the August 26, 1998 Board of Directors
meeting, approval was given to buy back an additional 500,000 shares of the
Company's common stock. The Company actually purchased 363,900 shares
throughout the year at a net cost of $8,300. Proceeds from the issuance of
stock in 1999 totaled $4,100.
Management believes there is sufficient liquidity to support the Company's
ongoing funding requirements from future operations as well as the availability
of bank lines of credit. At January 1999, the Company had unused short term
credit lines equal to $43,000 as well as availability under two long-term
revolving credit lines totaling $5,601. Working capital as of January 30, 1999
totaled $140,066.
The Company has foreign exchange exposure related to its foreign operations in
Mexico, Canada, Italy, Australia and the United Kingdom (see Note 13 for
details on the Company's foreign operations). Translation adjustments recorded
in the income statement were not of a material nature.
<PAGE>
Management's Discussion
Fiscal year ended January 1998 compared with fiscal year ended January 1997
Operations
Net sales were $65,943 or 17.5% higher than the previous year. All production
segments recorded significant sales increases over 1997 levels. Dinnerware
sales growth was attributed to both the acquisition of Rego China in late
fiscal 1997 and strong demand for Buffalo China products. Metal product sales
increased in all sales channels. International sales of all products increased
11.3% due to growth in all major foreign markets.
Gross margin as a percent of net sales increased to 38.0% from 35.3% in 1997.
The increase was attributable to both favorable product mix and improved
manufacturing efficiencies.
Operating expenses increased by $20,258 or 20.9% over 1997. Due to growing
sales volume and the start-up of new product lines, selling, distribution and
advertising expenses increased by $10,599. As a percentage of net sales,
these costs decreased to 17.7% from 18.0% in 1997. General and administrative
expenses were up $9,659 over 1997 levels. Nearly one-half of this increase is
attributable to costs incurred as a result of the November 1996 acquisition of
Rego China. The remaining increase is principally made up of higher employee
profit sharing resulting from increased operating income.
1998 interest expense (prior to capitalized interest) increased by $456 or 6.7%.
This was principally due to higher average interest rates on the Company's
borrowings.
Forward Looking Information
With the exception of historical data, the information contained in this Annual
Report, as well as those other documents incorporated by reference herein,
is forward-looking. For the purposes of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, the Company cautions readers
that changes in certain factors could affect the Company's future results and
could cause the Company's future consolidated results to differ materially from
those expressed herein. Such factors include, but are not limited to: general
economic conditions in the Company's markets; difficulties or delays in the
development, production and marketing of new products; the impact of competitive
products and pricing; certain assumptions related to consumer purchasing
patterns; significant increases in interest rates or the level of the Company's
indebtedness; major slowdowns in the retail, travel or entertainment industries;
the loss of several of the Company's major consumer and/or foodservice
customers; underutilization of the Company's plants and factories; the
amount and rate of growth of the Company's selling, general and
administrative expenses; and the inability of the Company or its customers,
suppliers, service providers or business partners, as well as governmental
agencies, to resolve Year 2000 issues in a timely manner.
Dividends and Price Range of the Company's Common Stock
The Company's Common Stock is listed on the New York Stock Exchange and
trades under the symbol OCQ. The total number of stockholders of record at
January 1999 was 4,381. The following table sets forth the high and low sale
prices per share of the Company's Common Stock for the periods indicated on
the Composite Tape, and cash dividends declared for the quarters in the
Company's 1999 and 1998 fiscal years.
<TABLE>
<CAPTION>
JANUARY 1999 JANUARY 1998
Fiscal Dividends Fiscal Dividends
Quarter High Low Per Share Quarter High Low Per Share
<S> <C> <C> <C> <S> <C> <C> <C>
First $31.81 $25.31 $.10 First $13.42 $11.58 $.173
Second 31.31 25.13 .20 Second 20.17 12.33 .087
Third 26.44 12.94 .10 Third 24.25 18.75 .087
Fourth 19.13 13.50 .10 Fourth 27.63 21.96 .100
</TABLE>
<PAGE>
FIVE YEAR SUMMARY
ONEIDA LTD.
(Thousands except per share amounts)
<TABLE>
<CAPTION>
Year ended January 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net sales $465,913 $442,866 $376,923 $363,811 $335,831
Gross margin 173,015 168,058 132,989 127,251 113,192
Interest expense 8,963 6,823 6,503 6,877 5,922
Income from continuing
operations before income taxes 31,952 42,324 28,555 25,569 17,393
Income taxes 12,202 16,189 11,279 10,144 7,306
Income from continuing
operations 19,750 26,135 17,276 15,425 10,087
Income (loss) from discontinued
operations 2,566 (304) 2,663 3,406
Net income 19,750 28,701 16,972 18,088 13,493
Cash dividends declared--
Preferred stock 132 132 133 134 134
Common stock 8,368 7,633 5,882 5,273 5,233
PER SHARE OF COMMON STOCK
Continuing operations<F1> 1.16 1.55 1.02 .93 .62
Discontinued operations<F1> .16 (.02) .16 .21
Net income<F1> 1.16 1.71 1.00 1.09 .83
Dividends declared .50 .45 .35 .32 .32
Book value 8.31 8.01 6.98 6.31 5.69
FINANCIAL DATA
Current assets 275,938 209,844 219,491 211,930 205,168
Working capital 140,066 119,344 122,937 140,106 134,386
Total assets 442,068 363,586 350,228 306,568 297,486
Long-term debt 89,605 69,415 68,126 63,129 68,277
Other long-term liabilities 76,343 68,404 67,230 65,315 63,231
Stockholders' equity 140,248 135,257 118,318 106,300 95,196
Additions to property, plant
and equipment 21,904 13,577 11,566 12,434 12,785
Property, plant and equipment --
at cost 218,038 206,272 195,429 185,637 177,166
Accumulated depreciation 123,010 121,460 116,283 105,957 97,474
SHARES OF CAPITAL STOCK
Outstanding at end of year
Preferred 87 88 89 89 89
Common 16,607 16,609 16,640 16,499 16,353
Weighted average number of
common shares outstanding
during the year 16,670 16,507 16,557 16,331 16,176
SALES OF MAJOR PRODUCTS BY PERCENT
OF TOTAL SALES
Metal products 70% 77% 83% 83% 82%
Dinnerware products 20% 19% 13% 12% 13%
Glass products 4% 3% 3% 3% 3%
Other products 6% 1% 1% 2% 2%
AVERAGE NUMBER OF EMPLOYEES 4,824 4,637 4,525 4,690 4,534
<FN>
<F1> diluted basis
</FN>
</TABLE>
<PAGE>
EXHIBIT 22
PARENTS AND SUBSIDIARIES
There are no parents of the Corporation. There is no subsidiary for
which separate financial statements are filed. The following list includes the
Corporation and its subsidiaries, all of which are included, in the consolidated
financial statements.
<TABLE>
<CAPTION>
State or Percentage of
Country of Voting Securities
Name Incorporation Owned by the Corporation
<S> <C> <C>
Oneida Ltd. New York -
Buffalo China, Inc. New York 100
Encore Promotions, Inc. New York 100
Kenwood Silver Company, Inc.
d/b/a Oneida Factory Stores New York 100
Oneida Australia Pty Ltd. Australia 100
Oneida Canada, Limited Canada 100
Oneida Distribution Services, Inc. New York 100
Oneida International, Inc. Delaware 88
Oneida Mexicana, S.A. de C.V. Mexico 100
THC Systems, Inc.
d/b/a Rego China New York 100
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ONEIDA LTD.'S ANNUAL REPORTS FOR THE FISCAL YEARS ENDED JANUARY 30, 1999,
JANUARY 31, 1998 AND JANUARY 25, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> JAN-30-1999 JAN-31-1998 JAN-25-1997
<PERIOD-START> JAN-28-1998 JAN-26-1997 JAN-28-1996
<PERIOD-END> JAN-30-1999 JAN-31-1998 JAN-25-1997
<CASH> 1,913 3,095 3,183
<SECURITIES> 0 0 0
<RECEIVABLES> 77,216 65,818 50,506
<ALLOWANCES> 1,520 1,896 1,797
<INVENTORY> 190,112 133,419 124,293
<CURRENT-ASSETS> 275,938 209,844 219,491
<PP&E> 218,038 206,272 195,429
<DEPRECIATION> 123,010 121,460 116,283
<TOTAL-ASSETS> 442,068 363,586 350,228
<CURRENT-LIABILITIES> 135,872 90,510 96,554
<BONDS> 89,605 69,415 68,126
0 0 0
2,185 2,200 2,216
<COMMON> 17,423 17,091 11,868
<OTHER-SE> 120,640 115,966 104,234
<TOTAL-LIABILITY-AND-EQUITY> 442,608 363,586 350,228
<SALES> 465,913 442,866 376,923
<TOTAL-REVENUES> 466,738 442,866 376,923
<CGS> 292,898 274,808 243,934
<TOTAL-COSTS> 292,898 274,808 243,934
<OTHER-EXPENSES> 132,925 118,911 97,931
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 8,963 6,823 6,503
<INCOME-PRETAX> 31,952 42,324 28,555
<INCOME-TAX> 12,202 16,189 11,279
<INCOME-CONTINUING> 19,750 26,135 17,276
<DISCONTINUED> 0 2,566 (304)
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 19,750 28,701 16,972
<EPS-PRIMARY> 1.18<F1> 1.73<F1> 1.02<F1>
<EPS-DILUTED> 1.16 1.71 1.00
<FN>
<F1> The amount reported as EPS-PRIMARY is actually earnings Per Share - Basic,
as the Corporation adopted SFAS 128 "Earnings Per Share" as of January 31, 1998.
</FN>
</TABLE>
