<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 29, 2000
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 New York Stock Exchange
$1.00 per share with attached
Preferred Stock purchase rights
Securities registered pursuant to Section 12(g) of the Act:
6% Cumulative Preferred Stock, par value $25 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 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 $18.6875 per share as reported on the New
York Stock Exchange Composite Index on April 17, 2000 was $293,660,626.
The number of shares of Common Stock ($1.00 par value) outstanding as of April
17, 2000, was 16,422,173.
Documents Incorporated by Reference
1. Portions of Oneida Ltd.'s Annual Report to Stockholders for the fiscal year
ended January 29, 2000 (Parts I and II of Form 10-K).
2. Portions of Oneida Ltd.'s Definitive Proxy Statement dated April 24, 2000
(Part III of Form 10-K).
Page 1 of 19. See list of Exhibits on pages 11-14.
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PART I
ITEM 1. BUSINESS.
a. General.
The Company (unless otherwise indicated by the context, the term "Company" means
Oneida Ltd. and its consolidated subsidiaries) was incorporated in New York in
1880 under the name Oneida Community, Limited. In 1935, the Company's name
was changed to Oneida Ltd. It maintains its executive offices in Oneida, New
York.
Since its inception, the Company has manufactured and marketed tableware -
initially sterling and later silverplated and stainless steel products.
By acquiring subsidiaries, entering into strategic distributorship
arrangements and expanding its own tableware lines, the Company has diversified
into the manufacture and distribution of commercial and retail china dinnerware
and the distribution of other tableware and gift items, most notably crystal and
glass stemware, barware and giftware.
b. Industry Segments.
The Company's operations and assets are in one principal industry:
tableware products. The Company's principal industry segments are grouped
around the manufacture and distribution of three major product categories:
metalware, dinnerware and glassware. The Company also distributes a variety
of other tabletop accessories.
Information regarding the Company's operations by industry segment for
the years ended January 29, 2000, January 30, 1999 and January 31, 1998 is set
forth on pages 24 through 25 of the Company's Annual Report to Stockholders for
the year ended January 29, 2000, 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), cutlery
and cookware.
The majority of the Company's flatware is manufactured at the Company's
facilities in Sherrill, New York. In addition, the Company also utilizes the
facilities of Oneida Mexicana, S.A., located in Toluca, Mexico, to manufacture
flatware patterns that are not produced in Sherrill, New York. The Company also
imports flatware and cutlery from several international sources.
In 1999 the Company, through its Oneida International, Inc. subsidiary,
completed construction of a new foodservice stainless steel holloware
manufacturing facility located in Shanghai, China. This facility is owned
and operated by Shanghai Premium Tableware Manufacturing Co., Ltd., a wholly
owned subsidiary of Oneida International, Inc. The Company also imports
stainless steel and silverplated holloware products from several international
sources.
The Company imports its aluminum and stainless steel cookware 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 1998 the Company entered the casual consumer dinnerware market. At
present, the Company offers 20 patterns of dinnerware grouped into 5 distinct
lines ranging from elegant to basic restaurant style to mix-and-match. The
Company imports its consumer dinnerware from several international sources.
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Buffalo China, Inc. is a leading manufacturer of vitreous china for the
foodservice industry. Buffalo China also operates a subsidiary, Ceramica de
Juarez, S.A. de C.V., located in Juarez, Mexico. Ceramica de Juarez produces
holloware and other specialty china pieces that are not manufactured in Buffalo,
including bisque china which is then finished in Buffalo and fully finished
items. THC Systems, Inc., another of the Company'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 Company is also the exclusive distributor of certain china dinnerware
products manufactured by Schonwald and Noritake Co., Inc. for the United
States foodservice and institutional markets.
Glassware:
The Company's Glassware segment includes glass and crystal stemware,
barware, serveware, giftware and decorative pieces.
In September 1997, the Company began acting as the exclusive distributor of
Schott Zwiesel crystal products in the foodservice and consumer markets of the
United States, Mexico and the Caribbean. In 1999 this distribution
relationship was extended to include the foodservice and consumer markets of
Australia, New Zealand and Central and South America. In 2000, the foodservice
and consumer markets of the United Kingdom were added as well. Schott Zwiesel
is a German manufacturer of fine crystal stemware, barware and giftware. The
Company markets Schott Zwiesel's crystal products under both the Schott
Zwiesel and Oneida names. In combination with this exclusive distributorship,
the Company 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 Company began acting as the exclusive distributor of
the crystal products manufactured by Cristalleria Artistica La Piana, SpA, also
known as CALP, for 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 Company will continue to market CALP's crystal
products under CALP's trademarks of RCR, CAPRI, DA VINCI, PRIMA VERA and
CRISTALLO, as well as under the Oneida name.
In addition to the distribution of Schott and CALP crystal, the Company
significantly expanded its self-branded glassware lines in 1998 with the
introduction of Oneida glassware for both foodservice and consumer use.
Oneida imports its glassware from several foreign sources, but is supplied
primarily by Pasabahce Cam Sanayii ve Ticaret A.S., a Turkish glassware
manufacturer. In April 2000, the Company and Pasabahce formalized their
relationship whereby the Company will act as Pasabahce's exclusive
foodservice distributor in the United States, Canada, Mexico and the Caribbean,
and for certain products in Australia and New Zealand.
The Company 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 Company has recently begun to expand its product offerings beyond its
main metalware, dinnerware and glassware segments. These other products
include ceramic and plastic serveware, kitchen and table linens, picture
frames and decorative pieces distributed primarily by the Company's Encore
Promotions and Kenwood Silver subsidiaries.
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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:
2000 1999 1998
Metalware: 68% 73% 77%
Dinnerware: 21% 20% 19%
Glassware: 8% 4% 3%
Other Tabletop 3% 3% 1%
Accessories:
Principal Markets.
Consumer:
Consumer marketing focuses on individual consumers, and the Company's
wide-ranging consumer marketing activities include both retail and direct
operations. The Company's retail accounts include national and regional
department store chains, mass merchandise and discount chains, specialty
shops and local establishments. The Company's direct accounts serve business
customers in the premium, incentive, mail order and direct selling
markets. The Company 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 Company's products. Kenwood
Silver Company, Inc. operates a chain of 64 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 tableware and
household items. Since late 1999 the Company has also been actively marketing
its products via its revised and updated web site, www.oneida.com.
Most consumer orders are filled directly by the Company from its primary
distribution center located in Sherrill, New York. For some accounts, however,
orders are fulfilled by one of the Company's two other distribution centers
which are located in Ontario, California and Nashville, Tennessee.
Foodservice:
The Company 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 Company from its
primary distribution centers in Sherrill and Buffalo, New York, some orders are
filled by the Company's other distribution centers which are located in Ontario,
California and Nashville, Tennessee. The Company also utilizes third party
warehouses located in Charlotte, North Carolina; Fond du Lac, Wisconsin; and
Miami, Florida 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 Company's
domestically manufactured and internationally sourced products throughout the
world.
Since 1999, all sales and marketing functions in the Mexican and Central
American markets have been served by a Company subsidiary, Oneida, S.A.
de C.V., while the European and Canadian markets continue to be served by Oneida
Silversmiths, Limited and Oneida Canada, Limited, respectively.
The Company owns 94% of Oneida International, Inc., a corporation formed to
market tabletop products of Italian design, some of which are manufactured in
Italy while others are manufactured in Shanghai, China or sourced
internationally. Oneida International, Inc. develops and markets these and
other of the Company's products in the international foodservice market
through its wholly-owned subsidiary, Oneida Italy, S.r.l. Oneida Italy was
created in 1999 by the merger of two existing Oneida International
subsidiaries, Sant'Andrea S.r.l. and Table Top Engineering & Design, S.r.l.
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Since 1998, the Asian and Pacific markets have been served by the Company's
subsidiary, Oneida Australia, PTY Ltd. In addition to marketing the Company's
existing products, Oneida Australia PTY Ltd. continues the businesses of two
1998 acquisitions, 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. Now supplementing the Company's Asian
and Pacific marketing efforts is Oneida Tableware Trading Co., Ltd., a Chinese
corporation formed in 1999 as a subsidiary of Oneida International,
Inc. Oneida Tableware Trading Co., Ltd. will market and distribute the
Company's various products throughout China and the other Pacific Rim countries.
In addition to the foregoing, the Company also uses a network of independent
representatives and distributors to market and sell the Company's products in
countries where the Company does not have offices or employees of its own.
International orders for both foodservice and consumer products are filled by
the Company from a variety of locations, including the Company's United States
distribution centers in Sherrill, New York and Nashville, Tennessee, as well as
the Company's international facilities in Toluca, Mexico; Bangor, Northern
Ireland; and Vercelli, Italy. In addition, many orders are shipped
directly from the suppliers to the Company's international customers.
Raw Materials.
The principal raw materials used by the Company 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 Company
experienced no significant or unusual problems in the purchase of raw materials
during 1999. Although the Company 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. For example,
the price of nickel, one of the components of stainless steel, a principal
ingredient of the Company's metalware products, has been volatile since late
1999. 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 Company's operations.
Intellectual Property.
The Company owns and maintains many design patents in the United States and
foreign countries. These patents, along with numerous copyrights, protect the
Company's product designs and decorations. In addition, the Company 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
Company's intellectual property, especially the market recognition associated
with the ONEIDA name, is a material, although intangible, corporate asset.
Licenses.
The Company continues to explore opportunities to capitalize on the ONEIDA
name in new product categories. One vehicle for this expansion has been
licensing the ONEIDA name for use by third parties on products complementary
to the Company's own core tableware lines. Examples include agreements with
Robinson Knife Manufacturing Co., Inc. and Trendex Home Designs, Inc. for the
manufacture and marketing of ONEIDA kitchen tools and accessories and ONEIDA
kitchen and table linens, respectively. Neither the terms nor the effects of
any of the Company's license agreements are material.
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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 Company'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 Company to respond promptly to orders.
Backlog Orders.
Tableware operations had order backlogs of $30,252,000 as of March 22, 2000
and $27,696,600 as of March 22, 1999. 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 Company is the only domestic manufacturer of a complete line of stainless
steel, silverplated and sterling flatware. The Company 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 Company a truly complete tableware supplier. The Company
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 Company strives to
maintain its market position through product diversity and design innovation.
The metalware, dinnerware and glassware businesses are each highly competitive.
The principal factors affecting domestic consumer competition are design, price,
quality and packaging. Other factors that have an effect on consumer competition
are availability of replacement pieces and product warranties. In the opinion of
the Company, no one factor is dominant and the significance of the different
competitive factors varies from customer to customer.
The principal factors affecting domestic foodservice competition are price,
service and quality. The Company'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 Company's participation in the international market
include competition with local suppliers and high import duties, both of
which increase the Company's costs relative to local producers.
Research and Development.
The Company places a considerable emphasis on excellence in development
and design. To achieve this end the Company maintains full time in-house design
and engineering departments that continuously develop, test and improve
products and manufacturing methods. Independent designers and collaborative
efforts with other companies contribute to the Company's emphasis on
development and design. The Company's actual expenditures on research and
development activities during the past three fiscal years, however, have not
been material.
Environmental Compliance.
The Company does not anticipate that compliance with federal, state and
local environmental laws and regulations will have any material effect upon the
capital expenditures, earnings or competitive position of the Company. The
Company does not anticipate any material capital expenditures for
environmental control facilities for the remainder of the current fiscal year
or the succeeding fiscal year.
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Employment.
The Company and its subsidiaries employed approximately 3,400 employees in
domestic operations and 1,400 employees in foreign operations as of March 1,
2000. The Company maintains positive relations with its domestic and foreign
employees. With the exception of its Buffalo China, Inc. subsidiary, the
Company'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, Plastic
& Allied Workers International Union AFL-CIO, CLC and its local union No. 76A
expires on July 31, 2002. The Company has experienced no work stoppages or
strikes in the past five years.
Year 2000.
Year 2000 issues relate to the ability of computer systems to distinguish
data that contains dates beyond December 31, 1999. The Company created and
implemented a comprehensive Year 2000 compliance plan.
As part of its compliance plan the Company reviewed all of its software and
information processing systems and identified date sensitive functions. Those
systems were then tested and, if necessary, brought into compliance prior to
January 1, 2000. The Company also contacted and worked with its major
customers, suppliers, service providers and business partners to ensure year
2000 readiness. Finally, the Company developed and maintains a contingency
plan.
Based on the information available as of the date hereof, all of the Company's
critical systems successfully made the year 2000 transition and neither the
Company nor its major customers, suppliers, service providers or business
partners experienced significant events attributable to year 2000 issues. The
Company continues to monitor year 2000 developments closely to insure a timely
response to any issues that may arise.
Since 1998 the Company has incurred a total of $500,000 in costs directly
related to year 2000 evaluation, preparation and compliance. The Company
does not expect to incur any additional significant direct costs related to the
year 2000 issue.
Notwithstanding the foregoing, the Company could still be adversely
affected if its customers, suppliers, service providers, business
partners and/or governmental agencies have not yet brought all of their
systems into year 2000 compliance. 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.
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 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 customers;
underutilization of the Company's plants and factories; and the amount and rate
of growth of the Company's selling, general and administrative expenses.
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ITEM 2. PROPERTIES.
The principal properties of the Company and its subsidiaries are situated at the
following locations and have the following characteristics:
Approximate Square Footage
Ontario, California Warehouse 206,000
Buffalo, New York Manufacturing China 257,000
Buffalo, New York Offices, Warehouse and China
Decorating Facility 203,000
Buffalo, New York Offices and Warehouse 82,000
Oneida, New York Executive Administrative Offices 95,000
Sherrill, New York Manufacturing Stainless Steel,
Silverplated and Sterling Flatware 1,082,000
Sherrill, New York Offices and Warehouse 206,000
Sherrill, New York Manufacturing Knives 135,000
Nashville, Tennessee Warehouse 293,000
Melbourne, Australia Offices, Warehouse and China
Decorating and Silver Plating Facility 60,000
Niagara Falls, Ontario, Offices and Warehouse 120,000
Canada
Shanghai, China Manufacturing Foodservice Holloware 55,000
Bangor, N. Ireland Offices and Warehouse 32,000
Vercelli, Italy Offices, Warehouse and Manufacturing
Stainless Steel Holloware 84,000
Juarez, Mexico Manufacturing China 65,000
Toluca, Mexico Manufacturing Stainless Steel Flatware 75,000
All of these buildings are owned by the Company with the following exceptions:
Ownership of the 206,000 square foot Oneida, New York warehouse and office
property was transferred to the Oneida County Industrial Agency on February
25, 2000 in exchange for various tax concessions from the county. The
property will remain in the ownership of the Oneida County Industrial
Development Agency for a term of fifteen years, upon the expiration of which
the property will be conveyed back to the Company.
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The 203,000 square foot Buffalo, New York office, warehouse and decorating
property was transferred to the Erie County Industrial Agency on February
29, 2000 in exchange for various tax concessions from the county. The
property will remain in the ownership of the Erie County Industrial Development
Agency for a term of fifteen 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; and Bangor, Northern Ireland are leased.
In addition to the land primarily associated with its manufacturing
operations, the Company owns approximately 600 additional acres in the
cities of Sherrill and Oneida and the town of Vernon, New York.
The Company leases sales offices and/or showrooms in New York City;
Melville, New York; Atlanta; Miami; London; and Vercelli, Italy. The Company
also leases retail outlet space in numerous locations throughout the United
States through its wholly-owned subsidiary, Kenwood Silver Company, Inc., and
in several locations in the United Kingdom through its branch, Oneida
Silversmiths, Limited.
In March 2000 the Company completed construction of a 206,000 square foot
expansion on a site adjacent to the Company's main manufacturing facility in
Sherrill, New York. The expansion, now fully operational, centralized the
Company's various metalware distribution operations, and includes warehousing
and related office space.
All of the Company'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 Madison and Oneida, 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 Company's headquarters
and main manufacturing and distribution facilities are located within this
land claim area. The Company 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
pending. Settlement discussions continue between the Oneidas' Madison and
Oneida counties and the State of New York.
In addition to the foregoing, the Company is involved in various routine legal
proceedings incidental to the operation of its business. Other than as
discussed herein, the Company's Management does not believe there is any
ongoing or pending litigation with a possible material effect on the financial
position of the Company.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF STOCKHOLDERS.
None.
<PAGE>
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 Company's Annual Report to
Stockholders for the year ended January 29, 2000, at the respective pages
indicated.
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS.
Page 30 of the Company's Annual Report.
ITEM 6. SELECTED FINANCIAL DATA.
Page 31 of the Company's Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Pages 27 through 30 of the Company's Annual Report.
ITEM 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.
Pages 13 through 31 of the Company's Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 13 through 31 of the Company'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 Company's definitive Proxy
Statement dated April 24, 2000 (File 1-5452), at the respective pages indicated.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Pages 3 through 4 of the Company's definitive Proxy Statement.
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Executive Officers of the Registrant.
As of March 29, 2000, the persons named below are the executive officers of
the Company 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 During
with Company Past Five Years
Allan H. Conseur, 51 Mr. Conseur was elected Executive Vice
Executive Vice President in May 1999. He has been
President, President President of Oneida International
Oneida International since 1998 and President of THC
and President THC Systems Systems, Inc. for more than the past
Inc. five years. Mr. Conseur joined the
Company in November 1996.
Harold J. DeBarr, 55 Mr. DeBarr was elected Corporate
Corporate Senior Vice Senior Vice President in May 1999. He
President, Manufacturing had been Senior Vice President,
and Engineering Manufacturing and Engineering since
1996 and Vice President, Manufacturing
since 1993.
Thomas A. Fetzner, 52 Mr. Fetzner has been Vice President
Vice President and and Corporate Controller for more than
Corporate Controller the past five years.
J. Peter Fobare, 50 Mr. Fobare assumed responsibility for
Senior Vice President the Consumer Direct Division in April
and General Manager, 1999. He had been Senior Vice
Consumer Retail and President and General Manager of the
Consumer Direct Consumer Retail Division for more than
Divisions and Director a five years prior to April 1999.
Robert J. Houle, 58 Mr. Houle was elected Corporate Vice
Corporate Vice President in May 1999. He had been
President, Human Vice President, Human Resources and
Resources Manufacturing Administration since 1995.
Peter J. Kallet, 53 Mr. Kallet was elected Chief Executive
President and Chief Officer in December 1998. He had been
Executive Officer President and Chief Operating Officer
and a Director since 1996 and Senior Vice President
and General Manager of the Company's
Foodservice Division for more than
five years prior to 1996.
Robert Lupica, 38 Mr. Lupica was elected Corporate
Corporate Senior Vice Senior Vice President in May 1999. He
President had been General Manager of the
Company's Buffalo China, Inc.
subsidiary since 1996. Mr. Lupica
joined the Company in 1996.
William D. Matthews, 65 Mr. Matthews has been Chairman of the
Chairman of the Board Board for more than the past five years.
Matthew J. Smith, 48 Mr. Smith was elected Corporate Senior
Corporate Senior Vice Vice President in May 1999. He had
President, Information been Senior Vice President since 1998
Systems and Logistics and Vice President since 1995.
Catherine H. Suttmeier, 43 Ms. Suttmeier was elected Corporate
Corporate Vice President, Vice President in May 1999. She had
Secretary and General been Vice President, Secretary and
Counsel and a Director General Counsel for more than five
years prior to May 1999.
Edward W. Thoma, 54 Mr. Thoma was elected Corporate Senior
Corporate Senior Vice Vice President in May 1999. He had
President, Finance been Senior Vice President, Finance
for more than five years prior to May 1999.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Pages 7 through 13 of the Company's definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Pages 1, 5 and 6 of the Company's definitive Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Pages 1 through 5 of the Company's definitive Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.
(a) 1. Financial statements incorporated by reference from the Company's 2000
Annual Report to Stockholders and filed as part of this Report:
Consolidated Statements of Operations for the fiscal years ended 2000,
1999 and 1998 (page 13 of the Company's Annual Report).
Consolidated Balance Sheets for the fiscal years ended 2000 and 1999
(pages 14 of the Company's Annual Report).
Consolidated Statements of Changes in Stockholders' Equity for the
fiscal years ended 2000, 1999 and 1998 (page 15 of the Company's
Annual Report).
Consolidated Statements of Cash Flows for the fiscal years ended 2000,
1999 and 1998 (page 16 of the Company's Annual Report).
Notes to Consolidated Financial Statements (pages 17 through 25 of
the Company's Annual Report).
Independent Auditor's Report (page 26 of the Company's Annual Report).
2. Financial Statement Schedule:
Schedule II, Valuation and Qualifying Accounts, for fiscal years ended
2000, 1999 and 1998 (page 18 of this Report).
Report of Independent Accountants on Accompanying Information (page 17
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.
<PAGE>
3. Exhibits:
(3)(i) The Company's Restated Articles of Incorporation, as amended.
(ii) The Company's By-Laws, as amended and restated.
(4)(a)(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
<PAGE>
(vii) 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.
(viii) 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., which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999. 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.
(ix) Waiver 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 30, 1999. 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.
(x) 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., which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999. 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.
(xi) Amendment No. 6 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.6 is
dated June 30, 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 HSBC Bank, USA
(successor to Marine Midland Bank).
(xii) Term Loan between Oneida Ltd. and Bank Alliance, N.A. dated
July 28, 1999.
(xiii) Term Loan between Oneida Ltd. and Fleet National Bank dated
July 28, 1999.
(xiv) 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 8,
1999, and was executed by The Chase Manhattan Bank (successor
to The Chase Manhattan Bank, N.A. and Chemical Bank), Bank of
America, N.A. (successor to NationsBank, N.A.) and HSBC Bank,
USA (successor to Marine Midland Bank).
(b) Amended and Restated Rights Agreement adopted by the Board of
Directors on October 27, 1999 and dated December 3, 1999.
10)(a)(i) Employment Agreement with one executive employee of the
Company dated March 12, 1999.
(ii) Employment Agreements with 11 executive employees of the
Company dated November 15, 1999.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board of
Directors on February 24, 1988, as amended, which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999.
<PAGE>
(c) Oneida Ltd. 1998 Stock Option Plan adopted by the Board of
Directors and approved by stockholders on May 27, 1998, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 30, 1999.
(d) Oneida Ltd. 1998 Non-Employee Director Stock Option Plan
adopted by the Board of Directors and approved by
stockholders on May 27, 1998, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 30, 1999.
(e) Oneida Ltd. Employee Security Plan adopted by the Board of
Directors on July 26, 1989.
(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) Amended and Restated Oneida Ltd. Deferred Compensation Plan
for Key Employees adopted by the Board of Directors on
October 27, 1999 and effective November 1, 1999.
(h) Oneida Ltd. Restoration Plan adopted by the Board of
Directors on February 28, 2000.
(13) Portions of the Oneida Ltd. Annual Report to Stockholders for
the fiscal year ended January 29, 2000, which have been
incorporated by reference in this Form 10-K.
(21) Subsidiaries of the Registrant.
(b) During the quarter ended January 29, 2000 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
Date: March 29, 2000
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 March 29, 2000
Peter J. Kallet Executive Officer
Principal Financial Officer
/s/ EDWARD W. THOMA Corporate Senior Vice March 29, 2000
Edward W/ Thoma President, Finance
Principal Accounting Officer
/s/ THOMAS A. FETZNER Vice President and March 29, 2000
Thomas A. Fetzner Corporate Controller
The Board of Directors
/s/ WILLIAM F. ALLYN Director March 29, 2000
William F. Allyn
/s/ R. QUINTUS ANDERSON Director March 29, 2000
R. Quintus Anderson
/s/ GEORGIA S. DERRICO Director March 29, 2000
Georgia S. Derrico
/s/ J. PETER FOBARE Director March 29, 2000
J. Peter Fobare
/s/ GREGORY M. HARDEN Director March 29, 2000
Gregory M. Harden
<PAGE>
/s/ PETER J. KALLET Director March 29, 2000
Peter J. Kallet
/s/ WILLIAM D. MATTHEWS Director March 29, 2000
William D. Matthews
/s/ WHITNEY D. PIDOT Director March 29, 2000
Whitney D. Pidot
/s/ RAYMOND T. SCHULER Director March 29, 2000
Raymond T. Schuler
/s/ CATHERINE H. SUTTMEIER Director March 29, 2000
Catherine H. Suttmeier
/s/ WILLIAM M. TUCK Director March 29, 2000
William M. Tuck
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON ACCOMPANYING INFORMATION
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 26 of the 2000
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 18 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 22, 2000
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 2-84304, 33-49462, 333-10795, 333-66425 and
333-87007), Form S-3 (File No. 33-64608) and Form 8-A/A (File No. 005-07119) of
Oneida Ltd. of our report dated February 22, 2000 relating to the financial
statements, which appear in the Annual Report to Shareholders, which is
incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report dated February 22, 2000 relating to
the financial statement schedules, which appear in this Form 10-K.
PRICEWATERHOUSECOOPERS
/s/ PricewaterhouseCoopers LLP
Syracuse, New York
April 26, 2000
<PAGE>
SCHEDULE II
<TABLE>
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 2000, 1999 AND 1998
(Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
Balance Additions
at Charged Balance
Beginning to at
of Cost and End of
Description Period Expenses Deduction Period
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 29, 2000:
Reserves deducted from
assets to which they apply:
Doubtful accounts
receivable.......... $1,520 $ 823 $ 934<F1> $1,409
Inventory reserves.. $1,466 $4,010<F4> $4,304<F3> $1,172<F3><F4>
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
<FN>
<F1> Adjustments and doubtful accounts written off.
<F2> Payments under rebate program.
<F3> Adjustments and inventory disposals.
<F4> Includes $3,000 of inventory related to discontinued product lines.
</FN>
</TABLE>
<PAGE>
Index to Exhibits
Exhibits:
(3)(i) The Company's Restated Articles of Incorporation, as amended.
(ii) The Company's By-Laws, as amended and restated.
(4)(a)(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
(vii) 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.
(viii) 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., which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999. 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.
(ix) Waiver 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 30, 1999. 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.
(x) 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., which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999. 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.
(xi) Amendment No. 6 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.6 is
dated June 30, 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 HSBC Bank, USA
(successor to Marine Midland Bank).
(xii) Term Loan between Oneida Ltd. and Bank Alliance, N.A. dated
July 28, 1999.
(xiii) Term Loan between Oneida Ltd. and Fleet National Bank dated
July 28, 1999.
(xiv) 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 8,
1999, and was executed by The Chase Manhattan Bank (successor
to The Chase Manhattan Bank, N.A. and Chemical Bank), Bank of
America, N.A. (successor to NationsBank, N.A.) and HSBC Bank,
USA (successor to Marine Midland Bank).
(b) Amended and Restated Rights Agreement adopted by the Board of
Directors on October 27, 1999 and dated December 3, 1999.
10)(a)(i) Employment Agreement with one executive employee of the
Company dated March 12, 1999.
(ii) Employment Agreements with 11 executive employees of the
Company dated November 15, 1999.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board of
Directors on February 24, 1988, as amended, which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999.
(c) Oneida Ltd. 1998 Stock Option Plan adopted by the Board of
Directors and approved by stockholders on May 27, 1998, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 30, 1999.
(d) Oneida Ltd. 1998 Non-Employee Director Stock Option Plan
adopted by the Board of Directors and approved by
stockholders on May 27, 1998, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 30, 1999.
(e) Oneida Ltd. Employee Security Plan adopted by the Board of
Directors on July 26, 1989.
(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) Amended and Restated Oneida Ltd. Deferred Compensation Plan
for Key Employees adopted by the Board of Directors on
October 27, 1999 and effective November 1, 1999.
(h) Oneida Ltd. Restoration Plan adopted by the Board of
Directors on February 28, 2000.
(13) Portions of the Oneida Ltd. Annual Report to Stockholders for
the fiscal year ended January 29, 2000, which have been
incorporated by reference in this Form 10-K.
(21) Subsidiaries of the Registrant.
<PAGE>
EXHIBIT 3(i)
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, rights, 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 qualifications 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 ob 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 acqurie shares of any
such parityshares 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 cancelled 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.
Section 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 sucfh 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 stockholders 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
minimumand maximum limitations specified in the preceding
sentence shall be fixed from time to time by the Board of
Directors pursuant toa 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 innumber 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
withthis 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
New York Business Corporation Law
Filing Receipt May be Sent to:
Ms. Erin L. Markey
Legal Department
Oneida Ltd.
161-183 Kenwood Avenue
Oneida, New York 13210
Telephone: (315) 361-3694
Fax: (315) 361-3700
<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 5th day of June, 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>
VERIFICATION
STATE OF NEW YORK |
| ss.:
COUNTY OF MADISON |
I, Martin J. Tyksinski, being duly sworn, depose and say that I
am the Senior Corporate Attorney and Assistant Secretary of
ONEIDA LTD., the corporation named and described in the foregoing
Certificate and know the contents thereof to be true.
By: /s/ MARTIN J. TYKSINSKI
Name: Martin J. Tyksinski
Title:Senior Corporate Attorney &
Assistant Secretary
Sworn to before me this
5th day of June, 1998.
/s/ ERIN L. MARKEY
Notary Public
<PAGE>
EXHIBIT 3(ii)
AMENDED AND RESTATED
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 Big Hall of the Mansion
House 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. (a) 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 be brought
before the meeting. To be properly brought before an annual
meeting of shareholders, business must be specified in the notice
of meeting given by or at the direction of the Board of Directors
or otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the Secretary. To be timely,
a shareholder's notice must be delivered to or mailed and
received by the Secretary at the principal executive offices of
the Corporation not less than 90 days nor more than 120 days
prior to the date of the annual meeting, regardless of any
postponements, deferrals or adjournments of that meeting to a
later date; provided, however, that if the annual meeting of
shareholders is called for a date that is not within 30 days
before or after the day for such annual meeting specified in the
first sentence of this Section 1.02, notice by the shareholder to
be timely must be so delivered or mailed and received by the
Secretary at the principal executive offices of the Corporation
not later than the close of business on the tenth day following
the earlier of (i) the day on which notice of the date of the
meeting was given or mailed to shareholders or (ii) the day on
which public disclosure of the date of the meeting was made. A
shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual
meeting of shareholders (i) the text of the proposal, (ii) a
brief statement of the reasons why the shareholder favors the
proposal, (iii) the shareholder's name and address, (iv) the
number and class of all shares of the Corporation beneficially
owned by the shareholder, (v) any material interest of the
shareholder in the proposal and (vi) if the shareholder intends
to solicit proxies in support of the proposal, a statement to
that effect.
(b) If the presiding officer of the annual meeting of
shareholders determines that a shareholder proposal was not made
in accordance with the terms of this Section 1.02, he shall so
declare at the annual meeting and any such proposal shall not be
acted upon at the annual meeting.
(c) This provision shall not prevent the consideration and
approval or disapproval at the annual meeting of shareholders of
reports of officers, directors and committees of the Board of
Directors but, in connection with such reports, no business shall
be acted upon at such annual meeting unless stated, filed and
received as herein provided.
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 shareholder 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
to each shareholder entitled to vote thereat, not fewer than 10
nor more than 60 days prior to the meeting; provided, however,
that such notice may be given by third class mail not fewer than
24 nor more than 60 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. (a) 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 eligible for election as directors
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.
(b) Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors.
Nominations of persons for election to the Board of Directors may
be made at an annual meeting of shareholders by or at the
direction of the Board of Directors, by any nominating committee
or person appointed by the Board of Directors or by any
shareholder of the Corporation entitled to vote for the election
of directors at the meeting who complies with the notice
procedures set forth in this Section 3.02. Such nominations,
other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to
the Secretary. To be timely, a shareholder's notice must be
delivered to or mailed and received by the Secretary at the
principal executive offices of the Corporation not less than 90
days nor more than 120 days prior to the date of the annual
meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however,
that if the annual meeting of shareholders is called for a date
that is not within 30 days before or after the day for such
annual meeting specified in the first sentence of Section 1.02
hereof, notice by the shareholder to be timely must be so
delivered or mailed and received by the Secretary at the
principal executive offices of the Corporation not later than the
close of business on the tenth day following the earlier of (i)
the day on which notice of the date of the meeting was given or
mailed to shareholders or (ii) the day on which public disclosure
of the date of the meeting was made. A shareholder's notice to
the Secretary shall set forth (i) as to each person whom the
shareholder proposes to nominate for election or reelection as a
director (A) the name, age, business address and residential
address of the person, (B) the principal occupation or employment
of the person, (C) the number and class of all shares of the
Corporation beneficially owned by the person, (D) the signed
consent of the person to be named as a nominee and to serve as a
director, if elected, and (E) any other information relating to
the person that is required to be disclosed in solicitations for
proxies for election of directors pursuant to Schedule 14A under
the Securities Exchange Act of 1934, as amended; and (ii) as to
the shareholder giving the notice (A) the shareholder's name and
address, (B) the number and class of all shares of the
Corporation beneficially owned by the shareholder, (C) a
description of all arrangements or understandings between the
shareholder and the shareholder's nominee or any other person or
persons (naming such person or persons) with respect to the
nomination of the shareholder's nominee and (D) if the
shareholder intends to solicit proxies in support of the
proposal, a statement to that effect. The Corporation may
require any proposed nominee to furnish such other information as
may reasonably be required by the Corporation to determine the
eligibility of such proposed nominee to serve as a director of
the Corporation. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with
the procedures set forth in this Section 3.02.
(c) If the presiding officer of the annual meeting of
shareholders determines that a nomination was not made in
accordance with this Section 3.02, he shall so declare at the
annual meeting and any such defective nomination shall be
disregarded.
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 of 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 shareholders. 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
certificates 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)(xi)
AMENDMENT NO. 6
TO
CREDIT AGREEMENT
This Amendment No. 6 ("Amendment"), dated as of June 30,
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 of have become parties to the Credit Agreement referred to
below ("Banks").
R E C I T A L S
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, Waiver and Amendment No. 4
dated as of September 14, 1998, and Amendment No. 5 dated as of
February 19, 1999 (as amended, hereafter referred to as the
"Credit Agreement").
B. Borrower incurred pre-tax non-cash restructuring
charges of approximately $22,000,000 in the fiscal quarter ending
May 31, 1999. Borrower has requested that the Agent and Banks
amend Section 6.11 and Exhibit G of the Credit Agreement to
eliminate the effects of these restructuring charges, and also
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 6.11 of the Credit Agreement is amended to
read as follows:
For the period of four consecutive fiscal quarters
immediately prior to the execution of this
Agreement and for each period of four consecutive
fiscal quarters while any Note is outstanding, the
Borrower will maintain Consolidated Income
Available for Interest Charges at not less than 200%
of Consolidated Interest Charges, provided that
Consolidated Income Available for Interest Charges
for the quarter ending May 31, 1999 shall be increased
by the amount of $22,000,000.
(b) 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;
1.95 to 1.0 at the end of the fiscal quarter ending
July 31, 1999; and
1.75 to 1.0 at the end of the fiscal quarter ending
October 30, 1999; and
1.45 to 1.0 at the end of the fiscal quarter ending
January 29, 2000 and at the end of each subsequent fiscal
quarter thereafter.
(c) Exhibit G of the Credit Agreement is amended to
add the following sentence at the end thereof:
For purposes of this Exhibit G, Consolidated Cash
Flow for the quarter ending May 31, 1999 shall be
increased by the amount of $22,000,000.
3. 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.
4. 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.
5. Confirmation of Credit Agreement. Except as amended by
this Amendment, all the provisions of the Credit Agreement (as
previously amended) 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.
6. Counterparts. This Amendment may be signed in any
number of courterparts, 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.
[Remainder of Page Intentionally Left Blank]
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. ODDO, JR.
Joseph H. Oddo, Jr.
Vice President
NATIONSBANK,N.A.
By: /s/ W. LAWRENCE HESS
W. Lawrence Hess
Managing Director
HSBC BANK, USA
(successor to 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 4(a)(xii)
LOAN AGREEMENT
ALLIANCE BANK, N.A.
to
ONEIDA LTD.
Dated as of July 28, 1999
<PAGE>
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of July 28, is made by and
between ONEIDA LTD., a New York business corporation with an
address at 163 Kenwood Avenue, Oneida, New York 13421
("Borrower"") and ALLIANCE BANK, N.A., a national banking
association with an address at 160 Main Street, Oneida, New York
13421 (the "Bank").
In consideration of the mutual covenants and agreements
contained herein, Borrower and the Bank agree as follows:
SECTION 1
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINED TERMS. All terms used in this Agreement
shall have the defined meanings set forth below when used herein
or in any Credit Document, or in any certificate or report made
or delivered under this Agreement, unless the context otherwise
requires or unless such term is otherwise defined therein.
"Adjusted Tangible Assets" shall mean all assets except:
(i) deferred assets, other than prepaid insurance and
prepaid taxes, deferred taxes and deferred pension
expense;
(ii) patents, copyrights, trademarks, trade names,
franchises, good will, experimental expense and other
similar intangibles;
(iii) Restricted Investments;
(iv) unamortized debt discount and expense; and
(v) assets located, and notes and accounts receivable
due from obligors domiciled, outside the United States
of America, unless such assets are owned by or such
notes and accounts receivable are due from
Subsidiaries.
"Affiliate" shall mean a Person (other than a Subsidiary)
which directly controls, or is controlled by, or is under common
control with, the Borrower. The term "control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
either through the ownership of Voting Securities, by contract or
otherwise.
"Agreement" shall mean this Loan Agreement as originally
executed, and as the same may, from time to time, be amended or
supplemented as hereinafter provided.
"Applicable Rate" shall be the rate of interest payable on
the Term Loan and shall mean and refer to the "Level IV Rate", or
the "Level III Rate", or the "Level II Rate", or the "Level I
Rate", calculated and determined by the Bank at Closing and
thereafter effective as of each November 1, February 1, May 1
and August 1, based upon the Borrower's quarterly and annual
financial statements for the immediately preceding four (4)
fiscal quarters commencing on November 1, 1999, as follows:
Level IV Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is greater than 3.5
to 1, the Applicable Rate shall be LIBOR plus
one hundred seventy (170) basis points.
Level III Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 3.5 to 1 but more than 2.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred fifty (150) basis points.
Level II Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 2.5 to 1 but more than 1.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred thirty (130) basis points.
Level I Rate - So long as no Event of Default
has occurred and the Borrower is then in
compliance with the financial covenants set
forth in Section 4 below, if the Borrower's
Leverage Ratio is 1.5 to 1 or less, the
Applicable Rate shall be LIBOR plus one
hundred ten (110) basis points.
"Authorized Person" shall mean:
Name Title
Edward Thoma Senior Vice President
Shelley Hyde Treasurer
Rodney Mayette Assistant Cashier
Ronald Putman Cashier
By written Notice, accompanied by a copy of the Borrower's
Board of Directors Resolution, the Borrower may designate its
Authorized Person(s) to be the individual(s) named in such
resolution.
"Bank" shall mean and refer to Alliance Bank, N.A. and its
successors and assigns.
"Borrower" shall mean and refer to Oneida Ltd.
"Business Day" shall mean any day other than a Saturday,
Sunday or day which in the State of New York shall be a legal
holiday or a day on which banking institutions are required or
authorized to close.
"Code" shall mean the Internal Revenue Code of 1986,
including all regulations issued thereunder, all as from time to
time amended.
"Consolidated Adjusted Net Income" shall mean for any
period, the gross revenues of the Borrower and its Subsidiaries
for such period less all expenses and other proper charges
(including taxes on income), determined on a consolidated basis
after eliminating earnings or losses attributable to outstanding
minority interests, but excluding in any event:
(i)(1) any gains or losses on the sale or other
disposition of investments and
(2) any gains or losses on the sale or other
disposition of plant, property and equipment which
gains or losses exceed, in the aggregate, One Hundred
Thousand Dollars ($100,000) during any fiscal year and
any taxes on such excluded gains and any tax deductions
or credits on account of any such excluded losses;
(ii) the proceeds of any life insurance policy;
(iii) net earnings and losses of any Subsidiary
accrued prior to the date it became a Subsidiary;
(iv) net earnings and losses of any corporation
(other than a Subsidiary), substantially all the assets
of which have been acquired in any manner by the
Borrower or any Subsidiary, realized by such
corporation prior to the date of such acquisition;
(v) net earnings and losses of any corporation (other
than a Subsidiary) with which the Borrower or a
Subsidiary shall have consolidated or which shall have
merged into or with the Borrower or a Subsidiary prior
to the date of such consolidation or merger;
(vi) net earnings of any business entity (other
than a Subsidiary) in which the Borrower or any
Subsidiary has an ownership interest unless such net
earnings shall have actually been received by the
Borrower or such Subsidiary in the form of cash
distributions or readily marketable securities;
(vii) any portion of the net earnings of any
Subsidiary which for any reason is unavailable for
payment of dividends to the Borrower or any other
Subsidiary;
(viii) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(ix) any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of
acquisition thereof over the amount invested in such
Subsidiary;
(x) any gain arising from the acquisition of any
securities of the Borrower or any Subsidiary;
(xi) any reversal of any contingency reserve,
except to the extent that provision for such
contingency reserve shall have been made from income
arising during such fiscal period or during the period
consisting of the four (4) consecutive fiscal quarters
immediately following the end of such fiscal period;
and
(xii) any other extraordinary gain.
"Consolidated Adjusted Tangible Assets" shall mean the
Adjusted Tangible Assets of the Borrower and its Subsidiaries at
such date determined on a consolidated basis.
"Consolidated Adjusted Tangible Net Worth" shall mean:
(i) the net book value (after deducting related
depreciation, obsolescence, amortization, valuation and
other proper reserves) at which the Adjusted Tangible
Assets of the Borrower and all Subsidiaries would be
shown on a consolidated balance sheet at such date, but
excluding any amount on account of write-ups of assets;
(ii) minus the amount at which their liabilities
(other than capital sock and surplus) would be shown on
such balance sheet, and including as liabilities all
reserves for contingencies and other potential
liabilities and all minority interests in Subsidiaries.
"Consolidated Current Assets" at any date means the amount
at which the current assets of the Borrower and all Subsidiaries
would be shown on a consolidated balance sheet at such date.
"Consolidated Current Liabilities" at any date shall mean
the amount at which the current liabilities of the Borrower and
all Subsidiaries would be shown on a consolidated balance sheet
at such date, plus (without duplication) the aggregate amount of
their Guaranties of current liabilities of other Persons
outstanding at such date.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control, which together with the
Borrower, are treated as a single employer under Section 414(b)
or 414(c) of the Code.
"Current Debt" with respect to a Person shall mean all
liabilities for borrowed money, all obligations under capitalized
leases, and all liabilities secured by any Lien other than a Lien
permitted by Section 4.6(a)(i)-(iv), existing on Property owned
by that Person, which, in any case, are payable on demand or
within one year from their creation, plus the aggregate amount of
Guaranties of all such liabilities of other Persons, except:
(i) any liabilities which are renewable or extendible
at the option of the debtor to a date more than one
year from the date of creation thereof; and
(ii) any liabilities which, although payable within one
year, constitute principal payments on indebtedness
expressed to mature more than one year from the date of
its creation.
"EBITDA" shall mean the Borrower's and Subsidiaries'
consolidated earnings before interest, taxes, depreciation and
amortization, provided that in calculating EBITDA for the
Borrower's fiscal year ending January 29, 2000, the May 1, 1999,
Thirty Five Million Eight Hundred Thousand Dollars ($35,800,000)
restructuring expense shall be disregarded.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as from time to time amended.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of any group or organizations (i)
described in Section 414(b) or (c) of the Code of which the
Borrower is a member, or (ii) solely for the purposes of
potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which the Borrower is a member.
"Event of Default" shall mean each event of default
described in Section 5 of this Agreement.
"GAAP" shall mean generally accepted accounting principles
in the United States of America in effect on the date the Credit
Documents are executed and delivered.
"Guaranty" shall mean with respect to any Person, all
guaranties of, and all other obligations which in effect guaranty
in any manner, any indebtedness, dividend or other obligation of
any other Person other than any Subsidiary or the Borrower (such
other person hereafter referred to as the "primary obligor"),
including obligations incurred through an agreement, contingent
or otherwise, by such Person:
(i) to purchase such indebtedness or obligation or, in
the circumstances contemplated by clause (iii) below,
any Property constituting security thereof;
(ii) to advance or supply funds (A) for the purchase or
payment of such indebtedness or obligation, or (B) to
maintain working capital or any balance sheet or income
statement condition;
(iii) to lease Property, or to purchase securities
or other Property or services, primarily for the
purpose of assuring the owner of such indebtedness or
obligation of the ability of the primary obligor to
make payment of the indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness
or obligation, or the primary obligor, against loss;
but excluding endorsements in the ordinary course of business of
negotiable instruments for deposit or collection.
"Leverage Ratio" shall mean the Borrower's and Subsidiaries'
Total Funded Debt divided by Borrower's and Subsidiaries'
consolidated EBITDA.
"LIBOR" shall mean the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in
U.S. dollars, for one (1) month, three (3) months or six (6)
months as specified by the Borrower in its Repricing Notice with
respect to Term Loan (the "Interest Period") which appears on the
Telerate page 3750 as of 11:00 a.m. London time on the day that
is two London Banking Days preceding the first day of such LIBOR
advance; provided that if the Bank does not receive Borrower's
Repricing Notice at least two (2) London Banking Days preceding
the first day of such LIBOR advance, this Note shall bear
interest at the Prime Rate of Interest; provided further,
however, if the rate described above does not appear on the
Telerate System on any applicable interest determination date,
the LIBOR rate shall be the rate (rounded upwards as described
above, if necessary) for deposits in dollars for a period
substantially equal to the Interest Period on the Reuters Page
"LIBO" (or such other page as may replace the LIBO Page on that
service for the purpose of displaying such rates), as of 11:00
a.m. (London Time), on the day that is two (2) London Banking
Days prior to the beginning of such Interest Period. "Banking
Day" shall mean, in respect of any city, any date on which
commercial banks are open for business in that city.
If both the Telerate and Reuters system are unavailable,
then the rate for that date will be determined on the basis of
the offered rates for deposits in U.S. dollars for the period of
time comparable to the Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00
a.m. London time, on the date that is two (2) London Banking Days
preceding the first day of such LIBOR advance as selected by the
Bank. The principal London office of each of the four major
London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis
of the rates quoted for loans in U.S. dollars to leading European
banks for period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00
a.m. New York City time, on the date that is two London Banking
Days preceding the first day of such LIBOR advance. In the event
that Bank is unable to obtain any such quotation as provided
above, it will be deemed that LIBOR pursuant to a LIBOR advance
cannot be determined, and the LIBOR rate shall not be available
to Borrower and interest on the Term Loan shall accrue and be
paid by the Borrower at the Bank's Prime Rate of Interest.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Bank then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-Currency Liabilities" as
defined in Regulation D.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner
of the Property, whether the interest is based on common law,
statute or contract (including the security interest lien arising
from a mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security
purposes). The term "Lien" shall not include minor reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions and other minor title exceptions
affecting Property, provided that they do not constitute security
for a monetary obligation. For the purposes of this Agreement,
the Borrower or a Subsidiary shall be deemed to be the owner of
any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement
pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such
retention or vesting shall be deemed to be a Lien. The amount of
any Lien shall be the aggregate amount of the obligation secured
thereby.
"Loan" shall mean and refer to the Term Loan.
"Loan Documents" or "Credit Documents" shall mean this
Agreement, the Term Note and any ISDA Master Agreement which is
or may hereafter be entered into by the Borrower with respect to
the Term Loan.
"Long Term Debt" with respect to a Person shall mean all
liabilities for borrowed money (including, without limitation,
subordinated debt), all obligations under capitalized leases, and
all liabilities secured by any Lien other than a Lien permitted
by Section 4.6(a)(i)-(iv), existing on Property owned by that
Person (whether or not those liabilities have been assumed), or
any other obligation (other than deferred taxes) which are
required by generally accepted accounting principles to be shown
as liabilities on its balance sheet which, in any case, are
payable more than one year from the date of their creation,
including (i) any liabilities which are renewable or extendible
at the option of the obligor to a date more than one year from
their creation and (ii) any liabilities which, although payable
within one year, constitute principal payments on indebtedness
expressed to mature more than one year from its creation, plus
the aggregate amount of Guaranties of all such liabilities of
other Persons.
"Note" shall mean the Term Note.
"Notice" or "notice" shall mean wherever used in this
Agreement, written notice delivered as specified in Section 6.4
of this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Pension Plan(s)" shall mean all "employee pension benefit
plans" as such term is defined in Section 3 of ERISA, maintained
by the Borrower and its subsidiaries from time to time.
"Person" shall mean a corporation, limited liability
company, association, partnership, trust, unincorporated
organization, business, individual and any government agency or
political subdivision or branch thereof.
"Plan" shall mean any employee benefit or other plan
established or maintained, or to which contributions have been
made, by the Borrower or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"Prime" or "Prime Rate" or "Prime Rate of Interest" shall
mean the variable per annum rate of interest so designated from
time to time by Alliance Bank, N.A. as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. Changes in the
rate of interest resulting from changes in the Prime Rate shall
take place immediately without notice or demand of any kind.
"Repricing Notice" shall mean the notice delivered by the
Borrower to the Bank as provided in Section 2.1(c) of this
Agreement in order to select a LIBOR Interest Period.
"Restricted Investments" shall mean all Property, including
all investments in any Person, whether by acquisition of stock,
indebtedness, other obligation or security, or by loan, advance,
capital contribution, or otherwise, except:
(i) investments in one or more Subsidiaries or any
corporation which concurrently with such investment
becomes a Subsidiary;
(ii) Property to be used in the ordinary course of
business, including without limitation, advances made
to employees for expenses incurred in the ordinary
course of business;
(iii) current assets arising from the sale of goods
and services in the ordinary course of business;
(iv) direct obligations of the United States of
America, or any of its agencies or obligations fully
guaranteed by the United States of America, provided
that such obligations mature within one year from the
date acquired;
(v) demand deposits or certificates of deposit
maturing within one year from the date acquired and
issued by a bank or trust company organized under the
laws of the United States or any of its states, and
having capital, surplus and undivided profits
aggregating at least Fifty Million Dollars
($50,000,000);
(vi) commercial paper given the highest rating by
a national credit rating agency and maturing not more
than 270 days from the date acquired; and
(vii) shares of capital stock of the Borrower held
in its treasury as of the date of this Agreement.
"Subsidiary" shall mean a corporation in which the Borrower
owns, directly or indirectly, sufficient Voting Stock to enable
it ordinarily, in the absence of contingencies, to elect a
majority of the corporate directors (or Persons performing
similar functions).
"Term Loan" shall mean the Five Million Dollar ($5,000,000)
Term Loan provided for in Section 2.1 of this Agreement.
"Term Note" shall mean and refer to the note executed and
delivered by the Borrower to the Bank to evidence the Borrower's
obligations to repay Term Loan.
"Total Funded Debt" shall mean the sum of the Borrower's and
Subsidiaries' (i) Long Term Debt (including the current portion
thereof) and (ii) Current Debt.
"Voting Stock" shall mean securities, the holders of which
are ordinarily in the absence of contingencies, entitled to elect
corporate officers (or Persons performing similar functions).
SECTION 2
THE LOAN
2.1 TERM LOAN.
(a) Loan Amount and Purpose. The Term Loan amount shall be
Five Million Dollars ($5,000,000), which amount shall be used by
the Borrower to repay and refinance certain short term
indebtedness incurred by the Borrower in connection with the
completion of certain capital projects.
(b) Term Loan Fee. Concurrently with the execution and
delivery of the Term Note, the Borrower shall pay to the Bank a
Term Loan fee in the amount of Twelve Thousand Five Hundred
Dollars ($12,500).
(c) Term Loan Interest Rate. The Borrower shall repay the
Term Loan with interest at the Applicable Rate. The Borrower
agrees that the Borrower will submit to the Bank the Borrower's
Repricing Notice not later than two (2) London Banking Days
preceding the date on which an Interest Period ends and the
Applicable Rate is to be reset. In its Repricing Notice, the
Borrower may elect up to three (3) different Interest Periods
with respect to up to three (3) portions of the Loan (each, a
"Tranche"), provided that no Tranche may be less than One Million
Dollars ($1,000,000). In the event Borrower timely elects more
than one Tranche, scheduled payments of principal received by the
Bank shall be applied by the Bank to reduce the principal balance
of each Tranche on a per capita basis.
(d) Term Loan Repayment. The Term Loan shall be repaid
under a Term Note in substantially the form attached hereto and
made a part hereof as Schedule A.
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1 EXISTENCE AND RIGHTS. The Borrower and each Subsidiary is a
corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation, each with full power and
authority to own its properties, conduct its operations as now
conducted, and with respect to the Borrower, to enter into and to
perform its obligations under this Agreement and the other Credit
Documents and the Borrower and each Subsidiary is duly licensed
or qualified and in good standing as a foreign corporation in
each other jurisdiction in which the failure to qualify would
materially and adversely affect the conduct of its business.
3.2 AGREEMENT AND CREDIT DOCUMENTS AUTHORIZED. The execution,
delivery and performance of the Credit Documents by the Borrower
have been duly authorized by all required corporate action and
the execution, delivery and performance of the Credit Documents
do not require consent or approval of any governmental body or
other regulatory authority, are not in contravention of or in
conflict with any law or regulation applicable to the Borrower or
any term or provision of the Borrower's certificate of
incorporation or by-laws, and the Credit Documents are each
valid, binding and legally enforceable obligations of the
Borrower enforceable in accordance with their respective terms.
3.3 NO CONFLICT. The execution, delivery and performance of each
of the Credit Documents by the Borrower will not breach or
constitute a default under any loan agreement, credit agreement,
indenture or similar document, or any other undertaking or
instrument, to which the Borrower is a party, or by which the
Borrower or any of its property is or may be bound or affected,
and the execution, delivery and performance by the Borrower will
not result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or security
interest in, any of the property of the Borrower excepting only
liens or security interests in favor of the Bank.
3.4 LITIGATION. Except as disclosed in the Borrower's audited
financial statements for the period ending January 30, 1999,
there is no action, proceeding or investigation at law or in
equity, pending or threatened by or before any court, arbitration
panel or governmental instrumentality or agency which is not
fully covered by insurance (less normal deductibles) and which if
determined adversely to Borrower could have a material adverse
effect on the financial condition, properties, affairs or
operations of Borrower and Borrower is not in default with
respect to any final order, writ, injunction, decree, rule,
ruling or demand of any court, tribunal or other governmental or
regulatory instrumentality or agency.
3.5 FINANCIAL CONDITION. The Borrower has furnished to the Bank
the Borrower's consolidated balance sheet and the related
operating statement and statement of changes in financial
position for the Borrower's fiscal year ending January 30, 1999.
These financial statements present fairly in conformity with GAAP
the consolidated financial condition and affairs of Borrower and
its Subsidiaries as of the date thereof, and the consolidated
results of the operations of Borrower and its Subsidiaries for
the periods covered thereby, and have been prepared in accordance
with generally accepted accounting principles on a basis
consistently applied. The unaudited consolidated balance sheet
of the Borrower and its Subsidiaries with respect to the period
ending May 1, 1999 and the related unaudited consolidated
statements of income and retained earnings and changes in
financial position of the Borrower and its Subsidiaries for the
period then ended, copies of which have been delivered to the
Bank, fairly present in accordance with GAAP, the consolidated
financial position of the Borrower and its Subsidiaries as at
such date and the consolidated results of the operations for the
period then ended. Since the date of the most recent such
balance sheet and related operating statement there has been no
materially adverse change in the assets or liabilities or
financial condition of Borrower or its Subsidiaries.
3.6 TITLE TO ASSETS. Except as set forth on Schedule B,
Borrower and each Subsidiary each have good and marketable title
to each of the assets titled in their respective names and none
of such assets are subject to any Lien, mortgage, deed of trust,
pledge, security interest or other encumbrance.
3.7 TAX STATUS. Borrower and each Subsidiary have filed all tax
returns and reports required to be filed (or have obtained
necessary and appropriate extensions of time) and have paid all
applicable federal, state and local franchise, income and other
taxes, fees, assessments or other charges which are or have been
due and payable prior to the date of this Agreement.
3.8 ABSENCE OF CONTINGENT OBLIGATIONS. Neither the Borrower nor
any Subsidiary have made any Guaranty of any nature or otherwise
agreed to or incurred any other contingent obligation not
disclosed on the financial statements delivered to the Bank.
3.9 ABSENCE OF DEFAULT. Each of the Borrower and each Subsidiary
has satisfied all judgments and neither the Borrower nor any
Subsidiary is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court, arbitrator,
or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or
foreign. Neither the Borrower nor any Subsidiary is a party to
any indenture, loan or credit agreement or lease or other
agreement or instrument or subject to any charter or corporate
restriction which could have a material adverse affect on the
business, properties, assets, operations or conditions, financial
or otherwise, of the Borrower or any Subsidiary, or the ability
of the Borrower to carry out its obligations under the Credit
Documents. Neither the Borrower nor any Subsidiary is in default
in any respect in the performance, observance or fulfillment of
any obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a
party.
3.10 SUBSIDIARIES. The capital stock of each Subsidiary has
been validly issued, is fully paid and non-assessable and is
owned by the Borrower free and clear of all Liens.
3.11 ENVIRONMENTAL COMPLIANCE. The Borrower and each Subsidiary
(a) is in compliance in all material respects with all applicable
environmental, transportation, health and safety statutes and
regulations, and (b) has not acquired, incurred or assumed,
directly or indirectly, any material contingent liability in
connection with the release or storage of any toxic or hazardous
waste or substance into the environment. Neither the Borrower nor
its Subsidiaries have acquired, incurred or assumed, directly or
indirectly, any material contingent liability in connection with
a release or other discharge of any hazardous, toxic or waste
material, including petroleum, on, in, under or into the
environment surrounding any property owned, used, leased or
operated by any of them.
3.12 ERISA. The Borrower and each member of the Controlled Group
have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently
applicable provisions of ERISA and Code and have not incurred any
liability to the PBGC or to a Plan under Title IV of ERISA.
Neither the Borrower nor any member of the Controlled Group have
incurred any accumulated funding deficiency within the meaning of
ERISA.
SECTION 4
COVENANTS
Borrower covenants and agrees that so long as any credit
hereunder shall be available, and until payment in full of the
Loan:
4.1 EXISTENCE. Except as permitted by Section 4.6(b), Borrower
and each Subsidiary shall maintain and preserve its corporate
existence and all rights, privileges and franchises and other
authority adequate for the conduct of their operations; maintain
their respective Property in good order and repair, conduct
their respective operations without voluntary interruption or
cessation. The Borrower shall maintain its principal offices at
the place specified at the beginning of this Agreement, until
after such time as the Bank is given written notice of any change
of any of such location.
4.2 INSURANCE. Borrower and each Subsidiary shall maintain with
financially sound and reputable insurers, insurance with respect
to each of their respective Property and business against such
casualties and contingencies, of such types (including public
liability, larceny, embezzlement or other criminal
misappropriation insurance) and in such amounts as is customarily
maintained in the case of corporations of established reputations
engaged in the same or similar businesses and similarly situated.
All insurance required to be provided by the Borrower and each
Subsidiary shall be issued by companies reasonably satisfactory
to the Bank and under policies requiring at least thirty (30)
days prior written notice to the Bank as a condition to any
termination or material reduction of coverage.
4.3 TAXES AND OTHER LIABILITIES. Intentionally deleted.
4.4 RECORDS AND REPORTS. Borrower and each Subsidiary shall
maintain a system of accounting in accordance with generally
accepted accounting principles on a basis consistently applied,
permit representatives of the Bank to have access to and to
examine Borrower's and each Subsidiaries' Property, books and
records at all reasonable times on reasonable notice, and at no
expense to the Bank, the Borrower furnish to the Bank:
(a) Within one hundred-twenty (120) days of the end of each
fiscal year, the Bank shall be furnished with Borrower's audited
consolidated financial statements (which shall include a copy of
any management letter delivered to the Borrower), each certified
by an independent certified public accountant retained by the
Borrower and reasonably satisfactory to the Bank, and which
contain balance sheets and income statements, together with
comparative figures for the prior year. Quarterly, within sixty
(60) days of each fiscal quarter, the Bank shall be furnished
with internally prepared consolidated financial statements for
the Borrower. Each such quarterly statement shall be certified
to by the Borrower's chief financial officer and shall contain
balance sheets and income statements together with comparative
figures for the same period for the prior year. Each such annual
and quarterly financial statement shall fairly present the
financial condition of the Borrower and its Subsidiaries for the
periods covered. The Borrower shall also furnish to the Bank (i)
the Borrower's annual 10-K report within one hundred twenty (120)
days of the end of each of the Borrower's fiscal years, (ii) the
Borrower's quarterly 10-Q report within sixty (60) days of the
end of each of the Borrower's fiscal quarters, and (iii) such
other management reports as the Bank may reasonably request.
(b) Concurrently with the delivery of the annual
consolidated audit and quarterly consolidated internal
statements, a certificate of the Chief Financial Officer or the
principal accounting officer of the Borrower (i) setting forth
whether the Borrower is in compliance with the requirements of
this Section 4 on the date of such financial statements, (ii)
stating whether there exists on the date of such certificate any
Event of Default and, if any Event of Default exists, setting
forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto, and (iii) having
attached thereto a schedule in reasonable detail satisfactory to
the Bank setting forth the computations necessary to determine
whether the Borrower is in compliance with the financial
covenants set forth in Section 4.5 of this Agreement.
(c) Promptly, after the occurrence of any Event of Default,
a certificate of the chief financial officer or the principal
accounting officer of the Borrower setting forth the details
thereof and the action which the Borrower is taking or proposes
to take with respect thereto.
(d) If and when the Borrower or any member of the
Controlled Group gives or is required to give notice to the PBGC
of any "Reportable Event" (as defined in Section 4043 of ERISA)
with respect to any Plan under Title IV of ERISA, or knows that
the Plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC;
and
(e) Such other financial information regarding Borrower
and each Subsidiary as the Bank may reasonably request.
4.5 CERTAIN BORROWER FINANCIAL COVENANTS COVENANTS.
(a) Minimum Current Ratio. The Borrower shall maintain a
minimum ratio of Consolidated Current Assets divided by
Consolidated Current Liabilities (all computed in accordance with
generally accepted accounting principles consistently applied),
measured as at the end of each of Borrower's fiscal quarters, of
not less than 1.75 to 1;
(b) Maximum Leverage Ratio. The Borrower shall maintain a
maximum Leverage Ratio of 4.0 to 1 measured as at the end of each
of the Borrower's fiscal quarters for the period including such
fiscal quarter and the then immediately preceding three (3)
fiscal quarters;
(c) Minimum Cash Flow Coverage. The Borrower shall
maintain a minimum ratio of consolidated EBITDA less cash
dividends and less cash income taxes (determined in accordance
with GAAP), divided by the current maturities of Borrower's and
Subsidiaries' Long-Term Debt plus interest, of not less than 1.50
to 1, all measured as at the end of each of Borrower's fiscal
quarters for the period including such fiscal quarter and the
immediately preceding three (3) fiscal quarters.
4.6 .6 .6 .6 NEGATIVE PLEDGE/SALE OF PROPERTY/SALE OF
PROPERTY/SALE OF PROPERTY/SALE OF PROPERTY. So long as any
amounts remain unpaid on account of the Loan, neither the
Borrower nor any Subsidiary shall:
(a) Cause or permit or hereafter agree or consent to cause
or permit in the future (upon the happening of a contingency or
otherwise) any of its Property, whether now owned or subsequently
acquired, to be subject to any Lien, except:
(i) Liens securing the payment of taxes, assessments
or governmental charges or levies or the demands of
suppliers, mechanics, repairmen, workmen, materialmen,
carriers, warehousers, landlords and other like
Persons, or similar statutory Liens, provided that (A)
they do not in the aggregate materially reduce the
value of any Property subject to the Liens or material
interfere with their use in the ordinary conduct of the
owning company's business, (B) all claims which the
Liens secure are not delinquent or are being actively
contested in good faith and by appropriate proceedings,
and (C) adequate reserves have been established
therefor on the books of the Borrower, if required by
generally accepted accounting principles;
(ii) Liens incurred or deposits made in the ordinary
course of business (A) in connection with worker's
compensation, unemployment insurance, social security
and other like laws, or (B) to secure the performance
of letters of credit, bids, tenders, sales contracts,
leases, statutory obligations, surety, appeal and
performance bonds and other similar obligations, in
each case not incurred in connection with the borrowing
of money, the obtaining of advances or the payment of
the deferred purchase price of Property;
(iii) attachment, judgment and other similar Liens
arising in connection with court proceedings, provided
that (A) execution and other enforcement are
effectively stayed, (B) all claims which the Liens
secure are being actively contested in good faith by
appropriate proceedings and (C) adequate reserves have
been established therefor on the books of the Borrower,
if required by generally accepted accounting
principles;
(iv) Liens on Property of a Subsidiary, provided that
they secure only obligations owing between the Borrower
and any Subsidiary;
(v) Liens existing on the date hereof, which Liens
have been disclosed in writing to the Bank;
(vi) other Liens not otherwise permitted under this
Section 4.6(a) securing Long Term Debt or Current Debt
and limited to real estate, plant or equipment,
provided such Liens secure the purchase price of such
property, do not exceed the lesser of the cost or fair
market value of such property, and do not extend to any
other asset; and provided, further, that the aggregate
amount of indebtedness secured by such Liens shall not
exceed twenty percent (20%) of Consolidated Adjusted
Tangible Net Worth or, with respect to Buffalo China,
Inc., Five Million Dollars ($5,000,000); and
(vii) Liens resulting from the extension,
refunding, renewal or replacement of the indebtedness
secured by the Liens described in paragraphs (iv), (v)
and (vi) above, up to the amount outstanding under such
indebtedness at the time of such extension, refunding,
renewal or replacement.
In case any Property is subjected to a Lien in violation of
Section 4.6(a), the Borrower will make or cause to be made
provisions whereby the Note will be secured equally and ratably
with all other obligations secured thereby, and in any case the
Note shall have the benefit, to the full extent that, and with
such priority as, the holders may be entitled thereto under
applicable law, of an equitable Lien on such Property securing
the Note. Such violation of Section 4.6(a) shall constitute an
Event of Default whether or not any such provision is made
pursuant to this paragraph; or
(b) Sell, lease, or otherwise dispose of any of its
Property (other than by the Borrower as permitted under Section
4.7 below) or sell or otherwise dispose of any shares of the
stock of a Subsidiary, nor will any Subsidiary issue, sell or
otherwise dispose of any shares of its own stock where the effect
would be to reduce the direct or indirect proportionate interest
of the Borrower and its other Subsidiaries in the stock of the
Subsidiary whose shares are the subject of the transaction,
provided, however, that these restrictions do not apply to:
(i) the issue of directors' qualifying shares; or
(ii) the transfer of Property (other than Subsidiary
stock) in the ordinary course of business; or
(iii) the transfer of Property (including up to,
but not more than, fifteen percent (15%) of the
outstanding stock of any Subsidiary) during any fiscal
year to any Person if (A) such Property does not,
together with Property of the Borrower and all of its
Subsidiaries previously disposed of during such fiscal
year (other than in the ordinary course of business or
as is permitted by Section 4.7), constitute ten percent
(10%) or more of Consolidated Adjusted Tangible Assets
determined as of the beginning of such fiscal year; (B)
the sum of the portions of Consolidated Adjusted Net
Income which were contributed during the immediately
preceding four (4) fiscal quarters by (1) such
Property, (2) each Subsidiary which has been disposed
of since the beginning of such four (4) fiscal quarters
(other than to the Borrower and other than in a
transaction permitted by Section 4.7 below), and (3)
other Property of the Borrower and all Subsidiaries
disposed of since the beginning of such four (4) fiscal
quarters (other than in the ordinary course of business
and other than to the Borrower and other than in a
transaction permitted by Section 4.7 below), do not
constitute more than ten percent (10%) of the
Consolidated Adjusted Net Income for any such four (4)
fiscal quarters; and (C) the amount of the Subsidiary
stock transferred when added to Subsidiary stock
previously transferred does not exceed fifteen percent
(15%) of the outstanding Subsidiary stock of any
Subsidiary. For the purposes of determining Borrower's
compliance with this subsection (iii), in the event of
a sale of up to fifteen percent (15%) of the stock of a
Subsidiary, the Property transferred shall be deemed to
be the Adjusted Tangible Assets of such Subsidiary
multiplied by the percentage of Subsidiary stock
transferred.
4.7 MERGER AND CONSOLIDATION. Neither Borrower nor any
Subsidiary will be a party to any merger or consolidation (except
that a Subsidiary may combine with the Borrower or another
Subsidiary) provided that the Borrower may merge or consolidate
if the surviving or acquiring corporation is organized under the
laws of the United States or any jurisdiction thereof, expressly
assumes the covenants and obligations of the Credit Documents,
is solvent and would not immediately after giving effect to the
transaction be in default under any term of any Credit Document.
4.8 GUARANTIES. Neither the Borrower nor any Subsidiary will
become liable for or permit any of its Property to become subject
to any Guaranty except: (a) Guaranties of indebtedness for
borrowed money under which the maximum aggregate principal amount
guaranteed can be mathematically determined at the time of
issuance, and (b) other Guaranties under which the maximum
aggregate amount guaranteed can be mathematically determined at
the time of issuance. Each Guaranty permitted by this Section 4.8
must comply with the other requirements of Section 4.5(a), 4.5(b)
and 4.5(c) to the extent the provisions of Section 4.5(a), 4.5(b)
and 4.5(c) require the amount of the Guaranty to be included in
Consolidated Current Liabilities, Current Debt, Long Term Debt or
Total Funded Debt.
4.9 TAXES AND CLAIMS. Intentionally deleted.
4.10 TRANSACTIONS WITH SUBSIDIARIES AND AFFILIATES. Neither the
Borrower nor any Subsidiary will enter into any transaction
(including the purchase, sale or exchange of Property or the
rendering of any service) with any Affiliate except upon fair and
reasonable terms which are at least as favorable to the Borrower
and to the Subsidiary as would be obtained in a comparable arms-
length transaction with a non-Affiliate.
4.11 PREPAYMENTS. The Borrower may prepay the Term Loan only
upon three (3) Business Days prior written notice to the Bank
(which notice shall be irrevocable), and any such prepayment
shall occur only on the last day of the Interest Period involved.
As a condition to the Borrower's right to make such prepayment,
the Borrower shall upon the request of the Bank pay to the Bank
such amount or amounts as shall be sufficient (in the reasonable
opinion of the Bank) to compensate it for any loss, cost or
expense incurred as a result of (i) any prepayment of the Term
Loan on a date other than the last day of the Interest Period
excepting only principal payments made by the Borrower as
scheduled under the terms of the Note, or (ii) any failure by
Borrower to prepay the Term Loan on the date for prepayment
specified in Borrower's written notice. Without limiting the
foregoing, the Borrower shall pay to the Bank a "yield
maintenance fee" in an amount computed as follows: The current
rate for United States Treasury Securities (bills on a discounted
basis shall be converted to a bond equivalent) with a maturity
date closest to the end of the Interest Period during which the
prepayment is made, shall be subtracted from the LIBOR in effect
at the time of prepayment. If the result is zero or a negative
number, there shall be no yield maintenance fee. If the result is
a positive number, then the resulting percentage shall be
multiplied by the amount of the principal balance being prepaid.
The resulting amount shall be divided by three hundred sixty
(360) and multiplied by the number of days remaining the Interest
Period during which the prepayment is made. Such amount shall be
reduced to a present value calculated using the above-referenced
United States Treasury Securities rate and the number of days
remaining in the Interest Period during which the prepayment is
made.
The resulting amount shall be the yield maintenance fee due
to the Bank upon the prepayment. If by reason of an Event of
Default, the Bank elects to declare the Term Loan to be
immediately due and payable, then any yield maintenance fee with
respect to the Term Loan shall become due and payable in the same
manner as though the Borrower had exercised such right of
prepayment.
4.12 ERISA COMPLIANCE.
(a) Neither the Borrower nor any Subsidiary will at any
time fail to comply with the minimum funding standards of Title
I, Part 3 of ERISA or Section 412 of the Code.
(b) All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension
Plans and the present value of assets of Pension Plans shall be
reasonable in the good faith judgment of the Borrower and shall
comply with all requirements of law.
(c) Neither the Borrower nor any Subsidiary will at any
time permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction", as such
term is defined in Section 4975 of the Code;
(ii) incur any "accumulated funding deficiency", as
such term is defined in Section 302 of ERISA, whether
or not waived; or
(iii) be terminated in a manner which could result
in the imposition of a Lien on the Property of the
Borrower or any Subsidiary pursuant to Section 4068 of
ERISA.
4.13 CHANGES IN BUSINESS. Neither the Borrower nor any
Subsidiary (whether now existing or hereafter acquired or
organized) will engage in any business if, after given effect
thereto, less than eighty percent (80%) of the Consolidated
Adjusted Tangible Assets of the Borrower at the most recently
ended fiscal quarter would be attributable to the current
business of the Borrower and its Subsidiaries taken as a whole,
including, but not limited to, the manufacturing, advertising,
sales and distribution of household and food service products and
related business.
4.14 MAINTENANCE OF OFFICE. Borrower shall maintain its
principal place of business at the location specified at the
beginning of this Agreement until such time as the Borrower
notifies the Bank of the Borrower's intention to relocate such
principal place of business.
4.15 COMPLIANCE WITH LAWS. The Borrower and each Subsidiary
shall comply with all laws, ordinances or governmental rules and
regulations to which it is subject and will not fail to obtain
any license, permit, franchise or other governmental
authorizations necessary to the ownership of its Property or to
conduct its business, which violation or failure to obtain might
materially adversely affect the business, prospects, profits,
Property or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole.
4.16 LOANS. The Borrower shall not lend money or extend credit
other than (a) the extension of normal payment terms to
Borrower's or a Subsidiary's customers in the ordinary and normal
course of Borrower's or such Subsidiary's business as presently
conducted, or (b) loans to Subsidiaries.
4.17 REGULATIONS G, T, U. The Borrower shall not use the proceeds
of the Loan directly or indirectly to purchase or carry any
margin stock (within the meaning of regulations G, T and U of the
Board of Governors of the Federal Reserve System), or extend
credit to others for the purpose of purchasing or carrying,
directly or indirectly, any margin stock.
4.18 PAYMENT OF TAXES AND CLAIMS. The Borrower and each
Subsidiary will pay, before they become delinquent:
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property; and
(b) all claims or demands of materialmen, mechanics,
carriers, warehouseman, landlords and other like Persons which,
if unpaid, might result in the creation of a Lien upon its
Property, provided that the items enumerated in subsections (a)
and (b) above need not be paid while being contested in good
faith and by appropriate proceedings and provided further that
adequate book reserves have been established with respect
thereto, if required by generally accepted accounting principles,
and provided further that the owing company's title to, and its
right to use, its Property is not materially adversely affected
thereby.
SECTION 5
EVENTS OF DEFAULT
5.1 EVENTS OF DEFAULT. Upon the occurrence of any of the
following Events of Default, automatically upon the happening of
any Event of Default specified in Section 5.1(d) or 5.1(e)
hereof, and, with respect to the other Events of Default during
the continuation thereof, at the option of the Bank, all sums of
principal and interest then remaining unpaid on account of the
Loan and all other amounts payable hereunder or under any other
Credit Document, shall be immediately due and payable, all
without demand, presentment or notice, all of which are expressly
waived, and the Bank may enforce all of its rights pursuant to
this Agreement, all other Credit Documents and under law:
(a) Failure by Borrower to make any payment of principal,
interest, fees or other amounts due under the Note, or by
Borrower or any Subsidiary on any other obligation owed to the
Bank, within ten (10) days of the date when due.
(b) The occurrence of an event of default which would
permit the acceleration before stated maturity of any revolving
credit obligation of the Borrower or any Subsidiary, any
reimbursement obligation with respect to any letter of credit
issued on behalf of the Borrower or any Subsidiary, any line of
credit or any private placement indebtedness of the Borrower or
any Subsidiary including the debt held by Allstate Life Insurance
and by Pacific Mutual Life Insurance where the amount which can
be accelerated exceeds in the aggregate, One Million Dollars
($1,000,000).
(c) The entry of one or more judgments against Borrower or
any Subsidiary individually aggregating in excess of One Million
Five Hundred Thousand Dollars ($1,500,000) not fully covered by
insurance (less normal deductibles) and the failure in any such
case to bond or otherwise satisfy or discharge such judgments or
liens within sixty (60) days of the date of entry.
(d) The Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to
authorize any of the foregoing.
(e) An involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or similar law now or
hereafter in effect seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary
case or other proceeding is not controverted by Borrower or such
Subsidiary within ten (10) days and is not dismissed within sixty
(60) days; or an order for relief shall be entered against the
Borrower or any Subsidiary under the federal bankruptcy laws as
now or hereafter in effect.
(f) The Borrower or any member of the Controlled Group
shall fail to pay when due any amount which it shall have become
liable to pay to the PBGC or to a Plan or Plans or notice of
intent to terminate a Plan or Plans having aggregate unfunded
vested liabilities shall be filed under Title IV of ERISA by the
Borrower or any member of the Controlled Group, any plan
administrator or any combination of the foregoing, or the PBGC
shall institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any such Plan
or Plans or a proceeding shall be instituted by a fiduciary of
any such Plan or Plans to enforce Section 515 of ERISA and such
proceeding shall not have been dismissed within thirty (30) days
thereafter, or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any
such Plan or Plans must be terminated.
(g) Any Person or two or more Persons acting in concert
(other than the Borrower, any Subsidiary, any employee benefit
plan maintained by the Borrower or any of its Subsidiaries, or
any trustee or fiduciary with respect to such Plan acting in such
capacity):
(i) shall have acquired beneficial ownership (within
the meaning of Rule 13(d)(3) of the Securities and
Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of securities of the
Borrower (or other securities convertible into such
securities) representing twenty percent (20%) or more
of the combined voting power of all securities of the
Borrower entitled to vote in the election of directors,
other than securities having such power only by reason
of the happening of a contingency; or
(ii) shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement which
upon consummation will result in its or their
acquisition of, control over securities of the Borrower
(or other securities convertible into such securities)
representing twenty percent (20%) or more of the
combined voting power of all securities of the Borrower
entitled to vote in the election of directors, other
than securities having such power only by reason of the
happening of a contingency.
(h) A breach or violation of the covenants described in
Sections 4.4, 4.6, 4.7, 4.8, 4.9, 4.10 or 4.12 above;
(i) A breach or violation by Borrower of any provision,
agreement or covenant contained in, or the occurrence of any
event of default under any other Credit Document and the failure
to cure same within any applicable grace period.
5.2 LATE FEE AND DEFAULT RATE OF INTEREST. In addition to the
Bank's other rights, remedies, powers and privileges, and not in
lieu thereof:
(a) Borrower shall pay to the Bank a late charge equal to
one-half of one percent (1/2%) of the amount of any payment due
under the Note and not made within ten (10) days of the date when
due.
(b) Upon the occurrence of an Event of Default, the Loan
shall thereafter bear interest at a rate equal to the Prime Rate
of Interest plus one percent (1%).
SECTION 6
MISCELLANEOUS
6.1 SURVIVAL OF PROVISIONS. All agreements, covenants,
provisions, representations, warranties and undertakings made
herein shall survive the execution and delivery of this
Agreement, the execution and delivery of all other Credit
Documents and the making of the Loan.
6.2 FAILURE OR INDULGENCE NOT A WAIVER. No failure or delay on
the part of the Bank or any holder of the any Note in the
exercise of any power, right, remedy or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right, remedy or privilege preclude
other or further exercise thereof, or of any other right, power,
remedy or privilege. All rights, powers, remedies and privileges
existing under this Agreement and the other Credit Documents are
cumulative to, and not exclusive of, any rights or remedies
otherwise available to the Bank, all of which rights and remedies
may be exercised by the Bank, singly or in combination and in
such order or sequence as the Bank, in its sole discretion, may
elect.
6.3 WAIVER/MODIFICATION. Neither this Agreement nor any Credit
Document nor any provision in any of them may be amended, waived
or modified in any manner, absent the execution and delivery of a
writing by the Bank intended for such purpose.
6.4 NOTICES. Except as otherwise expressly provided herein or
in any other Credit Document, any notice required or permitted to
be given, shall be deemed to have been duly given if personally
delivered, delivered by an overnight courier service or mailed by
certified mail return receipt requested, postage and registry
fees prepaid in the event of mailing, and in all events addressed
to the party to receive such notice at the address for such party
set forth at the beginning of this Agreement. By notice, any
party may change the address to which further notices shall be
sent. All notices shall be deemed given when mailed or delivered
in the manner provided in this Section, except that a notice
changing the address to which future notices shall be sent shall
be effective only on actual receipt (or refusal of delivery) by
the party to whom such notice is addressed.
6.5 SEVERABILITY. In the event any provision of this Agreement
or any other Credit Document shall be finally held by a court of
competent jurisdiction to be invalid, illegal or unenforceable,
such provision shall be severed from the remainder of this
Agreement or such other Credit Document, as the case may be, and
the validity, legality and enforceability of the remaining
provisions of this Agreement and the other Credit Documents shall
in no way be affected or impaired thereby.
6.6 APPLICABLE LAW. This Agreement, the other Credit Documents
and the rights and obligations of the parties hereto and thereto,
shall in all respects be governed by and enforced under and in
accordance with the laws of the State of New York, exclusive of
New York's Conflicts of Law rules and public policies.
6.7 ASSIGNABILITY. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns, and
shall inure to the benefit of the Bank and its successors and
assigns. Borrower may not assign, in whole or in part, any of
its rights under this Agreement.
6.8 SECTION AND SUBSECTION HEADINGS. The various headings used
in this Agreement and the division of the Agreement into sections
and subsections are for convenience of reference only, do not
form a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
6.9 FURTHER ASSURANCES. At any time or from time to time upon
the request of the Bank, Borrower shall execute and deliver such
further documents and do such other acts and things as the Bank
may reasonably request in order to effect fully the purposes of
the Credit Documents and to provide for the payment of the Loan
and interest thereon. Further, upon receipt of an affidavit of
an officer of the Bank as to the loss, theft, destruction or
mutilation of the Note or any other Credit Document which is not
of public record, and in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation of the
Note or other Credit Document, Borrower, will issue in lieu
thereof, a replacement Note or other Credit Document in the same
principal amount thereof in the case of the Note and otherwise of
like tenor.
6.10 ENTIRE AGREEMENT. This Agreement (including any Schedules)
and the other Credit Documents and any other instruments executed
by Borrower in connection with this Agreement, taken together
constitute the entire agreement between the parties and supersede
all prior or contemporaneous negotiations, agreements and
understandings, all of which are merged into this Agreement and
the other Credit Documents.
6.11 PAYMENTS ON BUSINESS DAYS. henever any payment to be made
under this Agreement or under a Note is due on a day other than a
day on which the Bank is open for business, the payment shall be
made on the immediately following Business Day.
6.12 NO USURY. All agreements between the Borrower and the Bank
are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the
Loan or otherwise, shall the amount paid or agreed to be paid to
the Bank for the use or forebearance of the Loan indebtedness
exceed the maximum permissible under applicable law. As used
herein, the term "applicable law" shall mean the law in effect as
of the date of this Agreement provided, however, that in the
event that there is a change in the law which results in a higher
permissible rate of interest, then this Agreement and the other
Credit Documents and the Loan shall be governed by such new law
as of its effective date. In this regard it is expressly agreed
that it is the intent of the Borrower and the Bank in the
execution, delivery and acceptance of this Agreement, the Notes
and the other Credit Documents to contract in strict accordance
with the laws of the State of New York from time to time in
effect. If, under or from any circumstance whatsoever,
fulfillment of any provision of this Agreement or of any of the
other Credit Documents at the time performance of such provision
shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be
fulfilled shall be automatically reduced to the limits of such
validity, and if, under or from any circumstance whatsoever the
Bank should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal
balance of the Loan and not to the payment of interest. This
provision shall control every other provision of all agreements
between the Borrower and the Bank.
6.13 BANK ENTITLED TO RELY. The Bank shall be entitled to rely on
all information, financial or otherwise, delivered to the Bank by
Borrower or by any Person authorized by Borrower to deliver same,
irrespective of any investigation or inquiry that the Bank has or
could have made, or which the Bank may in the future makes or
could make.
6.14 CERTAIN RULES OF CONSTRUCTION. Wherever possible, the terms
and provisions of which Agreement, the Note and each other Credit
Document, shall be read and construed as being consistent.
However, if notwithstanding the foregoing directive, any
provision in this Agreement conflicts with a provision in the
Note or in any other Credit Document, then the provision
affording to the Bank the greatest right, entitlement, discretion
or remedy shall govern and the conflicting provision shall for
all purposes be disregarded.
6.15 EXPENSES. Borrower agrees to pay all expenses of the Bank
(including the reasonable fees and expenses of its counsel) in
connection with the preparation of this Agreement and all of the
other Credit Documents, the completion of the transactions
contemplated hereby or thereby and incidental to the enforcement
of any provision of this Agreement or of any of the other Credit
Documents. Borrower further agrees that in the event the Bank
refers to an attorney for collection of any amounts due under
this Agreement, under the Note or under any other Credit
Document, or the enforcement of the Bank's rights under any
Credit Document, Borrower shall pay to the Bank the reasonable
attorneys fees and expenses thereby incurred by the Bank.
6.16 JURY WAIVER. Borrower and Bank mutually hereby knowingly,
voluntarily, and intentionally waive the right to a trial by jury
in respect of any claim based herein, arising out of, under or in
connection with this Agreement or any of the other Credit
Documents contemplated to be executed in connection herewith or
any course of conduct, course of dealings, statements (whether
verbal or written) or actions of any party. This waiver
constitutes a material inducement for the Bank to enter into this
Agreement and to make the Loan.
6.17 CERTAIN BANK RIGHTS.
(a) The Bank shall have the unrestricted right at any time
and from time to time and without the consent of or notice to
Borrower, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Bank's obligations to lend hereunder and/or in the Loan. In
the event of any such grant by the Bank of a participating
interest to a Participant, whether or not upon notice to
Borrower, the Bank shall remain liable for the performance of the
Bank's obligations under the Credit Documents and Borrower shall
continue to deal solely and directly with the Bank in connection
with the Bank's rights and obligations. The Bank may furnish any
information concerning Borrower or its Subsidiaries in its
possession from time to time to prospective assignees and
Participants, provided that each assignee or participant (or
prospective assignee or participant) agrees to maintain the
confidentiality of non-public confidential information received
from the Bank except for disclosures to officers, employees,
auditors and counsel and disclosures required by law or pursuant
to judicial process.
(b) The Bank may at any time pledge all or any portion of
its rights under the Credit Documents including any portion of
the Note, to any of the twelve (12) Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or enforcement thereof shall release
the Bank from its obligations under any of the Credit Documents.
6.18 PAYMENTS/INTEREST CALCULATION. All payments to the Bank
under the Note shall be in lawful money of the United States in
immediately available funds. All computations of interest on
account of the Loan shall be made on the basis of a three hundred
sixty (360) day year and the actual number of days elapsed.
6.19 OFFSET RIGHTS. Borrower grants to the Bank a lien, security
interest and right of setoff as security for all of its
liabilities and obligations to the Bank whether now existing or
hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in possession, custody,
safe keeping or control of the Bank or any entity under the
control of Alliance Bank, N.A., or in transit to any of them. At
any time without demand or notice, the Bank may setoff the same
or any part thereof and apply the same to any liability or
obligation of Borrower regardless of the adequacy of any other
collateral securing the Loan. Any and all rights to require the
Bank to exercise its rights or remedies with respect to any other
collateral which secures the Loan, prior to its exercising its
right of setoff with respect to such deposits, credits or other
property of Borrower are hereby knowingly and voluntarily and
irrevocably waived.
6.20 NO BROKER. Borrower represent and warrant to the Bank that
no broker has been instrumental in arranging for the Loan, and
Borrower agree to defend, indemnify and hold the Bank harmless
from and against any claim by any broker or any finder for any
fee or commission or similar payment on account of or with
respect to the Loan.
ALLIANCE BANK, N.A.
By: /s/ STEVE POTTER, V.P.
Steve Potter, Vice President
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward Thoma, Senior Vice
President, Finance
<PAGE>
SCHEDULE LIST
Schedule A - Term Note
Schedule B - Liens/Exceptions to
<PAGE>
Title
SCHEDULE A
TERM NOTE
$5,000,000
Dated as of July 28, 1999
At Syracuse, New York
FOR VALUE RECEIVED, the undersigned, ONEIDA LTD., a New York
business corporation with an address at 163 Kenwood Avenue,
Oneida, New York 13421 (the "Borrower") unconditionally promises
to pay to the order of ALLIANCE BANK, N.A., a national banking
association with an address at 160 Main Street, Oneida, New York
13421 (the "Bank"), the principal sum of Five Million Dollars
($5,000,000) together with interest at a rate equal to the
"Applicable Rate" (defined below) as follows:
Commencing on the 1st day of September, 1999
and continuing on the first day of each of
the then next succeeding ninety four (94)
equal monthly principal payments each in the
amount of Forty One Thousand Six Hundred
Sixty-Six and 67/100 Dollars ($41,666.67)
plus interest at the Applicable Rate and a
final ninety sixth (96th) monthly principal
payment in the amount of One Million Forty-
One Thousand Six Hundred Sixty-Six and 35/100
Dollars ($1,041,666.35) plus accrued and
unpaid interest at the Applicable Rate.
This Note is the Note referred to in the Loan Agreement
dated as of July 28, 1999 between the Bank and the Borrower (the
"Loan Agreement"). The Bank is entitled to all of the privileges
and benefits of the Loan Agreement, the terms and conditions of
which are incorporated herein and made a part hereof. Terms
denoted with a capitalized first letter and not otherwise defined
in this Note, shall have the meanings ascribed to such terms in
the Loan Agreement.
"Applicable Rate" shall be the rate of interest payable on
the Term Loan and shall mean and refer to the "Level IV Rate", or
the "Level III Rate", or the "Level II Rate", or the "Level I
Rate", calculated and determined by the Bank at Closing and
thereafter effective as of each November 1, February 1, May 1
and August 1, based upon the Borrower's quarterly and annual
financial statements for the immediately preceding four (4)
fiscal quarters commencing on November 1, 1999, as follows:
Level IV Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is greater than 3.5
to 1, the Applicable Rate shall be LIBOR plus
one hundred seventy (170) basis points.
Level III Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 3.5 to 1 but more than 2.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred fifty (150) basis points.
Level II Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 2.5 to 1 but more than 1.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred thirty (130) basis points.
Level I Rate - So long as no Event of Default
has occurred and the Borrower is then in
compliance with the financial covenants set
forth in Section 4 below, if the Borrower's
Leverage Ratio is 1.5 to 1 or less, the
Applicable Rate shall be LIBOR plus one
hundred ten (110) basis points.
Notwithstanding anything to the contrary contained in this
Note, the Applicable Rate for the period commencing on the date
of this Note and ending on October 31, 1999 shall be the Level II
Rate of LIBOR plus one hundred thirty (130) basis points.
"Leverage Ratio" shall mean the Borrower's and Subsidiaries'
Total Funded Debt (as defined in the Loan Agreement) divided by
consolidated EBITDA.
"LIBOR" means the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in U.S. dollars, for
one (1) month, three (3) months or six (6) months (the "Interest
Period") as specified by the Borrower in the rate election form
attached hereto as Schedule "A" (the "Repricing Notice") which
appears on the Telerate page 3750 as of 11:00 a.m. London time on
the day that is two (2) London Banking Days preceding the first
day of such LIBOR advance; provided that if the Bank does not
receive Borrower's Repricing Notice at least two (2) London
Banking days preceding the first day of such LIBOR advance, the
Loan shall bear interest at the Prime Rate of Interest; and
provided further, however, if the rate described above does not
appear on the Telerate System on any applicable interest
determination date, the LIBOR rate shall be the rate (rounded
upwards as described above, if necessary) for deposits in dollars
for a period substantially equal to the Interest Period on the
Reuters Page "LIBO" (or such other page as may replace the LIBO
Page on that service for the purpose of displaying such rates),
as of 11:00 a.m. (London Time), on the day that is two (2) London
Banking Days prior to the beginning of such Interest Period.
"Banking Day" shall mean, in respect of any city, any date on
which commercial banks are open for business in that city.
If both the Telerate and Reuters system are
unavailable, then the rate for that date will be determined on
the basis of the offered rates for deposits in U.S. dollars for
the period of time comparable to such advances which are offered
by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the date that is two (2)
London Banking Days preceding the first day of such LIBOR advance
as selected by the Bank. The principal London office of each of
the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least
two such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will
be determined on the basis of the rates quoted for loans in U.S.
dollars to leading European banks for period of time comparable
to such advances offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the date that is
two London Banking Days preceding the first day of such LIBOR
advance. In the event that Bank is unable to obtain any such
quotation as provided above, it will be deemed that LIBOR
pursuant to a LIBOR advance cannot be determined, and the LIBOR
Rate shall not be available to Borrower. In such event, the
Borrower's obligation to pay to the order of the Bank the amounts
then due under this Note shall bear interest at the Bank's Prime
Rate of Interest.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Bank then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-Currency Liabilities" as
defined in Regulation D.
In the Repricing Notice, Borrower may elect up to three (3)
different Interest Periods with respect to up to three (3)
portions of the Loan (each, a "Tranche"), provided that no
Tranche may be less than One Million Dollars ($1,000,000). In
the event Borrower timely elects more than one (1) Tranche,
scheduled payments of principal received by the Bank shall be
applied by the Bank to reduce the principal balance of each
Tranche on a per capita basis.
"Prime Rate of Interest" or "Prime Rate" means the variable
per annum rate of interest so designated from time to time by the
Bank as its prime rate. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate being
charged to any customer. Changes in the rate of interest
resulting from changes in the Prime Rate shall take place
immediately without notice or demand of any kind.
All computations of interest under this Note shall be made
on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed.
At any time that interest payable under this Note is
determined by reference to LIBOR, Borrower may prepay this Note
only upon at least three (3) Business Days prior written notice
to Bank (which notice shall be irrevocable), and any such
prepayment shall occur only on the last day of an Interest
Period. Borrower shall pay to Bank, upon request of Bank, such
amount or amounts as shall be sufficient (in the reasonable
opinion of Bank) to compensate it for any loss, cost, or expense
incurred as a result of: (i) any payment of this Note on a date
other than the last day of the Interest Period excepting only
principal payments made by Borrower as scheduled under the terms
of this Note; or (ii) any failure by Borrower to pay this Note on
the date for payment specified in Borrower's written notice.
Without limiting the foregoing, Borrower shall pay to Bank a
yield maintenance fee in an amount computed as follows: The
current rate for United States Treasury securities (bills on a
discounted basis shall be converted to a bond equivalent) with a
maturity date closest to the term chosen pursuant to the Fixed
Rate Election as to which the prepayment is made, shall be
subtracted from the LIBOR in effect at the time of prepayment.
If the result is zero or a negative number, there shall be no
yield maintenance fee. If the result is a positive number, then
the resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be
divided by three hundred sixty (360) and multiplied by the number
of days remaining in the term chosen pursuant to the Fixed Rate
Election as to which the prepayment is made. Said amount shall
be reduced to present value calculated by using the above
referenced United States Treasury securities rate and the number
of days remaining in the term chosen pursuant to the Fixed Rate
Election as to which prepayment is made. The resulting amount
shall be the yield maintenance fee due to Bank upon the payment
of the Loan. Each reference in this paragraph to "Fixed Rate
Election" shall mean the Borrower's election for the one (1)
month, three (3) month or six (6) month LIBOR. If by reason of
an Event of Default, Bank elects to declare the Note to be
immediately due and payable, then any Yield Maintenance Fee with
respect to this Note shall become due and payable in the same
manner as though the Borrower had exercised such right of
prepayment.
At any time that interest under this Note is determined by
reference to the Prime Rate, Borrower may prepay this Note, in
whole or in part, at any time, without penalty.
Payments of both principal and interest are to be made when
due in immediately available funds at the offices of Bank set
forth above, or at such other place as the holder of this Note
shall designate to Borrower in writing, in lawful money of the
United States of America.
If this Note or any payment hereunder becomes due on a day
which is not a Business Day (as defined below), the due date of
this Note or payment shall be extended to the next succeeding
Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment. As
used herein, "Business Day" shall mean any day other than a
Saturday, Sunday or day which shall be in the State of New York a
legal holiday or day on which banking institutions are required
or authorized to close.
All agreements between Borrower and Bank are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided,
however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of
Borrower and Bank in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the
State of New York, from time to time in effect. If under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances
whatsoever Bank should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the
principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of
all agreements between Borrower and Bank.
Upon the occurrence of an Event of Default as defined in the
Loan Agreement, the then unpaid balance of this Note, together
with all accrued and unpaid interest, shall be and become due and
payable in accordance with the provisions of the Loan Agreement.
Further and not in lieu of any other remedy, (a) in the
event any payment due hereunder is not made within ten (10) days
of the date when due, Borrower shall pay to Bank a late charge
equal to one-half of one percent (1/2%) of the amount of such
payment, and (b) upon the occurrence of an Event of Default under
the Loan Agreement, the amount due under this Note shall
thereafter bear interest at a rate equal to the Prime Rate of
Interest plus one percent (1%), and Borrower agrees to pay
interest at such rate until all amounts due under this Note are
paid in full.
Borrower expressly waives any presentment, demand, protest
or, except for notices required to be given by the Bank under the
Loan Agreement, any notice in connection with this Note.
Borrower grants to Bank, a lien, security interest and right
of setoff as security for all liabilities and obligations to
Bank, whether now existing or hereafter arising, upon and against
all deposits, credits, collateral and property, now or hereafter
in the possession, custody, safekeeping or control of Bank or any
entity under the control of Alliance Bank, N.A., or in transit to
any of them. At any time, without demand or notice, Bank may set
off the same or any part thereof and apply the same to any
liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the
Loan. Any and all rights to require Bank to exercise its rights
or remedies with respect to any other collateral which secures
the Loan, prior to exercising its right of setoff with respect to
such deposits, credits or other property of the Borrower, are
hereby knowingly, voluntarily and irrevocably waived.
Borrower promises and agrees to pay the costs of collection
and any reasonable attorneys' fees incurred by the Bank upon the
occurrence of an Event of Default under the Loan Agreement.
This Note, together with the provisions of the Loan
Agreement and the other Loan Documents constitutes the complete
understanding between the parties and taken together, supersede
all prior or contemporaneous understandings, agreements and
negotiations, all of which are merged into this Note, the Loan
Agreement and such other Loan Documents.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York, exclusive of
New York's conflicts of laws rules and public policies.
The Borrower unconditionally consents to the jurisdiction of
the courts of the State of New York or of federal courts located
within the State of New York and agree that any action to
construe, enforce or effect collection of amounts due under, this
Note, may be commenced in a state or federal court located within
the State of New York.
The Bank may at any time pledge all or any portion of its
rights under this Note or under any other Loan Document, to any
of the twelve (12) federal reserve banks organized under Section
4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or enforcement thereof shall release the Bank from its
obligations under the Loan Documents.
The Bank shall have the unrestricted right at any time and
from time to time and without the consent of or notice to the
Borrower to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Loan evidenced by this Note. In the event of any such grant
by the Bank of a participating interest to a Participant, whether
or not upon notice to the Borrower, the Bank shall remain
responsible for the performance of its obligations hereunder and
the Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the
Borrower or its Subsidiaries in its possession from time to time
to prospective participants, each assignee or participant (or
prospective assignee or participant) agrees to maintain the
confidentiality of non-public confidential information received
from the Bank except for disclosures to officers, employees,
auditors and counsel and disclosures required by law or pursuant
to judicial process.
Upon receipt of an affidavit of an officer of the Bank as to
the loss, theft, destruction or mutilation of this Note or any
other Loan Document which is not of public record, and, in the
face of any such loss, theft, destruction or mutilation, upon
cancellation of this Note or such other Loan Document, Borrower
will issue, in lieu thereof, a replacement note or other Loan
Document in the same principal amount thereof and otherwise of
like tenor.
Borrower and Bank hereby knowingly, voluntarily and
intentionally waive the right to a trial by jury in respect of
any claim based hereon, arising out of, under or in connection
with this Note or any other Loan Document contemplated to be
executed in connection herewith or any course of conduct, course
of dealings, statements (whether verbal or written) or actions by
any party. This waiver constitutes a material inducement for the
Bank to accept this Note and to make the Loan evidenced hereby.
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward Thoma,
Senior Vice President, Finance
<PAGE>
SCHEDULE A
REPRICING NOTICE
TO: ALLIANCE BANK, N.A.
(Commercial Loan Department)
Reference herein to the Term Note shall mean the Oneida Ltd.
("Borrower") Term Note dated July 28, 1999 in the original
principal amount of Five Million Dollars ($5,000,000) executed
and delivered to the Bank.
Borrower wishes to continue its borrowing under the Term
Note:
For ____ month(s) [insert one month, three
months or six months] at the rate quoted to
the Borrower of ________% per annum for the
terms of the Term Note
Kindly confirm by fax to Borrower's fax number (315)__________.
DATED: ____________ ONEIDA LTD.
By:______________________________
Authorized Person
<PAGE>
SCHEDULE B
A COMPLETE LISTING OF PRESENTLY
EFFECTIVE FINANCING STATEMENTS
FILE NUMBER SECURED PARTY FILE DATE
162265 Chase Lincoln 7/30/91 with a
Lease/Way, Inc. continuation filed
on 5/20/96
Filing No. 100716
176312 NYS Urban 8/21/92 with a
Development continuation filed
Corporation on 8/8/97
Filing No. 165998
259019 IBM Credit 12/29/95
Corporation
257249 IBM Credit 12/15/97
Corporation
011969 Thompson & Johnson 1/20/98
Equipment Co., Inc.
079787 IBM Credit 4/14/98
Corporation
134758 Ervin Leasing 7/6/99
Company
<PAGE>
EXHIBIT 4(a)(xiii)
LOAN AGREEMENT
FLEET NATIONAL BANK
to
ONEIDA LTD.
Dated as of July 28, 1999
<PAGE>
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of July 28, is made by and
between ONEIDA LTD., a New York business corporation with an
address at 163 Kenwood Avenue, Oneida, New York 13421
("Borrower"") and FLEET NATIONAL BANK, a national banking
association with an address at One Clinton Square, P.O. Box 4821,
Syracuse, New York 13221-4821 (the "Bank").
In consideration of the mutual covenants and agreements
contained herein, Borrower and the Bank agree as follows:
SECTION 1
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINED TERMS. All terms used in this Agreement
shall have the defined meanings set forth below when used herein
or in any Credit Document, or in any certificate or report made
or delivered under this Agreement, unless the context otherwise
requires or unless such term is otherwise defined therein.
"Adjusted Tangible Assets" shall mean all assets except:
(i) deferred assets, other than prepaid insurance and
prepaid taxes, deferred taxes and deferred pension
expense;
(ii) patents, copyrights, trademarks, trade names,
franchises, good will, experimental expense and other
similar intangibles;
(iii) Restricted Investments;
(iv) unamortized debt discount and expense; and
(v) assets located, and notes and accounts receivable
due from obligors domiciled, outside the United States
of America, unless such assets are owned by or such
notes and accounts receivable are due from
Subsidiaries.
"Affiliate" shall mean a Person (other than a Subsidiary)
which directly controls, or is controlled by, or is under common
control with, the Borrower. The term "control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
either through the ownership of Voting Securities, by contract or
otherwise.
"Agreement" shall mean this Loan Agreement as originally
executed, and as the same may, from time to time, be amended or
supplemented as hereinafter provided.
"Applicable Rate" shall be the rate of interest payable on
the Term Loan and shall mean and refer to the "Level IV Rate", or
the "Level III Rate", or the "Level II Rate", or the "Level I
Rate", calculated and determined by the Bank at Closing and
thereafter effective as of each November 1, February 1, May 1
and August 1, based upon the Borrower's quarterly and annual
financial statements for the immediately preceding four (4)
fiscal quarters commencing on November 1, 1999, as follows:
Level IV Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is greater than 3.5
to 1, the Applicable Rate shall be LIBOR plus
one hundred seventy (170) basis points.
Level III Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 3.5 to 1 but more than 2.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred fifty (150) basis points.
Level II Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 2.5 to 1 but more than 1.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred thirty (130) basis points.
Level I Rate - So long as no Event of Default
has occurred and the Borrower is then in
compliance with the financial covenants set
forth in Section 4 below, if the Borrower's
Leverage Ratio is 1.5 to 1 or less, the
Applicable Rate shall be LIBOR plus one
hundred ten (110) basis points.
"Authorized Person" shall mean:
Name Title
Edward Thoma Senior Vice President
Shelley Hyde Treasurer
Rodney Mayette Assistant Cashier
Ronald Putman Cashier
By written Notice, accompanied by a copy of the Borrower's
Board of Directors Resolution, the Borrower may designate its
Authorized Person(s) to be the individual(s) named in such
resolution.
"Bank" shall mean and refer to Fleet National Bank, and its
successors and assigns.
"Borrower" shall mean and refer to Oneida Ltd.
"Business Day" shall mean any day other than a Saturday,
Sunday or day which in the State of New York shall be a legal
holiday or a day on which banking institutions are required or
authorized to close.
"Code" shall mean the Internal Revenue Code of 1986,
including all regulations issued thereunder, all as from time to
time amended.
"Consolidated Adjusted Net Income" shall mean for any
period, the gross revenues of the Borrower and its Subsidiaries
for such period less all expenses and other proper charges
(including taxes on income), determined on a consolidated basis
after eliminating earnings or losses attributable to outstanding
minority interests, but excluding in any event:
(i)(1) any gains or losses on the sale or other
disposition of investments and
(2) any gains or losses on the sale or other
disposition of plant, property and equipment which
gains or losses exceed, in the aggregate, One Hundred
Thousand Dollars ($100,000) during any fiscal year and
any taxes on such excluded gains and any tax deductions
or credits on account of any such excluded losses;
(ii) the proceeds of any life insurance policy;
(iii) net earnings and losses of any Subsidiary
accrued prior to the date it became a Subsidiary;
(iv) net earnings and losses of any corporation
(other than a Subsidiary), substantially all the assets
of which have been acquired in any manner by the
Borrower or any Subsidiary, realized by such
corporation prior to the date of such acquisition;
(v) net earnings and losses of any corporation (other
than a Subsidiary) with which the Borrower or a
Subsidiary shall have consolidated or which shall have
merged into or with the Borrower or a Subsidiary prior
to the date of such consolidation or merger;
(vi) net earnings of any business entity (other
than a Subsidiary) in which the Borrower or any
Subsidiary has an ownership interest unless such net
earnings shall have actually been received by the
Borrower or such Subsidiary in the form of cash
distributions or readily marketable securities;
(vii) any portion of the net earnings of any
Subsidiary which for any reason is unavailable for
payment of dividends to the Borrower or any other
Subsidiary;
(viii) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(ix) any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of
acquisition thereof over the amount invested in such
Subsidiary;
(x) any gain arising from the acquisition of any
securities of the Borrower or any Subsidiary;
(xi) any reversal of any contingency reserve,
except to the extent that provision for such
contingency reserve shall have been made from income
arising during such fiscal period or during the period
consisting of the four (4) consecutive fiscal quarters
immediately following the end of such fiscal period;
and
(xii) any other extraordinary gain.
"Consolidated Adjusted Tangible Assets" shall mean the
Adjusted Tangible Assets of the Borrower and its Subsidiaries at
such date determined on a consolidated basis.
"Consolidated Adjusted Tangible Net Worth" shall mean:
(i) the net book value (after deducting related
depreciation, obsolescence, amortization, valuation and
other proper reserves) at which the Adjusted Tangible
Assets of the Borrower and all Subsidiaries would be
shown on a consolidated balance sheet at such date, but
excluding any amount on account of write-ups of assets;
(ii) minus the amount at which their liabilities
(other than capital stock and surplus) would be shown
on such balance sheet, and including as liabilities all
reserves for contingencies and other potential
liabilities and all minority interests in Subsidiaries.
"Consolidated Current Assets" at any date means the amount
at which the current assets of the Borrower and all Subsidiaries
would be shown on a consolidated balance sheet at such date.
"Consolidated Current Liabilities" at any date shall mean
the amount at which the current liabilities of the Borrower and
all Subsidiaries would be shown on a consolidated balance sheet
at such date, plus (without duplication) the aggregate amount of
their Guaranties of current liabilities of other Persons
outstanding at such date.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control, which together with the
Borrower, are treated as a single employer under Section 414(b)
or 414(c) of the Code.
"Cost of Funds" shall mean the per annum rate of interest
which the Bank is required to pay, or is offering to pay, for
wholesale liabilities of like tenor, adjusted for reserve
requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as
determined by the Bank.
"Current Debt" with respect to a Person shall mean all
liabilities for borrowed money, all obligations under capitalized
leases, and all liabilities secured by any Lien other than a Lien
permitted by Section 4.6(a)(i)-(iv), existing on Property owned
by that Person, which, in any case, are payable on demand or
within one year from their creation, plus the aggregate amount of
Guaranties of all such liabilities of other Persons, except:
(i) any liabilities which are renewable or extendible
at the option of the debtor to a date more than one
year from the date of creation thereof; and
(ii) any liabilities which, although payable within one
year, constitute principal payments on indebtedness
expressed to mature more than one year from the date of
its creation.
"Draw Request" shall mean the Borrower's request for a Line
Loan completed and delivered to the Bank as provided in Section
2.1(b) of this Agreement.
"EBITDA" shall mean the Borrower's and Subsidiaries'
consolidated earnings before interest, taxes, depreciation and
amortization, provided that in calculating EBITDA for the
Borrower's fiscal year ending January 29, 2000, the May 1, 1999,
Thirty Five Million Eight Hundred Thousand Dollars ($35,800,000)
restructuring expense shall be disregarded.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as from time to time amended.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of any group or organizations (i)
described in Section 414(b) or (c) of the Code of which the
Borrower is a member, or (ii) solely for the purposes of
potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which the Borrower is a member.
"Event of Default" shall mean each event of default
described in Section 5 of this Agreement.
"GAAP" shall mean generally accepted accounting principles
in the United States of America in effect on the date the Credit
Documents are executed and delivered.
"Guaranty" shall mean with respect to any Person, all
guaranties of, and all other obligations which in effect guaranty
in any manner, any indebtedness, dividend or other obligation of
any other Person other than any Subsidiary or the Borrower (such
other person hereafter referred to as the "primary obligor"),
including obligations incurred through an agreement, contingent
or otherwise, by such Person:
(i) to purchase such indebtedness or obligation or, in
the circumstances contemplated by clause (iii) below,
any Property constituting security thereof;
(ii) to advance or supply funds (A) for the purchase or
payment of such indebtedness or obligation, or (B) to
maintain working capital or any balance sheet or income
statement condition;
(iii) to lease Property, or to purchase securities
or other Property or services, primarily for the
purpose of assuring the owner of such indebtedness or
obligation of the ability of the primary obligor to
make payment of the indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness
or obligation, or the primary obligor, against loss;
but excluding endorsements in the ordinary course of business of
negotiable instruments for deposit or collection.
"Leverage Ratio" shall mean the Borrower's and Subsidiaries'
Total Funded Debt divided by Borrower's and Subsidiaries'
consolidated EBITDA.
"LIBOR" shall mean the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in
U.S. dollars, for one (1) month to six (6) months as specified by
the Borrower in its Repricing Notice with respect to Term Loan
(the "Interest Period") which appears on the Telerate page 3750
as of 11:00 a.m. London time on the day that is two London
Banking Days preceding the first day of such LIBOR advance;
provided that if the Bank does not receive Borrower's Repricing
Notice at least two (2) London Banking Days preceding the first
day of such LIBOR advance, this Note shall bear interest at the
Prime Rate of Interest; provided further, however, if the rate
described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR rate shall be
the rate (rounded upwards as described above, if necessary) for
deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as
may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the
day that is two (2) London Banking Days prior to the beginning of
such Interest Period. "Banking Day" shall mean, in respect of
any city, any date on which commercial banks are open for
business in that city.
If both the Telerate and Reuters system are unavailable,
then the rate for that date will be determined on the basis of
the offered rates for deposits in U.S. dollars for the period of
time comparable to the Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00
a.m. London time, on the date that is two (2) London Banking Days
preceding the first day of such LIBOR advance as selected by the
Bank. The principal London office of each of the four major
London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis
of the rates quoted for loans in U.S. dollars to leading European
banks for period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00
a.m. New York City time, on the date that is two London Banking
Days preceding the first day of such LIBOR advance. In the event
that Bank is unable to obtain any such quotation as provided
above, it will be deemed that LIBOR pursuant to a LIBOR advance
cannot be determined, and the LIBOR rate shall not be available
to Borrower and interest on the Term Loan shall accrue and be
paid by the Borrower at the Bank's Prime Rate of Interest.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Bank then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-Currency Liabilities" as
defined in Regulation D.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner
of the Property, whether the interest is based on common law,
statute or contract (including the security interest lien arising
from a mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security
purposes). The term "Lien" shall not include minor reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions and other minor title exceptions
affecting Property, provided that they do not constitute security
for a monetary obligation. For the purposes of this Agreement,
the Borrower or a Subsidiary shall be deemed to be the owner of
any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement
pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such
retention or vesting shall be deemed to be a Lien. The amount of
any Lien shall be the aggregate amount of the obligation secured
thereby.
"Line" or "Line of Credit" shall mean and refer to the
Fifteen Million Dollar ($15,000,000) line of credit provided for
in Section 2.1 of this Agreement.
"Line Loan" shall mean and refer to each advance by the Bank
to the Borrower under the Line of Credit.
"Line Termination Date" shall have the meaning given to such
term in Section 2.1(c) of this Agreement.
"Loans" shall mean and refer to the Term Loan and each
advance under the Line of Credit.
"Loan Documents" or "Credit Documents" shall mean this
Agreement, the Term Note, the Line Note and any ISDA Master
Agreement which is or may hereafter be entered into by the
Borrower with respect to the Term Loan.
"Long Term Debt" with respect to a Person shall mean all
liabilities for borrowed money (including, without limitation,
subordinated debt), all obligations under capitalized leases, and
all liabilities secured by any Lien other than any Lien permitted
by Section 4.6(a)(i)-(iv), existing on Property owned by that
Person (whether or not those liabilities have been assumed), or
any other obligation (other than deferred taxes) which are
required by generally accepted accounting principles to be shown
as liabilities on its balance sheet which, in any case, are
payable more than one year from the date of their creation,
including (i) any liabilities which are renewable or extendible
at the option of the obligor to a date more than one year from
their creation and (ii) any liabilities which, although payable
within one year, constitute principal payments on indebtedness
expressed to mature more than one year from its creation, plus
the aggregate amount of Guaranties of all such liabilities of
other Persons.
"Note" or "Notes" shall mean the Line Note and the Term
Note.
"Notice" or "notice" shall mean wherever used in this
Agreement, written notice delivered as specified in Section 6.4
of this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Pension Plan(s)" shall mean all "employee pension benefit
plans" as such term is defined in Section 3 of ERISA, maintained
by the Borrower and its subsidiaries from time to time.
"Person" shall mean a corporation, limited liability
company, association, partnership, trust, unincorporated
organization, business, individual and any government agency or
political subdivision or branch thereof.
"Plan" shall mean any employee benefit or other plan
established or maintained, or to which contributions have been
made, by the Borrower or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"Prime" or "Prime Rate" or "Prime Rate of Interest" shall
mean the variable per annum rate of interest so designated from
time to time by Fleet National Bank as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. Changes in the
rate of interest resulting from changes in the Prime Rate shall
take place immediately without notice or demand of any kind.
"Repricing Notice" shall mean the notice delivered by the
Borrower to the Bank as provided in Section 2.2(c) of this
Agreement in order to select a LIBOR Interest Period.
"Restricted Investments" shall mean all Property, including
all investments in any Person, whether by acquisition of stock,
indebtedness, other obligation or security, or by loan, advance,
capital contribution, or otherwise, except:
(i) investments in one or more Subsidiaries or any
corporation which concurrently with such investment
becomes a Subsidiary;
(ii) Property to be used in the ordinary course of
business, including without limitation, advances made
to employees for expenses incurred in the ordinary
course of business;
(iii) current assets arising from the sale of goods
and services in the ordinary course of business;
(iv) direct obligations of the United States of
America, or any of its agencies or obligations fully
guaranteed by the United States of America, provided
that such obligations mature within one year from the
date acquired;
(v) demand deposits or certificates of deposit
maturing within one year from the date acquired and
issued by a bank or trust company organized under the
laws of the United States or any of its states, and
having capital, surplus and undivided profits
aggregating at least Fifty Million Dollars
($50,000,000);
(vi) commercial paper given the highest rating by
a national credit rating agency and maturing not more
than 270 days from the date acquired; and
(vii) shares of capital stock of the Borrower held
in its treasury as of the date of this Agreement.
"Subsidiary" shall mean a corporation in which the Borrower
owns, directly or indirectly, sufficient Voting Stock to enable
it ordinarily, in the absence of contingencies, to elect a
majority of the corporate directors (or Persons performing
similar functions).
"Term Loan" shall mean the Fifteen Million Dollar
($15,000,000) Term Loan provided for in Section 2.2 of this
Agreement.
"Term Note" shall mean and refer to the note executed and
delivered by the Borrower to the Bank to evidence the Borrower's
obligations to repay Term Loan.
"Total Funded Debt" shall mean the sum of the Borrower's and
Subsidiaries' (i) Long Term Debt (including the current portion
thereof) and (ii) Current Debt.
"Voting Stock" shall mean securities, the holders of which
are ordinarily in the absence of contingencies, entitled to elect
corporate officers (or Persons performing similar functions).
SECTION 2
THE LOANS
2.1 LINE OF CREDIT.
(a) Line Amount. The Bank shall provide to the Borrower
on an offering basis a line of credit in an amount not to exceed
Fifteen Million Dollars ($15,000,000).
(b) Line Loans. Prior to the Business Day immediately
preceding the Line Termination Date, so long as no Event of
Default has occurred and so long as no event has occurred which
but for the giving of notice or the lapse of time or both would
constitute an Event of Default, the Borrower may request Line
Loans by timely delivering to the Bank a Draw Request in the form
attached hereto as Schedule A, signed by an Authorized Person,
setting forth the date, the amount of the requested Line Loan,
whether the Borrower elects a floating interest rate based on the
Bank's Prime Rate of Interest less one hundred and fifty (150)
basis points or a fixed rate based upon the Bank's Cost of Funds
plus fifty (50) basis points (and in the latter case, specifying
the term of the requested Line Loan), and otherwise completing
the Draw Request. Draw Requests must be received by the Bank not
later than 1:00 p.m. on the Business Day on which the Borrower
requests a Line Loan to be made.
(c) Line Termination Date. Unless extended in writing by
the Bank or unless the Bank earlier demands payment in full of
outstanding Line Loans, the Bank's obligation to make Line Loans
shall in all event cease and expire on July 29, 2000.
(d) Line Loan Repayment Terms. The Borrower's obligation
to repay Line Loans shall be evidenced by the Borrower's demand
Note in substantially the form attached hereto as Schedule B.
(e) Line of Credit Interest Rate. Loans made by the Bank
to the Borrower under the Line shall bear interest as specified
in the Borrower's Draw Request at either (i) the Bank's Prime
Rate of Interest less one hundred and fifty (150) basis points,
or (ii) with respect to Line Loans of Five Hundred Thousand
Dollars ($500,000) or more, a fixed rate equal to the Bank's Cost
of Funds for a period not to exceed one hundred and eighty (180)
days (but in no event beyond the Line Termination Date), plus
fifty (50) basis points.
2.2 TERM LOAN.
(a) Loan Amount and Purpose. The Term Loan amount shall be
Fifteen Million Dollars ($15,000,000), which amount shall be used
by the Borrower to repay and refinance certain short term
indebtedness incurred by the Borrower in connection with the
completion of certain capital projects.
(b) Term Loan Fee. Concurrently with the execution and
delivery of the Term Note, the Borrower shall pay to the Bank a
Term Loan fee in the amount of Thirty Seven Thousand Five Hundred
Dollars ($37,500).
(c) Term Loan Interest Rate. The Borrower shall repay the
Term Loan with interest at the Applicable Rate. The Borrower will
submit to the Bank the Borrower's Repricing Notice not later than
two (2) London Banking Days preceding the date on which an
Interest Period ends and the Applicable Rate is to be reset. In
the Repricing Notice, the Borrower may request up to three (3)
different Interest Periods with respect to up to three (3)
portions of the Loan (each, a "Tranche"). In its discretion, the
Bank may agree to the Borrower's request for separate Tranches in
which event as of the date of the creation of the separate
Tranches, (i) no Tranche may be less than Two Million Dollars
($2,000,000), (ii) at least one Tranche shall bear interest at
the Applicable Rate based upon one month LIBOR (the "One Month
Tranche"), and (iii) all scheduled payments of principal received
by the Bank will be applied by the Bank to reduce the principal
balance of the One Month Tranche.
(d) Term Loan Repayment. The Term Loan shall be repaid
under a Term Note in substantially the form attached hereto and
made a part hereof as Schedule C.
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1 EXISTENCE AND RIGHTSAND RIGHTSRIGHTS. The Borrower and each
Subsidiary is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation, each
with full power and authority to own its properties, conduct its
operations as now conducted, and with respect to the Borrower, to
enter into and to perform its obligations under this Agreement
and the other Credit Documents and the Borrower and each
Subsidiary is duly licensed or qualified and in good standing as
a foreign corporation in each other jurisdiction in which the
failure to qualify would materially and adversely affect the
conduct of its business.
3.2 AGREEMENT AND CREDIT DOCUMENTS AUTHORIZED. The execution,
delivery and performance of the Credit Documents by the Borrower
have been duly authorized by all required corporate action and
the execution, delivery and performance of the Credit Documents
do not require consent or approval of any governmental body or
other regulatory authority, are not in contravention of or in
conflict with any law or regulation applicable to the Borrower or
any term or provision of the Borrower's certificate of
incorporation or by-laws, and the Credit Documents are each
valid, binding and legally enforceable obligations of the
Borrower enforceable in accordance with their respective terms.
3.3 NO CONFLICT. The execution, delivery and performance of each
of the Credit Documents by the Borrower will not breach or
constitute a default under any loan agreement, credit agreement,
indenture or similar document, or any other undertaking or
instrument, to which the Borrower is a party, or by which the
Borrower or any of its property is or may be bound or affected,
and the execution, delivery and performance by the Borrower will
not result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or security
interest in, any of the property of the Borrower excepting only
liens or security interests in favor of the Bank.
3.4 LITIGATION. Except as disclosed in the Borrower's audited
financial statements for the period ending January 30, 1999,
there is no action, proceeding or investigation at law or in
equity, pending or threatened by or before any court, arbitration
panel or governmental instrumentality or agency which is not
fully covered by insurance (less normal deductibles) and which if
determined adversely to Borrower could have a material adverse
effect on the financial condition, properties, affairs or
operations of Borrower and Borrower is not in default with
respect to any final order, writ, injunction, decree, rule,
ruling or demand of any court, tribunal or other governmental or
regulatory instrumentality or agency.
3.5 FINANCIAL CONDITION. The Borrower has furnished to the Bank
the Borrower's consolidated balance sheet and the related
operating statement and statement of changes in financial
position for the Borrower's fiscal year ending January 30, 1999.
These financial statements present fairly in conformity with GAAP
the consolidated financial condition and affairs of Borrower and
its Subsidiaries as of the date thereof, and the consolidated
results of the operations of Borrower and its Subsidiaries for
the periods covered thereby, and have been prepared in accordance
with generally accepted accounting principles on a basis
consistently applied. The unaudited consolidated balance sheet
of the Borrower and its Subsidiaries with respect to the period
ending May 1, 1999 and the related unaudited consolidated
statements of income and retained earnings and changes in
financial position of the Borrower and its Subsidiaries for the
period then ended, copies of which have been delivered to the
Bank, fairly present in accordance with GAAP, the consolidated
financial position of the Borrower and its Subsidiaries as at
such date and the consolidated results of the operations for the
period then ended. Since the date of the most recent such
balance sheet and related operating statement there has been no
materially adverse change in the assets or liabilities or
financial condition of Borrower or its Subsidiaries.
3.6 TITLE TO ASSETS. Except as set forth on Schedule D,
Borrower and each Subsidiary each have good and marketable title
to each of the assets titled in their respective names and none
of such assets are subject to any Lien, mortgage, deed of trust,
pledge, security interest or other encumbrance.
3.7 TAX STATUS. Borrower and each Subsidiary have filed all tax
returns and reports required to be filed (or have obtained
necessary and appropriate extensions of time) and have paid all
applicable federal, state and local franchise, income and other
taxes, fees, assessments or other charges which are or have been
due and payable prior to the date of this Agreement.
3.8 ABSENCE OF CONTINGENT OBLIGATIONS. Neither the Borrower nor
any Subsidiary have made any Guaranty of any nature or otherwise
agreed to or incurred any other contingent obligation not
disclosed on the financial statements delivered to the Bank.
3.9 ABSENCE OF DEFAULT. Each of the Borrower and each Subsidiary
has satisfied all judgments and neither the Borrower nor any
Subsidiary is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court, arbitrator,
or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or
foreign. Neither the Borrower nor any Subsidiary is a party to
any indenture, loan or credit agreement or lease or other
agreement or instrument or subject to any charter or corporate
restriction which could have a material adverse affect on the
business, properties, assets, operations or conditions, financial
or otherwise, of the Borrower or any Subsidiary, or the ability
of the Borrower to carry out its obligations under the Credit
Documents. Neither the Borrower nor any Subsidiary is in default
in any respect in the performance, observance or fulfillment of
any obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a
party.
3.10 SUBSIDIARIES. The capital stock of each Subsidiary has
been validly issued, is fully paid and non-assessable and is
owned by the Borrower free and clear of all Liens..
3.11 ENVIRONMENTAL COMPLIANCE. The Borrower and each Subsidiary
(a) is in compliance in all material respects with all applicable
environmental, transportation, health and safety statutes and
regulations, and (b) has not acquired, incurred or assumed,
directly or indirectly, any material contingent liability in
connection with the release or storage of any toxic or hazardous
waste or substance into the environment. Neither the Borrower nor
its Subsidiaries have acquired, incurred or assumed, directly or
indirectly, any material contingent liability in connection with
a release or other discharge of any hazardous, toxic or waste
material, including petroleum, on, in, under or into the
environment surrounding any property owned, used, leased or
operated by any of them.
3.12 ERISA. The Borrower and each member of the Controlled Group
have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently
applicable provisions of ERISA and Code and have not incurred any
liability to the PBGC or to a Plan under Title IV of ERISA.
Neither the Borrower nor any member of the Controlled Group have
incurred any accumulated funding deficiency within the meaning of
ERISA.
SECTION 4
COVENANTS
Borrower covenants and agrees that so long as any credit
hereunder shall be available, and until payment in full of the
Loans:
4.1 EXISTENCE. Except as permitted by Section 4.6(b), Borrower
and each Subsidiary shall maintain and preserve its corporate
existence and all rights, privileges and franchises and other
authority adequate for the conduct of their operations; maintain
their respective Property in good order and repair, conduct
their respective operations without voluntary interruption or
cessation. ;The Borrower shall maintain its principal offices at
the place specified at the beginning of this Agreement, until
after such time as the Bank is given written notice of any change
of any of such location.
4.2 INSURANCE. Borrower and each Subsidiary shall maintain with
financially sound and reputable insurers, insurance with respect to each of
their respective Property and business against such casualties
and contingencies, of such types (including public liability,
larceny, embezzlement or other criminal misappropriation
insurance) and in such amounts as is customarily maintained in
the case of corporations of established reputations engaged in
the same or similar businesses and similarly situated. All
insurance required to be provided by the Borrower and each
Subsidiary shall be issued by companies reasonably satisfactory
to the Bank and under policies requiring at least thirty (30)
days prior written notice to the Bank as a condition to any
termination or material reduction of coverage.
4.3 TAXES AND OTHER LIABILITIES. Intentionally deleted.
4.4 RECORDS AND REPORTS. Borrower and each Subsidiary shall
maintain a system of accounting in accordance with generally
accepted accounting principles on a basis consistently applied,
permit representatives of the Bank to have access to and to
examine Borrower's and each Subsidiaries' Property, books and
records at all reasonable times on reasonable notice, and at no
expense to the Bank, the Borrower furnish to the Bank:
(a) Within one hundred-twenty (120) days of the end of each
fiscal year, the Bank shall be furnished with Borrower's audited
consolidated financial statements (which shall include a copy of
any management letter delivered to the Borrower), each certified
by an independent certified public accountant retained by the
Borrower and reasonably satisfactory to the Bank, and which
contain balance sheets and income statements, together with
comparative figures for the prior year. Quarterly, within sixty
(60) days of each fiscal quarter, the Bank shall be furnished
with internally prepared consolidated financial statements for
the Borrower. Each such quarterly statement shall be certified
to by the Borrower's chief financial officer and shall contain
balance sheets and income statements together with comparative
figures for the same period for the prior year. Each such annual
and quarterly financial statement shall fairly present the
financial condition of the Borrower and its Subsidiaries for the
periods covered. The Borrower shall also furnish to the Bank (i)
the Borrower's annual 10-K report within one hundred twenty (120)
days of the end of each of the Borrower's fiscal years, (ii) the
Borrower's quarterly 10-Q report within sixty (60) days of the
end of each of the Borrower's fiscal quarters, and (iii) such
other management reports as the Bank may reasonably request.
(b) Concurrently with the delivery of the annual
consolidated audit and quarterly consolidated internal
statements, a certificate of the Chief Financial Officer or the
principal accounting officer of the Borrower (i) setting forth
whether the Borrower is in compliance with the requirements of
this Section 4 on the date of such financial statements, (ii)
stating whether there exists on the date of such certificate any
Event of Default and, if any Event of Default exists, setting
forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto, and (iii) having
attached thereto a schedule in reasonable detail satisfactory to
the Bank setting forth the computations necessary to determine
whether the Borrower is in compliance with the financial
covenants set forth in Section 4.5 of this Agreement.
(c) Promptly, after the occurrence of any Event of Default,
a certificate of the chief financial officer or the principal
accounting officer of the Borrower setting forth the details
thereof and the action which the Borrower is taking or proposes
to take with respect thereto.
(d) If and when the Borrower or any member of the
Controlled Group gives or is required to give notice to the PBGC
of any "Reportable Event" (as defined in Section 4043 of ERISA)
with respect to any Plan under Title IV of ERISA, or knows that
the Plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC;
and
(e) Such other financial information regarding Borrower
and each Subsidiary as the Bank may reasonably request.
4.5 CERTAIN BORROWER FINANCIAL COVENANTS.
(a) Minimum Current Ratio. The Borrower shall maintain a
minimum ratio of Consolidated Current Assets divided by
Consolidated Current Liabilities (all computed in accordance with
generally accepted accounting principles consistently applied),
measured as at the end of each of Borrower's fiscal quarters, of
not less than 1.75 to 1;
(b) Maximum Leverage Ratio. The Borrower shall maintain a
maximum Leverage Ratio of 4.0 to 1 measured as at the end of each
of the Borrower's fiscal quarters for the period including such
fiscal quarter and the then immediately preceding three (3)
fiscal quarters;
(c) Minimum Cash Flow Coverage. The Borrower shall
maintain a minimum ratio of consolidated EBITDA less cash
dividends and less cash income taxes (determined in accordance
with GAAP), divided by the current maturities of Borrower's and
Subsidiaries' Long-Term Debt plus interest, of not less than 1.50
to 1, all measured as at the end of each of Borrower's fiscal
quarters for the period including such fiscal quarter and the
immediately preceding three (3) fiscal quarters.
4.6 .6 .6 .6 NEGATIVE PLEDGE/SALE OF PROPERTY. So long as
any amounts remain unpaid on account of any of the Loans and so
long as the Borrower may request Loans from the Bank, neither the
Borrower nor any Subsidiary shall:
(a) Cause or permit or hereafter agree or consent to cause
or permit in the future (upon the happening of a contingency or
otherwise) any of its Property, whether now owned or subsequently
acquired, to be subject to any Lien, except:
(i) Liens securing the payment of taxes, assessments
or governmental charges or levies or the demands of
suppliers, mechanics, repairmen, workmen, materialmen,
carriers, warehousers, landlords and other like
Persons, or similar statutory Liens, provided that (A)
they do not in the aggregate materially reduce the
value of any Property subject to the Liens or material
interfere with their use in the ordinary conduct of the
owning company's business, (B) all claims which the
Liens secure are not delinquent or are being actively
contested in good faith and by appropriate proceedings,
and (C) adequate reserves have been established
therefor on the books of the Borrower, if required by
generally accepted accounting principles;
(ii) Liens incurred or deposits made in the ordinary
course of business (A) in connection with worker's
compensation, unemployment insurance, social security
and other like laws, or (B) to secure the performance
of letters of credit, bids, tenders, sales contracts,
leases, statutory obligations, surety, appeal and
performance bonds and other similar obligations, in
each case not incurred in connection with the borrowing
of money, the obtaining of advances or the payment of
the deferred purchase price of Property;
(iii) attachment, judgment and other similar Liens
arising in connection with court proceedings, provided
that (A) execution and other enforcement are
effectively stayed, (B) all claims which the Liens
secure are being actively contested in good faith by
appropriate proceedings and (C) adequate reserves have
been established therefor on the books of the Borrower,
if required by generally accepted accounting
principles;
(iv) Liens on Property of a Subsidiary, provided that
they secure only obligations owing between the Borrower
and any Subsidiary;
(v) Liens existing on the date hereof, which Liens
have been disclosed in writing to the Bank;
(vi) other Liens not otherwise permitted under this
Section 4.6(a) securing Long Term Debt or Current Debt
and limited to real estate, plant or equipment,
provided such Liens secure the purchase price of such
property, do not exceed the lesser of the cost or fair
market value of such property, and do not extend to any
other asset; and provided, further, that the aggregate
amount of indebtedness secured by such Liens shall not
exceed twenty percent (20%) of Consolidated Adjusted
Tangible Net Worth or, with respect to Buffalo China,
Inc., Five Million Dollars ($5,000,000); and
(vii) Liens resulting from the extension,
refunding, renewal or replacement of the indebtedness
secured by the Liens described in paragraphs (iv), (v)
and (vi) above, up to the amount outstanding under such
indebtedness at the time of such extension, refunding,
renewal or replacement.
In case any Property is subjected to a Lien in violation of
Section 4.6(a), the Borrower will make or cause to be made
provisions whereby the Notes will be secured equally and ratably
with all other obligations secured thereby, and in any case the
Notes shall have the benefit, to the full extent that, and with
such priority as, the holders may be entitled thereto under
applicable law, of an equitable Lien on such Property securing
the Notes. Such violation of Section 4.6(a) shall constitute an
Event of Default whether or not any such provision is made
pursuant to this paragraph; or
(b) Sell, lease, or otherwise dispose of any of its
Property (other than by the Borrower as permitted under Section
4.7 below) or sell or otherwise dispose of any shares of the
stock of a Subsidiary, nor will any Subsidiary issue, sell or
otherwise dispose of any shares of its own stock where the effect
would be to reduce the direct or indirect proportionate interest
of the Borrower and its other Subsidiaries in the stock of the
Subsidiary whose shares are the subject of the transaction,
provided, however, that these restrictions do not apply to:
(i) the issue of directors' qualifying shares; or
(ii) the transfer of Property (other than Subsidiary
stock) in the ordinary course of business; or
(iii) the transfer of Property (including up to,
but not more than, fifteen percent (15%) of the
outstanding stock of any Subsidiary) during any fiscal
year to any Person if (A) such Property does not,
together with Property of the Borrower and all of its
Subsidiaries previously disposed of during such fiscal
year (other than in the ordinary course of business or
as is permitted by Section 4.7), constitute ten percent
(10%) or more of Consolidated Adjusted Tangible Assets
determined as of the beginning of such fiscal year; (B)
the sum of the portions of Consolidated Adjusted Net
Income which were contributed during the immediately
preceding four (4) fiscal quarters by (1) such
Property, (2) each Subsidiary which has been disposed
of since the beginning of such four (4) fiscal quarters
(other than to the Borrower and other than in a
transaction permitted by Section 4.7 below), and (3)
other Property of the Borrower and all Subsidiaries
disposed of since the beginning of such four (4) fiscal
quarters (other than in the ordinary course of business
and other than to the Borrower and other than in a
transaction permitted by Section 4.7 below), do not
constitute more than ten percent (10%) of the
Consolidated Adjusted Net Income for any such four (4)
fiscal quarters; and (C) the amount of the Subsidiary
stock transferred when added to Subsidiary stock
previously transferred does not exceed fifteen percent
(15%) of the outstanding Subsidiary stock of any
Subsidiary. For the purposes of determining Borrower's
compliance with this subsection (iii), in the event of
a sale of up to fifteen percent (15%) of the stock of a
Subsidiary, the Property transferred shall be deemed to
be the Adjusted Tangible Assets of such Subsidiary
multiplied by the percentage of Subsidiary stock
transferred.
4.7 MERGER AND CONSOLIDATION. Neither Borrower nor any
Subsidiary will be a party to any merger or consolidation (except
that a Subsidiary may combine with the Borrower or another
Subsidiary) provided that the Borrower may merge or consolidate
if the surviving or acquiring corporation is organized under the
laws of the United States or any jurisdiction thereof, expressly
assumes the covenants and obligations of the Credit Documents,
is solvent and would not immediately after giving effect to the
transaction be in default under any term of any Credit Document.
4.8 GUARANTIES. Neither the Borrower nor any Subsidiary will
become liable for or permit any of its Property to become subject
to any Guaranty except: (a) Guaranties of indebtedness for
borrowed money under which the maximum aggregate principal amount
guaranteed can be mathematically determined at the time of
issuance, and (b) other Guaranties under which the maximum
aggregate amount guaranteed can be mathematically determined at
the time of issuance. Each Guaranty permitted by this Section 4.8
must comply with the other requirements of Section 4.5(a), 4.5(b)
and 4.5(c) to the extent the provisions of Section 4.5(a), 4.5(b)
and 4.5(c) require the amount of the Guaranty to be included in
Consolidated Current Liabilities, Current Debt, Long Term Debt or
Total Funded Debt.
4.9 TAXES AND CLAIMS. Intentionally deleted.
4.10 TRANSACTIONS WITH SUBSIDIARIES AND AFFILIATES. Neither the
Borrower nor any Subsidiary will enter into any transaction
(including the purchase, sale or exchange of Property or the
rendering of any service) with any Affiliate except upon fair and
reasonable terms which are at least as favorable to the Borrower
and to the Subsidiary as would be obtained in a comparable arms-
length transaction with a non-Affiliate.
4.11 PREPAYMENTS.
(a) Term Loan Prepayment. The Borrower may prepay the Term
Loan only upon three (3) Business Days prior written notice to
the Bank (which notice shall be irrevocable), and any such
prepayment shall occur only on the last day of the Interest
Period involved. As a condition to the Borrower's right to make
such prepayment, the Borrower shall upon the request of the Bank
pay to the Bank such amount or amounts as shall be sufficient (in
the reasonable opinion of the Bank) to compensate it for any
loss, cost or expense incurred as a result of (i) any prepayment
of the Term Loan on a date other than the last day of the
Interest Period, or (ii) any failure by Borrower to prepay the
Term Loan on the date for prepayment specified in Borrower's
written notice. Without limiting the foregoing, the Borrower
shall pay to the Bank a "yield maintenance fee" in an amount
computed as follows: The current rate for United States Treasury
Securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the end of the
Interest Period during which the prepayment is made, shall be
subtracted from the LIBOR in effect at the time of prepayment. If
the result is zero or a negative number, there shall be no yield
maintenance fee. If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be
divided by three hundred sixty (360) and multiplied by the number
of days remaining the Interest Period during which the prepayment
is made. Such amount shall be reduced to a present value
calculated using the above-referenced United States Treasury
Securities rate and the number of days remaining in the Interest
Period during which the prepayment is made.
The resulting amount shall be the yield maintenance fee due
to the Bank upon the prepayment. If by reason of an Event of
Default, the Bank elects to declare the Term Loan to be
immediately due and payable, then any yield maintenance fee with
respect to the Term Loan shall become due and payable in the same
manner as though the Borrower had exercised such right of
prepayment.
(b) PREPAYMENT OF LINE LOANS. The Borrower may prepay a
Line Loan bearing interest based upon the Bank's Prime Rate of
Interest without premium or yield maintenance fee. The Borrower
shall have the right to prepay a Line Loan (bearing interest
based upon the Bank's Cost of Funds) in whole (but not in part)
only upon the condition that the Borrower concurrently pay to the
Bank a yield maintenance fee in an amount computed as follows:
The current rate for United States Treasury Securities
(bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the maturity date
chosen pursuant to the Fixed Rate Election (defined below) as to
which the prepayment is made, shall be subtracted from the Cost
of Funds component of the fixed rate in effect at the time of
prepayment. If the result is zero or a negative number, there
shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the
amount of the principal balance being prepaid. The resulting
amount shall be divided by three hundred sixty (360) and
multiplied by the number of days remaining the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is
made. Such amount shall be reduced to a present value calculated
using the referenced United States Treasury Securities rate and
the number of days remaining in the term chosen pursuant to the
Fixed Rate Election as to which the prepayment is made. The
resulting amount shall be the yield maintenance fee due to the
Bank upon such prepayment.
Each reference in this section to "Fixed Rate Election"
shall mean the election by the Borrower for a Line Loan bearing
interest based upon the Bank's Cost of Funds. If by reason of an
Event of Default, the Bank elects to declare the Line Loan(s) to
be immediately due and payable, then any yield maintenance fee
with respect to each Loan involved shall become due and payable
in the same manner as though the Borrower had exercised such
right of prepayment.
4.12 ERISA COMPLIANCE.
(a) Neither the Borrower nor any Subsidiary will at any
time fail to comply with the minimum funding standards of Title
I, Part 3 of ERISA or Section 412 of the Code.
(b) All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension
Plans and the present value of assets of Pension Plans shall be
reasonable in the good faith judgment of the Borrower and shall
comply with all requirements of law.
(c) Neither the Borrower nor any Subsidiary will at any
time permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction", as such
term is defined in Section 4975 of the Code;
(ii) incur any "accumulated funding deficiency", as
such term is defined in Section 302 of ERISA, whether
or not waived; or
(iii) be terminated in a manner which could result
in the imposition of a Lien on the Property of the
Borrower or any Subsidiary pursuant to Section 4068 of
ERISA.
4.13 CHANGES IN BUSINESS. Neither the Borrower nor any
Subsidiary (whether now existing or hereafter acquired or
organized) will engage in any business if, after given effect
thereto, less than eighty percent (80%) of the Consolidated
Adjusted Tangible Assets of the Borrower at the most recently
ended fiscal quarter would be attributable to the current
business of the Borrower and its Subsidiaries taken as a whole,
including, but not limited to, the manufacturing, advertising,
sales and distribution of household and food service products and
related business.
4.14 MAINTENANCE OF OFFICE. Borrower shall maintain its
principal place of business at the location specified at the
beginning of this Agreement until such time as the Borrower
notifies the Bank of the Borrower's intention to relocate such
principal place of business.
4.15 COMPLIANCE WITH LAWS. The Borrower and each Subsidiary
shall comply with all laws, ordinances or governmental rules and
regulations to which it is subject and will not fail to obtain
any license, permit, franchise or other governmental
authorizations necessary to the ownership of its Property or to
conduct its business, which violation or failure to obtain might
materially adversely affect the business, prospects, profits,
Property or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole.
4.16 LOANS. The Borrower shall not lend money or extend credit
other than (a) the extension of normal payment terms to
Borrower's or a Subsidiary's customers in the ordinary and normal
course of Borrower's or such Subsidiary's business as presently
conducted, or (b) loans to Subsidiaries.
4.17 REGULATIONS G, T, U. The Borrower shall not use the proceeds
of any Loan directly or indirectly to purchase or carry any
margin stock (within the meaning of regulations G, T and U of the
Board of Governors of the Federal Reserve System), or extend
credit to others for the purpose of purchasing or carrying,
directly or indirectly, any margin stock.
4.18 PAYMENT OF TAXES AND CLAIMS. The Borrower and each
Subsidiary will pay, before they become delinquent:
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property; and
(b) all claims or demands of materialmen, mechanics,
carriers, warehouseman, landlords and other like Persons which,
if unpaid, might result in the creation of a Lien upon its
Property,
provided that the items enumerated in subsections (a) and (b)
above need not be paid while being contested in good faith and by
appropriate proceedings and provided further that adequate book
reserves have been established with respect thereto, if required
by generally accepted accounting principles, and provided further
that the owing company's title to, and its right to use, its
Property is not materially adversely affected thereby.
SECTION 5
EVENTS OF DEFAULT
5.1 EVENTS OF DEFAULT. Upon the occurrence of any of the
following Events of Default, automatically upon the happening of
any Event of Default specified in Section 5.1(d) or 5.1(e)
hereof, and, with respect to the other Events of Default during
the continuation thereof, at the option of the Bank, the Bank
shall have no obligation to consider or to make Line Loans to the
Borrower and all sums of principal and interest then remaining
unpaid on account of the Loans and all other amounts payable
hereunder or under any other Credit Document, shall be
immediately due and payable, all without demand, presentment or
notice, all of which are expressly waived, and the Bank may
enforce all of its rights pursuant to this Agreement, all other
Credit Documents and under law:
(a) Failure by Borrower to make any payment of principal,
interest, fees or other amounts due under any Note, or by
Borrower or any Subsidiary on any other obligation owed to the
Bank, within ten (10) days of the date when due.
(b) The occurrence of an event of default which would
permit the acceleration before stated maturity of any revolving
credit obligation of the Borrower or any Subsidiary, any
reimbursement obligation with respect to any letter of credit
issued on behalf of the Borrower or any Subsidiary, any line of
credit or any private placement indebtedness of the Borrower or
any Subsidiary including the debt held by Allstate Life Insurance
and by Pacific Mutual Life Insurance where the amount which can
be accelerated exceeds in the aggregate, One Million Dollars
($1,000,000).
(c) The entry of one or more judgments against Borrower or
any Subsidiary individually or aggregating in excess of One
Million Five Hundred Thousand Dollars ($1,500,000) not fully
covered by insurance (less normal deductibles) and the failure in
any such case to bond or otherwise satisfy or discharge such
judgments or liens within sixty (60) days of the date of entry.
(d) The Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to
authorize any of the foregoing.
(e) An involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or similar law now or
hereafter in effect seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary
case or other proceeding is not controverted by Borrower or such
Subsidiary within ten (10) days and is not dismissed within sixty
(60) days; or an order for relief shall be entered against the
Borrower or any Subsidiary under the federal bankruptcy laws as
now or hereafter in effect.
(f) The Borrower or any member of the Controlled Group
shall fail to pay when due any amount which it shall have become
liable to pay to the PBGC or to a Plan or Plans or notice of
intent to terminate a Plan or Plans having aggregate unfunded
vested liabilities shall be filed under Title IV of ERISA by the
Borrower or any member of the Controlled Group, any plan
administrator or any combination of the foregoing, or the PBGC
shall institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any such Plan
or Plans or a proceeding shall be instituted by a fiduciary of
any such Plan or Plans to enforce Section 515 of ERISA and such
proceeding shall not have been dismissed within thirty (30) days
thereafter, or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any
such Plan or Plans must be terminated.
(g) Any Person or two or more Persons acting in concert
(other than the Borrower, any Subsidiary, any employee benefit
plan maintained by the Borrower or any of its Subsidiaries, or
any trustee or fiduciary with respect to such Plan acting in such
capacity):
(i) shall have acquired beneficial ownership (within
the meaning of Rule 13(d)(3) of the Securities and
Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of securities of the
Borrower (or other securities convertible into such
securities) representing twenty percent (20%) or more
of the combined voting power of all securities of the
Borrower entitled to vote in the election of directors,
other than securities having such power only by reason
of the happening of a contingency; or
(ii) shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement which
upon consummation will result in its or their
acquisition of, control over securities of the Borrower
(or other securities convertible into such securities)
representing twenty percent (20%) or more of the
combined voting power of all securities of the Borrower
entitled to vote in the election of directors, other
than securities having such power only by reason of the
happening of a contingency.
(h) A breach or violation of the covenants described in
Sections 4.4, 4.6, 4.7, 4.8, 4.9, 4.10 or 4.12 above;
(i) A breach or violation by Borrower of any provision,
agreement or covenant contained in, or the occurrence of any
event of default under any other Credit Document and the failure
to cure same within any applicable grace period.
5.2 LATE FEE AND DEFAULT RATE OF INTEREST. In addition to the
Bank's other rights, remedies, powers and privileges, and not in
lieu thereof:
(a) Borrower shall pay to the Bank a late charge equal to
one-half of one percent (1/2%) of the amount of any payment due
under a Note and not made within ten (10) days of the date when
due.
(b) Upon the occurrence of an Event of Default, the Loans
shall thereafter bear interest at a rate equal to the Prime Rate
of Interest plus one percent (1%).
SECTION 6
MISCELLANEOUS
6.1 SURVIVAL OF PROVISIONS. All agreements, covenants,
provisions, representations, warranties and undertakings made
herein shall survive the execution and delivery of this
Agreement, the execution and delivery of all other Credit
Documents and the making of the Loans.
6.2 FAILURE OR INDULGENCE NOT A WAIVER. No failure or delay on
the part of the Bank or any holder of any Note in the exercise of
any power, right, remedy or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any
such power, right, remedy or privilege preclude other or further
exercise thereof, or of any other right, power, remedy or
privilege. All rights, powers, remedies and privileges existing
under this Agreement and the other Credit Documents are
cumulative to, and not exclusive of, any rights or remedies
otherwise available to the Bank, all of which rights and remedies
may be exercised by the Bank, singly or in combination and in
such order or sequence as the Bank, in its sole discretion, may
elect.
6.3 WAIVER/MODIFICATION. Neither this Agreement nor any Credit
Document nor any provision in any of them may be amended, waived
or modified in any manner, absent the execution and delivery of a
writing by the Bank intended for such purpose.
6.4 NOTICES. Except as otherwise expressly provided herein or in
any other Credit Document, any notice required or permitted to be
given, shall be deemed to have been duly given if personally
delivered, delivered by an overnight courier service or mailed by
certified mail return receipt requested, postage and registry
fees prepaid in the event of mailing, and in all events addressed
to the party to receive such notice at the address for such party
set forth at the beginning of this Agreement. By notice, any
party may change the address to which further notices shall be
sent. All notices shall be deemed given when mailed or delivered
in the manner provided in this Section, except that a notice
changing the address to which future notices shall be sent shall
be effective only on actual receipt (or refusal of delivery) by
the party to whom such notice is addressed.
6.5 SEVERABILITY. In the event any provision of this Agreement
or any other Credit Document shall be finally held by a court of
competent jurisdiction to be invalid, illegal or unenforceable,
such provision shall be severed from the remainder of this
Agreement or such other Credit Document, as the case may be, and
the validity, legality and enforceability of the remaining
provisions of this Agreement and the other Credit Documents shall
in no way be affected or impaired thereby.
6.6 APPLICABLE LAW. This Agreement, the other Credit Documents
and the rights and obligations of the parties hereto and thereto,
shall in all respects be governed by and enforced under and in
accordance with the laws of the State of New York, exclusive of
New York's Conflicts of Law rules and public policies.
6.7 ASSIGNABILITY. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns, and
shall inure to the benefit of the Bank and its successors and
assigns. Borrower may not assign, in whole or in part, any of
its rights under this Agreement.
6.8 SECTION AND SUBSECTION HEADINGS. The various headings used
in this Agreement and the division of the Agreement into sections
and subsections are for convenience of reference only, do not
form a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
6.9 FURTHER ASSURANCES. At any time or from time to time upon
the request of the Bank, Borrower shall execute and deliver such
further documents and do such other acts and things as the Bank
may reasonably request in order to effect fully the purposes of
the Credit Documents and to provide for the payment of the Loans
and interest thereon. Further, upon receipt of an affidavit of
an officer of the Bank as to the loss, theft, destruction or
mutilation of a Note or any other Credit Document which is not of
public record, and in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation of the
Note or other Credit Document, Borrower, will issue in lieu
thereof, a replacement Note or other Credit Document in the same
principal amount thereof in the case of a Note and otherwise of
like tenor.
6.10 ENTIRE AGREEMENT. This Agreement (including any Schedules)
and the other Credit Documents and any other instruments executed
by Borrower in connection with this Agreement, taken together
constitute the entire agreement between the parties and supersede
all prior or contemporaneous negotiations, agreements and
understandings, all of which are merged into this Agreement and
the other Credit Documents.
6.11 PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made
under this Agreement or under a Note is due on a day other than a
day on which the Bank is open for business, the payment shall be
made on the immediately following Business Day.
6.12 NO USURY. All agreements between the Borrower and the Bank
are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of a
Loan or otherwise, shall the amount paid or agreed to be paid to
the Bank for the use or forebearance of a Loan indebtedness
exceed the maximum permissible under applicable law. As used
herein, the term "applicable law" shall mean the law in effect as
of the date of this Agreement provided, however, that in the
event that there is a change in the law which results in a higher
permissible rate of interest, then this Agreement and the other
Credit Documents and each Loan shall be governed by such new law
as of its effective date. In this regard it is expressly agreed
that it is the intent of the Borrower and the Bank in the
execution, delivery and acceptance of this Agreement, the Notes
and the other Credit Documents to contract in strict accordance
with the laws of the State of New York from time to time in
effect. If, under or from any circumstance whatsoever,
fulfillment of any provision of this Agreement or of any of the
other Credit Documents at the time performance of such provision
shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be
fulfilled shall be automatically reduced to the limits of such
validity, and if, under or from any circumstance whatsoever the
Bank should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal
balance of the Loans and not to the payment of interest. This
provision shall control every other provision of all agreements
between the Borrower and the Bank.
6.13 BANK ENTITLED TO RELY. The Bank shall be entitled to rely on
all information, financial or otherwise, delivered to the Bank by
Borrower or by any Person authorized by Borrower to deliver same,
irrespective of any investigation or inquiry that the Bank has or
could have made, or which the Bank may in the future makes or
could make.
6.14 CERTAIN RULES OF CONSTRUCTION. Wherever possible, the terms
and provisions of which Agreement, the Notes and each other
Credit Document, shall be read and construed as being consistent.
However, if notwithstanding the foregoing directive, any
provision in this Agreement conflicts with a provision in the
Notes or in any other Credit Document, then the provision
affording to the Bank the greatest right, entitlement, discretion
or remedy shall govern and the conflicting provision shall for
all purposes be disregarded.
6.15 EXPENSES. Borrower agrees to pay all expenses of the Bank
(including the reasonable fees and expenses of its counsel) in
connection with the preparation of this Agreement and all of the
other Credit Documents, the completion of the transactions
contemplated hereby or thereby and incidental to the enforcement
of any provision of this Agreement or of any of the other Credit
Documents. Borrower further agrees that in the event the Bank
refers to an attorney for collection of any amounts due under
this Agreement, under any Note or under any other Credit
Document, or the enforcement of the Bank's rights under any
Credit Document, Borrower shall pay to the Bank the reasonable
attorneys fees and expenses thereby incurred by the Bank.
6.16 JURY WAIVER. Borrower and Bank mutually hereby knowingly,
voluntarily, and intentionally waive the right to a trial by jury
in respect of any claim based herein, arising out of, under or in
connection with this Agreement or any of the other Credit
Documents contemplated to be executed in connection herewith or
any course of conduct, course of dealings, statements (whether
verbal or written) or actions of any party. This waiver
constitutes a material inducement for the Bank to enter into this
Agreement and to make the Loans.
6.17 CERTAIN BANK RIGHTS.
(a) The Bank shall have the unrestricted right at any time
and from time to time and without the consent of or notice to
Borrower, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Bank's obligations to lend hereunder and/or in any Loan. In
the event of any such grant by the Bank of a participating
interest to a Participant, whether or not upon notice to
Borrower, the Bank shall remain liable for the performance of the
Bank's obligations under the Credit Documents and Borrower shall
continue to deal solely and directly with the Bank in connection
with the Bank's rights and obligations. The Bank may furnish any
information concerning Borrower or its Subsidiaries in its
possession from time to time to prospective assignees and
Participants, provided that each assignee or participant (or
prospective assignee or participant) agrees to maintain the
confidentiality of non-public confidential information received
from the Bank except for disclosures to officers, employees,
auditors and counsel and disclosures required by law or pursuant
to judicial process.
(b) The Bank may at any time pledge all or any portion of
its rights under the Credit Documents including any portion of
any Note, to any of the twelve (12) Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or enforcement thereof shall release
the Bank from its obligations under any of the Credit Documents.
6.18 PAYMENTS/INTEREST CALCULATION. All payments to the Bank
under the Notes shall be in lawful money of the United States in
immediately available funds. All computations of interest on
account of the Loans shall be made on the basis of a three
hundred sixty (360) day year and the actual number of days
elapsed.
6.19 OFFSET RIGHTS. Borrower grants to the Bank a lien, security
interest and right of setoff as security for all of its
liabilities and obligations to the Bank whether now existing or
hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in possession, custody,
safe keeping or control of the Bank or any entity under the
control of Fleet Financial Group, or in transit to any of them.
At any time without demand or notice, the Bank may setoff the
same or any part thereof and apply the same to any liability or
obligation of Borrower regardless of the adequacy of any other
collateral securing the Loans. Any and all rights to require the
Bank to exercise its rights or remedies with respect to any other
collateral which secures the Loans, prior to its exercising its
right of setoff with respect to such deposits, credits or other
property of Borrower are hereby knowingly and voluntarily and
irrevocably waived.
6.20 NO BROKER. Borrower represent and warrant to the Bank that
no broker has been instrumental in arranging for the Loans, and
Borrower agree to defend, indemnify and hold the Bank harmless
from and against any claim by any broker or any finder for any
fee or commission or similar payment on account of or with
respect to any of the Loans.
FLEET NATIONAL BANK
By: /s/ DAVID A. KAVNEY
David A. Kavney, Vice President
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward Thoma, Senior Vice
President, Finance
<PAGE>
SCHEDULE LIST
Schedule A - Draw Request
Schedule B - Line Note
Schedule C - Term Note
Schedule D - Liens/Exceptions to
<PAGE>
Title
SCHEDULE A
DRAW REQUEST
TO: FLEET NATIONAL BANK (Commercial Loan Department)
The Borrower, Oneida Ltd., hereby requests a draw from Fleet
National Bank under Borrower's Line of Credit. Reference herein
to the Commercial Purpose Master Note shall mean the Line Note
given by Borrower to Bank dated July 28, 1999.
A. We wish to draw $_______________ on a Variable Rate basis
per the terms of the Line Note.
B. We wish to draw $_______________ for _________ days at the
rate quoted to us of _______% per annum, on a fixed rate
basis per the terms of the Line Note.
With respect to the draw requested above, we hereby ask that you
wire transfer such funds to us in accordance with the following
wiring instructions:
WIRE TRANSFER INSTRUCTIONS
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
C. We owe the principal sum of $___________ pursuant to a
previous borrowing made by us on a Fixed Rate basis per the
terms of the Line Note. We wish to continue our borrowing of
said principal sum:
q On a Variable Rate basis per the terms of the Line
Note.
q For _______ days at the rate quoted to us of _______%
per annum, on a Fixed Rate basis per the terms of the
Line Note.
Kindly confirm by fax to our fax number (____)_____________.
DATED:________________ ONEIDA LTD.
By:___________________________
Its Authorized Person
<PAGE>
SCHEDULE B
LINE NOTE
$15,000,000 Dated as of July 28, 1999
At Syracuse, New York
FOR VALUE RECEIVED, the undersigned, ONEIDA LTD., a New York
business corporation with an address at 163 Kenwood Avenue,
Oneida, New York 13421 (the "Borrower") unconditionally promises
to pay to the order of FLEET NATIONAL BANK, a national banking
association with an address at One Clinton Square, P.O. Box 4821,
Syracuse, New York 13221-4821 and its successors or assigns (the
"Bank") on demand, the principal sum of Fifteen Million Dollars
($15,000,000) or the aggregate such amount of "Line Loans" (as
that quoted term is defined in the Loan Agreement between the
Bank and the Borrower dated as of July 28, 1999 [the "Loan
Agreement"]), together with interest at a rate equal to either
(i) the Bank's Prime Rate of Interest less one hundred and fifty
(150) basis points, or (ii) with respect to Line Loans of
$500,000 or more, a fixed rate equal to the Bank's Cost of Funds
for a period not to exceed one hundred and eighty (180) days (but
in no event beyond the Line Termination Date (the "Cost of Funds
Interest Period") plus fifty (50) basis points, as follows:
The Borrower shall pay interest on all Line
Loans bearing interest at the Bank's Prime
Rate of Interest less one hundred and fifty
(150) basis points on the last day of each
calendar quarter on the unpaid principal
balance of such Line Loans computed on a
daily basis for the immediately preceding
calendar quarter. The Borrower shall pay
interest on all Line Loans bearing interest
at a rate equal to the Bank's Cost of Funds
plus fifty (50) basis points on the last day
of the Cost of Funds Interest Period
applicable to such Loan. On July 29, 2000
(the "Line Termination Date") (unless such
date is extended in writing by the Bank) or
on such earlier date that the Bank demands
payment of amounts due under this Note, the
Borrower shall pay to the Bank one hundred
percent (100%) of the then unpaid principal
balance of all Line Loans, together with all
accrued and unpaid interest.
This Line Note is one of the Notes provided for in the Loan
Agreement. The Bank is entitled to all of the privileges and
benefits of the Loan Agreement, the terms and conditions of which
are incorporated herein and made part hereof. Terms used in this
Line Note and denoted with a capitalized first letter shall have
the meanings ascribed to such terms in the Loan Agreement unless
otherwise defined herein.
"Prime Rate of Interest" or "Prime Rate" shall mean the
variable per annum rate of interest so designated from time to
time by Fleet National Bank as its prime rate. The prime rate is
a reference rate and does not necessarily represent the lowest or
the best rate being charged to any customer. Changes in the rate
of interest resulting from changes in the prime rate shall take
place immediately without any notice or demand of any kind.
"Cost of Funds" shall mean the per annum rate of interest
which the Bank is required to pay, or is offering to pay, for
wholesale liabilities of like tenor, adjusted for reserve
requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as
determined by the Bank.
All computations of interest under this Note shall be made
on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed.
The Borrower may prepay a Line Loan bearing interest based
upon the Bank's Prime Rate of Interest without premium or yield
maintenance fee. The Borrower shall have the right to prepay a
Line Loan bearing interest based upon the Bank's Cost of Funds in
whole (but not in part) only upon the condition that the Borrower
concurrently pay to the Bank a yield maintenance fee in an amount
computed as follows:
The current rate for United States Treasury Securities
(bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the maturity date
chosen pursuant to the Fixed Rate Election (defined below) as to
which the prepayment is made, shall be subtracted from the Cost
of Funds component of the fixed rate in effect at the time of
prepayment. If the result is zero or a negative number, there
shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the
amount of the principal balance being prepaid. The resulting
amount shall be divided by three hundred sixty (360) and
multiplied by the number of days remaining the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is
made. Such amount shall be reduced to a present value calculated
using the referenced United States Treasury Securities rate and
the number of days remaining in the term chosen pursuant to the
Fixed Rate Election as to which the prepayment is made. The
resulting amount shall be the yield maintenance fee due to the
Bank upon such prepayment.
Each reference in this Note to "Fixed Rate Election" shall
mean the election by the Borrower for interest on a Line Loan to
be computed based upon the Bank's Cost of Funds. If by reason of
an Event of Default, the Bank elects to declare the Line Loan(s)
to be immediately due and payable, then any yield maintenance fee
with respect to each Loan involved shall become due and payable
in the same manner as though the Borrower had exercised such
right of prepayment.
Payments of both principal and interest are to be made when
due in immediately available funds at the offices of Bank set
forth above, or at such other place as the holder of this Note
shall designate to Borrower in writing, in lawful money of the
United States of America.
If this Note or any payment hereunder becomes due on a day
which is not a Business Day (as defined below), the due date of
this Note or payment shall be extended to the next succeeding
Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment. As
used herein, "Business Day" shall mean any day other than a
Saturday, Sunday or day which shall be in the State of New York a
legal holiday or day on which banking institutions are required
or authorized to close.
All agreements between Borrower and Bank are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided,
however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of
Borrower and Bank in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the
State of New York, from time to time in effect. If under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances
whatsoever Bank should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the
principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of
all agreements between Borrower and Bank.
Upon the occurrence of an Event of Default as defined in the
Loan Agreement, the then unpaid balance of this Note, together
with all accrued and unpaid interest, shall be and become due and
payable in accordance with the provisions of the Loan Agreement.
Further and not in lieu of any other remedy, (a) in the
event any payment due hereunder is not made within ten (10) days
of the date when due, Borrower shall pay to Bank a late charge
equal to one-half of one percent (1/2%) of the amount of such
payment, and (b) upon the occurrence of an Event of Default under
the Loan Agreement, the amount due under this Note shall
thereafter bear interest at a rate equal to the Prime Rate of
Interest plus one percent (1%), and Borrower agrees to pay
interest at such rate until all amounts due under this Note are
paid in full.
Borrower expressly waives any presentment, demand, protest
or, except for notices required to be given by the Bank under the
Loan Agreement, any notice in connection with this Note.
Borrower hereby grants to Bank, a lien, security interest
and right of setoff as security for all liabilities and
obligations to Bank, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property,
now or hereafter in the possession, custody, safekeeping or
control of Bank or any entity under the control of Fleet
Financial Group, or in transit to Borrower. At any time, without
demand or notice, Bank may set off the same or any part thereof
and apply the same to any liability or obligation of Borrower
even though unmatured and regardless of the adequacy of any other
collateral securing this Note. Any and all rights to require Bank
to exercise its rights or remedies with respect to any other
collateral which secures the Loans, prior to exercising its right
of setoff with respect to such deposits, credits or other
property of the Borrower are hereby knowingly, voluntarily and
irrevocably waived.
Borrower promises and agrees to pay the costs of collection
and any reasonable attorneys' fees incurred by the Bank upon the
occurrence of an Event of Default under the Loan Agreement.
This Note, together with the provisions of the Loan
Agreement and the other Loan Documents constitutes the complete
understanding between the parties and taken together, supersede
all prior or contemporaneous understandings, agreements and
negotiations, all of which are merged into this Note, the Loan
Agreement and such other Loan Documents.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York, exclusive of
New York's conflicts of laws rules and public policies.
The undersigned unconditionally consents to the jurisdiction
of the courts of the State of New York or of federal courts
located within the State of New York and agree that any action to
construe, enforce or effect collection of amounts due under, this
Note, may be commenced in a state or federal court located within
the State of New York.
The Bank may at any time pledge all or any portion of its
rights under this Note or under any other Loan Document, to any
of the twelve (12) federal reserve banks organized under Section
4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or enforcement thereof shall release the Bank from its
obligations under the Loan Documents.
The Bank shall have the unrestricted right at any time and
from time to time and without the consent of or notice to the
Borrower to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Loan evidenced by this Note. In the event of any such grant
by the Bank of a participating interest to a Participant, whether
or not upon notice to the Borrower, the Bank shall remain
responsible for the performance of its obligations hereunder and
the Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the
Borrower or its Subsidiaries in its possession from time to time
to prospective participants, provided that each assignee or
participant (or prospective assignee or participant) agrees to
maintain the confidentiality of non-public confidential
information received from the Bank except for disclosures to
officers, employees, auditors and counsel and disclosures
required by law or pursuant to judicial process.
Upon receipt of an affidavit of an officer of the Bank as to
the loss, theft, destruction or mutilation of this Note or any
other Loan Document which is not of public record, and, in the
face of any such loss, theft, destruction or mutilation, upon
cancellation of this Note or such other Loan Document, Borrower
will issue, in lieu thereof, a replacement note or other loan
document in the same principal amount thereof and otherwise of
like tenor.
Borrower and Bank hereby knowingly, voluntarily and
intentionally waive the right to a trial by jury in respect of
any claim based hereon, arising out of, under or in connection
with this Note or any other Loan Document contemplated to be
executed in connection herewith or any course of conduct, course
of dealings, statements (whether verbal or written) or actions by
any party. This waiver constitutes a material inducement for the
Bank to accept this Note and to make the Loans evidenced hereby.
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward Thoma, Senior Vice
President, Finance
<PAGE>
SCHEDULE C
TERM NOTE
$15,000,000
Dated as of July 28, 1999
At Syracuse, New York
FOR VALUE RECEIVED, the undersigned, ONEIDA LTD., a New York
business corporation with an address at 163 Kenwood Avenue,
Oneida, New York 13421 (the "Borrower") unconditionally promises
to pay to the order of FLEET NATIONAL BANK, a national banking
association with an address at One Clinton Square, P.O. Box 4821,
Syracuse, New York 13221-4821 (the "Bank"), the principal sum of
Fifteen Million Dollars ($15,000,000) together with interest at
a rate equal to the "Applicable Rate" (defined below) as
follows:
Commencing on the 1st day of September, 1999
and continuing on the first day of each of
the then next succeeding ninety-four (94)
calendar months the Borrower will pay to the
order of the Bank on each such date a
principal payment in the amount of $125,000
plus interest on the unpaid principal balance
of this ("Note") at the Applicable Rate and,
on the first day of August, 2007, the
Borrower shall pay to the order of the Bank a
principal payment in the amount of $3,125,000
plus accrued and unpaid interest at the
Applicable Rate.
This Note is one of the Notes referred to in the Loan
Agreement dated as of July 28, 1999 between the Bank and the
Borrower (the "Loan Agreement"). The Bank is entitled to all of
the privileges and benefits of the Loan Agreement, the terms and
conditions of which are incorporated herein and made a part
hereof. Terms denoted with a capitalized first letter and not
otherwise defined in this Note, shall have the meanings ascribed
to such terms in the Loan Agreement.
"Applicable Rate" shall be the rate of interest payable on
the Term Loan and shall mean and refer to the "Level IV Rate", or
the "Level III Rate", or the "Level II Rate", or the "Level I
Rate", calculated and determined by the Bank at Closing and
thereafter effective as of each November 1, February 1, May 1
and August 1, based upon the Borrower's quarterly and annual
financial statements for the immediately preceding four (4)
fiscal quarters commencing on November 1, 1999, as follows:
Level IV Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is greater than 3.5
to 1, the Applicable Rate shall be LIBOR plus
one hundred seventy (170) basis points.
Level III Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 3.5 to 1 but more than 2.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred fifty (150) basis points.
Level II Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 2.5 to 1 but more than 1.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred thirty (130) basis points.
Level I Rate - So long as no Event of Default
has occurred and the Borrower is then in
compliance with the financial covenants set
forth in Section 4 below, if the Borrower's
Leverage Ratio is 1.5 to 1 or less, the
Applicable Rate shall be LIBOR plus one
hundred ten (110) basis points.
Notwithstanding anything to the contrary contained in this
Note, the Applicable Rate for the period commencing on the date
of this Note and ending on October 31, 1999 shall be the Level II
Rate of LIBOR plus one hundred thirty (130) basis points.
"Leverage Ratio" shall mean the Borrower's and Subsidiaries'
Total Funded Debt (as defined in the Loan Agreement) divided by
consolidated EBITDA.
"LIBOR" means the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in U.S. dollars, from
one (1) month to six (6) months (the "Interest Period") as
specified by the Borrower in the rate election form attached
hereto as Schedule "A" (the "Repricing Notice") which appears on
the Telerate page 3750 as of 11:00 a.m. London time on the day
that is two (2) London Banking Days preceding the first day of
such LIBOR advance; provided that if the Bank does not receive
Borrower's Repricing Notice at least two (2) London Banking days
preceding the first day of such LIBOR advance, the Loan shall
bear interest at the Prime Rate of Interest; and provided
further, however, if the rate described above does not appear on
the Telerate System on any applicable interest determination
date, the LIBOR rate shall be the rate (rounded upwards as
described above, if necessary) for deposits in dollars for a
period substantially equal to the Interest Period on the Reuters
Page "LIBO" (or such other page as may replace the LIBO Page on
that service for the purpose of displaying such rates), as of
11:00 a.m. (London Time), on the day that is two (2) London
Banking Days prior to the beginning of such Interest Period.
"Banking Day" shall mean, in respect of any city, any date on
which commercial banks are open for business in that city.
If both the Telerate and Reuters system are
unavailable, then the rate for that date will be determined on
the basis of the offered rates for deposits in U.S. dollars for
the period of time comparable to such advances which are offered
by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the date that is two (2)
London Banking Days preceding the first day of such LIBOR advance
as selected by the Bank. The principal London office of each of
the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least
two such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will
be determined on the basis of the rates quoted for loans in U.S.
dollars to leading European banks for period of time comparable
to such advances offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the date that is
two London Banking Days preceding the first day of such LIBOR
advance. In the event that Bank is unable to obtain any such
quotation as provided above, it will be deemed that LIBOR
pursuant to a LIBOR advance cannot be determined, and the LIBOR
Rate shall not be available to Borrower. In such event, the
Borrower's obligation to pay to the order of the Bank the amounts
then due under this Note shall bear interest at the Bank's Prime
Rate of Interest.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Bank then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-Currency Liabilities" as
defined in Regulation D.
In the Repricing Notice, the Borrower may request up to
three (3) different Interest Periods with respect to up to three
(3) portions of the Loan (each, a "Tranche"). In its discretion,
the Bank may agree to the Borrower's request for separate
Tranches in which event (i) as of the date of the creation of the
separate Tranche, no Tranche may be less than Two Million Dollars
($2,000,000), (ii) at least one Tranche shall bear interest at
the Applicable Rate based upon one month LIBOR (the "One Month
Tranche"), and (iii) all scheduled payments of principal received
by the Bank will be applied by the Bank to reduce the principal
balance of the One Month Tranche.
"Prime Rate of Interest" or "Prime Rate" means the
variable per annum rate of interest so designated from time to
time by the Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or
best rate being charged to any customer. Changes in the rate of
interest resulting from changes in the Prime Rate shall take
place immediately without notice or demand of any kind.
All computations of interest under this Note shall be made
on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed.
At any time that interest payable under this Note is
determined by reference to LIBOR, Borrower may prepay this Note
only upon at least three (3) Business Days prior written notice
to Bank (which notice shall be irrevocable), and any such
prepayment shall occur only on the last day of an Interest
Period. Borrower shall pay to Bank, upon request of Bank, such
amount or amounts as shall be sufficient (in the reasonable
opinion of Bank) to compensate it for any loss, cost, or expense
incurred as a result of: (i) any payment of this Note on a date
other than the last day of the Interest Period; or (ii) any
failure by Borrower to pay this Note on the date for payment
specified in Borrower's written notice. Without limiting the
foregoing, Borrower shall pay to Bank a yield maintenance fee in
an amount computed as follows: The current rate for United States
Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to
the term chosen pursuant to the Fixed Rate Election as to which
the prepayment is made, shall be subtracted from the LIBOR in
effect at the time of prepayment. If the result is zero or a
negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall
be multiplied by the amount of the principal balance being
prepaid. The resulting amount shall be divided by three hundred
sixty (360) and multiplied by the number of days remaining in the
term chosen pursuant to the Fixed Rate Election as to which the
prepayment is made. Said amount shall be reduced to present
value calculated by using the above referenced United States
Treasury securities rate and the number of days remaining in the
term chosen pursuant to the Fixed Rate Election as to which
prepayment is made. The resulting amount shall be the yield
maintenance fee due to Bank upon the payment of the Loan. Each
reference in this paragraph to "Fixed Rate Election" shall mean
the Borrower's election for the one (1) month, two (2) month,
three (3) month, four (4) month, five (5) month or six (6) month
LIBOR. If by reason of an Event of Default, Bank elects to
declare the Note to be immediately due and payable, then any
yield maintenance fee with respect to this Note shall become due
and payable in the same manner as though the Borrower had
exercised such right of prepayment.
At any time that interest under this Note is determined by
reference to the Prime Rate, Borrower may prepay this Note, in
whole or in part, at any time, without penalty.
Payments of both principal and interest are to be made when
due in immediately available funds at the offices of Bank set
forth above, or at such other place as the holder of this Note
shall designate to Borrower in writing, in lawful money of the
United States of America.
If this Note or any payment hereunder becomes due on a day
which is not a Business Day (as defined below), the due date of
this Note or payment shall be extended to the next succeeding
Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment. As
used herein, "Business Day" shall mean any day other than a
Saturday, Sunday or day which shall be in the State of New York a
legal holiday or day on which banking institutions are required
or authorized to close.
All agreements between Borrower and Bank are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided,
however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of
Borrower and Bank in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the
State of New York, from time to time in effect. If under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances
whatsoever Bank should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the
principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of
all agreements between Borrower and Bank.
Upon the occurrence of an Event of Default as defined in the
Loan Agreement, the then unpaid balance of this Note, together
with all accrued and unpaid interest, shall be and become due and
payable in accordance with the provisions of the Loan Agreement.
Further and not in lieu of any other remedy, (a) in the
event any payment due hereunder is not made within ten (10) days
of the date when due, Borrower shall pay to Bank a late charge
equal to one-half of one percent (1/2%) of the amount of such
payment, and (b) upon the occurrence of an Event of Default under
the Loan Agreement, the amount due under this Note shall
thereafter bear interest at a rate equal to the Prime Rate of
Interest plus one percent (1%), and Borrower agrees to pay
interest at such rate until all amounts due under this Note are
paid in full.
Borrower expressly waives any presentment, demand, protest
or, except for notices required to be given by the Bank under the
Loan Agreement, any notice in connection with this Note.
Borrower grants to Bank, a lien, security interest and right
of setoff as security for all liabilities and obligations to
Bank, whether now existing or hereafter arising, upon and against
all deposits, credits, collateral and property, now or hereafter
in the possession, custody, safekeeping or control of Bank or any
entity under the control of Fleet Financial Group, or in transit
to any of them. At any time, without demand or notice, Bank may
set off the same or any part thereof and apply the same to any
liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the
Loan. Any and all rights to require Bank to exercise its rights
or remedies with respect to any other collateral which secures
the Loan, prior to exercising its right of setoff with respect to
such deposits, credits or other property of the Borrower, are
hereby knowingly, voluntarily and irrevocably waived.
Borrower promises and agrees to pay the costs of collection
and any reasonable attorneys' fees incurred by the Bank upon the
occurrence of an Event of Default under the Loan Agreement.
This Note, together with the provisions of the Loan
Agreement and the other Loan Documents constitutes the complete
understanding between the parties and taken together, supersede
all prior or contemporaneous understandings, agreements and
negotiations, all of which are merged into this Note, the Loan
Agreement and such other Loan Documents.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York, exclusive of
New York's conflicts of laws rules and public policies.
The Borrower unconditionally consents to the jurisdiction of
the courts of the State of New York or of federal courts located
within the State of New York and agree that any action to
construe, enforce or effect collection of amounts due under, this
Note, may be commenced in a state or federal court located within
the State of New York.
The Bank may at any time pledge all or any portion of its
rights under this Note or under any other Loan Document, to any
of the twelve (12) federal reserve banks organized under Section
4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or enforcement thereof shall release the Bank from its
obligations under the Loan Documents.
The Bank shall have the unrestricted right at any time and
from time to time and without the consent of or notice to the
Borrower to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Loan evidenced by this Note. In the event of any such grant
by the Bank of a participating interest to a Participant, whether
or not upon notice to the Borrower, the Bank shall remain
responsible for the performance of its obligations hereunder and
the Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the
Borrower or its Subsidiaries in its possession from time to time
to prospective participants, provided that each assignee or
participant (or prospective assignee or participant) agrees to
maintain the confidentiality of non-public confidential
information received from the Bank except for disclosures to
officers, employees, auditors and counsel and disclosures
required by law or pursuant to judicial process.
Upon receipt of an affidavit of an officer of the Bank as to
the loss, theft, destruction or mutilation of this Note or any
other Loan Document which is not of public record, and, in the
face of any such loss, theft, destruction or mutilation, upon
cancellation of this Note or such other Loan Document, Borrower
will issue, in lieu thereof, a replacement note or other Loan
Document in the same principal amount thereof and otherwise of
like tenor.
Borrower and Bank hereby knowingly, voluntarily and
intentionally waive the right to a trial by jury in respect of
any claim based hereon, arising out of, under or in connection
with this Note or any other Loan Document contemplated to be
executed in connection herewith or any course of conduct, course
of dealings, statements (whether verbal or written) or actions by
any party. This waiver constitutes a material inducement for the
Bank to accept this Note and to make the Loan evidenced hereby.
ONEIDA LTD.
By: /s/ EDWARD W. THOMA
Edward Thoma, Senior Vice
President, Finance
<PAGE>
SCHEDULE A
REPRICING NOTICE
TO: Fleet National Bank
(Commercial Loan Department)
Reference herein to the Term Note shall mean the Oneida Ltd.
("Borrower") Term Note dated July 28, 1999 in the original
principal amount of Fifteen Million Dollars ($15,000,000)
executed and delivered to the Bank.
Borrower wishes to continue its borrowing under the Term
Note:
For ____ month(s) [insert one month, two
months, three months, four months, five
months or six months] at the rate quoted to
the Borrower of ________% per annum for the
terms of the Term Note
Kindly confirm by fax to Borrower's fax number (315)
__________.
DATED: ____________ ONEIDA LTD.
By:______________________________
Authorized Person
<PAGE>
SCHEDULE D
A COMPLETE LISTING OF PRESENTLY
EFFECTIVE FINANCING STATEMENTS
FILE NUMBER SECURED PARTY FILE DATE
162265 Chase Lincoln 7/30/91 with a
Lease/Way, Inc. continuation filed
on 5/20/96
Filing No. 100716
176312 NYS Urban 8/21/92 with a
Development continuation filed
Corporation on 8/8/97
Filing No. 165998
259019 IBM Credit 12/29/95
Corporation
257249 IBM Credit 12/15/97
Corporation
011969 Thompson & Johnson 1/20/98
Equipment Co., Inc.
079787 IBM Credit 4/14/98
Corporation
134758 Ervin Leasing 7/6/99
Company
<PAGE>
EXHIBIT 4(a)(xiii)
WAIVER
This Waiver ("Waiver"), dated as of December 8, 1999, 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 or have become parties to the Credit Agreement referred to
below ("Banks"), in favor of ONEIDA LTD., a New York corporation
(the "Borrower"),
R E C I T A L S
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. 1dated as of September
25, 1996, Amendment No. 2 dated as of November 1, 1996, Amendment
No. 3 dated as of January 24, 1997, Waiver and Amendment No. 4
dated as of September 14, 1998, Amendment No. 5 dated as of
February 19, 1999, and Amendment No. 6 dated as of June 30, 1999
(as amended, hereafter referred to as the "Credit Agreement").
B. Borrower has advised the Agent and Banks that for the
fiscal quarter ending October 30, 1999 it is not in compliance
with the financial covenant contained in 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 30, 1999.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Waiver
which are not otherwise defined shall have the meanings given to
those terms in the Credit Agreement.
2. Representation. Borrower represents and warrants to
the Agent and the Banks that for the fiscal quarter ending
October 30, 1999 its ratio of Total Funded Debt to Consolidated
Adjusted Tangible Net Worth was 1.89 to 1.0. Borrower
acknowledges that it is in violation of Section 6.17(a) of the
Credit Agreement at October 30, 1999.
3. 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 30, 1999 as described
in Section 2 above. This waiver is limited to the failure to
comply with Section 6.17(a) at October 30, 1999 as described in
Section 2 and shall not be construed as a waiver of any other
presently existing or future Events of Default.
4. 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.
5. 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.
6. Counterparts. This Waiver 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
Waiver by facsimile transmission shall be as effective as
delivery of a manually signed counterpart.
IN WITNESS WHEREOF, the Agent and the Banks have caused this
Waiver to by duly executed as of the day and year first above
written.
THE CHASE MANHATTAN BANK
(as Agent and as Bank)
By: /s/ JOSEPH H. ODDO, JR.
Joseph H. Oddo, Jr.
Vice President
BANK OF AMERICA, N.A.
(successor to NationsBank, N.A.)
By: /s/ LISA CHOI
Lisa Choi
Vice President
HSBC BANK, USA
(successor to Marine Midland Bank)
By: /s/ JOHN R. PENNISI
John R. Pennisi
Vice President
<PAGE>
EXHIBIT 4(b)
ONEIDA LTD.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Amended and Restated Rights Agreement
Dated as of December 3, 1999
<PAGE>
Table of Contents
Section: Page:
1. Certain Definitions 1
2. Appointment of Rights Agent 5
3. Issue of Rights Certificates 5
4. Form of Rights Certificates 6
5. Countersignature and Registration 7
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates 8
7. Exercise of Rights; Purchase Price; Expiration Date
of Rights 9
8. Cancellation and Destruction of Rights Certificates 11
9. Reservation and Availability of Capital Stock 11
10. Preferred Stock Record Date 12
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights 13
12. Certificate of Adjusted Purchase Price or Number
of Shares 21
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 22
14. Fractional Rights and Fractional Shares 25
15. Rights of Action 25
16. Agreement of Rights Holders 26
17. Rights Certificate Holder Not Deemed a Shareholder 27
18. Concerning the Rights Agent 27
19. Merger or Consolidation or Change of Name of Rights Agent 27
20. Duties of Rights Agent 28
21. Change of Rights Agent 31
22. Issuance of New Rights Certificates 31
23. Redemption and Termination 32
24. Notice of Certain Events 32
25. Notices 33
26. Supplements and Amendments 34
27. Successors 34
28. Determinations and Actions by the Board of Directors, Etc.34
29. Benefits of this Agreement 35
30. Severability 35
31. Governing Law 35
32. Counterparts 35
33. Descriptive Headings 35
34. Exchange 36
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
Exhibit C -- Certificate of Amendment of Restated Certificate of
Incorporation
<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT
This agreement (the "Agreement") dated as of December 13,
1989, and amended and restated as of December 3, 1999, between
Oneida Ltd., a New York corporation (the "Company"), and American
Stock Transfer & Trust Company, a New York corporation (the
"Rights Agent").
WHEREAS, on December 13, 1989 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a distribution of one right for each
share of common stock, par value $1.00 per share, of the Company
(the "Company Common Stock") outstanding as of the Close of
Business (as defined below) on December 26, 1989 (the "Record
Date"), and authorized the issuance of one right (as such number
may have been thereafter adjusted) for each share of Company
Common Stock issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and, except as
otherwise provided in Section 22, the Distribution Date, each
right initially representing the right to purchase, upon certain
terms and subject to certain conditions, one Unit (as defined
below) of Preferred Stock (as defined below);
WHEREAS, pursuant to authorization of the Board of Directors
of the Company at a meeting properly noticed and convened on
October 27, 1999, this Agreement has been amended and restated in
accordance with the provisions of Section 26 hereof to, among
other things, (a) provide that each share of Company Common Stock
outstanding at the close of business on the date hereof shall
entitle the holder thereof to one Right (each a "Right"),
(b) extend the Final Expiration Date (as defined below), (c)
amend the Purchase Price (as defined below), and (d) include
provisions to permit the Company, at its option, to exchange the
outstanding and exercisable Rights for Units of Preferred Stock;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person that (i) shall
be the Beneficial Owner, directly or indirectly, of 20% or more
of the shares of Voting Stock then outstanding or (ii) is an
Affiliate or Associate of the Company and at any time within the
five-year period immediately prior to a Stock Acquisition Date
was the Beneficial Owner, directly or indirectly, of more than
20% of the Voting Stock; but shall not include (x) the Company,
any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity or (y) any such Person who has become and is such a
Beneficial Owner solely because (A) of a change in the aggregate
number of shares of Voting Stock since the last date on which
such Person acquired beneficial ownership of any shares of Voting
Stock or (B) it acquired such beneficial ownership in the good
faith belief that such acquisition would not (1) cause such
beneficial ownership to be equal to or exceed 20% of the shares
of Voting Stock then outstanding and such Person relied in good
faith in computing the percentage of its beneficial ownership on
publicly filed reports or documents of the Company that are
inaccurate or out-of-date or (2) otherwise cause a Distribution
Date or the adjustment provided for in Section 11(a)(ii) to
occur; provided, however, that for purpose of determining whether
a Person is an Acquiring Person, the number of shares of Voting
Stock deemed outstanding shall include shares beneficially owned
by such Acquiring Person but shall not include any unissued
shares of Voting Stock which may be issued pursuant to any
agreement, arrangement or understanding or upon exercise of
conversion rights, warrants or options, or otherwise.
Notwithstanding clause (ii)(y)(B) of the prior sentence, if any
Person that is not an Acquiring Person due to such clause
(ii)(y)(B) does not reduce its percentage of beneficial ownership
of Voting Stock to less than 20% by the Close of Business on the
fifth Business Day after notice from the Company that such
person's beneficial ownership of Voting Stock so equals to or
exceeds 20%, such Person shall at the end of such five Business
Day period become an Acquiring Person (and such clause (ii)(y)(B)
shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good
faith" shall be conclusively determined by the Board of Directors
of the Company.
(b) "Adjustment Shares" has the meaning set forth in
Section 11(a)(ii).
(c) "Adjustment Spread" has the meaning set forth in
Section 34(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Section 912(a) of the New York
Business Corporation Law (the "NYBCL"), as in effect on the date
hereof.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", and shall be deemed to
have "Beneficial Ownership" of any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly; or
(ii) which such Person or any of such Person's
Affiliates or Associates, has (A) the right to acquire such
securities (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise; provided, however, that a person shall not
be deemed the Beneficial Owner of securities tendered pursuant to
a tender or exchange offer made by such Person or any of such
Persons' Affiliates or Associates until such tendered securities
are accepted for purchase or exchange or, of securities that may
be issued upon exercise of Rights at any time prior to the
occurrence of a Triggering Event; or (B) the right to vote such
stock pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person
shall not be deemed the Beneficial Owner of any securities if the
agreement, arrangement or understanding to vote such security
(X) arises solely from a revocable proxy or consent given in
response to a proxy or consent solicitation made in accordance
with the applicable rules and regulations under the Exchange Act
and (Y) is not then reportable on a Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except voting pursuant to
a revocable proxy or consent as described in item (B) of clause
(ii) of this subparagraph), or disposing of such security.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in New
York City are authorized or obligated by law or executive order
to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.
(h) "Common Stock" of any Person other than the Company
shall mean the capital stock of such Person with the greatest
voting power, or, if such Person shall have no capital stock, the
equity securities or other equity interest having power to
control or direct the management of such Person.
(i) "Company Common Stock" has the meaning set forth in the
recitals to this Agreement.
(j) "Distribution Date" has the meaning set forth in
Section 3(a).
(k) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(l) "Expiration Date" has the meaning set forth in Section
7(a).
(m) "Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or
other entity, as well as any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act.
(n) "Preferred Stock" shall mean the Series A Preferred
Stock, par value $1.00 per share, of the Company having the
relative rights, preferences and limitations described in the
Certificate of Amendment of Restated Certificate of Incorporation
of the Company set forth as Exhibit C hereto.
(o) "Purchase Price" has the meaning set forth in Section
7(b).
(p) "Record Date" has the meaning set forth in the recitals
to this Agreement.
(q) "Right" has the meaning set forth in the recitals to
this Agreement.
(r) "Rights Certificate" has the meaning set forth in
Section 3(a).
(s) "Rights Dividend Declaration Date" has the meaning set
forth in the recitals to this Agreement.
(t) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii)(A), (B) or (C) hereof.
(u) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(v) "Section 34(a)(i) Exchange Ratio" has the meaning set
forth in Section 34(a)(i).
(w) "Section 34(a)(ii) Exchange Ratio" has the meaning set
forth in Section 34(a)(ii).
(x) "Stock Acquisition Date" shall mean the first date of
public announcement (including, without limitation, the filing of
any report pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has
become such.
(y) "Subsidiary" shall mean, with reference to any Person,
any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is owned, directly or indirectly, by such Person.
(z) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(aa) "Unit" has the meaning set forth in Section 7(b).
(bb) "Voting Stock" shall mean any shares of capital stock
of the Company entitled to vote generally in the election of
directors.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. With the consent of the
Rights Agent, the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a) Until the earlier
of (i) the Close of Business on the tenth day after the Stock
Acquisition Date, and (ii) the Close of Business on the tenth
Business Day after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is first published or sent
or given within the meaning of Rule 14d-4(a) of the Exchange Act
Regulations or any successor rule, if upon consummation thereof
such Person would be the Beneficial Owner of 20% or more of the
shares of Voting Stock then outstanding (the earlier of (i) and
(ii) above being the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for shares of Company Common Stock
registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which
certificates for shares of Company Common Stock shall be deemed
also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Company
Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first-class, insured, postage prepaid mail, to each
record holder of shares of Company Common Stock as of the Close
of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights
certificates in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of
Company Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights
per share of Company Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) On the Record Date or as promptly as practicable
thereafter, the Company sent a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form attached
hereto as Exhibit B (as amended to summarize the Rights as
amended as of the date hereof, the "Summary of Rights"), by first-
class, postage prepaid mail, to each record holder of shares of
Company Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the
Company.
(c) The number of Rights associated with each share of
Company Common Stock outstanding (including any shares of Company
Common Stock held in treasury) on the date hereof shall be
adjusted so that the number of Rights associated with each share
of Company Common Stock on the date hereof shall equal one.
(d) Rights shall, without any further action, be issued in
respect of all shares of Company Common Stock which are issued
(including any shares of Company Common Stock held in treasury)
after the date hereof but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates
representing such shares of Company Common Stock issued after the
date hereof shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Amended and
Restated Rights Agreement, dated as of December 3, 1999,
(the "Rights Agreement") between Oneida Ltd. and American
Stock Transfer & Trust Company (the "Rights Agent"), the
terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal office of
the stock transfer administration office of the Rights
Agent. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Rights Agent will mail to the holder of
this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to certificates representing shares of Company
Common Stock (whether or not such certificates include the
foregoing legend or have appended to them the Summary of Rights),
until the earlier of (i) the Distribution Date and (ii) the
Expiration Date, the Rights associated with the shares of Company
Common Stock represented by such certificates shall be evidenced
by such certificates alone and registered holders of the shares
of Company Common Stock shall also be the registered holders of
the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the shares of Company Common Stock represented by
such certificates.
Section 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase, assignment and certificate to be
printed on the reverse thereof) shall each be substantially in the form set
forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or any rule or regulation thereunder or with any rule or
regulation of any stock exchange on which the Rights may from
time to time be listed or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders thereof
to purchase such number of Units of Preferred Stock as shall be
set forth therein at the price set forth therein, but the amount
and type of securities, cash or other assets that may be acquired
upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) which becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and
which receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests
in such Acquiring Person (or any such Associate or Affiliate) or
to any Person with whom such Acquiring Person (or such Associate
or Affiliate) has any continuing agreement, arrangement or
understanding regarding either the transferred Rights, shares of
Company Common Stock or the Company or (B) a transfer which the
Company's Board of Directors has determined to be part of a plan,
arrangement or understanding which has as a primary purpose or
effect the avoidance of Section 7(e) hereof shall, upon the
written direction of the Company's Board of Directors, contain
(to the extent feasible), the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) Rights Certificates
shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the countersignature of such Rights Certificates or did not
hold such offices at the date of such Rights Certificates. No
Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on
such Rights Certificate a countersignature duly executed by the
Rights Agent by manual signature of an authorized officer, and
such countersignature upon any Rights Certificate shall be
conclusive evidence, and the only evidence, that such Rights
Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender
of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the name and address of each
holder of the Rights Certificates, the number of Rights evidenced
on its face by each Rights Certificate and the date of each
Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. (a) Subject to the provisions of Sections 4(b),
7(e) and 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business
on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered
holder to purchase a like number of Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other
assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged, together with, in
the event of a transfer, the form of assignment and related
certificate duly completed and executed, at the office of the
Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have
completed and executed the certificate set forth in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or
Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of
Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights
Certificates.
(b) If a Rights Certificate shall be mutilated, lost,
stolen or destroyed, upon request by the registered holder of the
Rights represented thereby and upon payment to the Company and
the Rights Agent of all reasonable expenses incident thereto,
there shall be issued, in exchange for and upon cancellation of
the mutilated Rights Certificate, or in substitution for the
lost, stolen or destroyed Rights Certificate, a new Rights
Certificate, in substantially the form of the prior Rights
Certificate, of like tenor and representing the equivalent number
of Rights, but, in the case of loss, theft or destruction, only
upon receipt of evidence satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights
Certificate and, if requested by the Company or the Rights Agent,
indemnity also satisfactory to it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Prior to the earlier of (i) the Close of
Business on December 3, 2009 (the "Final Expiration Date"), or
(ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the earlier of (i) and (ii) being the
"Expiration Date"), the registered holder of any Rights
Certificate may, subject to the provisions of Sections 7(e) and
9(c) hereof, exercise the Rights evidenced thereby in whole or in
part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase
Price (as hereinafter defined) for the number of Units of
Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which
such surrendered Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a
share (each such one one-thousandth of a share being a "Unit") of
Preferred Stock upon exercise of Rights shall be $115.00 subject
to adjustment from time to time as provided in Sections 11 and
13(a) hereof (such purchase price, as so adjusted, being the
"Purchase Price"), and shall be payable in accordance with
paragraph (c) below.
(c) As promptly as practicable following the occurrence of
the Distribution Date, the Company shall deposit with a
corporation in good standing organized under the laws of the
United States or any State of the United States, which is
authorized under such laws to exercise corporate trust powers and
is subject to supervision or examination by federal or state
authority (such institution being the "Depositary Agent")
certificates representing the shares of Preferred Stock that may
be acquired upon exercise of the Rights and shall cause such
Depositary Agent to enter into an agreement pursuant to which the
Depositary Agent shall issue receipts representing interests in
the shares of Preferred Stock so deposited. Upon receipt of a
Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised,
of the Purchase Price for the Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other
assets, as the case may be) to be purchased thereby as set forth
below and an amount equal to any applicable transfer tax or
evidence satisfactory to the Company of payment of such tax, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) requisition from the Depositary Agent depositary
receipts representing such number of Units of Preferred Stock as
are to be purchased and the Company will direct the Depositary
Agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may
be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. In the event that the Company
is obligated to issue Company Common Stock, other securities of
the Company, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements
necessary so that such Company Common Stock, other securities,
cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. Subject to Section 34,
the payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made in cash or by
certified or bank check or bank draft payable to the order of the
Company.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders
of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom such Acquiring
Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred
Rights, shares of Company Common Stock or the Company or (B) a
transfer which the Company's Board of Directors has determined to
be part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e),
shall be null and void without any further action, and no holder
of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any
holder of Rights or any other Person as a result of its failure
to make any determination under this Section 7(e) or Section 4(b)
with respect to an Acquiring Person or its Affiliates, Associates
or transferees.
(f) Notwithstanding anything in this Agreement or any
Rights Certificate to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any
purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the
certificate following the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of
the Rights represented by such Rights Certificate or Affiliates
or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent
for cancellation or in canceled form, or, if surrendered to the
Rights Agent, shall be canceled by it, and no Rights Certificates
shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Rights Certificates acquired by the
Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company shall at all times prior to the Expiration Date
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock, the number of shares of
Preferred Stock that, as provided is this Agreement, will be
sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an
increase in the aggregate number of shares of Preferred Stock (or
other equity securities of the Company) issuable upon exercise of
all outstanding Rights above the number then reserved, the
Company shall make an appropriate increase in the number of
shares so reserved.
(b) So long as the shares of Preferred Stock to be issued
and delivered upon the exercise of Rights may be listed on any
national securities exchange, the Company shall during the period
from the Distribution Date through the Expiration Date use its
best efforts to cause all securities reserved for such issuance
to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event
and a determination by the Company in accordance with
Section 11(a)(iii) hereof of the consideration to be delivered by
the Company upon exercise of the Rights or, if so required by
law, as soon as practicable following the Distribution Date (such
date being the "Registration Date"), to file a registration
statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the
securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration
Statement to become effective as soon as practicable after such
filing, (iii) to cause the Registration Statement to continue to
be effective (and to include a prospectus complying with the
requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for the
securities covered by the Registration Statement, and (B) the
Expiration Date and (iv) to take as soon as practicable following
the Registration Date such action as may be required to ensure
that any acquisition of securities upon exercise of the Rights
complies with any applicable state securities or "blue sky" laws.
Notwithstanding anything herein or in the Rights Certificates to
the contrary, after the Distribution Date the Company may
instruct the Rights Agent not to deliver Units of Preferred Stock
upon the exercise of Rights (or, following the occurrence of a
Triggering Event, any other securities that may be delivered upon
exercise of Rights) if the Company determines that such delivery
would violate the Securities Act and the rules then in effect
thereunder.
(d) The Company shall take such action as may be necessary
to ensure that all shares of Preferred Stock (and, following the
occurrence of a Triggering Event, any other securities that may
be delivered upon exercise of Rights) shall be, at the time of
delivery of the certificates or depositary receipts for such
securities, duly and validly authorized and issued and fully paid
and non-assessable.
(e) The Company shall pay any documentary, stamp or
transfer tax imposed in connection with the issuance or delivery
of the Rights Certificates or upon the exercise of Rights;
provided, however, the Company shall not be required to pay any
such tax imposed in connection with the issuance or delivery of
Units of Preferred Stock, or any certificates or depositary
receipts for such Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to any person other than the
registered holder of the Rights Certificates evidencing the
Rights surrendered for exercise. The Company shall not be
required to issue or deliver any certificates or depositary
receipts for Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to, or in a name other than that of,
the registered holder upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) is issued
upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Units of Preferred Stock
(or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be
dated, the date on which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon
which the Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) transfer books of the Company
are closed, such Person shall be deemed to have become the record
holder of such securities on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or, following the occurrence of a Triggering Event, other
securities) transfer books of the Company are open; and, provided
further that if delivery of any certificate for Units of
Preferred Stock (or, following the occurrence of a Triggering
Event, any other securities that may be delivered upon exercise
of Rights) is delayed pursuant to Section 9(c) hereof, such
Person shall be deemed to have become the record holder of such
Securities on, and such certificate shall be dated, the date on
which such securities first become deliverable. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a shareholder
of the Company with respect to securities for which the Rights
shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and
kind of securities covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at
the time of the record date of such dividend or of the effective
date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital
stock, as the case may be, issuable on such date upon exercise of
the Rights, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of
this Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger
or combination and Company Common Stock shall remain outstanding,
(2) shall, in one transaction or a series of transactions,
transfer any assets to the Company or to any of its Subsidiaries
in exchange (in whole or in part) for shares of Company Common
Stock, for other equity securities of the Company or any such
Subsidiary, or for securities exercisable for or convertible into
shares of equity securities of the Company or any of its
Subsidiaries (whether Company Common Stock or otherwise) or
otherwise obtain from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of such
equity securities or securities exercisable for or convertible
into such equity securities (other than pursuant to a pro rata
distribution to all holders of Company Common Stock), (3) shall
sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series
of transactions, to, from or with (as the case may be) the
Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity, assets (including securities) on terms and conditions
less favorable to the Company or such Subsidiary or plan than
those that could have been obtained in arm's length negotiations
with an unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a) hereof, (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series
of transactions, to, from or with the Company or any of the
Company's Subsidiaries or any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity
(other than transactions, if any, consistent with those engaged
in, as of the date hereof, by the Company and such Acquiring
Person or such Associate or Affiliate), assets (including
securities) having an aggregate fair market value of more than
$1,000,000, other than pursuant to a transaction set forth in
Section 13(a) hereof, (5) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in
one transaction or a series of transactions, to, from or with the
Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity, any material trademark or material service mark, other
than pursuant to a transaction set forth in Section 13(a) hereof,
(6) shall receive, or any designee, agent or representative of
such Acquiring Person, or any Associate or Affiliate of such
Acquiring Person shall receive any compensation from the Company
or any of its Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (7) shall
receive the benefit, directly or indirectly (except
proportionately as a holder of Company Common Stock or as
required by law or governmental regulation), of any loans,
advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantage provided by the Company or
any of its Subsidiaries or any employee benefit plan maintained
by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person,
other than pursuant to any transaction set forth in Section 13(a)
hereof; or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any
of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries,
other than a transaction or transactions to which the provisions
of Section 13(a) apply (whether or not with or into or otherwise
involving an Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities of
the Company or any of its Subsidiaries which is directly or
indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of
any event described in Section 11(a)(ii)(A)-(C) hereof (a
"Section 11(a)(ii) Event"), proper provision shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of the
number of Units of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, such number of Units of Preferred Stock
as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of Units of Preferred
Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event (such product
thereafter being, for all purposes of this Agreement other than
Section 13 hereof, the "Purchase Price"), and (y) dividing that
product by 50% of the then current market price (determined
pursuant to Section 11(d) hereof) per Unit of Preferred Stock on
the date of such first occurrence (such Units of Preferred Stock
being the "Adjustment Shares").
(iii) In the event that the number of shares of
Preferred Stock which are authorized by the Company's Restated
Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company, by the vote of the Company's Board of
Directors, shall: (A) determine the excess of (1) the value of
the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess being
the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for such Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Company Common Stock or other equity
securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock (such other shares being
"preferred stock equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Company's
Board of Directors, after receiving advice from a nationally
recognized investment banking firm; provided, however, that if
the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty days following
the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, Units of Preferred Stock (to the extent available) and
then, if necessary, cash, which Units of Preferred Stock and/or
cash shall have an aggregate value equal to the Spread. To the
extent that the Company determines that some action need be taken
pursuant to the first sentence of this Section 11(a)(iii), the
Company will provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Unit of
Preferred Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per Unit of Preferred Stock on
the Section 11(a)(ii) Trigger Date and the value of any preferred
stock equivalent shall be deemed to have the same value as the
Preferred Stock on such date.
(b) In case the Company shall fix a record for the issuance
of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date)
shares of Preferred Stock (or shares having substantially the
same rights, privileges and preferences as shares of Preferred
Stock ("equivalent preferred stock")) or securities convertible
into Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the sum of the number of shares of
Preferred Stock outstanding on such record date plus the number
of shares of Preferred Stock which the aggregate offering price
of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of
additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Company's Board of Directors,
whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or
held for the account of the Company or any Subsidiary shall not
be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable
in shares of Preferred Stock, but including any dividend payable
in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date less the fair market value
(as determined in good faith by the Company's Board of Directors,
whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the
holder of the Rights) of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants distributable in respect of a share of Preferred
Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted
to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock or
Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of Company Common Stock or Common
Stock, as the case may be, for the ten consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such
date; provided, however, if prior to the expiration of such
requisite ten Trading Day period the issuer announces either
(A) a dividend or distribution on such shares payable in such
shares or securities convertible into such shares (other than the
Rights), or (B) any subdivision, combination or reclassification
of such shares, then, following the ex-dividend date for such
dividend or the record date for such subdivision, as the case may
be, the "current market price" shall be properly adjusted to take
into account such event. The closing price for each day shall
be, if the shares are listed and admitted to trading on a
national securities exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which such shares are listed or admitted to trading or, if
such shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then is use, or, if on such date such shares
are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in such shares selected by the
Company's Board of Directors. If on any date no market maker is
making a market in such shares, the fair value of such shares on
such date as determined in good faith by the Company's Board of
Directors shall be used. If such shares are not publicly held or
not so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by the
Company's Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean,
if such shares are listed or admitted to trading on any national
securities exchange, a day on which the principal national
securities exchange on which such shares are listed or admitted
to trading is open for the transaction of business or, if such
shares are not so listed or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for Company
Common Stock in clause (i) of this Section 11(d) (other than the
fourth sentence thereof). If the current market price per share
of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1000 (as such amount
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to Company
Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of Company
Common Stock. If neither Company Common Stock nor Preferred
Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock shall mean the fair value
per share as determined in good faith by the Company's Board of
Directors whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. For all purposes of this
Agreement, the "current market price" of a Unit of Preferred
Stock shall be equal to the "current market price" of one share
of Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Company Common Stock or
Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares
of capital stock other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of Units of Preferred Stock (or other securities or
amount of cash or combination thereof) that may be acquired from
time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one-ten thousandth of a Unit)
obtained by (i) multiplying (x) the number of Units of Preferred
Stock covered by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of Units of Preferred
Stock that may be acquired upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Units of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten days later than the date
of such public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Units of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per Unit and the number of Units of Preferred
Stock which was expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the
number of Units of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such fully paid and non-
assessable number of Units of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date of that number of
Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise
over and above the number of Units of Preferred Stock and shares
of other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive
such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Company's Board of
Directors shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash or
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to the holders of its Preferred Stock, shall not be
taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), if (x) at the time or immediately
after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the Person which constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have distributed or otherwise
transferred to its shareholders or other persons holding an
equity interest in such Person Rights previously owned by such
Person or any of its Affiliates and Associates; provided,
however, this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, merge with or
into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not,
except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the date hereof and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Company Common
Stock payable in shares of Company Common Stock, (ii) subdivide
the outstanding shares of Company Common Stock, (iii) combine the
outstanding shares of Company Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
the number of Rights associated with each share of Company Common
Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each
share of Company Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights
associated with each share of Company Common Stock immediately
prior to such event by a fraction the numerator of which shall be
the total number of shares of Company Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11
or Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Company
Common Stock) in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed
to have knowledge of any such adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning. (a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of
Company Common Stock shall be converted into or exchanged for
stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) to any Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), in one or more
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) (any such event being a "Section
13 Event"), then, and in each such case, proper provision shall
be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase
Price, such number of validly authorized and issued, fully paid
and non-assessable shares of Common Stock of the Principal Party
(as such term is hereinafter defined), which shares shall not be
subject to any liens, encumbrances, rights of first refusal,
transfer restrictions or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current
Purchase Price by the number of Units of Preferred Stock for
which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such Units for which a Right
would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in
effect hereunder but for such first occurrence) and (2) dividing
that product (which, following the first occurrence of a Section
13 Event, shall be the "Purchase Price" for all purposes of this
Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of the Common Stock
of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), (A) the Person
that is the issuer of any securities into which shares of Company
Common Stock are converted in such merger or consolidation, or,
if there is more than one such issuer, the issuer of Common Stock
that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no securities are so
issued, the Person that is the other party to such merger or
consolidation, or, if there is more than one such Person, the
Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d)
hereof); and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is
the party receiving the largest portion of the assets or earning
power transferred pursuant to such transaction or transactions,
or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or
if the Person receiving the largest portion of the assets or
earning power cannot be determined, whichever Person the Common
Stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); provided, however,
that in any such case, (1) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange
Act ("Registered Common Stock"), or such Person is not a
corporation, and such Person is a direct or indirect Subsidiary
of another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the
Common Stock of such Person is not Registered Common Stock or
such Person is not a corporation, and such Person is a direct or
indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate
parent entity of such first-mentioned Person; (3) if the Common
Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding,
"Principal Party" shall refer to whichever of such other Persons
is the issuer of the Registered Common Stock having the highest
aggregate current market price (determined pursuant to Section
11(d) hereof); and (4) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and
such Person is directly or indirectly controlled by more than one
Person, and none of such other Persons have Registered Common
Stock outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the corporation having the greatest
shareholders equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is
the entity having the greatest net assets.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as
practicable following the execution of such agreement, a
registration statement under the Securities Act with respect to
the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective
(and to include a prospectus complying with the requirements of
the Securities Act) until the Expiration Date, and (C) as soon as
practicable following the execution of such agreement, take such
action as may be required to ensure that any acquisition of such
Common Stock upon the exercise of the Rights complies with any
applicable state securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any
of its authorized securities or in its Certificate of
Incorporation or By-laws or other instrument governing its
corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as
a consequence of, the consummation of a transaction referred to
in this Section 13, shares of Common Stock of such Principal
Party at less than the then current market price per share
(determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then current market price
(other than to holders of Rights pursuant to this Section 13) or
(ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13; then,
in such event, the Company shall not consummate any such
transaction unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or
amended, or that the authorized securities shall be redeemed, so
that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed
transaction.
(e) The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid
to the Persons to which such fractional Rights would otherwise be
issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the
market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be, if the Rights
are listed or admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Company's Board of Directors. If on any such date no such
market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the
Company's Board of Directors shall be used and such determination
shall be described in a statement filed with the Rights Agent and
the holders of the Rights.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates
which evidence such fractional shares of Preferred Stock (other
than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock). In lieu of such fractional
shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the then current market value of a Unit of Preferred
Stock on the day of exercise determined in accordance with
Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights
Agent pursuant to Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of certificates
representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution
Date, of a certificate representing shares of Company Common
Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of a certificate representing shares of Company Common
Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company
Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Company Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Company
Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or any other Person as a
result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the
holder of the number of shares of Preferred Stock or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, except as provided
in Section 24 hereof, to receive notice of meetings or other
actions affecting shareholders, or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees
to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses, including
reasonable fees and disbursements of its counsel, incurred in
connection with the execution and administration of this
Agreement and the exercise and performance of its duties
hereunder. The Company shall indemnify the Rights Agent for, and
hold it harmless against, any loss, liability or expense,
incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending
against any claim of liability hereunder. The indemnity provided
herein shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it
to be genuine and to have been signed, executed and, where
necessary, verified or acknowledged by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services businesses of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any document or any further act on the part of any of
the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be specified
herein) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent or any action
taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for
the validity of this Agreement or the execution and delivery
hereof (except the due execution and delivery hereof by the
Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
failure by the Company to satisfy conditions contained in this
Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or for the manner, method or
amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after receipt by the Rights Agent of the certificate
describing any such adjustment contemplated by Section 12); nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Preferred Stock or any other securities to be
issued pursuant to this Agreement or any Rights Certificate or as
to whether any shares of Preferred Stock or any other securities
will, when so issued, be validly authorized and issued, fully
paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and
delivered all such further acts, instruments and assurances as
may reasonably be required by the Rights Agent for the
performance by the Rights Agent of its duties under this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer
or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer. Any application by the Rights
Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this
Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such
application (which date shall not be less than five Business Days
after the date any such officer of the Company actually receives
such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct if reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties or in
the exercise of its rights hereunder if the Rights Agent shall
have reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed, not
signed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first
consulting with the Company. If such certificate has been
completed and signed and shows a negative response to clauses 1
and/or 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may
impose on the Rights Agent additional ministerial
responsibilities, but no discretionary responsibilities), the
Rights Agent may assume without further inquiry that the Rights
Certificate is not owned by a person described in Section 4(b) or
Section 7(e) hereof and shall not be charged with any knowledge
to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty days' prior notice in
writing mailed to the Company, and to each transfer agent of the
Preferred Stock and the Company Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty days' prior notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Preferred Stock and the
Company Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then such registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be a corporation organized and doing business under the laws of
the United States or any state of the United States in good
standing. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as a Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Preferred Stock and the Company Common Stock, and mail a notice
thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or the Rights to the
contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by
the Company's Board of Directors to reflect any adjustment or
change made in accordance with the provisions of this Agreement
in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired under the
Rights Certificates. In addition, in connection with the
issuance or sale of shares of Company Common Stock following the
Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Company Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Company's Board of Directors, issue Rights
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that
(i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination. (a) Subject to Section 30 hereof,
the Company may, at its option, by action of the Company's Board of
Directors, at any time prior to the earlier of (i) the Close of Business
on the tenth day following the Stock Acquisition Date, or (ii) the Final
Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, as
such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being the "Redemption Price"),
and the Company may, at its option, by action of the Company's
Board of Directors, pay the Redemption Price either in shares of
Company Common Stock (based on the "current market price", as
defined in Section 11(d) hereof, of the shares of Company Stock
at the time of redemption) or cash.
(b) Immediately upon the action of the Company's Board of
Directors ordering the redemption of the Rights, evidence of
which shall be filed with the Rights Agent, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Company's
Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer
agent for Company Common Stock. Any notice which is mailed in
the manner provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price
will be made.
Section 24. Notice of Certain Events. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to
pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), (ii) to
offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of the
Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), (iv) to
effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 25 hereof, a notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty
(20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares
of Preferred Stock whichever shall be the earlier; provided,
however, no such notice shall be required pursuant to this
Section 24, if any Subsidiary of the Company effects a
consolidation or merger with or into, or effects a sale or other
transfer of assets or earning power to, any other Subsidiary of
the Company.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, the Company
shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be
in writing (including by telex, telegram or cable) and mailed or
sent or delivered, if to the Company, at its address at:
Oneida Ltd.
Oneida, New York 13421
Attention: Secretary
And if to the Rights Agent, at its address at:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attention: Office of the Assignee
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Company Common
Stock) shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date, the Company may and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Company Common Stock. From and after the
Distribution Date, the Company may and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, however, this
Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) subject to Section
30 hereof, a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or
(B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery
of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Company Common Stock.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of
Directors, Etc. For all purposes of this Agreement, any
calculation of the number of shares of Company Common Stock
outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares
of Company Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on
the date hereof. Except as otherwise specifically provided
herein, the Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary
or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board or any member
thereof to any liability to the holders of the Rights. Any
reference herein to action by the Board of Directors of the
Company refers to action by such vote as is required by the
Restated Certificate of Incorporation or By-laws of the Company
or otherwise required by applicable law.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of shares of Company Common Stock) any legal
or equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of shares of Company Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Company's Board of Directors
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement and the Rights shall not then be
redeemable, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the Close
of Business on the tenth Business Day following the date of such
determination by the Company's Board of Directors.
Section 31. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by, and
construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed entirely
in such State.
Section 32. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be
an original, but all of which taken together shall constitute one
and the same instrument.
Section 33. Descriptive Headings. The headings contained in this Agreement
are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 34. Exchange. (a) (i) The Company may, at its option,
at any time after any Person becomes an Acquiring Person, upon
resolution adopted by a majority of the Company's Board of
Directors, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant Section 7(e) hereof) for Units of Preferred
Stock at an exchange ratio of one Unit of Preferred Stock per
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the
"Section 34(a)(i) Exchange Ratio"). Notwithstanding the
foregoing, the Company may not effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or
any of its Subsidiaries, or any trustee or fiduciary with respect
to such plan acting in such capacity), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the shares of Company Common Stock then
outstanding.
(ii) The Company may, at its option, at any time after
any Person becomes an Acquiring Person, upon resolution adopted
by a majority of the Company's Board of Directors, exchange all
or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to
Section 7(e) hereof) for Units of Preferred Stock at an exchange
ratio specified in the following sentence, as appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof. Subject to such
adjustment, each Right may be exchanged for that number of Units
of Preferred Stock obtained by dividing the Adjustment Spread (as
defined below) by the then current market price (determined
pursuant to Section 11(d) hereof) per Unit of Preferred Stock on
the earlier of (i) the date on which any Person becomes an
Acquiring Person and (ii) the date on which a tender or exchange
offer by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity) is first published
or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of
20%or more of the shares of Company Common Stock then outstanding
(such exchange ratio being the "Section 34(a)(ii) Exchange
Ratio"). The "Adjustment Spread" shall equal (x) the aggregate
market price on the date of such event of the number of
Adjustment Shares determined pursuant to Section 11(a)(ii)
hereof, minus (y) the Purchase Price. Notwithstanding the
foregoing, the Company may not effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or
any of its Subsidiaries, or any trustee or fiduciary with respect
to such plan acting in such capacity), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the shares of the Company Common Stock
then outstanding.
(b) Immediately upon the determination of the Company's
Board of Directors to exchange any Rights pursuant to
Section 34(a) and without any further action or notice, the right
to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of Units of Preferred Stock equal to the number of such
Rights held by such holder multiplied by the Section 34(a)(i)
Exchange Ratio or Section 34(a)(ii) Exchange Ratio, as the case
may be. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such
exchange. Each such notice of exchange shall state the method by
which the exchange of Units of Preferred Stock for Rights shall
be effected and, in the event of any partial exchange, the number
of Rights that shall be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights that have become void pursuant to Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that the number of shares of Preferred
Stock that are authorized by the Company's Restated Certificate
of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit any exchange of Rights as contemplated in
accordance with this Section 34, the Company shall take all such
action as may be necessary to authorize additional shares of
Preferred Stock for issuance upon exchange of the Rights or make
adequate provision to substitute (1) cash, (2) Company Common
Stock or other equity securities of the Company, (3) debt
securities of the Company, (4) other assets or (5) any
combination of the foregoing, having an aggregate value equal to
the Adjustment Spread, where such aggregate value has been
determined by the Company's Board of Directors.
(d) The Company shall not be required to issue fractions of
Units of Preferred Stock or to distribute certificates that
evidence fractional Units. In lieu of fractional Units, the
Company may pay to the registered holders of Rights Certificates
at the time such Rights are exchanged as herein provided an
amount in cash equal to the same fraction of the current market
price (determined pursuant to Section 11(d) hereof) of one Unit
of Preferred Stock.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the date first above
written.
ONEIDA LTD.
By: /s/ PETER J. KALLET
Name: Peter J. Kallet
Title: President & Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ PAULA CAROPPOLI
Name: Paula Caroppoli
Title: Vice President
<PAGE>
Exhibit A
[Form of Rights Certificates]
Certificate No. _____________ ____________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED
IN THE RIGHTS AGREEMENT). THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Rights Certificate
ONEIDA LTD.
This certifies that ________________, or registered assigns, is
the registered holder of the number of Rights set forth above,
each of which entitles the registered holder thereof, subject to
the terms and conditions of the Amended and Restated Rights
Agreement dated as of December 3, 1999 (the "Rights Agreement")
between Oneida Ltd., a New York corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York corporation,
as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent under the Rights Agreement), to purchase
from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to the
Expiration Date (as such term is defined in the Rights Agreement)
at the office of the Rights Agent or its successor designated for
such purpose, one one-thousandth of a fully paid nonassessable
share of Series A Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), of the Company at the Purchase Price
initially of $115.00 per one one-thousandth share (each such one
one-thousandth of a share being a "Unit") of Preferred Stock,
upon presentation and surrender of this Rights Certificate with
the Election to Purchase and related certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and
the number of Units which may be purchased upon exercise thereof)
set forth above, and the Purchase Price per Unit set forth above
shall be subject to adjustment in certain events as provided in
the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement) or, under certain
circumstances described in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, such Rights
shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the
rights evidenced hereby may entitle the registered holder thereof
to purchase capital stock of an entity other than the Company or
receive cash or other assets, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms and conditions
are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for
a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the principal office of
the Company and are available from the Rights Agent or the
Company upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date
evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be
exercised in part, the registered holder shall be entitled to
receive, upon surrender hereof, another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company
under certain circumstances at its option at a redemption price
of $.01 per Right, payable at the Company's option in cash or in
common stock of the Company, subject to adjustment in certain
events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of Preferred Stock or of any other securities which may at
any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ______________, __.
ATTEST: ONEIDA LTD.
By: ______________________ By: ________________________
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
By: _____________________________
Authorized Signature
(Form of Reverse Side of Rights Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfers unto __________________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ____________________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _________________, __
_________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not
being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate of an
Acquiring Person.
Dated: _________________, __
__________________________
Signature
Signature Guaranteed:
- -----------------------------------------------------------------
- -----------------------------------------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend
to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Rights Certificate.)
TO: ONEIDA LTD.
The undersigned hereby irrevocably elects to exercise
_________ Rights represented by this Rights Certificate to
purchase the Units of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other Person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such
Units be issued in the name of and delivered to:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Please insert social security or other identifying number:
________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Please insert social security or other identifying number:
______________________________
Dated: ________________, ____
___________________________
Signature
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not beneficially owned by an Acquiring Person
or an Affiliate or an Associate thereof (as defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire
the Rights evidenced by this Rights Certificate from any Person
who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated: _________________, __
__________________________
Signature
Signature Guaranteed:
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
NOTICE
The signature in the foregoing Election to Purchase and
Certificate must conform to the name as written upon the face of
this Rights Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend
to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.
<PAGE>
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On December 13, 1989, the Board of Directors of Oneida Ltd.
(the "Company") declared a distribution of one right for each
outstanding share of Common Stock, par value $1.00 per share (the
"Company Common Stock"), to shareholders of record at the close
of business on December 26, 1989 and for each share of Company
Common Stock issued (including shares distributed from Treasury)
by the Company thereafter and prior to the Distribution Date.
Each right entitled the registered holder, subject to the terms
of a Rights Agreement executed by the Company and Chase Lincoln
First Bank, N.A., as rights agent, dated as of December 13, 1989,
to purchase from the Company one one-thousandth of a share (a
"Unit") of Series A Preferred Stock, par value $1.00 per share
(the "Preferred Stock").
Pursuant to authorization of the Board of Directors of the
Company at a meeting properly noticed and convened on October 27,
1999, the Company and American Stock Transfer & Trust Company, as
Rights Agent, executed an Amended and Restated Rights Agreement
dated as of December 3, 1999 (the "Rights Agreement") to, among
other things, (a) provide that each share of Company Common Stock
outstanding at the close of business on December 3, 1999 shall
entitle the holder thereof to one Right (each a "Right") to
purchase a Unit at a Purchase Price of $115.00 per Unit, subject
to adjustment, (b) extend the Final Expiration Date, and (c)
include provisions to permit the Company, at its option, to
exchange the outstanding and exercisable Rights for Units of
Preferred Stock. The Purchase Price is payable in cash or by
certified or bank check or money order payable to the order of
the Company. The description and terms of the Rights are set
forth in the Rights Agreement.
Copies of the Rights Agreement and the Certificate of
Amendment of Restated Certificate of Incorporation (the
"Certificate of Amendment") for the Preferred Stock have been
filed with the Securities and Exchange Commission as exhibits to
a Registration Statement on Form 8-A, as amended. Copies of the
Rights Agreement and the Certificate of Amendment are available
free of charge from the Company. This summary description of the
Rights and the Preferred Stock does not purport to be complete
and is qualified in its entirety by reference to all the
provisions of the Rights Agreement and the Certificate of
Amendment, including the definitions therein of certain terms,
which Rights Agreement and Certificate of Amendment are
incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates
representing shares of outstanding Company Common Stock, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Company Common Stock and the Distribution
Date will occur upon the earlier of (i) 10 days following a
public announcement (the date of such announcement being the
"Stock Acquisition Date") that a person or group of affiliated
persons (other than the Company, any Subsidiary of the Company or
any employee benefit plan of the Company or such Subsidiary) has
acquired, obtained the right to acquire, or otherwise obtained
beneficial ownership of 20% or more of the then outstanding
shares of Voting Stock, or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 20% or more of
the then outstanding shares of Voting Stock. Until the
Distribution Date, (i) the Rights will be evidenced by Company
Common Stock certificates and will be transferred with and only
with such Company Common Stock certificates, (ii) new Company
Common Stock certificates issued after December 3, 1999 (also
including shares distributed from Treasury) will contain a
notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates representing
outstanding Company Common Stock will also constitute the
transfer of the Rights associated with the Company Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on the tenth anniversary
of the Rights Agreement unless earlier redeemed by the Company as
described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company
Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will
represent the Rights.
In the event that (i) the Company is the surviving
corporation in a merger with an Acquiring Person and shares of
Company Common Stock shall remain outstanding, (ii) a Person
becomes an Acquiring Person, (iii) an Acquiring Person engages in
one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an
Acquiring Persons, an event occurs which results in such
Acquiring Person's ownership interest being increased by more
than 1% (e.g., by means of a reverse stock split or
recapitalization), then in each such case, each holder of a Right
will thereafter have the right to receive, upon exercise, Units
of Preferred Stock having a value equal to two times the exercise
price of the Right. The exercise price is the Purchase Price
multiplied by the number of Units of Preferred Stock issuable
upon exercise of a Right prior to the events described in this
paragraph. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this Paragraph, all
Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction and the Company is not the
surviving corporation, (ii) any Person consolidates or merges
with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any
other Person or (iii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as described
above) shall thereafter have the right to receive, upon exercise,
common stock of the other Person to such transaction having a
value equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of
Preferred Stock issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the
Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock, or (iii)
upon the distribution to the holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exception, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. The Company is not required to issue
fractional Units. In lieu thereof, an adjustment in cash may be
made based on the market price of the Preferred Stock prior to
the date of exercise.
In the event any Person or group becomes an Acquiring
Person, the Company=s Board of Directors may, at its option,
require all or any portion of the outstanding Rights to be
exchanged for (i) one Unit of Preferred Stock or (ii) Units of
Preferred Stock in an amount equal to (x) the difference between
the aggregate market price of the number of Units to be received
upon a Section 11(a)(ii) Event and the Purchase Price, divided by
(y) the market price per Unit of Preferred Stock. However any
rights held by an Acquiring Person would not be entitled to
participate in this exchange.
At any time until ten days following the Stock Acquisition
Date, the Company may, by action of the Company's Board of
Directors, redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"), payable, at the
election of the Company's Board of Directors, in cash or shares
of Company Common Stock. Immediately upon the action of the
Company's Board of Directors ordering the redemption of the
Rights, the Rights will terminate and the only right of the
holders of the Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Units of Preferred Stock (or other
consideration).
Any of the provisions of the Rights Agreement may be amended
at any time prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be
amended in order to cure any ambiguity, defect or inconsistency,
to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust
the time period governing redemption shall be made at such time
as the Rights are not redeemable.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon
exercise of the Rights will be nonredeemable and subordinate to
any other shares of preferred stock that may be issued by the
Company.
Each Unit of Preferred Stock will have a minimum
preferential quarterly dividend rate of $0.12 per Unit but will,
in any event, be entitled to a dividend equal to the per share
dividend declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of
Preferred Stock will receive a preferred liquidation payment
equal to the greater of $0.01 per Unit or the per share amount
paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting
together with the Company Common Stock. The holders of Units of
Preferred Stock, voting as a separate class, shall be entitled to
a dividend equal to the per share dividend declared on the
Company Common Stock.
In the event of liquidation, the holder of a Unit of
Preferred Stock will receive a preferred liquidation payment
equal to the greater of $0.01 per Unit or the per share amount
paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting
together with the Company Common Stock. The holders of Units of
Preferred Stock, voting as a separate class, shall be entitled to
elect two directors if dividends on the Preferred Stock are in
arrears for six fiscal quarters.
In the event of any merger, consolidation or other
transaction in which shares of the Company Common Stock are
exchanged, each Unit of Preferred Stock will be entitled to
receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and
consolidations, are protected by customary antidilution
provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the economic value of one Unit of
Preferred Stock that may be acquired upon the exercise of each
Right should approximate the economic value of one share of the
Company Common Stock.
<PAGE>
Exhibit C
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ONEIDA LTD.
____________________________________________________
Under Section 805 of the
Business Corporation Law
_____________________________________________________
We, William D. Matthews and M. Jack Rudnick, respectively
the Chairman of the Board and the Secretary of Oneida Ltd., DO
HEREBY CERTIFY:
1. The name of the corporation is ONEIDA LTD. (hereinafter
called the "Corporation"). The name under which it was
originally incorporated was Oneida Community, Limited.
2. The Certificate of Incorporation of the Corporation was
filed by the Department of State on the 20th day of November,
1880, and a Restated Certificate of Incorporation of the
Corporation was filed on the 19th day of April, 1984.
3. The Certificate of Incorporation of the Corporation is
amended by the addition of the following provisions stating the
number, designation, relative rights, preferences, and
limitations of the shares of a series of preferred stock of the
Corporation designated as "Series A Preferred Stock."
4. A new subdivision (C) is added to Article FOURTH
thereof, which subdivision (C) reads in its entirety as follows:
"(C) Series A Preferred Stock. The designation and
amount, relative rights, preferences and limitations of the
shares of Series A Preferred Stock, of a par value of $1.00 each,
as fixed by the Board of Directors, are as follows:
(1) Designation and Amount. The shares of such
series shall be designated as "Series A Preferred Stock" and the
number of shares constituting such series shall be 150,000. Such
number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less
than that of the shares then outstanding plus the number of
shares issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by
the Company.
(2) Dividends and Distributions. (a) Subject to
the prior and superior rights of the holders of any shares of any
other series of preferred stock or any other preferred stock of
the Corporation ranking prior to and superior to the Series A
Preferred Stock with respect to dividends, each holder of one one-
thousandth (1/1000) of a share (a "Unit") of Series A Preferred
Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that
purpose, (i) quarterly dividends payable in cash on the 1st day
of March, June, September and December in each year (each such
date being a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first
issuance of such Unit of Series A Preferred Stock, in an amount
per Unit (rounded to the nearest cent) equal to the greater of
(A) $0.12 or (B) subject to the provisions 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 provisions for adjustment hereinafter set forth,
quarterly distributions (payable in kind) on each Quarterly
Dividend Payment Date in an amount per Unit equal to the
aggregate per share amount of all non-cash dividends or other
distributions (other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock,
by reclassification or otherwise) declared on shares of Common
Stock since the immediately preceding Quarterly Dividend Payment
Date, or with respect to the first Quarterly Dividend Payment
Date, since the first issuance of a Unit of Series A Preferred
Stock. In the event that the Corporation shall at any time after
December 13, 1989 (the "Rights Declaration Date") (i) declare any
dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common
Stock or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case the amount to
which the holder of a Unit of Series A Preferred Stock was
entitled immediately prior to such event pursuant to the
preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which shall be the number of share
common Stock that are outstanding immediately after such event
and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend
or distribution on Units of Series A Preferred Stock as provided
in paragraph (a) above immediately after it declares a dividend
or distribution on the shares of Common Stock (other than a
dividend payable in shares of Common Stock); provided, however,
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $0.12 per Unit on the Series
A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and
shall be cumulative on each outstanding Unit of Series A
Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of such Unit of Series A Preferred
Stock, unless the date of issuance of such Unit is prior to the
record date for the first Quarterly Dividend Payment Date, in
which case, dividends on such Unit shall begin to accrue from the
date of issuance of each 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 or shareholders owning in
the aggregate not less than 25% of the total number of Units of
Series A Preferred Stock outstanding may request, the calling of
a special meeting of the holders of Units of Series A Preferred
Stock, which meeting shall thereupon be called by the Secretary
of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Units of Series A Preferred Stock are
entitled to vote pursuant to this subparagraph (c)(iii) shall be
given to each holder of record of Units of Series A Preferred
Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 10 days and
not later than 50 days after such order or request or in default
of the calling of such meeting within 50 days after such order or
request, such meeting may be called on similar notice by any
shareholder or shareholders owning in the aggregate not less than
25% of the total number of outstanding Units of Series A
Preferred Stock. Notwithstanding the provisions of this
paragraph (c)(iii), no such special meeting shall be called
during the 60 days immediately preceding the date fixed for the
next annual meeting of the shareholders.
(iv) During any default period, the
holders of shares of Common Stock and Units of Series A Preferred
Stock, and other classes or series of stock of the Corporation,
if applicable, shall continue to be entitled to elect all the
Directors until the holders of Units of Series A Preferred Stock
shall have exercised their right to elect two Directors voting as
a separate class, after the exercise of which right (x) the
Directors so elected by the holders of Units of Series A
Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration
of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in subparagraph (c)(ii) of this
Section 3) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of
capital stock which elected the Director whose office shall have
become vacant. References in this paragraph (c) to Directors
elected by the holders of a particular class of capital stock
shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of
a default period, (x) the right of the holders of Units of Series
A Preferred Stock as a separate class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of
Units of Series A Preferred Stock as a separate class shall
terminate, and (z) the number of Directors shall be such number
as may be provided for in the Certificate or by-laws irrespective
of any increase made pursuant to the provisions of subparagraph
(c)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the
Certificate or by-laws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
Directors.
(vi) The provisions of this subparagraph
(c) shall govern the election of Directors by holders of Units of
Series A Preferred Stock during any default period
notwithstanding any provisions of the Certificate or by-laws to
the contrary.
(d) Except as set forth herein, holders of
Units of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of shares of Common
Stock as set forth herein) for taking any corporate action.
(4) Certain Restrictions. (a) Whenever
quarterly dividends or other dividends or distributions payable
on Units of Series A Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on outstanding Units
of Series A Preferred Stock shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make
any other distributions on, or redeem or purchase or otherwise
acquire for consideration any junior shares;
(ii) declare or pay dividends on or make
any other distributions on any parity shares, except dividends
paid ratably on Units of Series A Preferred Stock and shares of
all such parity shares on which dividends are payable or in
arrears in proportion to the total amounts to which the holders
of such Units and all such shares are then entitled;
(iii) redeem or purchase or
otherwise acquire for consideration shares of any parity shares,
provided, however, that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity shares in
exchange for any junior shares;
(iv) purchase or otherwise acquire for
consideration any Units of Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such Unit.
(b) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
for consideration any shares of the Corporation unless the
Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
(5) Reacquired Shares. Any Units of Series B
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such Units
shall, upon their cancellation, become authorized but unissued
preferred stock and may reissued as part of a new series of
preferred stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
(6) Liquidation, Dissolution or Winding Up. (a)
Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (i)
to the holders of shares of junior shares unless the holders of
Units of Series A Preferred Stock shall have received, subject to
adjustment as hereinafter provided in paragraph (b), the greater
of either (x) $0.01 per Unit plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not earned
or declared, to the date of such payment, or (y) the amount equal
to the aggregate per share amount to be distributed to holders of
shares of Stock, or (ii) to the holders of shares of parity
shares, unless simultaneously therewith distributions are made
ratably on Units of Series A Preferred Stock and all other shares
of such parity shares in proportion to the total amounts to which
the holders of Units of Series A Preferred Stock are entitled
under clause (i)(x) of this sentence and to which the holders of
such parity shares are entitled, in each case upon such
liquidation, dissolution or winding up.
(b) In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case the aggregate
amount to which holders of Units of Series A Preferred Stock were
entitled immediately prior to such event pursuant to clause
(i)(y) of paragraph (a) of this Section 6 shall be adjusted by
multiplying such amount by a fraction the numerator of which
shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of
which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(7) Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or converted into other shares or
securities, cash and/or any other property, then in any such case
Units of Series A Preferred Stock shall at the same time be
similarly exchanged for or converted into an amount per Unit
(subject to the provision for adjustment hereinafter set forth)
equal to the aggregate amount of shares, securities, cash and/or
any other property (payable in kind), as the case may be, into
which or for which such 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."
5. The manner in which the foregoing amendment of the
Certificate of Incorporation was authorized is as follows: The
Board of Directors of the Corporation authorized the amendment
under the authority vested in said Board under the provisions of
the Certificate of Incorporation of the Company and of Section
502 of the Business Corporation Law.
IN WITNESS WHEREOF, we have subscribed this document on the
date hereof and do hereby affirm, under the penalties of perjury,
that the statements contained herein have been examined by us and
are true and correct.
DATE: December 13, 1989
By: /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman of the Board
By: /s/ M. Jack Rudnick
Name: M. Jack Rudnick
Title: Secretary
<PAGE>
EXHIBIT 10(a)(i)
EMPLOYMENT AGREEMENT
This AGREEMENT, made as of March 12, 1999 by and between
ONEIDA LTD., a New York corporation (the "Employer") and ALLAN
CONSEUR (the "Executive").
W I T N E S S E T H:
WHEREAS, the Employer has entered into an Asset Purchase
Agreement with EUGENE AND ROBERT, INC., formerly known as THC
SYSTEMS, INC., (the "Seller"), Eugene Goldberg and Robert
Goldberg (collectively, the "Shareholders"), dated as of August
__, 1996 (the "Asset Purchase Agreement");
WHEREAS, the Seller is engaged in the business of importing
and distributing chinaware, flatware, hollowware and related
products to a diversified base of customers, including hotels,
restaurants, distributors, airlines and institutions (the
"Business");
WHEREAS, subject to the terms and conditions contained in
the Asset Purchase Agreement, the Employer will buy and the
Seller and the Shareholders will sell the Business;
WHEREAS, the Executive and the Employer's wholly-owned
subsidiary, THC SYSTEMS, INC., formerly known as ONEIDA
COMMUNITY CHINA, INC., entered into an Employment Agreement with
dated as of August __, 1996 (the "Initial Employment Agreement")
whereby the Employer retained the Executive as the President of
THC SYSTEMS, INC., formerly known as ONEIDA COMMUNITY CHINA,
INC.; and
WHEREAS, the Employer and the Executive wish to replace the
Initial Employment Agreement with this Employment Agreement
effective as of the date first written above.
NOW, THEREFORE, in consideration of the foregoing, the
mutual promises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Employer and the Executive agree as follows:
1. Employment and Duties.
(a) The Employer hereby employs the Executive as the
President of its THC Systems, Inc. subsidiary on the terms set
forth herein, and the Executive hereby accepts such employment.
The Executive shall have such duties as are set forth in the
Certificate of Incorporation and the By-Laws of the Employer and
THC Systems, Inc. and such additional duties as are commensurate
with the Executive's position. The Executive shall devote
substantially all his business time, attention, skill and
efforts to the faithful performance of his duties hereunder and
shall not accept employment elsewhere while employed hereunder
during the Term (as defined in Section 2). The Executive shall
report exclusively to the Employer's Chief Executive Officer
The Executive agrees to serve as (i) a member of the Board of
Directors of THC Systems, Inc. (the "Board") or of the board of
directors of any Affiliate (as defined in Section 6(f)) if asked
to do so by the Employer or the Board and if elected by the
shareholders of the Employer or such Affiliate, as the case may
be, and (ii) an officer of Oneida Ltd. or any other Affiliate if
directed to do so by the Employer. The Executive may (a) with
the prior approval of the Employer, serve on corporate, civic or
charitable boards or committees; (b) deliver lectures, fulfill
speaking engagements or teach at educational institutions; and
(c) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive's responsibilities hereunder. The Executive shall at
all times conduct himself in such a manner as not to prejudice
the reputation of the Employer in the fields of business in
which it is engaged or with the public at large.
(b) The Employer hereby agrees that it shall not require
the Executive (i) to relocate his principal place of business
more than twenty-five (25) miles from its present location in
Melville, New York, except if such relocation is made not
earlier than two years after the Effective Date to Oneida Ltd.'s
offices at 41 Madison Avenue, New York, New York, and (ii) to
make in excess of four (4) trips to the Far East annually during
the Term (as defined in Section 2).
2. Term.
The term of this Agreement shall commence as of the closing
of the acquisition of the Business pursuant to the Asset Purchase
Agreement (the "Effective Date") and shall continue in effect
through and including January 31, 2003. As used hereinafter,
"Term" shall mean the original and extended term of this
Agreement.
3. Compensation.
During the Term, the Executive shall be entitled to the
following compensation for his services to the Employer and any
Affiliate:
(a) Base Salary. The Executive's base salary (the "Base
Salary") shall be $364,000 per annum, payable in accordance with
Oneida Ltd.'s normal payroll practices. The Base Salary shall be
reviewed at least annually by the Board. The Base Salary level
and any increases thereon shall not be decreased during the
Term.
(b) Annual Bonus. In addition to the Base Salary, for
each fiscal year during the Term, the Executive shall be
eligible to receive an annual bonus (the "Annual Bonus").
During the Term, the minimum Annual Bonus payable to the
Executive under this Section shall be $150,000.00 per fiscal
year.
(c) Benefit Plans. In addition to the Base Salary and
Annual Bonus payable pursuant to this Agreement, the Executive
shall be entitled to participate in all incentive, savings and
retirement plans and welfare benefit plans of Oneida Ltd.
applicable to other key executives of Oneida Ltd. and its
subsidiaries, including, but not limited to, the Oneida Ltd.
401(k) Plan and the Oneida Ltd. defined benefit pension plan,
and shall be entitled to vacation and fringe benefits in
accordance with the policies of Oneida Ltd. applicable to other
key executives. In addition, the Executive shall be (i)
entitled to a monthly automobile allowance of $1,000; (ii)
recommended to the Compensation Committee of the Board of
Directors of Oneida Ltd. for awards under Oneida Ltd.'s 1987
Stock Option Plan, in accordance with its terms as in effect
from time to time; and (iii) eligible to participate in Oneida
Ltd.'s non-qualified deferred compensation plan for its
executives, in accordance with its terms as in effect from time
to time.
(d) Expenses. The Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses, including
travel and entertainment expenses, incurred by him in the
performance of his duties for the Employer, which expenses shall
be reimbursed to him in accordance with the policies and
procedures of Oneida Ltd. that are applicable to key executives
of Oneida Ltd. and its subsidiaries at the time such expenses
are incurred.
(e) Vacation. The Executive shall be entitled to annual
vacation in accordance with the policies periodically
established by Oneida Ltd. for similarly situated executives,
which vacation shall in no event be less that four (4) weeks per
year.
4. Termination of Employment.
(a) Termination for Cause; Resignation. The Employer may
terminate the Executive's employment hereunder for Cause (as
defined in Section 6(a)). If the Executive's employment is
terminated by the Employer for Cause, or by the Executive at any
time prior to the expiration of the Term, the Employer shall be
under no obligation to make any additional payments of Base
Salary, Annual Bonus or any other benefits specified in Section
3 for any periods after the Date of Termination (as defined in
Section 6(c)), except for payment of any Base Salary or Annual
Bonus earned prior to the Date of Termination but not yet paid
to the Executive or any payment from any employee benefit plan
or the continuation of coverage under any insurance program that
may be required by law. Furthermore, the Executive shall not be
entitled to the payment of any pro rata amount of any Annual
Bonus for the calendar year during which the Date of Termination
occurs.
(b) Termination without Cause. If the Executive's
employment is terminated by the Employer without Cause, prior to
the expiration of the Term, the Executive shall be entitled to a
severance benefit (the "Severance Benefit") equal to the Base
Salary he would have received during the remainder of the Term
(the "Severance Period"). The Severance Benefit shall be
payable in accordance with the normal payroll policy of the
Employer in effect as of the Date of Termination. The Executive
shall also be entitled to continue to receive coverage under
Oneida Ltd.'s medical and life insurance programs through the
end of the Severance Period at the same cost to the Executive as
applied prior to his termination of employment; provided,
however, that such entitlement shall cease as of the time that
the Executive obtains alternate full-time employment.
(c) Death Before End of Term. If the Executive dies prior
to the expiration of the Term, the Employer shall be under no
obligation to make additional payments to the Executive's estate
after the Date of Termination except for any compensation earned
prior to the Date of Termination but not yet paid and for the
pro rata portion of any Annual Bonus that would have been paid
to the Executive had he survived and been employed by the
Employer until the last day of the year of his death. Such
Annual Bonus payment shall be made at the time such bonus
payments would normally have been made for such year. The
Employer shall also continue to provide any benefits to the
Executive's survivors as required by law.
(d) Disability. The Employer may terminate the
Executive's employment because of Permanent Disability (as
defined in Section 6(d)) prior to the expiration of the Term.
If the Executive's employment is terminated because of Permanent
Disability, the Executive shall be entitled to continue to
receive payment of Base Salary through the end of the Term,
offset by any payment to the Executive on account of disability
from any employer or government-sponsored disability insurance
plan through the end of the Term. The Employer shall also
continue to provide any benefits to the Executive required by
law or the terms of any benefit plan.
(e) Retirement. The Executive's employment may be
terminated by the Executive or by the Employer on account of
Retirement (as defined in Section 6(e)). The Executive shall
not be entitled to any further payments of compensation or other
benefits provided under Section 3 after the Date of Termination,
except for any retirement benefit payments due to the Executive
from any retirement plan sponsored by Oneida Ltd.
(f) Change of Control. The Executive may terminate this
Agreement and his employment with the Employer on account of a
Change of Control of the Employer (as defined in Section 6(g)).
A termination by the Executive under this Section 4(f) shall be
effective thirty (30) days after the Employer receives a Notice
of Termination and shall relieve both the Employer and the
Executive of all rights and duties under this Agreement as of
the effective date of the termination, except that on or before
the effective date of the termination the Employer shall pay to
the Executive all amounts that are otherwise due under this
Agreement through the effective date of the termination,
including but not limited to all Base Salary, the value of all
accrued but unused vacation, the pro-rata amount of the Annual
Bonus and the auto allowance.
In the event that the Employer or a successor-in-interest
to the Employer terminates this Agreement following a Change of
Control, the Employer shall pay to the Executive a lump sum
equal to all amounts that the Executive would otherwise have
been entitled to under this Agreement through January 31, 2003,
including but not limited to all Base Salary, Annual Bonuses and
auto allowance. This paragraph shall be in addition to and not
in lieu of any other rights or remedies the Executive might have
against the Employer or any successor-in-interest to the
Employer at law or in equity.
(g) Notice of Termination Required. No termination of
employment by the Executive or by the Employer pursuant to this
Section 4 shall be effective unless the terminating party shall
have delivered a Notice of Termination (as defined in Section
6(b)) to the other party.
5. Non-Competition and Trade Secrets.
(a) No Competing Employment. While employed by the
Employer and for so long as the Executive shall be receiving
payments of Base Salary hereunder, or, if longer, during the
twelve-month period following the Date of Termination (the
"Restricted Period"), the Executive shall not, without the prior
written consent of the Employer, directly or indirectly, own an
interest in, manage, operate, join, control, lend money or
render financial or other assistance to or participate in or be
connected with, as an officer, employee, partner, stockholder,
consultant or otherwise, any individual, partnership, firm,
corporation or other business organization or entity that, at
such time, is engaged in the business of manufacturing,
producing or supplying Tabletop Products or related services to
customers in the foodservice or consumer products industry
worldwide. Notwithstanding the foregoing, this Section 5(a)
shall not apply to the Executive in the event that (i.) he
properly exercises his option to terminate this Agreement under
Section 6(f), above, or (ii.) the Executive's employment is
terminated following a Change in Control.
(b) No Interference. During the Restricted Period, the
Executive shall not, whether for his own account or for the
account of any other individual, partnership, firm, corporation
or other business organization (other than the Employer or an
Affiliate), intentionally solicit, endeavor to entice away from
the Employer or an Affiliate, or otherwise interfere with the
relationship of the Employer or an Affiliate with, any person
who is employed by the Employer or an Affiliate or any person or
entity who is, or was within the then most recent twenty-four-
month period, a customer or client of the Employer's or an
Affiliate's products.
(c) Secrecy. The Executive recognizes that the services
to be performed by him hereunder are special, unique and
extraordinary in that, by reason of his employment with the
Employer, he may acquire confidential information and trade
secrets concerning the operation of the Employer or an
Affiliate, the use or disclosure of which could cause the
Employer or an Affiliate substantial loss and damages which
could not be readily calculated and for which no remedy at law
would be adequate. Accordingly, the Executive covenants and
agrees with the Employer that he will not at any time (whether
during or after the Term), except in the performance of his
obligations to the Employer hereunder or with the prior written
consent of the Board, directly or indirectly, disclose any
secret or confidential information that he may learn or has
learned by reason of his association with the Employer, or any
predecessors to its business, or use any such information to the
detriment of the Employer. The term "confidential information"
includes, without limitation, information not previously
disclosed to the public or to the trade by the Employer's
management with respect to the Employer's products,
manufacturing processes, facilities and methods, research and
development, trade secrets and other intellectual property,
systems, patents and patent applications, procedures, manuals,
confidential reports, product price lists, customer lists,
financial information (including the revenues, costs or profits
associated with any of the Employer's products), business plans,
prospects or opportunities.
(d) Exclusive Property. The Executive confirms that all
confidential information is the exclusive property of the
Employer. All business records, papers and documents kept or
made by the Executive relating to the business of the Employer
or an Affiliate shall be and remain the property of the Employer
or the Affiliate, respectively, during the Term and at all times
thereafter. Upon the termination of his employment with the
Employer or upon the request of the Employer at any time, the
Executive shall promptly deliver to the Employer, and shall
retain no copies of, any written materials, records and
documents made by the Executive or coming into his possession
concerning the business or affairs of the Employer or an
Affiliate other than personal notes or correspondence of the
Executive not containing proprietary information relating to
such business or affairs.
(e) Stock Ownership. Nothing in this Agreement shall
prohibit the Executive from acquiring or holding any issue of
stock or securities of any company that has any securities
listed on a national securities exchange or quoted on the
automated quotation system of the National Association of
Securities Dealers, Inc., provided that, at any time during the
Restricted Period, the Executive and members of his immediate
family do not own more than five (5) percent of any voting
securities of any such company engaging in the type of business
described in Section 5(a) above.
(f) Injunctive Relief. The Executive acknowledges that a
breach of any of the covenants contained in this Section 5 may
result in material irreparable injury to the Employer for which
there is no adequate remedy at law, that it will not be possible
to measure damages for such injuries precisely and that, in the
event of such a breach, any payments remaining under the terms
of this Agreement shall cease and the Employer shall be entitled
to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining the Executive from engaging in
activities prohibited by this Section 5 or such other relief as
may be required to specifically enforce any of the covenants in
this Section 5. The Executive agrees to and hereby does submit
to in personam jurisdiction before each and every such court for
that purpose.
6. Definitions.
As used in this Agreement, the following terms shall have
the following meanings:
(a) Cause. Each of the following shall constitute Cause:
(i) the willful and continued failure by the
Executive to perform his duties or to comply with the policies
of the Employer or Oneida Ltd. (other than any such failure
resulting from the termination of the Executive's employment for
death, Retirement, Permanent Disability or Good Reason), after
written notice of such failure has been given to the Executive
and the Executive has had a reasonable period of time to correct
such failure;
(ii) the willful commission by the Executive of acts
that are dishonest and demonstrably or materially injurious to
the Employer, monetarily or otherwise;
(iii) the conviction of the Executive for a
felony; or
(iv) a material breach of any of the covenants set
forth in this Agreement, after written notice of such breach has
been given to the Executive and the Executive has had a
reasonable period of time to cure such breach.
(b) Notice of Termination. A "Notice of Termination"
shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(c) Date of Termination. "Date of Termination" shall mean
(A) if the Executive's employment is terminated for Permanent
Disability, thirty (30) days after a Notice of Termination is
given (provided that the Executive shall not have returned to
the full-time performance of the Executive's duties during such
thirty (30) day period), and (B) for any other reason, the date
specified in the Notice of Termination (which, in the case of a
termination without Cause shall not be less than thirty (30)
days, and in the case of a termination by the Executive shall
not be less than thirty (30) nor more than sixty (60) days,
respectively, from the date such Notice of Termination is
given).
(d) Permanent Disability. "Permanent Disability" shall
have the meaning attributable thereto in the applicable
disability plans of the Employer.
(e) Retirement. "Retirement" shall have the meaning
attributable thereto in the applicable retirement plans of the
Employer.
(f) Affiliate. "Affiliate" shall include any company
controlling, controlled by or under common control with the
Employer.
(g.) Change of Control. "Change of Control" shall be
deemed to have occurred if any of the following have occurred:
(i) any individual, partnership, firm,
corporation, association, trust, unincorporated
organization or other entity or person, or any
syndicate or group deemed to be a person under Section
14(d)(2) of the Exchange Act, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the
General Rules and Regulations 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 entitled
to vote in the election of directors of the Company;
(ii) during any period of two consecutive years
(not including any period prior to the execution of
this Agreement), individuals who at the beginning of
such period constituted the Board and any new
directors, whose election by the Board or nomination
for election by the Company's stockholders was approved
by a vote of at least three-fourths (3/4ths) 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 (the "Incumbent Directors"), cease for any
reason to constitute a majority thereof;
(iii) there occurs a reorganization, merger,
consolidation or other corporate transaction involving
the Company (a "Transaction"), in each case with
respect to which the stockholders of the Company
immediately prior to such Transaction do not,
immediately after the Transaction, own more than 50% of
the combined voting power of the Company or other
corporation resulting from such Transaction;
(iv) all or substantially all of the assets of the
Company are sold, liquidated or distributed; or
(v) there is a "change in control" or a "change in
the effective control" of the Company within the meaning
of Section 280G of the Code and the Regulations.
7. Binding Agreement.
This Agreement shall be binding on, and inure to the
benefit of, the Employer and its successors and assigns. This
Agreement shall be binding on the Executive. This Agreement
shall also inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount would
still be payable hereunder if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee or, if there is
no such designee, to the Executive's estate.
8. Notice.
Any notice hereunder by either party to the other shall be
given in writing by personal delivery, telex, telecopy or
certified mail, return receipt requested, to the applicable
address first set forth below (or such other address as may from
time to time be designated by notice by any party hereto for
such purpose):
To the Employer: Oneida Ltd.
Oneida, New York 13421
Attention: Peter J. Kallet
With a copy to: Oneida Ltd.
Legal Department
Oneida, New York 13421
Attention: Catherine H. Suttmeier
To the Executive: Mr. Allan Conseur
8 Hawkins Drive
Northport, New York 11768
Notice shall be deemed given, if by personal delivery, on
the date of such delivery or, if by telex or telecopy, on the
business day following receipt of answer back or telecopy
confirmation or, if by certified mail, on the date shown on the
applicable return receipt.
9. Amendment and Waiver.
No provision of this Agreement may be amended, modified,
waived or discharged unless such amendment, modification, waiver
or discharge is agreed to in writing and signed by the Executive
and such officer as may be specifically designated by the
Employer. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time.
10. Merger of Prior Negotiations.
This Agreement sets forth all of the promises, agreements,
conditions and understandings between the parties hereto
respecting the subject matter hereof and supersedes all prior
negotiations, conversations, discussions, correspondence,
memoranda and agreements between the parties concerning such
subject matter.
11. Partial Invalidity.
If the final determination of a court of competent
jurisdiction declares, after the expiration of the time within
which judicial review (if permitted) of such determination may
be perfected, that any term or provision hereof is invalid or
unenforceable, (a) the remaining terms and provisions hereof
shall be unimpaired and (b) the invalid or unenforceable term or
provision shall be deemed replaced by a term or provision that
is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.
12. Governing Law.
This Agreement is to be governed by and interpreted in
accordance with the laws of the State of New York.
13. Counterparts.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Statements.
During the Restricted Period, the Executive and the
Employer agree to refrain from making any comments or statements
to the press, the employees of the Employer or any Affiliate or
any individual or entity with whom the Employer or any Affiliate
has a business relationship which would be likely to adversely
affect (a) the conduct of the business of the Employer or any
Affiliate or the business reputation of the Employer or any
Affiliate or any of their employees, representatives or members
of their boards of directors, in the case of comments made by
the Executive or (b) the Executive's future employment or
personal or professional reputation, in the case of comments
made by the Employer.
15. Arbitration.
Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration
in New York in accordance with the commercial rules of the
American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
ONEIDA LTD.
By: /s/ PETER J. KALLET
Name: Peter J. Kallet
Title: President & Chief Executive Officer
Date:
ALLAN CONSEUR
By: /s/ ALLAN H. CONSUER
Date:
<PAGE>
EXHIBIT 10(a)(ii)
November 15, 1999
Mr. Allan H. Conseur
23 Gillette Lane
Cazenovia, NY 13035
Dear Mr.Conseur:
Oneida, Ltd., a New York corporation (the "Company"),
considers it essential to the best interests of its stockholders
to take reasonable steps to retain key management personnel.
Further, the Board of Directors of the Company (the "Board")
recognizes that the uncertainty and questions which might arise
among management in the context of a Change of Control (as
described below) of the Company could result in the departure or
distraction of management personnel to the detriment of the
Company and its stockholders. Thus, in order to induce you to
remain in the employ of the Company, the Company has previously
entered into a letter agreement with you dated February 25, 1998
(the "Prior Agreement") that provides you with certain severance
benefits set forth therein in the event that your employment with
the Company is terminated subsequent to a change in control (as
defined in the Prior Agreement).
The Board has determined, therefore, that appropriate steps
should be taken to reinforce and encourage the continued
attention and dedication of members of the management of the
Company and its subsidiaries (collectively, the "Companies")
including yourself, to their assigned duties without distraction
in the face of potentially disturbing circumstances arising from
any possible Change of Control.
In order to induce you to remain in the employ of the
Company, the Company has determined to amend and restate the
terms of your Prior Agreement by entering into this letter
agreement (the "Agreement") which addresses the terms and
conditions of your employment in the event of a Change of
Control. Capitalized words which are not otherwise defined
herein shall have the meanings assigned to such words in Section
10 of this Agreement.
1. Severance Payments. In the event that your employment with
the Companies should terminate during a Change of Control Period
as a result of an Involuntary Termination, the Company shall pay
you the following amounts in one lump sum cash payment, within
ten days following your Date of Termination:
(a) the full amount of any earned but unpaid Base Salary
through the Date of Termination at the rate in effect at the time
of the Notice of Termination;
(b) a payment (calculated on the basis of your Base Salary)
for all unused vacation time which you may have accrued as of the
Date of Termination;
(c) a pro rata portion of your annual bonus for the year in
which your Involuntary Termination occurs, calculated on the
basis of your target bonus for that year and on the assumption
that all performance targets have been or will be achieved; and
(d) an amount equal to three times the sum of (i) your Base
Salary and (ii) your Annual Bonus.
2. Benefit Continuation. In the event that your employment with
the Companies should terminate during the Change of Control
Period as a result of an Involuntary Termination, you and your
then eligible dependents shall continue to be covered by and
participate in the medical, dental, health, life, accident and
fringe benefit plans of the Companies in which you participated
immediately prior to the Date of Termination through the end of
the Benefit Continuation Period. You shall be eligible to
participate in such plans on the same terms and conditions as are
applicable to similarly situated executives of the Company.
3. Supplemental Pension. In the event your employment with the
Companies should terminate during the Change of Control Period as
a result of an Involuntary Termination, the Company shall pay you
in a lump sum payment in cash, within ten days following your
Date of Termination, equal to the actuarial equivalent of the
excess of (y) the retirement pension (determined as a straight
life annuity commencing at age 65) which you would have accrued
under the terms of the Pension Plan and any other pension benefit
program (without regard to any amendment to such Pension Plan or
other pension benefit program made subsequent to the Change of
Control Date and on or prior to the Date of Termination, which
amendment adversely affects in any manner the computation of
pension benefits thereunder), determined as if you were fully
vested thereunder and had accumulated (after the Date of
Termination) thirty-six additional months of service credit
thereunder at your highest annual rate of compensation (the
"Compensation Rate") during the twelve month period immediately
preceding the Date of Termination (but in no event shall you be
deemed to have accumulated additional months of service credit
after your sixty-fifth (65th) birthday), over (z) the retirement
pension (determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the
provisions of the Pension Plan. For purposes of clause (y)
above, the Compensation Rate shall be deemed to include amounts
payable pursuant to Section 1 hereof, and amounts payable
pursuant to Section 1 hereof shall be deemed to represent thirty-
six (36) months of compensation (or such lesser number of months
of compensation to your sixty-fifth (65th) birthday) for purposes
of determining benefits under the Pension Plan. For purposes of
this Section, "actuarial equivalent" shall be determined using
the same methods and assumptions utilized under the Pension Plan
immediately prior to the Change of Control Date.
4. Employee Benefit Plans.
(a) Other Benefit Plans. In the event your employment with
the Companies should terminate during the Change of Control
Period as a result of an Involuntary Termination, you shall be
entitled to receive all benefits payable to you under the
Company's benefit and pension plans, not otherwise specifically
provided for in this Agreement.
(b) Rabbi Trust. In the event of a Change of Control, the
Company shall transfer on the Change of Control Date sufficient
cash in U.S. dollars to the Oneida Ltd. Benefits Protection Trust
(the "Rabbi Trust") so that the aggregate assets held in the
Rabbi Trust are sufficient at all times to pay or provide for any
payments required to be made to you pursuant to the terms of the
Oneida Ltd. Deferred Compensation Plan for Key Employees. The
trust agreement for the Rabbi Trust shall be in the form attached
hereto as Exhibit A.
5. Legal and Attorney's Fees. The Company will promptly pay or
reimburse you for any legal fees and expenses incurred by you in
connection with the enforcement by you of your rights and
entitlements under this Agreement; provided, however, that the
Company shall have no obligation to reimburse you for any fees or
expenses hereunder which are based on a claim by you which a
court having jurisdiction over such claim determines to be
frivolous.
6. Date and Notice of Termination. Any termination of your
employment by the Company or by you during the Change of Control
Period shall be communicated by a notice of termination to the
other party hereto (the "Notice of Termination"). The Notice of
Termination shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.
The date of your termination of employment with the Companies
(the "Date of Termination") shall be determined as follows: (i)
if your employment is terminated for Disability, thirty days
after a Notice of Termination is given (provided that your shall
not have returned to the full-time performance of your duties
during such thirty day period), (ii) if your employment is
terminated by the Company in an Involuntary Termination, five
days after the date the Notice of Termination is received by you
and (iii) if your employment is terminated by the Company for
Cause, the later of the date specified in the Notice of
Termination or twenty days following the date such notice is
received by you. The Date of Termination for a resignation of
employment other than for Good Reason shall be the date set forth
in the applicable notice.
7. No Mitigation or Offset. You shall not be required to
mitigate the amount of any payment provided for herein by seeking
other employment or otherwise, nor shall the amount of any
payment or benefit provided for herein be reduced by any
compensation earned by you as the result of employment by another
employer or by pension benefits paid by the Company or another
employer after the Date of Termination or otherwise.
8. Gross Up Payments. If any amount payable to you under this
Agreement and under any other plan or program of the Company (a
"Payment"), is subject to the excise tax imposed under Section
4999 of the Code, or any similar federal or state law (an "Excise
Tax"), the Company shall pay to you an additional amount (the
"Gross Up Amount") in cash, which is equal to (i) the amount of
the Excise Tax, plus (ii) the aggregate amount of any interest,
penalties, fines or additions to any tax which is imposed in
connection with the imposition of such Excise Tax, plus (iii) all
income, excise and other applicable taxes imposed on you under
the laws of any federal, state or local government or taxing
authority by reason of the payments required under clause (i) and
clause (ii) and this clause (iii).
(a) Tax Rate. For purposes of determining the Gross Up
Amount, you shall be deemed to be taxed at the highest marginal
rate under all applicable local, state, federal and foreign
income tax laws for the year in which the Gross Up Amount is
paid. The Gross Up Amount payable with respect to an Excise Tax
shall be paid by the Company coincident with the Payment with
respect to which such Excise Tax relates.
(b) Notice. All calculations under this Section 8 shall be
made initially by the Company and the Company shall provide
prompt written notice thereof to you to enable you to timely file
all applicable tax returns. Upon your request, the Company shall
provide you with sufficient tax and compensation data to enable
you or your tax advisor to independently make the calculations
described in subparagraph (a) above and the Company shall
reimburse you for reasonable fees and expenses incurred for any
such verification.
(c) Tax Determination. If you give written notice to the
Company of any objection to the results of the Company's
calculations within 60 days of your receipt of written notice
thereof, the dispute shall be referred for determination to the
independent auditors of the Company (the "Accounting Firm"). The
Company shall pay all fees and expenses of such Accounting Firm.
Pending such determination by the Accounting Firm, the Company
shall pay you the Gross Up Amount as determined by it in good
faith. The Company shall pay you any additional amount
determined by the Accounting Firm to be due under this Section 8
(together with interest thereon at a rate equal to 120% of the
federal short-term rate determined under Section 1274(d) of the
Code) promptly after such determination.
(d) Determination Binding. The determination by the
Accounting Firm shall be conclusive and binding upon all parties
unless the Internal Revenue Service, a court of competent
jurisdiction, or such other duly empowered governmental body or
agency (a "Tax Authority") determines that you owe a greater or
lesser amount of Excise Tax with respect to any Payment than the
amount determined by the Accounting Firm.
(e) Claims. If a Taxing Authority makes a claim against
you which, if successful, would require the Company to make a
payment under this Section 8, you agree to contest the claim on
request of the Company subject to the following conditions:
(i) You shall notify the Company of any such claim
within ten days of becoming aware thereof. In the event that the
Company desires the claim to be contested, it shall promptly (but
in no event more than 30 days after the notice from you or such
shorter time as the Taxing Authority may specify for responding
to such claim) request you to contest the claim. You shall not
make any payment of any tax which is the subject of the claim
before you have given the notice or during the 30-day period
thereafter unless you receive written instructions from the
Company to make such payment together with an advance of funds
sufficient to make the requested payment plus any amounts payable
under this Section 8 determined as if such advance were an Excise
Tax, in which you will act promptly in accordance with such
instructions.
(ii) If the Company so requests, you will contest the
claim by either paying the tax claimed and suing for a refund in
the appropriate court or contesting the claim in the United
States Tax Court or other appropriate court, as directed by the
Company; provided, however, that any request by the Company for
you to pay the tax shall be accompanied by an advance from the
Company to you of funds sufficient to make the requested payment
plus any amounts under this Section 8 determined as if such
advance were an Excise Tax. If directed by the Company in
writing you will take all action necessary to compromise or
settle the claim, but in no event will you compromise or settle
the claim or cease to contest the claim without the written
consent of the Company; provided, however, that you may take any
such action if you waive in writing your right to a payment under
this Section 8 for any amounts payable in connection with such
claim. You agree to cooperate in good faith with the Company in
contesting the claim and to comply with any reasonable request
from the Company concerning the contest of the claim, including
the pursuit of administrative remedies, the appropriate forum for
any judicial proceedings, and the legal basis for contesting the
claim. Upon request of the Company, you shall take appropriate
appeals of any judgment or decision that would require the
Company to make a payment under this Section 8. Provided that
you are in compliance with the provisions of this subparagraph,
the Company shall be liable for and indemnify you against any
loss in connection with, and all costs and expenses, including
attorneys' fees, which may be incurred as a result of, contesting
the claim, and shall provide to you within 30 days after each
written request therefor by you cash advances or reimbursement
for all such costs and expenses actually incurred or reasonably
expected to be incurred by you as a result of contesting the
claim.
(f) Payments. Should a Tax Authority ultimately determine
that an additional Excise Tax is owed, then the Company shall pay
an additional Gross Up Amount to you in a manner consistent with
this Section 8 with respect to any additional Excise Tax and any
assessed interest, fines, or penalties. If any Excise Tax as
calculated by the Company or the Accounting Firm, as the case may
be, is finally determined by a Tax Authority to exceed the
amount required to be paid under applicable law, then you shall
repay such excess to the Company within 30 days of such
determination; provided, that such repayment shall be reduced by
the amount of any taxes paid by you on such excess which is not
offset by the tax benefit attributable to the repayment.
9. Successors; Binding Agreement.
(a) Assumption by Successor. The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and to
agree to perform its obligations under this Agreement in the same
manner and to the same extent that the Company would be required
to perform such obligations if no such succession had taken
place; provided, however, that no such assumption shall relieve
the Company of its obligations hereunder. As used herein, the
"Company" shall mean the Company as hereinbefore defined and any
successor to its business or assets as aforesaid which assumes
and agrees to perform its obligations by operation of law or
otherwise.
(b) Enforceability; Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of you (and your personal
representatives and heirs) and the Company and any organization
which succeeds to substantially all of the business or assets of
the Company, whether by means of merger, consolidation,
acquisition of all or substantially all of the assets of the
Company or otherwise, including, without limitation, as a result
of a Change of Control or by operation of law. This Agreement
shall inure to the benefit of and be enforceable by your personal
or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die
while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee or other designee or, if
there is no such designee, to your estate.
10. Definitions. For purposes of this Agreement, the following
capitalized terms have the meanings set forth below:
"Annual Bonus" shall mean the greater of (i) your target
cash bonus opportunity for the year in which the Date of
Termination occurs and (ii) the highest cash bonus paid to you
during the three-year period ending on the Date of Termination;
provided, however, that any annual bonus described on clauses (i)
or (ii) shall be annualized for any year during which you were
employed by any of the Companies for less than a full year.
"Base Salary" shall mean the greater of (i) the highest
annual rate of base salary paid to you by any of the Companies at
any time in the twenty-four month period ending on the Date of
Termination and (ii) the highest annual rate of base salary paid
to you by the Companies at any time during the twenty-four month
period ending immediately prior to the Change of Control Date.
Your annual rate of base salary shall include any portion of your
salary which you elect or are required to defer to one or more
employee benefit plans or arrangements contributed to, sponsored
or maintained by the Companies.
"Benefit Continuation Period" means the period beginning on
the Date of Termination and ending on the last day of the month
in which occurs the earlier of (i) the third anniversary of the
Date of Termination and (ii) the date on which you elect coverage
for you and your covered dependents under substantially
comparable benefit plans of a subsequent employer.
"Cause" shall mean (a) your willfully engaging in illegal
conduct or gross misconduct which is materially and demonstrably
injurious to the Company or (b) your willful and continued
failure substantially to perform your duties with the Company
(other than any such failure resulting from your incapacity due
to physical or mental illness or any such actual or anticipated
failure resulting from your resignation for Good Reason) after a
written demand for substantial performance is delivered to you by
the Board within sixty days of such event, which demand
specifically identifies the manner in which the Board believes
that you have not substantially performed your duties, and which
performance is not substantially corrected by you within twenty
days of receipt of such demand (or in the event that such event
or condition is not susceptible to correction within such twenty
day period, you have not taken all reasonable steps within such
twenty day period to correct such event or condition as promptly
as practicable thereafter). For purposes of the previous
sentence, no act or failure to act on your part shall be deemed
"willful" if it is done, or omitted to be done, by you in good
faith or with a reasonable belief that it was in the best
interest of the Company. Notwithstanding the foregoing, you
shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than
three-fourths of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable
notice to you and an opportunity for you, together with your
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board you were guilty of conduct set forth
above in clause (a) or (b) above and specifying the particulars
thereof in detail.
"Change of Control" shall mean a change in control of the
Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, whether or not the Company is
then subject to such reporting requirement; provided, however,
that, anything in this Agreement to the contrary notwithstanding,
a Change of Control shall be deemed to have occurred if:
(a) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity
or person, or any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the General Rules
and Regulations 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 entitled to vote in the election of directors of the
Company;
(b) during any period of two consecutive years (not
including any period prior to the effective date of this
Agreement), individuals who at the beginning of such period
constituted the Board and any new directors, whose election by
the Board or nomination for election by the Company's
stockholders was approved by a vote of at least three-fourths of
the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof;
(c) there occurs a reorganization, merger,
consolidation or other corporate transaction involving the
Company (a "Business Combination"), in each case with respect to
which the stockholders of the Company immediately prior to such
transaction do not, immediately after such transaction, own
directly or indirectly more than 50% of the combined voting power
of the Company or other corporation resulting from such Business
Combination in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
voting securities of the Company;
(d) all or substantially all of the assets of the
Company are sold, liquidated or distributed; or
(e) there occurs a transaction that constitutes a
change in the (i) ownership of the Company, (ii) effective
control of the Company or (iii) effective ownership of a
substantial portion of the assets of the Company, as determined
pursuant to Code Section 280G and the regulations promulgated
thereunder.
"Change of Control Date" shall mean the date on which a
Change of Control occurs.
"Change of Control Period" shall mean the five-year period
commencing on the Change of Control Date; provided, however, that
if your employment with the Company and its subsidiaries
terminates prior to the Change of Control Date but on or after a
Potential Change of Control Date, and it is reasonably
demonstrated that your termination of employment (a) was at the
request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (b) otherwise arose
in connection with or in anticipation of a Change of Control,
then the "Change of Control Period" shall mean, as applied to
you, the five-year period beginning on the date immediately prior
to the date of your termination of employment.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor provisions thereto.
"Date of Termination" has the meaning assigned thereto in
Section 6.
"Disability" shall mean (a) your incapacity due to physical
or mental illness which causes you to be absent from the
full-time performance of your duties with the Company for six
consecutive months and (b) your failure to return to full-time
performance of your duties for the Company within 30 days after
written Notice of Termination due to Disability is given to you.
Any question as to the existence a Disability upon which you and
the Company cannot agree shall be determined by a qualified
independent physician selected by you (or, if your are unable to
make such selection, such selection shall be made by any adult
member of your immediate family), and approved by the Company.
The determination of such physician made in writing to the
Company and to you shall be final and conclusive for all purposes
hereunder.
"ESOP" shall mean the Oneida Ltd. Employee Stock Ownership
Plan, as amended from time to time.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, and any successor
provisions thereto.
"Good Reason" shall mean the occurrence of any of the
following during the Change of Control Period:
(a) A meaningful and detrimental alteration in your
position, titles, or nature or status of responsibilities
(including reporting responsibilities) from those in effect
immediately prior to the Change of Control Date;
(b) A reduction by the Company in your annual base
salary as in effect immediately prior to the Change of Control
Date or as the same may be increased from time to time
thereafter; a failure by the Company to increase your salary at a
rate commensurate with that of other key executives of the
Company; a failure by the Company to increase your salary on an
annual basis to reflect the percentage increase in the cost of
living (as determined in accordance with such statistics or
indices as the Board shall reasonably consider appropriate for
such purposes); or a reduction in your target annual bonus
(expressed as a percentage of base salary) below the target in
effect for you prior to the Change of Control Date;
(c) The relocation of the office of the Company where
you are employed at the time of the Change of Control (the "CIC
Location") to a location which in your good faith assessment is
an area not generally considered conducive to maintaining the
executive offices of a company such as the Company because of
hazardous or undesirable conditions, including, without
limitation, a high crime rate or inadequate facilities, or to a
location which is more than 25 miles away from the CIC Location
or the Company's requiring you to be based more than 25 miles
away from the CIC Location (except for required travel on the
Company's business to an extent substantially consistent with
your customary business travel obligations in the ordinary course
of business prior to the Change of Control Date);
(d) The failure by the Company to continue to provide
you with benefits at least as favorable in the aggregate to those
enjoyed by you under the Company's pension, ESOP, savings, life
insurance, medical, health and accident, disability, and fringe
benefit plans and arrangements in which you were participating
immediately prior to the Change of Control Date; or the failure
by the Company to provide you with the number of paid vacation
days to which you are entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation
policy in effect immediately prior to the Change of Control;
(e) The failure of the Company to obtain an agreement
from any successor to assume and agree to perform the Company's
obligations under this Agreement, as contemplated in Section 9(a)
hereof;
(f) Any termination of your employment which is not
effected pursuant to the terms of this Agreement; or
(g) A material breach by the Company of the provisions
of this Agreement.
"Involuntary Termination" shall mean (a) your termination of
employment by the Companies during the Change of Control Period
other than for Cause or Disability or (b) your resignation of
employment with the Companies during the Change of Control Period
for Good Reason.
"Notice of Termination" has the meaning assigned thereto in
Section 6.
"Pension Plan" shall mean the Retirement Plan for Employees
of Oneida Ltd., as amended from time to time.
"Potential Change of Control" shall mean the earliest to
occur of (a) the date on which the Company executes an agreement
or letter of intent, the consummation of the transactions
described in which would result in the occurrence of a Change of
Control, (b) the date on which the Board approves a transaction
or series of transactions, the consummation of which would result
in a Change of Control, (c) any "person" or "group" within the
meaning of Section 13(d) and 14(d)(2) of the Exchange 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 or (d) the
date on which a tender offer for the Company's voting stock is
publicly announced, the completion of which would result in a
Change of Control.
"Potential Change of Control Date" shall mean the date on
which a Potential Change of Control occurs.
11. Notice. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the Board of
Directors, Oneida Ltd., Oneida, NY 13421, with a copy to the
General Counsel of the Company, or to you at the address set
forth on the first page of this Agreement or to such other
address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
12. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this
Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing. No
waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made
by either party which are not expressly set forth in this
Agreement and this Agreement shall supersede all prior
agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, with respect to
the subject matter hereof.
(b) Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
(c) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
(d) No Contract of Employment. Nothing in this Agreement
shall be construed as giving you any right to be retained in the
employ of the Company or shall affect the terms and conditions of
your employment with the Company prior to the commencement of the
Change of Control Period.
(e) Withholding. Amounts paid to you hereunder shall be
subject to all applicable federal, state and local withholding
taxes.
(f) Source of Payments. All payments provided under this
Agreement shall be paid in cash from the general funds of the
Company, and no special or separate fund shall be established,
and no other segregation of assets made, to assure payment. You
will have no right, title or interest whatsoever in or to any
investments which the Company may make to aid it in meeting its
obligations hereunder. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right
shall be no greater than the right of an unsecured creditor of
the Company.
(g) Headings. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect
the rights of the parties to this Agreement.
If this letter sets forth our agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed
copy of this letter which will then constitute our agreement on
this subject.
Sincerely,
ONEIDA LTD.
By: /s/ PETER J. KALLET
Peter J. Kallet
President & Chief Executive Officer
Agreed to as of this 7th day of January, 2000
/s/ ALLAN H. CONSEUR
Allan H. Conseur
<PAGE>
EXHIBIT A
Trust Agreement
This Agreement, dated as of this 1st day of January,
2000 (the "Effective Date"), by and between ONEIDA LTD., a
corporation organized under the laws of the State of New York
(the "Company") and The Chase Manhattan Bank, a banking
corporation organized under the laws of New York (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has adopted the Oneida Ltd.
Deferred Compensation Plan for Key Employees, restated effective
August 1, 1997, as may be amended or modified from time to time
(the "Deferred Compensation Plan") in substantially the form of
attached Exhibit A;
WHEREAS, the Deferred Compensation Plan contemplates
the establishment by the Company of deferred compensation
accounts on its books and records (the "Accounts") to record
amounts voluntarily deferred by the eligible employees pursuant
to Paragraph 2 of the Deferred Compensation Plan (the
"Participants") and to periodically credit such Accounts with the
Investment Rate (as defined in the Deferred Compensation Plan)
specified in paragraph 3 of the Deferred Compensation Plan and
further contemplates that the Company will provide for an
additional amount to be credited to each Participant's Account
upon a Change of Control;
WHEREAS, the Company now desires to establish an
irrevocable trust (the "Trust") and to make contributions of cash
and other assets to the Trust to fund its obligations to the
Participants under the Deferred Compensation Plan (the
"Obligation") on and after a Change of Control (as defined
herein); and
WHEREAS, the Trust assets shall be held in the Trust
subject to the claims of the Company's creditors in the event of
the Company's Insolvency (as hereinafter defined) until paid to
the Participants in accordance with the terms of the Deferred
Compensation Plan;
WHEREAS, the Company intends that the existence of the
Trust will not alter the characterization of the Deferred
Compensation Plan as "unfunded" and will not be construed to
provide taxable income to any Participant prior to the actual
payment of benefits thereunder;
NOW, THEREFORE, the parties do hereby establish the
Trust and agree that the Trust shall be comprised, held and
disposed of as follows:
Section 1. Establishment of Trust.
(a) The Company hereby deposits with the Trustee IN
TRUST the amount of $1,000. which shall become the principal of
the Trust be held, administered and disposed by the Trustee as
provided in the Trust Agreement. Upon the date that a Change of
Control occurs, the Company shall deposit with the Trustee IN
TRUST an additional amount of cash equal to the total value of
the Accounts held under the Deferred Compensation Plan, such
amounts to be held, administered and disposed by the Trustee as
provided in this Trust Agreement. The Trustee hereby accepts the
Trust established under this Trust Agreement on the terms and
subject to the provisions set forth herein, and it agrees to
discharge and perform fully and faithfully all of the duties and
obligations imposed upon it under this Trust Agreement. The
Trust shall be known as the "Oneida Ltd. Benefits Protection
Trust".
(b) The Trust hereby established is irrevocable by the
Company.
(c) The Trust is intended to be a grantor trust, of
which the Company is the grantor, within the meaning of subpart
E, part I, subchapter J, chapter 1, subtitle A of the U.S.
Internal Revenue Code of 1986, as amended (the "Code") and shall
be construed accordingly.
(d) The principal of the Trust, and any earnings
thereon, shall be held separate and apart from other funds of the
Company and shall be used exclusively for the purpose of
satisfying the Company's Obligation and the Company's obligations
to its general creditors as hereinafter set forth. The
Participant and his or her beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Deferred Compensation
Plan and this Trust Agreement shall be mere unsecured contractual
rights of the Participant and his or her beneficiaries against
the Company. Any assets held by the Trust will be subject to the
claims of the Company's general creditors under U.S. federal and
state law in the event of Insolvency.
(e) The Company, in its sole discretion, may at any
time, or from time to time, make additional deposits of cash to
be held IN TRUST by the Trustee to augment the principal to be
held, administered and disposed of by the Trustee as provided in
this Trust Agreement. Neither the Trustee, the Participants nor
any beneficiary of the Participants shall have any right to
compel such additional deposits.
(f) Within 30 days following each anniversary of the
Effective Date, the Company shall provide the Trustee with a
statement of the Obligation, taking into account all deferrals
credited to the Accounts through such anniversary date, interest
on the Account balance, all payments to the Participants and
their beneficiaries and any forfeitures. As of each such
anniversary date, and subject to Section 6 below, the Trustee
shall determine the fair market value of the assets of the Trust
and communicate the results of such valuation of the Company. In
the event that, as of each applicable anniversary date on or
after the date that a Change of Control occurs, the fair market
value of the assets of the Trust is less than the Obligation as
of such date, the Company shall deposit with the Trustee IN TRUST
a supplemental amount (the "Supplemental Contribution") of cash
equal to the difference between the Obligation and the fair
market value of the assets of the Trust on such anniversary date.
The Supplemental Contribution shall be made within 45 days
following the applicable anniversary date. Supplemental
Contributions (and all income, gains and losses attributable
thereto) shall be accounted for separately by the Trustee in a
supplemental account (the "Supplemental Account"). On each
subsequent anniversary after the Company has made a Supplemental
Contribution (a "Subsequent Anniversary Date"), the Obligation
shall be determined, and the assets of the Trust shall be valued
(including, for this purpose, any assets attributable to
Supplemental Contributions).
(g) For purposes of this Trust Agreement, a "Change in
Control" shall mean a change in control of the Company of a
nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is then subject to such reporting
requirement; provided, however, that, anything in this Trust
Agreement to the contrary notwithstanding, a Change in Control
shall be deemed to have occurred if:
(A) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other
entity or person, or any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act is or
becomes the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations 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 entitled to vote in
the election of directors of the Company;
(B) during any period of two consecutive years (not
including any period prior to the effective date of this
Trust Agreement), individuals who at the beginning of such
period constituted the Board of Directors (the "Board") and
any new directors, whose election by the Board or nomination
for election by the Company's stockholders was approved by a
vote of at least three-fourths of the directors then still
in office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority thereof;
(C) there occurs a reorganization, merger,
consolidation or other corporate transaction involving the
Company (a "Business Combination"), in each case with
respect to which the stockholders of the Company immediately
prior to such transaction do not, immediately after such
transaction, own directly or indirectly more than 50% of the
combined voting power of the Company or other corporation
resulting from such Business Combination in substantially
the same proportions as their ownership, immediately prior
to such Business Combination, of the voting securities of
the Company;
(D) all or substantially all of the assets of the
Company are sold, liquidated or distributed; or
(E) there occurs a transaction that constitutes a
change in the (i) ownership of the Company, (ii) effective
control of the Company or (iii) effective ownership of a
substantial portion of the assets of the Company, as
determined pursuant to Code Section 280G and the regulations
promulgated thereunder.
Section 2. Payments to Participant or His or Her
Beneficiaries.
(a) Upon the occurrence of a Change of Control, the
Company shall deliver to the Trustee a payment schedule (the
"Payment Schedule") that indicates the amounts payable to the
Participants and the times at which such amounts are payable.
Except as otherwise provided herein, the Trustee shall make
payments to the Participant and his or her beneficiaries in
accordance with such Payment Schedule and Section 2(b) below.
The Trustee shall make provision for the reporting and
withholding of any taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the
Deferred Compensation Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by the Company.
(b) Subject to the provisions of Section 2(c), 2(d)
and 2(e), upon a Change of Control, the Trustee shall pay the
amounts due to the Participant and his or her beneficiaries in
respect of the Company's Obligation upon receipt of either (i) a
written instruction from the Company authorizing such payment or
(ii) an affidavit from the Participant, in substantially the form
of Exhibit B hereto (an "Affidavit"), attesting to the amount of
such payment and setting forth the circumstances giving rise to
the obligation to make such payment under the Deferred
Compensation Plan. The Trustee shall be authorized to rely on
the Payment Schedule, written instructions from the Company or
any such Affidavit, and in the event of a conflict between the
written instructions from the Company and the Affidavit, the
provisions of the Affidavit shall be controlling.
(c) To the extent that (i) the Trustee is notified in
writing by the Company that the Company's Obligation has been
paid in full and (ii) the notice from the Company is confirmed in
writing by the Participant (which confirmation may be waived by
the Trustee if the Trustee determines in good faith after
reasonable inquiry that such confirmation is being unreasonably
withheld by the Participant or cannot be obtained because the
Participant is deceased), then the Trustee shall promptly pay to
the Company the then remaining assets of the Trust.
(d) The Company may make payment of benefits directly
to the Participant or his or her beneficiaries as they become due
under the terms of the Deferred Compensation Plan. In the event
any amount referred to in a Payment Schedule is paid by the
Company to the Participant following a Change of Control, the
Company shall notify the Trustee in writing of such event. Such
notice shall include a Payment Schedule revised in accordance
with such notice, such revised Payment Schedule to be confirmed
by the Participant (which confirmation may be waived by the
Trustee if the Trustee determines in good faith after reasonable
inquiry that such confirmation is being unreasonably withheld by
the Participant or cannot be obtained because the Participant is
deceased). Upon receipt of such notice, the Trustee shall amend
the Payment Schedule to reduce the amount payable thereunder as
set forth in such notice and confirmed by the Participant and
shall distribute to the Company an amount of assets from the
Trust equal to the fair market value of the amount so paid by the
Company; provided, however, that no such payment shall be made to
the Company if such payment would cause the assets of the Trust
to be less than the balance of the Accounts as of the date such
payment would otherwise be due hereunder.
(e) If any amounts held in the Trust are found in a
"determination," within the meaning of Section 1313(a) of the
Code, to have been includable in the gross income of the
Participant prior to the payment of such amounts from the Trust,
the Trustee shall, as soon as practicable, pay such amounts to
the Participant and charge the Payment Schedule accordingly. For
purposes of this section, the Trustee shall be entitled to rely
on an Affidavit from the Participant to the effect that a
determination described above has occurred, such Affidavit to be
accompanied by a copy of the notice given by the Participant to
the Company in accordance with the further provisions of this
Section 2(e). Promptly after receipt by the Participant of
written notice of the assertion of any claim, or the commencement
of any suit, action, proceeding, investigation or audit in
respect of which the Participant could receive a distribution
under this Section 2(e), the Participant shall give written
notice to the Company of the assertion or commencement thereof.
The Company shall have the right at its own expense to
participate in, assume the defense of and control any such suit,
action, proceeding, investigation or audit, with counsel
reasonably satisfactory to the Participant. If the Company
assumes the defense of such an action, (a) no compromise or
settlement thereof may be effected by the Company without the
Participant's consent (which shall not be unreasonably withheld)
and (b) no compromise or settlement thereof may be effected by
the Participant without the consent of the Company (which shall
not be unreasonably withheld). If the Company elects to assume
the defense of such action, the Participant may employ his own
counsel to participate in a secondary role in such defense. If
written notice is given to the Participant of the assertion of
any claim, or the commencement of any suit, action, proceeding,
investigation or audit, and the Company does not, within ten days
after the Participant's written notice to the Company together
with reasonably complete details of the claim, suit, action,
proceeding, investigation or audit, give written notice to the
Participant of its election to assume the defense thereof, the
Company shall be bound by any determination made in such claim,
suit, action, proceeding, investigation or audit or any
compromise or settlement thereof effected by the Participant.
(f) The Trust is established as a means of
facilitating the payment of the Company's Obligation under the
Deferred Compensation Plan. Following a Change of Control, if
the principal of the Trust and any earnings thereon are not
sufficient to make payments of benefits in accordance with the
terms of the Deferred Compensation Plan and the Payment Schedule,
the Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company where principal
and earnings of the Trust are not sufficient to satisfy the
Obligation. Nothing in this Trust Agreement or in the Payment
Schedule shall be construed in any way as relieving the Company
of the Obligation if the Obligation is not satisfied from the
assets of the Trust.
Section 3. Trustee Responsibility Regarding
Payments to Trust Beneficiaries When Company Is Insolvent.
(a) The Trustee shall cease payment of benefits to the
Participant and his beneficiaries following a Change of Control
if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the
Company is unable to pay its debts as they become due or (ii) the
Company is subject to a pending proceeding as a debtor under the
United States Bankruptcy Code or the comparable provisions of any
other applicable jurisdiction to which the Company is then
subject.
(b) At all times during the continuance of this Trust,
as provided in Section 1(d) hereof, the principal and income of
the Trust shall be subject to claims of general creditors of the
Company under U.S. federal and state law as set forth below and
the laws of any other applicable jurisdiction to which the
Company is then subject.
(1) The Board of Directors and the Chief Executive
Officer of the Company shall have the duty to inform the
Trustee in writing of the Company's Insolvency. If a person
claiming to be a creditor of the Company alleges in writing
to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall
discontinue payment of benefits to Participants or his or
her beneficiaries.
(2) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the
Company or a person claiming to be a creditor alleging that
the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. The Trustee may
in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments
to the Participant or his or her beneficiaries and shall
hold the assets of the Trust for the benefit of the
Company's general creditors. Nothing in this Trust
Agreement shall in any way diminish any rights of the
Participant or his or her beneficiaries to pursue their
rights as general creditors of the Company with respect to
benefits due under the Deferred Compensation Plan or
otherwise.
(4) The Trustee shall resume the payment of benefits
to the Participant or his or her beneficiaries in accordance
with Section 2 of this Trust Agreement only after the
Trustee has determined that the Company is not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to the
Participant or his or her beneficiaries under the terms of the
Deferred Compensation Plan for the period of such discontinuance,
less the aggregate amount of any payments made to the Participant
or his or her beneficiaries by the Company under the terms of the
Deferred Compensation Plan in lieu of the payments provided for
hereunder during any such period of discontinuance.
Section 4. Payments to the Company. Except as
provided in Sections 2 and 3 above, the Company shall have no
right or power to direct the Trustee to return to the Company or
to divert any of the assets of the Trust to any purpose other
than the payment of the Obligation before all payment of benefits
has been made to the Participant and his or her beneficiaries
pursuant to the terms of the Deferred Compensation Plan.
Following a determination by the Trustee in accordance with
Sections 2(c) and 2(d) that the Company's Obligation has been
paid in full, the Trustee shall pay to the Company any remaining
assets of the Trust, net of any unpaid Trustee's fees and
expenses and a reserve for accrued but unpaid expenses of the
Trust.
Section 5. Investment Authority. In no event may
the Trustee invest in securities (including stock or rights to
acquire stock) or obligations issued by the Company (or any
subsidiary or affiliate thereof), other than a de minimis amount
held in common investment vehicles in which the Trustee invests.
All rights associated with assets of the Trust shall be exercised
by the Trustee or the person designated by the Trustee, and shall
in no event be exercisable by or rest with the Participant or his
or her beneficiaries. The Trustee shall invest and reinvest the
principal and income of the Trust Fund and keep the Trust Fund
invested, without distinction between principal and income, in
accordance with the investment guidelines set forth in Exhibit C.
Section 6. Accounting by Trustee. The Trustee
shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to
be made, including such specific records as shall be agreed upon
in writing between the Company and the Trustee. Within 90 days
following the close of each calendar year and within 90 days
after the removal or resignation of the Trustee, the Trustee
shall deliver to the Company a written account of its
administration of the Trust during such year or during the period
from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued
interest paid or receivable being separate), and showing all
cash, securities and other property held in the Trust at the end
of such year or as of the date of such removal or resignation, as
the case may be.
Section 7. Responsibility of Trustee.
(a) The Trustee shall act with the care, skill,
prudence and diligence under the circumstances then prevailing
that a prudent person acting in like capacity and familiar with
such matters would use in the conduct of an enterprise of a like
character and with like aim; provided, however, that the Trustee
shall incur no liability to any person for any action taken (i)
pursuant to an Affidavit delivered to the Trustee by Participant
in accordance with Section 2(b) above or (ii) pursuant to any
written direction, request or approval given by the Company that
is in conformity with the terms of the Deferred Compensation Plan
and this Trust Agreement.
(b) If the Trustee undertakes or defends any
litigation arising in connection with the Trust, the Company
shall indemnify fully the Trustee against the Trustee's costs,
expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be
primarily liable for such payments.
(c) The Trustee may consult with legal counsel (who
may also be counsel for the Company generally) with respect to
any of its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants,
actuaries, investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(e) The Trustee shall have, without exclusion, all
powers conferred on Trustees by applicable law, unless expressly
provided otherwise herein; provided, however, that, if an
insurance policy is held as an asset of the Trust, the Trustee
shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor
trustee (the "Successor Trustee"), or to loan to any person the
proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or applicable law, the Trustee
shall not have any power that could give the Trust the objective
of carrying on a business and dividing the gains therefrom,
within the meaning of Section 301.7701-2 of the Procedures and
Administrative Regulations promulgated pursuant to the Code.
Section 8. Compensation and Expenses of Trustee.
The Company shall pay directly (and not from the assets of the
Trust) all reasonable Trustee's fees and expenses, as may be
agreed to in writing between the Company and the Trustee from
time to time.
Section 9. Resignation and Removal of Trustee.
(a) Subject to Section 10 and the following sentence,
the Trustee may resign at any time by written notice to the
Company, which shall be effective 90 days after receipt of such
notice by the Company, unless the Company and the Trustee agree
in writing otherwise. Such resignation shall not be effective
until such time as a Successor Trustee is duly appointed and
qualified to serve hereunder. Until such time as a Successor
Trustee is duly appointed and qualified to serve hereunder, such
resignation shall not affect (i) the Trustee's obligations to
hold custody of the assets of the Trust, to make payments
contemplated by Section 2 of this Trust Agreement or (ii) the
Trustee's obligations or responsibilities set forth in this Trust
Agreement.
(b) Subject to Section 10, the Trustee may be removed
by the Company on 90 days' prior written notice; provided,
however, that following a Change of Control, the Company may not
remove the Trustee, without the written consent of three-quarters
of the Participants. Such removal shall not be effective until
such time as a Successor Trustee is duly appointed and qualified
to serve hereunder.
(c) Upon the resignation or removal of the Trustee and
appointment of a Successor Trustee, in accordance with Section
10, all assets shall subsequently be transferred to the Successor
Trustee. The transfer shall be completed within 30 days after
the appointment of the Successor Trustee.
(d) If the Trustee resigns or is removed, a successor
shall be appointed, in accordance with Section 10 hereof, by the
effective date of resignation or removal. If no such appointment
has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions
and pending such determination, the Trustee shall continue to
hold the assets of the Trust as a custodian. All expenses of the
Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
(e) This Trust Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original,
but all of which shall together constitute only one agreement.
Section 10. Appointment of Successor.
(a) If the Trustee resigns or is removed in accordance
with the provisions of this Trust Agreement, the Company shall
appoint a bank or trust company unaffiliated with the Company,
any successors to the Company by merger consolidation or
otherwise or any successor to all or substantially all of the
business assets of the Company that has corporate trustee powers
under applicable law and which has trust assets under management
at the time of such appointment of at least $10 billion, as a
successor to replace the Trustee upon such resignation or removal
(the "Successor Trustee"). The appointment shall be effective
when accepted in writing by the Successor Trustee, which shall
have all of the rights and powers of the former Trustee. The
former Trustee shall execute any instrument necessary or
reasonably requested by the Company or the Successor Trustee to
evidence the transfer. Following a Change of Control, the
Trustee may not be removed by the Company unless the then current
Trustee approves the Successor Trustee, which approval shall be
granted only if the Trustee reasonably determines that the
appointment of the Successor Trustee will not impair the rights
of any beneficiary under the Deferred Compensation Plan and this
Trust Agreement.
(b) The Successor Trustee need not examine the records
and acts of any prior Trustee and may retain or dispose of
existing Trust assets, subject to Section 7 hereof. The
Successor Trustee shall not be responsible for and the Company
shall indemnify and defend the Successor Trustee from any claim
or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing
at the time it becomes Successor Trustee.
Section 11. Amendment or Termination.
(a) Prior to a Change of Control, this Trust Agreement
may be amended by a written instrument executed by the Trustee
and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Deferred
Compensation Plan or shall make the Trust revocable.
(b) Following a Change of Control, the Trust Agreement
may not be amended without the prior written consent of three-
quarters of the Participants.
(c) The Trust shall not terminate until the date on
which the Participant and his or her beneficiaries are no longer
entitled to benefits pursuant to the terms of the Deferred
Compensation Plan. Upon termination of the Trust, any assets
remaining in the Trust shall be returned to the Company.
Section 12. Trust Effective Date. This Trust
Agreement shall be effective on the Effective Date.
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited
by law shall be ineffective to the extent of any such
prohibition, without invalidating the remaining provisions
hereof.
(b) Benefits payable to the Participant and his or her
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(d) This Trust Agreement shall be binding upon and
inure to the benefit of any successor(s) or assign(s) of the
Company or the Trustee, or any of its businesses, in whole or in
part, as the result of merger, consolidation, reorganization,
transfer of assets or otherwise, and any subsequent successor
thereto. In the event of any such merger, consolidation,
reorganization, transfer of assets or other similar transaction,
the successor to the Company or the Trustee or its business or
relevant part thereof or any subsequent successor shall promptly
notify the other party hereto in writing of its successorship.
(e) This Trust Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original,
but all of which shall together constitute only one agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Effective Date.
ONEIDA LTD.
By:/s/ EDWARD W. THOMA
Edward W. Thoma
Senior Vice President-Finance
[Name] CHASE MANHATTAN BANK
By:/s/ CAROL M. ECKLER
Title: Vice President
<PAGE>
Exhibit B
Form of Affidavit
I, , under penalties of perjury, do hereby
solemnly swear; (i) that I make this affidavit in order to induce
, as trustee under the Trust Agreement (the "Trust Agreement")
with Oneida Ltd.(the "Company") dated as of __________, 2000, to
pay me the balance of my Account to which I am entitled under the
Oneida Ltd. Deferral Compensation Plan for Key Executives ( the
"Plan"); (ii) that the amount of the payment to which I am
entitled is described in the attached schedule hereto, (iii) that
the events giving rise to the Company's obligation to make such
payment are accurately and fairly described on the attached
schedule, (iv) that I have previously furnished a copy of this
Affidavit to the Company, and (v) this Affidavit is given in
accordance with Section 2(b) of the Trust Agreement.
______________________________
Signature
STATE OF )
ss.:
COUNTY OF )
On the _____ day of __________, 20000, before me
personally came _____________________ to me known, who, being by
me duly sworn, did depose and say that he resides at
________________________, and that the statements herein are all
true and correct.
_________________________________
Notary Public
<PAGE>
EXHIBIT C
[Investment Guidelines]
The initial deposit per Section 1(a) should be invested in
the VISTA U.S. Government Money Market Fund or a money market
fund of equivalent asset size, quality and investment objective.
At the time of a Change in Control and the deposit by the
Company of an additional amount of cash equal to the Obligation,
the Company and Trustee will determine an asset allocation and
investment guidelines which takes into account the payment
requirements and investment rate designated in the Deferred
Compensation Plan and the composition of the Participants.
<PAGE>
The foregoing Agreement, attached hereto as EXHIBIT 10(a)(ii),
has also been executed in substantially identical form by the
employees listed on the schedule below. This schedule also lists
the material details in which such Agreements differ from the
foregoing EXHIBIT 10(a)(ii) Agreement.
<TABLE>
<CAPTION>
Employee Name Employee Address Date of Date of
"Prior Execution
Agreement" by
Employee
<S> <C> <C> <C>
Harold J. DeBarr 427 Betsinger Road 02/25/98 01/14/00
Sherrill, NY 13461
Thomas A. Fetzner 7767 Academy Street 07/26/89 01/14/00
Fabius, NY 13063
J. Peter Fobare 130 Kenwood Avenue 02/28/96 01/19/00
Oneida, NY 13421
Robert J. Houle RR4, Box 210 02/25/98 01/14/00
Canastota, NY 13032
Peter J. Kallet 552 Main Street 02/28/96 01/24/00
Oneida, NY 13421
W. Arnold Kimmons 7817 Cheviot Court 02/25/98 01/24/00
Fayetteville, NY 13066
Robert L. Lupica 4640 Wisteria Circle 07/06/99 Undated
Manlius, NY 13104
Matthew J. Smith 55 Lincklaen Street 02/25/98 01/17/00
Cazenovia, NY 13035
Catherine H. SUttmeir P.O. Box 977 03/29/95 01/17/00
Oneida, NY 13421
Edward W. Thoma 808 W. Hamilton Avenue 07/26/89 01/14/00
Sherrill, NY 13461
</TABLE>
<PAGE>
EXHIBIT 10(e)
ONEIDA LTD.
EMPLOYEE SECURITY PLAN
Oneida Ltd. hereby adopts the Oneida Ltd. Employee Security
Plan for the benefit of certain employees of the Company, its
affiliates and subsidiaries, on the terms and conditions
hereinafter stated.
The Plan, as set forth herein, is intended to help
retain qualified employees, maintain a stable work environment
and provide economic security to certain Employees of the
Employer in the event of a Severance of employment under the
enumerated circumstances. The Plan, as a "severance pay
arrangement" within the meaning of Section 3(2)(B)(i) of ERISA,
is intended to be excepted from the definitions of "employee
pension benefit plan" and "pension plan" set forth under Section
3(2) of ERISA, and is intended to meet the descriptive
requirements of a plan constituting a "severance pay plan" within
the meaning of regulations published by the Secretary of Labor at
Title 29, Code of Federal Regulations, Section 2510.3-2(b).
SECTION 1. Definitions. As used herein:
1.1 "Board" means the Board of Directors of the Company.
1.2 A "Chance in Control" of the Company shall be deemed
to have occurred if:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Company, any trustee
or other fiduciary holding securities under an employee benefit
plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period of two consecutive years (not
including any period prior to the Effective Date), individuals
who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this Section)
whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for
any reason to constitute at least a majority thereof;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other company, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity)
more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no "person" (as
hereinabove defined) acquires more than 20% of the combined
voting power of the company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the
Company's assets.
1.3 "Code" means the Internal Revenue Code of 1986, as it
may be amended from time to time.
1.4 "Company" means Oneida Ltd. or any successors thereto.
1.5 "Effective Date" means July 26, 1989.
1.6 An "Employee" means a person who is an active, full-time
employee of an Employer, excluding any employee who is included
in a unit of employees covered by a negotiated collective
bargaining agreement which does not provide for his or her
participation in the Plan. A director of the Company is not
eligible for participation in the Plan unless he or she is also
an Employee. Notwithstanding the foregoing, any person who has
entered into a written agreement with the Company or an Employer
that provides for the payment of benefits in the event of the
termination of such person's employment following a Change in
Control of the Company or Recapitalization shall not be
considered an Employee for purposes of this Plan.
1.7 "Employer" means the Company and such subsidiaries or
affiliates of the Company as authorized and approved by the Board
and listed on Annex I hereto.
1.8 "ERISA" means the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.
1.9 "Hours of Service" means hours during which an Employee
performs service for which he or she is directly or indirectly
paid or entitled to pay (including any back pay irrespective of
mitigation of damages).
1.10 "Mandatory Retirement Age" means the age at which the
Employer may legally require an Employee to retire. An Employee
who has served for a minimum of two (2) years at a high level
executive or high policy-making position and who is entitled to a
nonforfeitable immediate annual Employer-provided retirement
benefit, from any source, which is at least equal to a benefit,
computed as a life annuity, of $44,000 per year (or such other as
may be provided by future legislation) attains Mandatory
Retirement Age at age sixty-five (65), unless otherwise provided
by law.
1.11 "Pay" means all compensation, including salary, wages,
fees, commissions, profit-sharing bonus and overtime pay, paid to
the Employee for personal services actually rendered to the
Company or the Employer as reported on the Employee's IRS Form
W-2 for the tax year out of the three tax years immediately prior
to a Change in Control of the Company or Recapitalization in
which the Employee's W-2 amount was the highest, and including
the amount of any elective deferrals contributed on behalf of
such Employee to a cash or deferred arrangement maintained by the
Company or any affiliate of the Company under Section 401(k) of
the Code. A "Month of Pay" shall be equal to one twelfth (1/12)
of Pay.
1.12 The "Plan" means the Oneida Ltd. Employee Security
Plan, as set forth herein, as may be amended from time to time.
1.13 The "Plan Administrator" means an administrative
committee appointed by the Board and acting in accordance with
the terms of the Plan. Such committee shall consist of at least
three members who are active Employees, including the Vice
President of Human Resources of the Company.
1.14 "Recapitalization" means a transaction approved by the
Board involving a special distribution in respect of shares of
Common Stock, par value $6.25 per share, of the Company or a
similar transaction designated by the Board as a Recapitalization
for purposes of the Plan.
1.15 "Service" means active, full-time employment with the
Company or an Employer and, to the extent and for the purposes
determined by the Plan Administrator under rules uniformly
applicable to all Employees similarly situated, shall include (i)
periods of vacation, (ii) periods of paid layoff, (iii) periods
of absence authorized by the Company or an Employer for sickness,
temporary disability or personal reasons, (iv) if and to the
extent required by the Military Selective Service Act as amended
or any other Federal law, service in the Armed Forces of the
United States and (v) such other periods as the Plan
Administrator shall specify in such rules.
1.16 "Severance" means the termination of an Employee's
employment with the Employer within two (2) years following a
Change in Control or Recapitalization, (i) by the Employer other
than for Cause, or (ii) by the Employee for Good Reason.
Notwithstanding the foregoing, an Employee will not be considered
to have incurred a Severance (i) if his or her employment is
discontinued by reason of the Employee's voluntary or Mandatory
Retirement, the Employee's death or a physical or mental
condition causing the Employee's inability to substantially
perform his or her duties with the Employer, including without
limitation, such condition entitling him or her to benefits under
any sick pay or disability income policy or program of the
Employer, (ii) if his or her employment is temporarily
discontinued by reason of a temporary lay-off for a period of
less than six months or (iii) by reason of the divestiture of a
facility or subsidiary of the Employer in which the Employee
works if the Employee is offered comparable employment by the
successor company and the successor company assumes the
Employer's responsibilities under the Plan with respect to such
Employee. For purposes of the Plan, "Cause" means (i) an
Employee's willful and continued failure to substantially perform
his duties with the Employer, (ii) an Employee's willful
engagement in conduct which is demonstrably and materially
injurious to the Employer, monetarily or otherwise (provided,
however, that no act, or failure to act, on an Employee's part
shall be deemed "willful" unless done, or omitted to be done, by
the Employee not in good faith and without reasonable belief that
such action or omission was in the best interest of the Employer)
or (iii) an Employee's material failure to comply with the work
rules or policies of the Company or the Employee's Employer. For
the purposes of the Plan, "Good Reason" means (i) the Employer's
seeking the transfer of the Employee to another Employer facility
more than 25 miles from the Employee's then current place of
employment, (ii) a reduction by the Employer in the Employee's
Pay or benefits, including, without limitation, retirement and
health and welfare benefits or (iii) a change in the Employee's
duties or responsibilities in the nature of a demotion (other
than for Cause).
1.17 "Severance Date" means the date after the Effective
Date on which an Employee incurs a Severance.
1.18 "Severance Pay" means payments made to eligible
Employees pursuant to Section 3.1 hereof.
1.19 "Year of Service" means, with respect to any Employee,
each calendar year during which the Employee completes at least
1,000 Hours of Service. In addition, if an Employee does not
complete 1,000 Hours of Service during the calendar year in which
his or her Service commences, but does complete at least 1,000
Hours of Service during the 12-consecutive month period beginning
on the date the Employee's Service commenced, as determined by
the Plan Administrator, then, for purposes of determining when an
Employee shall be eligible to participate in the Plan as provided
in Section 2, he or she shall be credited with a Year of Service
for such 12-consecutive month period.
SECTION 2. Eligibility.
2.1 Notwithstanding any provision to the contrary contained
herein, each Employee shall be eligible to participate in the
Plan upon completion of one Year of Service.
SECTION 3. Benefits.
3.1 Each Employee who incurs a Severance shall be entitled
to receive a one-time Severance Pay equal to 2-1/2 Months of Pay
for each year of Service, up to a maximum amount of 24 Months of
Pay.
3.2 Severance Payments will be made to an eligible severed
Employee in one lump sum on the second pay day following the
Severance Date.
3.3 Health care benefits and life insurance benefits will
be continued (at the active employee rate) for a severed Employee
for the number of months determined in Section 3.1 above, but not
after he or she becomes an employee of another employer and
covered under another group health or group life plan,
respectively.
3.4 In the event of a claim by an Employee as to the amount
of any distribution or its method of payment, such Employee shall
present the reason for his or her claim in writing to the Plan
Administrator. The Plan Administrator shall, within sixty (60)
days after receipt of such written claim, send a written
notification to the Employee as to its disposition. In the event
the claim is wholly or partially denied, such written
notification shall (a) state the specific reason or reasons for
the denial, (b) make specific reference to pertinent Plan
provisions on which the denial is based, (c) provide a
description of any additional material or information necessary
for the Employee to perfect the claim and an explanation of why
such material or information is necessary, and (d) set forth the
procedure by which the Employee may appeal the denial of his
claim. In the event an Employee wishes to appeal the denial of
his claim, he or she may request a review of such denial by
making application in writing to the Plan Administrator within
sixty (60) days after receipt of such denial. Such Employee (or
his or her duly authorized legal representative) may, upon
written request to the Plan Administrator, review any documents
pertinent to his or her claim, and submit in writing issues and
comments in support of his or her position. Within sixty (60)
days after receipt of a written appeal (unless special
circumstances, such as the need to hold a hearing, require an
extension of time, but in no event more than one hundred twenty
(120) days after such receipt), the Plan Administrator shall
notify the Employee of the final decision. The final decision
shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan
provisions on which the decision is based.
3.5 The Company will pay to each Employee all legal fees
and expenses incurred by such employee in seeking to obtain or
enforce any right or benefit provided under this Plan (other than
any such fees and expenses incurred in pursuing any claim
determined to be frivolous by a court of competent jurisdiction).
SECTION 4. Limitation on Severance Payments.
4.1 Notwithstanding any provision in this Plan or in any
other agreement, commitment, arrangement or plan regarding
payments or transfers of property to an Employee to the contrary,
the aggregate of all Severance Payments to an Employee under this
Plan and all other agreements and arrangements with, and plans
of, the Employer shall be reduced by such amount as may be
necessary so that no Payment, either alone or when taken together
with all other Payments, results in the failure of any Payment,
or any other amount paid or property transferred to, or for the
benefit of, an Employee, to be allowed as a deduction to the
Company on its Federal income tax return under Code Section 280G;
provided, however, that no provision of this Plan shall be deemed
to prohibit or restrict any Payment, or any payment or transfer
of property, to an Employee pursuant to an Employee Benefit Plan.
4.2 Promptly, and in any event within 10 days before any
Severance Payment is due, the Company shall determine whether any
Payment, or any portion thereof, payable to, or for the benefit
of, an Employee would result in the failure of any Payment, or
any other amount paid or property transferred to, or for the
benefit of, an Employee, to be allowed as a deduction to the
Company on its Federal income tax return under Code Section 280G,
and shall immediately notify the Employee of its determination by
delivering to the Employee a statement (the "Statement") which
sets out a detailed account of its determination, including a
description of the method by which the Fair Market Value was
assigned in such determination to any property constituting a
Payment. Within 8 days of delivery of the Statement, and after
consulting with the Employee to determine how the Company can
best implement its obligation to compensate the Employee under
the terms of this Plan, the Company shall reduce the Severance
Payment under the Plan by the amount described in Section 4.1.
4.3 In the event the Employee disputes a determination
reflected in the Statement, including the assignment of a Fair
Market Value to any property constituting a Payment, the Employee
shall promptly notify the Company in writing, and the parties
shall use their best efforts to resolve such dispute. If no
resolution has been reached within 2 days of receipt of the
notice of such dispute, the dispute shall be referred to an
Independent Auditor, whose determination with respect to such
dispute shall be communicated in writing to the parties within 5
days of the date of such referral. The determination of the
Independent Auditor shall be at the expense of the Company and
shall be conclusive and binding on the parties. The 8 day time
period provided in Section 4.2 shall be suspended and shall not
elapse during the period provided for the resolution of disputes
pursuant to this Section 4.3.
4.4 For the purposes of this Section 4, the following terms
shall have the following meanings:
(i) "Affiliate" means any person or entity affiliated
with the Company, including any corporation which is part of an
affiliated or controlled group (or which as a result of a Change
in Control of the Company becomes part of an affiliated or
controlled group) within the meaning of Sections 1504 or 1563 of
the Code;
(ii) "Base Amount" means the Employee's annualized
includible compensation for the base period, determined in
accordance with Code Section 280G. For the purposes of this
Section, "annualized includible compensation for the base period"
means the average annual compensation which (1) was payable by
the Employer to the Employee and (2) was includible in the gross
income of the Employee for the most recent 5 taxable years ending
before the date of the Change of Ownership (or such shorter
portion during which the Employee was an employee of the
Employer);
(iii) "Change of Ownership" means a change in the
ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the Company,
as determined under Code Section 280G; and the determination that
payments are contingent upon a Change of Ownership shall be made
in accordance with Code Section 280G;
(iv) "Employee Benefit Plan" means an employee benefit
plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, which is contributed to or
maintained by the Employer;
(v) "Fair Market Value" means the value of any
property, determined in accordance with the applicable provisions
of the Code and the rulings and regulations issued by the
Secretary of Treasury or his delegate thereunder, or, in the
absence of such authority, determined by the Board of Directors
of the Company in good faith as reflecting the fair market value
of such property;
(vi) "Independent Auditor" means a nationally
recognized independent auditing firm selected by the Employee;
(vii) "Payments" means any payments or transfers of
property required to be made by the Employer or an Affiliate, or
which would be required to be made by the Employer or an
Affiliate pursuant to an agreement, including this Plan,
commitment or arrangement with, or a plan of, the Employer or an
Affiliate, but for the provisions of this Section 4, in the
nature of compensation to, or for the benefit of, an Employee,
which are contingent on a Change of Ownership to the extent
required to be considered, pursuant to Code Section 280G, in
determining whether a payment is a "parachute payment", as
defined under such Section;
(viii) "Present Value" shall be determined in
accordance with Section 1274(b)(2) of the Code and the rulings
and regulations issued by the Secretary of the Treasury or his
delegate under such Section and Code Section 280G; and
(ix) "Code Section 280G" means Section 280G of the Code
and the rulings and regulations issued by the Secretary of the
Treasury or his delegate under such Section.
4.5 The provisions of this Section 4 shall be administered
in accordance with Code Section 280G.
SECTION 5. Plan Administration.
5.1 The Plan shall be interpreted, administered and operated
by the Plan Administrator, who shall have complete authority, in
its sole discretion subject to the express provisions of the
Plan, to determine who shall be eligible for Severance Pay, to
interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations
necessary or advisable for the administration of the Plan.
5.2 All questions of any character whatsoever arising in
connection with the interpretation of the Plan or its
administration or operation shall be submitted to and settled and
determined by the Plan Administrator in an equitable and fair
manner in accordance with the procedure for claims and appeals
described in Section 3.4. Any such settlement and determination
shall be final and conclusive, and shall bind and may be relied
upon by the Employer, each of the Employees and all other parties
in interest.
5.3 The Plan Administrator may delegate any of their duties
hereunder to such person or persons from time to time as they may
designate.
5.4 The Plan Administrator is empowered, on behalf of the
Plan, to engage accountants, legal counsel and such other
personnel as it deems necessary or advisable to assist it in the
performance of its duties under the Plan. The functions of any
such persons engaged by the Plan Administrator shall be limited
to the specified services and duties for which they are engaged,
and such persons shall have no other duties, obligations or
responsibilities under the Plan. Such persons shall exercise no
discretionary authority or discretionary control respecting the
management of the Plan. All reasonable expenses thereof shall be
borne by the Company.
SECTION 6. Plan Modification or Termination.
6.1 The Plan may be amended or terminated by the Board at
any time; provided, however, that within the two-year period
following a Change in Control or Recapitalization, the Plan may
not be terminated or amended if such amendment would be adverse
to the interests of any Employee.
SECTION 7. General Provisions.
7.1 Nothing in the Plan shall be deemed to give any Employee
the right to be retained in the employ of the Employer without
the Employer's consent, nor to interfere with the right of the
Employer to discharge him or her at any time and for any lawful
reason, with or without cause, with or without notice.
7.2 Except as otherwise provided herein or by law, no right
or interest of any Employee under the Plan shall be assignable or
transferable, in whole or in part, either directly or by
operation of law or otherwise, including without limitation by
execution, levy, garnishment, attachment, pledge or in any
manner; no attempted assignment or transfer thereof shall be
effective; and no right or interest of any Employee under the
Plan shall be liable for, or subject to, any obligation or
liability of such Employee. When a payment is due under this Plan
to an Employee who is unable to care for his affairs, payment may
be made directly to his legal guardian or personal
representative.
7.3 If an Employer is obligated by law or by contract to pay
severance pay, a termination indemnity, notice pay, or the like,
or if the Employer is obligated by law or by contract to provide
advance notice of separation ("Notice Period"), then any
Severance Pay hereunder shall be reduced by the amount of any
such severance pay, termination indemnity, notice pay or the
like, as applicable, and shall be reduced by the amount of any
compensation received during any Notice Period.
7.4 All payments provided under the Plan shall be paid in
cash from the general funds of the Company, and no special or
separate fund shall be established, and no other segregation of
assets made, to assure payment. Employees shall have no right,
title, or interest whatever in or to any investments which the
Company may make to aid the Company in meeting its obligations
hereunder.
7.5 If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be
construed and enforced as if such provisions had not been
included.
7.6 The Plan shall be governed by and construed in
accordance with ERISA and all applicable rules and regulations
thereunder.
7.7 The Plan shall be effective as of the Effective Date and
shall remain in effect unless and until terminated pursuant to
Section 6.1 hereof.
IN WITNESS WHEREOF, the Company has caused the Plan
to be adopted this 26th day of July, 1989.
ONEIDA LTD.
By: /s/ M. Jack Rudnick
WITNESS:
by: /s/ Sandra C. Britton
<PAGE>
ANNEX I
Camden Wire Co., Inc.
Buffalo China, Inc.
Kenwood Silver Company, Inc.
Oneida Canada, Limited
<PAGE>
EXHIBIT 10(g)
ONEIDA LTD.
DEFERRED COMPENSATION PLAN
FOR
KEY EMPLOYEES
Restated Effective November 1, 1999
<PAGE>
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
November 1, 1999.
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 but 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
(a) 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.
(b) Notwithstanding the foregoing, as soon as practicable,
the Company shall establish an irrevocable trust intended to
qualify as a grantor trust within the meaning of subpart E, part
I, subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended (a "Rabbi Trust"), in substantially the
form set forth as Appendix A hereto, which trust shall be subject
to the claims of the creditors of the Company in the event of the
insolvency of the Company. At the time of a Change in Control,
the Company shall transfer assets to the Rabbi Trust so that the
aggregate assets held in the trust are sufficient at all times to
pay or provide for the payments required to be made to
participants pursuant to subparagraph (a) of Section 12 of the
Plan, as such amounts are accrued on the books of the Company.
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.
(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 three-fourths (3/4) of the directors then still in
office who either were directors at the beginning of the period
or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
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 other Plan provision or any part thereof.
The Company caused the Plan to be executed by a duly
authorized officer to be effective
as of November 1, 1999, 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 November 1, 1999.
ONEIDA LTD.
BY:__________________________
BUFFALO CHINA, INC.
BY:__________________________
THC SYSTEMS, INC.
BY:__________________________
<PAGE>
AMENDMENT TO THE
ONEIDA LTD.
DEFERRED COMPENSATION PLAN FOR KEY EMPLOYEES
The Board of Directors of Oneida Ltd. (the "Company")
hereby amend the Oneida Ltd. Deferred Compensation Plan for Key
Employees (the "Plan"), effective as of November 1, 1999, as
follows:
1. Section 10 of the Plan is hereby amended by adding
"(a)" immediately before the first sentence thereof.
2. A new subparagraph (b) is hereby added to Section
10 of the Plan to read as follows:
"(b) Notwithstanding the foregoing, as soon as
practicable, the Company shall establish an
irrevocable trust intended to qualify as a grantor
trust within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the
Internal Revenue Code of 1986, as amended (a
"Rabbi Trust"), in substantially the form set
forth as Appendix A hereto, which trust shall be
subject to the claims of the creditors of the
Company in the event of the insolvency of the
Company. At the time of a Change in Control, the
Company shall transfer assets to the Rabbi Trust
so that the aggregate assets held in the trust are
sufficient at all times to pay or provide for the
payments required to be made to participants
pursuant to subparagraph (a) of Section 12 of the
Plan, as such amounts are accrued on the books of
the Company."
3. Subparagraph (a)(iii) of Section 12 of the
Plan is hereby deleted in its entirety.
4. Except as expressly amended herein all rights and
obligations of the parties shall remain in full force and effect.
IN WITNESS WHEREOF, the Company has duly executed and
delivered this Amendment as of the date first above written.
ONEIDA LTD.
By: ______________________
Name:
Title:
<PAGE>
EXHIBIT A
Trust Agreement
This Agreement, dated as of this 1st day of January,
2000 (the "Effective Date"), by and between ONEIDA LTD., a
corporation organized under the laws of the State of New York
(the "Company") and The Chase Manhattan Bank, a banking
corporation organized under the laws of New York (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has adopted the Oneida Ltd.
Deferred Compensation Plan for Key Employees, restated effective
August 1, 1997, as may be amended or modified from time to time
(the "Deferred Compensation Plan") in substantially the form of
attached Exhibit A;
WHEREAS, the Deferred Compensation Plan contemplates
the establishment by the Company of deferred compensation
accounts on its books and records (the "Accounts") to record
amounts voluntarily deferred by the eligible employees pursuant
to Paragraph 2 of the Deferred Compensation Plan (the
"Participants") and to periodically credit such Accounts with the
Investment Rate (as defined in the Deferred Compensation Plan)
specified in paragraph 3 of the Deferred Compensation Plan and
further contemplates that the Company will provide for an
additional amount to be credited to each Participant's Account
upon a Change of Control;
WHEREAS, the Company now desires to establish an
irrevocable trust (the "Trust") and to make contributions of cash
and other assets to the Trust to fund its obligations to the
Participants under the Deferred Compensation Plan (the
"Obligation") on and after a Change of Control (as defined
herein); and
WHEREAS, the Trust assets shall be held in the Trust
subject to the claims of the Company's creditors in the event of
the Company's Insolvency (as hereinafter defined) until paid to
the Participants in accordance with the terms of the Deferred
Compensation Plan;
WHEREAS, the Company intends that the existence of the
Trust will not alter the characterization of the Deferred
Compensation Plan as "unfunded" and will not be construed to
provide taxable income to any Participant prior to the actual
payment of benefits thereunder;
NOW, THEREFORE, the parties do hereby establish the
Trust and agree that the Trust shall be comprised, held and
disposed of as follows:
Section 1. Establishment of Trust.
(a) The Company hereby deposits with the Trustee IN
TRUST the amount of $1,000. which shall become the principal of
the Trust be held, administered and disposed by the Trustee as
provided in the Trust Agreement. Upon the date that a Change of
Control occurs, the Company shall deposit with the Trustee IN
TRUST an additional amount of cash equal to the total value of
the Accounts held under the Deferred Compensation Plan, such
amounts to be held, administered and disposed by the Trustee as
provided in this Trust Agreement. The Trustee hereby accepts the
Trust established under this Trust Agreement on the terms and
subject to the provisions set forth herein, and it agrees to
discharge and perform fully and faithfully all of the duties and
obligations imposed upon it under this Trust Agreement. The
Trust shall be known as the "Oneida Ltd. Benefits Protection
Trust".
(b) The Trust hereby established is irrevocable by the
Company.
(c) The Trust is intended to be a grantor trust, of
which the Company is the grantor, within the meaning of subpart
E, part I, subchapter J, chapter 1, subtitle A of the U.S.
Internal Revenue Code of 1986, as amended (the "Code") and shall
be construed accordingly.
(d) The principal of the Trust, and any earnings
thereon, shall be held separate and apart from other funds of the
Company and shall be used exclusively for the purpose of
satisfying the Company's Obligation and the Company's obligations
to its general creditors as hereinafter set forth. The
Participant and his or her beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Deferred Compensation
Plan and this Trust Agreement shall be mere unsecured contractual
rights of the Participant and his or her beneficiaries against
the Company. Any assets held by the Trust will be subject to the
claims of the Company's general creditors under U.S. federal and
state law in the event of Insolvency.
(e) The Company, in its sole discretion, may at any
time, or from time to time, make additional deposits of cash to
be held IN TRUST by the Trustee to augment the principal to be
held, administered and disposed of by the Trustee as provided in
this Trust Agreement. Neither the Trustee, the Participants nor
any beneficiary of the Participants shall have any right to
compel such additional deposits.
(f) Within 30 days following each anniversary of the
Effective Date, the Company shall provide the Trustee with a
statement of the Obligation, taking into account all deferrals
credited to the Accounts through such anniversary date, interest
on the Account balance, all payments to the Participants and
their beneficiaries and any forfeitures. As of each such
anniversary date, and subject to Section 6 below, the Trustee
shall determine the fair market value of the assets of the Trust
and communicate the results of such valuation of the Company. In
the event that, as of each applicable anniversary date on or
after the date that a Change of Control occurs, the fair market
value of the assets of the Trust is less than the Obligation as
of such date, the Company shall deposit with the Trustee IN TRUST
a supplemental amount (the "Supplemental Contribution") of cash
equal to the difference between the Obligation and the fair
market value of the assets of the Trust on such anniversary date.
The Supplemental Contribution shall be made within 45 days
following the applicable anniversary date. Supplemental
Contributions (and all income, gains and losses attributable
thereto) shall be accounted for separately by the Trustee in a
supplemental account (the "Supplemental Account"). On each
subsequent anniversary after the Company has made a Supplemental
Contribution (a "Subsequent Anniversary Date"), the Obligation
shall be determined, and the assets of the Trust shall be valued
(including, for this purpose, any assets attributable to
Supplemental Contributions).
(g) For purposes of this Trust Agreement, a "Change in
Control" shall mean a change in control of the Company of a
nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is then subject to such reporting
requirement; provided, however, that, anything in this Trust
Agreement to the contrary notwithstanding, a Change in Control
shall be deemed to have occurred if:
(A) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other
entity or person, or any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act is or
becomes the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations 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 entitled to vote in
the election of directors of the Company;
(B) during any period of two consecutive years (not
including any period prior to the effective date of this
Trust Agreement), individuals who at the beginning of such
period constituted the Board of Directors (the "Board") and
any new directors, whose election by the Board or nomination
for election by the Company's stockholders was approved by a
vote of at least three-fourths of the directors then still
in office who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority thereof;
(C) there occurs a reorganization, merger,
consolidation or other corporate transaction involving the
Company (a "Business Combination"), in each case with
respect to which the stockholders of the Company immediately
prior to such transaction do not, immediately after such
transaction, own directly or indirectly more than 50% of the
combined voting power of the Company or other corporation
resulting from such Business Combination in substantially
the same proportions as their ownership, immediately prior
to such Business Combination, of the voting securities of
the Company;
(D) all or substantially all of the assets of the
Company are sold, liquidated or distributed; or
(E) there occurs a transaction that constitutes a
change in the (i) ownership of the Company, (ii) effective
control of the Company or (iii) effective ownership of a
substantial portion of the assets of the Company, as
determined pursuant to Code Section 280G and the regulations
promulgated thereunder.
Section 2. Payments to Participant or His or Her
Beneficiaries.
(a) Upon the occurrence of a Change of Control, the
Company shall deliver to the Trustee a payment schedule (the
"Payment Schedule") that indicates the amounts payable to the
Participants and the times at which such amounts are payable.
Except as otherwise provided herein, the Trustee shall make
payments to the Participant and his or her beneficiaries in
accordance with such Payment Schedule and Section 2(b) below.
The Trustee shall make provision for the reporting and
withholding of any taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the
Deferred Compensation Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by the Company.
(b) Subject to the provisions of Section 2(c), 2(d)
and 2(e), upon a Change of Control, the Trustee shall pay the
amounts due to the Participant and his or her beneficiaries in
respect of the Company's Obligation upon receipt of either (i) a
written instruction from the Company authorizing such payment or
(ii) an affidavit from the Participant, in substantially the form
of Exhibit B hereto (an "Affidavit"), attesting to the amount of
such payment and setting forth the circumstances giving rise to
the obligation to make such payment under the Deferred
Compensation Plan. The Trustee shall be authorized to rely on
the Payment Schedule, written instructions from the Company or
any such Affidavit, and in the event of a conflict between the
written instructions from the Company and the Affidavit, the
provisions of the Affidavit shall be controlling.
(c) To the extent that (i) the Trustee is notified in
writing by the Company that the Company's Obligation has been
paid in full and (ii) the notice from the Company is confirmed in
writing by the Participant (which confirmation may be waived by
the Trustee if the Trustee determines in good faith after
reasonable inquiry that such confirmation is being unreasonably
withheld by the Participant or cannot be obtained because the
Participant is deceased), then the Trustee shall promptly pay to
the Company the then remaining assets of the Trust.
(d) The Company may make payment of benefits directly
to the Participant or his or her beneficiaries as they become due
under the terms of the Deferred Compensation Plan. In the event
any amount referred to in a Payment Schedule is paid by the
Company to the Participant following a Change of Control, the
Company shall notify the Trustee in writing of such event. Such
notice shall include a Payment Schedule revised in accordance
with such notice, such revised Payment Schedule to be confirmed
by the Participant (which confirmation may be waived by the
Trustee if the Trustee determines in good faith after reasonable
inquiry that such confirmation is being unreasonably withheld by
the Participant or cannot be obtained because the Participant is
deceased). Upon receipt of such notice, the Trustee shall amend
the Payment Schedule to reduce the amount payable thereunder as
set forth in such notice and confirmed by the Participant and
shall distribute to the Company an amount of assets from the
Trust equal to the fair market value of the amount so paid by the
Company; provided, however, that no such payment shall be made to
the Company if such payment would cause the assets of the Trust
to be less than the balance of the Accounts as of the date such
payment would otherwise be due hereunder.
(e) If any amounts held in the Trust are found in a
"determination," within the meaning of Section 1313(a) of the
Code, to have been includable in the gross income of the
Participant prior to the payment of such amounts from the Trust,
the Trustee shall, as soon as practicable, pay such amounts to
the Participant and charge the Payment Schedule accordingly. For
purposes of this section, the Trustee shall be entitled to rely
on an Affidavit from the Participant to the effect that a
determination described above has occurred, such Affidavit to be
accompanied by a copy of the notice given by the Participant to
the Company in accordance with the further provisions of this
Section 2(e). Promptly after receipt by the Participant of
written notice of the assertion of any claim, or the commencement
of any suit, action, proceeding, investigation or audit in
respect of which the Participant could receive a distribution
under this Section 2(e), the Participant shall give written
notice to the Company of the assertion or commencement thereof.
The Company shall have the right at its own expense to
participate in, assume the defense of and control any such suit,
action, proceeding, investigation or audit, with counsel
reasonably satisfactory to the Participant. If the Company
assumes the defense of such an action, (a) no compromise or
settlement thereof may be effected by the Company without the
Participant's consent (which shall not be unreasonably withheld)
and (b) no compromise or settlement thereof may be effected by
the Participant without the consent of the Company (which shall
not be unreasonably withheld). If the Company elects to assume
the defense of such action, the Participant may employ his own
counsel to participate in a secondary role in such defense. If
written notice is given to the Participant of the assertion of
any claim, or the commencement of any suit, action, proceeding,
investigation or audit, and the Company does not, within ten days
after the Participant's written notice to the Company together
with reasonably complete details of the claim, suit, action,
proceeding, investigation or audit, give written notice to the
Participant of its election to assume the defense thereof, the
Company shall be bound by any determination made in such claim,
suit, action, proceeding, investigation or audit or any
compromise or settlement thereof effected by the Participant.
(f) The Trust is established as a means of
facilitating the payment of the Company's Obligation under the
Deferred Compensation Plan. Following a Change of Control, if
the principal of the Trust and any earnings thereon are not
sufficient to make payments of benefits in accordance with the
terms of the Deferred Compensation Plan and the Payment Schedule,
the Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company where principal
and earnings of the Trust are not sufficient to satisfy the
Obligation. Nothing in this Trust Agreement or in the Payment
Schedule shall be construed in any way as relieving the Company
of the Obligation if the Obligation is not satisfied from the
assets of the Trust.
Section 3. Trustee Responsibility Regarding
Payments to Trust Beneficiaries When Company Is Insolvent.
(a) The Trustee shall cease payment of benefits to the
Participant and his beneficiaries following a Change of Control
if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the
Company is unable to pay its debts as they become due or (ii) the
Company is subject to a pending proceeding as a debtor under the
United States Bankruptcy Code or the comparable provisions of any
other applicable jurisdiction to which the Company is then
subject.
(b) At all times during the continuance of this Trust,
as provided in Section 1(d) hereof, the principal and income of
the Trust shall be subject to claims of general creditors of the
Company under U.S. federal and state law as set forth below and
the laws of any other applicable jurisdiction to which the
Company is then subject.
(1) The Board of Directors and the Chief Executive
Officer of the Company shall have the duty to inform the
Trustee in writing of the Company's Insolvency. If a person
claiming to be a creditor of the Company alleges in writing
to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall
discontinue payment of benefits to Participants or his or
her beneficiaries.
(2) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the
Company or a person claiming to be a creditor alleging that
the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. The Trustee may
in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments
to the Participant or his or her beneficiaries and shall
hold the assets of the Trust for the benefit of the
Company's general creditors. Nothing in this Trust
Agreement shall in any way diminish any rights of the
Participant or his or her beneficiaries to pursue their
rights as general creditors of the Company with respect to
benefits due under the Deferred Compensation Plan or
otherwise.
(4) The Trustee shall resume the payment of benefits
to the Participant or his or her beneficiaries in accordance
with Section 2 of this Trust Agreement only after the
Trustee has determined that the Company is not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to the
Participant or his or her beneficiaries under the terms of the
Deferred Compensation Plan for the period of such discontinuance,
less the aggregate amount of any payments made to the Participant
or his or her beneficiaries by the Company under the terms of the
Deferred Compensation Plan in lieu of the payments provided for
hereunder during any such period of discontinuance.
Section 4. Payments to the Company. Except as
provided in Sections 2 and 3 above, the Company shall have no
right or power to direct the Trustee to return to the Company or
to divert any of the assets of the Trust to any purpose other
than the payment of the Obligation before all payment of benefits
has been made to the Participant and his or her beneficiaries
pursuant to the terms of the Deferred Compensation Plan.
Following a determination by the Trustee in accordance with
Sections 2(c) and 2(d) that the Company's Obligation has been
paid in full, the Trustee shall pay to the Company any remaining
assets of the Trust, net of any unpaid Trustee's fees and
expenses and a reserve for accrued but unpaid expenses of the
Trust.
Section 5. Investment Authority. In no event may
the Trustee invest in securities (including stock or rights to
acquire stock) or obligations issued by the Company (or any
subsidiary or affiliate thereof), other than a de minimis amount
held in common investment vehicles in which the Trustee invests.
All rights associated with assets of the Trust shall be exercised
by the Trustee or the person designated by the Trustee, and shall
in no event be exercisable by or rest with the Participant or his
or her beneficiaries. The Trustee shall invest and reinvest the
principal and income of the Trust Fund and keep the Trust Fund
invested, without distinction between principal and income, in
accordance with the investment guidelines set forth in Exhibit C.
Section 6. Accounting by Trustee. The Trustee
shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to
be made, including such specific records as shall be agreed upon
in writing between the Company and the Trustee. Within 90 days
following the close of each calendar year and within 90 days
after the removal or resignation of the Trustee, the Trustee
shall deliver to the Company a written account of its
administration of the Trust during such year or during the period
from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued
interest paid or receivable being separate), and showing all
cash, securities and other property held in the Trust at the end
of such year or as of the date of such removal or resignation, as
the case may be.
Section 7. Responsibility of Trustee.
(a) The Trustee shall act with the care, skill,
prudence and diligence under the circumstances then prevailing
that a prudent person acting in like capacity and familiar with
such matters would use in the conduct of an enterprise of a like
character and with like aim; provided, however, that the Trustee
shall incur no liability to any person for any action taken (i)
pursuant to an Affidavit delivered to the Trustee by Participant
in accordance with Section 2(b) above or (ii) pursuant to any
written direction, request or approval given by the Company that
is in conformity with the terms of the Deferred Compensation Plan
and this Trust Agreement.
(b) If the Trustee undertakes or defends any
litigation arising in connection with the Trust, the Company
shall indemnify fully the Trustee against the Trustee's costs,
expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be
primarily liable for such payments.
(c) The Trustee may consult with legal counsel (who
may also be counsel for the Company generally) with respect to
any of its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants,
actuaries, investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(e) The Trustee shall have, without exclusion, all
powers conferred on Trustees by applicable law, unless expressly
provided otherwise herein; provided, however, that, if an
insurance policy is held as an asset of the Trust, the Trustee
shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor
trustee (the "Successor Trustee"), or to loan to any person the
proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or applicable law, the Trustee
shall not have any power that could give the Trust the objective
of carrying on a business and dividing the gains therefrom,
within the meaning of Section 301.7701-2 of the Procedures and
Administrative Regulations promulgated pursuant to the Code.
Section 8. Compensation and Expenses of Trustee.
The Company shall pay directly (and not from the assets of the
Trust) all reasonable Trustee's fees and expenses, as may be
agreed to in writing between the Company and the Trustee from
time to time.
Section 9. Resignation and Removal of Trustee.
(a) Subject to Section 10 and the following sentence,
the Trustee may resign at any time by written notice to the
Company, which shall be effective 90 days after receipt of such
notice by the Company, unless the Company and the Trustee agree
in writing otherwise. Such resignation shall not be effective
until such time as a Successor Trustee is duly appointed and
qualified to serve hereunder. Until such time as a Successor
Trustee is duly appointed and qualified to serve hereunder, such
resignation shall not affect (i) the Trustee's obligations to
hold custody of the assets of the Trust, to make payments
contemplated by Section 2 of this Trust Agreement or (ii) the
Trustee's obligations or responsibilities set forth in this Trust
Agreement.
(b) Subject to Section 10, the Trustee may be removed
by the Company on 90 days' prior written notice; provided,
however, that following a Change of Control, the Company may not
remove the Trustee, without the written consent of three-quarters
of the Participants. Such removal shall not be effective until
such time as a Successor Trustee is duly appointed and qualified
to serve hereunder.
(c) Upon the resignation or removal of the Trustee and
appointment of a Successor Trustee, in accordance with Section
10, all assets shall subsequently be transferred to the Successor
Trustee. The transfer shall be completed within 30 days after
the appointment of the Successor Trustee.
(d) If the Trustee resigns or is removed, a successor
shall be appointed, in accordance with Section 10 hereof, by the
effective date of resignation or removal. If no such appointment
has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions
and pending such determination, the Trustee shall continue to
hold the assets of the Trust as a custodian. All expenses of the
Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
(e) This Trust Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original,
but all of which shall together constitute only one agreement.
Section 10. Appointment of Successor.
(a) If the Trustee resigns or is removed in accordance
with the provisions of this Trust Agreement, the Company shall
appoint a bank or trust company unaffiliated with the Company,
any successors to the Company by merger consolidation or
otherwise or any successor to all or substantially all of the
business assets of the Company that has corporate trustee powers
under applicable law and which has trust assets under management
at the time of such appointment of at least $10 billion, as a
successor to replace the Trustee upon such resignation or removal
(the "Successor Trustee"). The appointment shall be effective
when accepted in writing by the Successor Trustee, which shall
have all of the rights and powers of the former Trustee. The
former Trustee shall execute any instrument necessary or
reasonably requested by the Company or the Successor Trustee to
evidence the transfer. Following a Change of Control, the
Trustee may not be removed by the Company unless the then current
Trustee approves the Successor Trustee, which approval shall be
granted only if the Trustee reasonably determines that the
appointment of the Successor Trustee will not impair the rights
of any beneficiary under the Deferred Compensation Plan and this
Trust Agreement.
(b) The Successor Trustee need not examine the records
and acts of any prior Trustee and may retain or dispose of
existing Trust assets, subject to Section 7 hereof. The
Successor Trustee shall not be responsible for and the Company
shall indemnify and defend the Successor Trustee from any claim
or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing
at the time it becomes Successor Trustee.
Section 11. Amendment or Termination.
(a) Prior to a Change of Control, this Trust Agreement
may be amended by a written instrument executed by the Trustee
and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Deferred
Compensation Plan or shall make the Trust revocable.
(b) Following a Change of Control, the Trust Agreement
may not be amended without the prior written consent of three-
quarters of the Participants.
(c) The Trust shall not terminate until the date on
which the Participant and his or her beneficiaries are no longer
entitled to benefits pursuant to the terms of the Deferred
Compensation Plan. Upon termination of the Trust, any assets
remaining in the Trust shall be returned to the Company.
Section 12. Trust Effective Date. This Trust
Agreement shall be effective on the Effective Date.
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited
by law shall be ineffective to the extent of any such
prohibition, without invalidating the remaining provisions
hereof.
(b) Benefits payable to the Participant and his or her
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(d) This Trust Agreement shall be binding upon and
inure to the benefit of any successor(s) or assign(s) of the
Company or the Trustee, or any of its businesses, in whole or in
part, as the result of merger, consolidation, reorganization,
transfer of assets or otherwise, and any subsequent successor
thereto. In the event of any such merger, consolidation,
reorganization, transfer of assets or other similar transaction,
the successor to the Company or the Trustee or its business or
relevant part thereof or any subsequent successor shall promptly
notify the other party hereto in writing of its successorship.
(e) This Trust Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original,
but all of which shall together constitute only one agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Effective Date.
ONEIDA LTD.
By:/s/ EDWARD W. THOMA
Edward W. Thoma
Senior Vice President-Finance
[Name], CHASE MANHATTAN BANK
By:/s/ CAROL M. ECKLER
Title: Vice President
<PAGE>
Exhibit B
Form of Affidavit
I, , under penalties of perjury, do hereby
solemnly swear; (i) that I make this affidavit in order to induce
, as trustee under the Trust Agreement (the "Trust Agreement")
with Oneida Ltd.(the "Company") dated as of __________, 2000, to
pay me the balance of my Account to which I am entitled under the
Oneida Ltd. Deferral Compensation Plan for Key Executives ( the
"Plan"); (ii) that the amount of the payment to which I am
entitled is described in the attached schedule hereto, (iii) that
the events giving rise to the Company's obligation to make such
payment are accurately and fairly described on the attached
schedule, (iv) that I have previously furnished a copy of this
Affidavit to the Company, and (v) this Affidavit is given in
accordance with Section 2(b) of the Trust Agreement.
______________________________
Signature
STATE OF )
ss.:
COUNTY OF )
On the _____ day of __________, 20000, before me
personally came _____________________ to me known, who, being by
me duly sworn, did depose and say that he resides at
________________________, and that the statements herein are all
true and correct.
_________________________________
Notary Public
<PAGE>
EXHIBIT C
[Investment Guidelines]
The initial deposit per Section 1(a) should be invested in
the VISTA U.S. Government Money Market Fund or a money market
fund of equivalent asset size, quality and investment objective.
At the time of a Change in Control and the deposit by the
Company of an additional amount of cash equal to the Obligation,
the Company and Trustee will determine an asset allocation and
investment guidelines which takes into account the payment
requirements and investment rate designated in the Deferred
Compensation Plan and the composition of the Participants.
<PAGE>
EXHIBIT 10(h)
ONEIDA LTD.
RESTORATION PLAN
(Effective January 1, 2000)
<PAGE>
TABLE OF CONTENTS
Page
1. Purpose 1
2. Definitions and Construction 1
(a) Definitions 1
(b) Construction 7
3. Eligibility 8
(a) Initial Participants 8
(b) Other Participants 8
(c) Reemployment 8
(d) Plan Agreement 8
4. Administration 8
(a) General Authority 8
(b) Plan Administrator 8
(c) Actions; Indemnification 9
5. Vesting of Benefits 9
(a) Vesting 9
(b) Forfeiture 9
(c) Forfeiture upon Certain Other Events 9
(d) Definitions 10
6. Normal Retirement Benefit 11
(a) Eligible Participants 11
(b) Amount of Normal Retirement Benefit 11
(c) Increase of Retirement Income Formula 11
7. Early Retirement Benefit 12
(a) Eligible Participants 12
(b) Amount of Early Retirement Benefit 12
8. Disability Benefit 12
(a) Eligible Participants 12
(b) Amount of Disability Retirement Benefit 12
(c) Vesting Service During Disability 12
(d) Death During Disability 13
(e) Normal Retirement Date. 13
9. Government Restoration Benefit 13
10. Other Retirement Income 13
(a) From Retirement Plan, ESOP, Terminated Pension Plan,
Government Restoration Benefit and Company Long-Term
Disability Plan 13
(b) From Social Security 14
11. Death Benefit to Surviving Beneficiary 15
(a) Eligibility for Benefit 15
(b) Amount of Benefit Where Beneficiary Is a Surviving
Spouse 15
(c) Amount of Benefit Where Beneficiary Is Not a Spouse 16
(d) Duration of Benefit 16
12. Forms of Payment 17
(a) Married Participant 17
(b) Single Participant 17
(c) Election of Alternate Payment Form 17
13. Change of Control 17
(a) Changes to the Vesting Schedule 17
(b) Elimination of Early Retirement Factors 17
(c) Effect on Section 5(c) 17
(d) Single Sum Payment 18
(e) Required Trust Contribution 18
14. Actuarial Equivalent 18
15. Amendment and Termination 18
16. Claims Procedure 18
(a) Initial Claim 18
(b) Appeal to the Compensation Committee 19
(c) Finality 19
17. Miscellaneous 19
(a) No Right to Continued Employment 19
(b) Spendthrift Provision 20
(c) Payment of Expenses 20
(d) Payment of Taxes 20
(e) Unfunded 21
(f) Unsecured Promise to Pay 21
(g) Successors 21
(h) Tax Withholding 21
(i) Headings and Captions 21
(j) Governing Law 21
<PAGE
Oneida Ltd.
Restoration Plan
1. Purpose.
The Plan is maintained by the Company for the purpose
of providing Participants with a means of supplementing the
retirement benefits provided to them under the other retirement
plans and programs sponsored or recognized by the Company. The
Plan is intended to be a plan which is unfunded within the
meaning of ERISA and the Code and maintained by the Company
primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees within
the meaning of Section 201(2) of ERISA.
2. Definitions and Construction.
(a) Definitions(a) Definitions(a) Definitions. As
used in the Plan, the following capitalized words shall have the
meanings set forth below:
"Actuarial Equivalent" has the meaning set forth in
Section 14.
"Actuary" means the actuary for the Retirement Plan, as
selected by the Plan Administrator from time to time.
"Beneficiary" means the individual designated by a
Participant to receive survivor benefits under the Plan. A
Beneficiary designation shall be in writing on a form
approved by the Plan Administrator for this purpose. No
Beneficiary designation shall be effective unless it is
signed by the Participant and received by the Plan
Administrator prior to the date of the Participant's death.
If a Participant is married at the time of death, the
Participant's Beneficiary shall be the Participant's
surviving Spouse, unless such Spouse has previously
consented in writing, on such form and in accordance with
such procedures as the Plan Administrator shall specify for
this purpose, to the designation of an individual other than
such Spouse as the Participant's Beneficiary for purposes of
the Plan.
"Board" means the Board of Directors of the Company.
"Cause" shall mean (a) on or after a Change of Control,
"cause" as defined in an Employee Security Agreement
applicable to the Participant or (b) prior to the occurrence
of a Change of Control or, in the case of a Participant who
does not have an Employee Security Agreement that defines
"cause" or for whom the term of the Employee Security
Agreement has expired, (i) a Participant's willfully
engaging in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Companies, (ii)
a Participant's willful and continued failure substantially
to perform his duties with the Companies (other than any
such failure resulting from the Participant's incapacity due
to a Disability) or (iii) a violation of the provisions of
Section 5(c).
"CEO" shall mean the Chief Executive Officer of the
Company.
"Change of Control" shall mean a change of control of
the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act, whether
or not the Company is then subject to such reporting
requirement; provided, however, that, anything in this
Agreement to the contrary notwithstanding, a Change of
Control shall be deemed to have occurred if:
(a) any individual, partnership, firm,
corporation, association, trust, unincorporated
organization or other entity or person, or any
syndicate or group deemed to be a person under Section
14(d)(2) of the Exchange Act is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the
General Rules and Regulations 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 entitled
to vote in the election of directors of the Company;
(b) during any period of two consecutive years
(not including any period prior to the effective date
of this Plan), individuals who at the beginning of such
period constituted the Board and any new directors,
whose election by the Board or nomination for election
by the Company's stockholders was approved by a vote of
at least three-fourths of the directors then still in
office who either were directors at the beginning of
the period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute a majority thereof;
(c) there occurs a reorganization, merger,
consolidation or other corporate transaction involving
the Company (a "Business Combination"), in each case
with respect to which the stockholders of the Company
immediately prior to such transaction do not,
immediately after such transaction, own directly or
indirectly more than 50% of the combined voting power
of the Company or other corporation resulting from such
Business Combination in substantially the same
proportions as their ownership, immediately prior to
such Business Combination, of the voting securities of
the Company;
(d) all or substantially all of the assets of the
Company are sold, liquidated or distributed; or
(e) there occurs a transaction that constitutes a
change in the (i) ownership of the Company, (ii)
effective control of the Company or (iii) effective
ownership of a substantial portion of the assets of the
Company, as determined pursuant to Code Section 280G
and the regulations promulgated thereunder.
"Code" means the Internal Revenue Code of 1986, as
amended, and the applicable rulings and regulations
thereunder.
"Companies" means the Company and each of its
Subsidiaries.
"Company" means Oneida Ltd., a New York corporation,
and any successor to all or substantially all of the
business or assets thereof.
"Compensation Committee" means the Compensation
Committee of the Board, as constituted from time to time.
"Continuous Employment" means the period beginning on a
Participant's employment commencement date with the
Companies and ending on his severance date from the
Companies, as determined by the Plan Administrator in
accordance with rules and procedures promulgated by the
Compensation Committee.
"Deferred Compensation Plan" means the Oneida Ltd.
Deferred Compensation Plan for Key Employees, as amended
from time to time by the Company.
"Disability" means any physical or mental injury or
disorder of a Participant which precludes the continued
active employment of a Participant and which is evidenced by
the Participant's eligibility to receive disability benefits
under the Company Long-Term Disability Plan (or a
determination by the Plan Administrator that such
Participant would be eligible to receive disability benefits
if then participating in such plan).
"Early Retirement Date" means the first day of the
month following a Participant's termination of Continuous
Employment prior to his Normal Retirement Date that is
coincident with or next following the date he (i) has
attained age fifty-five while in Continuous Employment and
(ii) has completed at least five Years of Vesting Service.
"Effective Date" means January 1, 2000.
"Employee Security Agreement" means any written
contract between a Participant and the Company that becomes
effective upon the occurrence of a Change of Control and
which provides specified severance and other protections to
the Participant following the Change of Control.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and the applicable rulings and
regulations thereunder.
"ESOP" means the Oneida Ltd. Employee Stock Ownership
Plan, as amended and restated form time to time.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the applicable rulings and regulations
thereunder.
"FICA and HI Taxes" means the employee portion of
Social Security tax under the Federal Insurance Contribution
Act and Medicare tax.
"Good Reason" shall mean (a) on or after a Change of
Control, "good reason" as defined in an Employee Security
Agreement applicable to the Participant or (b) prior to the
occurrence of a Change of Control or, in the case of a
Participant who does not have an Employee Security Agreement
that defines "good reason" or for whom the term of the
Employee Security Agreement has expired,
(i) a meaningful and detrimental alteration in the
Participant's position, titles, or nature or status of
responsibilities (including reporting responsibilities) from
those in effect immediately prior to the Change of Control;
(ii) a reduction by the Company in the Participant's
annual base salary as in effect immediately prior to the
Change of Control or as the same may be increased from time
to time thereafter; a failure by the Company to increase the
Participant's base salary at a rate commensurate with that
of other key employees of the Company; a failure by the
Company to increase the Participant's base salary on an
annual basis to reflect the percentage increase in the cost
of living (as determined in accordance with such statistics
or indices as the Board shall reasonably consider
appropriate for such purposes); or a reduction in the
Participant's target annual bonus (expressed as a percentage
of base salary) below the target in effect for the
Participant immediately prior to the Change of Control;
(iii) the relocation of the office of the Company
where the Participant is employed at the time of the Change
of Control (the "CIC Location") to a location which in the
Participant's good faith assessment is an area not generally
considered conducive to maintaining the executive offices of
a company such as the Company because of hazardous or
undesirable conditions, including, without limitation, a
high crime rate or inadequate facilities, or to a location
which is more than 25 miles away from the CIC Location or
the Company's requiring the Participant to be based more
than 25 miles away from the CIC Location (except for
required travel on the Company's business to an extent
substantially consistent with your customary business travel
obligations in the ordinary course of business immediately
prior to the Change of Control);
(iv) the failure by the Company to continue to provide
the Participant with benefits at least as favorable in the
aggregate to those enjoyed by such Participant under the
Company's Retirement Plan, ESOP, savings, life insurance,
medical, health and accident, disability, and fringe benefit
plans and arrangements in which the Participant was
participating immediately prior to the Change of Control; or
the failure by the Company to provide the Participant with
the number of paid vacation days to which such Participant
is entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation
policy in effect immediately prior to the Change of Control;
(v) the failure of the Company to obtain an agreement
from any successor to assume and agree to perform the
Company's obligations under this Plan, as contemplated in
Section 17(g) hereof; or
(vi) a material breach by the Company of the provisions
of this Plan.
"Government Restoration Benefit" means the monthly
benefit of a Participant determined in accordance with
Section 9.
"Hour of Service" shall have the same meaning as set
forth in Article 2 of the Retirement Plan.
"Initial Participants" means the individuals named in
Section 3(a).
"Normal Retirement Date" means the first day of the
month following a Participant's termination of Continuous
Employment that is coincident with or next following the
date he (i) has attained age sixty-two while in Continuous
Employment and (ii) has completed at least five Years of
Vesting Service.
"Other Participants" means such other key employees and
individuals who are designated by the CEO and are approved
by the Compensation Committee to participate in the Plan in
accordance with Section 3(b).
"Other Retirement Income" has the meaning set forth in
Section 10 with regard to each of the following: (i) a
Participant's Government Restoration Benefit, (ii) fifty
percent of a Participant's Social Security benefit as
calculated in the manner set forth in Section 10(a), (iii)
the benefits payable in respect of a Participant pursuant to
the Retirement Plan, the ESOP, the Company Long-Term
Disability Plan and the Terminated Pension Plan and (iv) the
benefits payable to the Participant under any other
retirement plan or arrangement of a prior employer that is
designated by the Compensation Committee as a source of
Other Retirement Income.
"Participants" means the Initial Participants and the
Other Participants.
"Plan" means this Oneida Ltd. Restoration Plan, as may
be amended from time to time.
"Plan Administrator" means the person serving from time
to time as the Vice President of Human Resources of the
Company or such other person designated as the Plan
Administrator by the Compensation Committee.
"Plan Agreement" means a written agreement between a
Participant and the Company providing for a Participant's
participation in the Plan.
"Plan Benefit" means the monthly benefit of a
Participant determined in accordance with Section 6, Section
7 or Section 8, or the monthly benefit payable to a
Beneficiary under Section 11.
"Plan Earnings" means for each calendar year (i) the
base salary paid to a Participant for personal services
actually rendered to the Companies for such year and the
annual cash incentive bonus paid to the Participant pursuant
to the Company's annual incentive bonus plan and (ii) the
Participant's elective deferrals under any cafeteria plan
maintained by the Companies under Section 125 of the Code,
the Deferred Compensation Plan, the Oneida Ltd. 401(k)
Savings Plan or any similar pension, welfare, deferred
compensation plan or other plan designated by the Plan
Administrator.
"Plan Year" means the calendar year.
"Retirement" means a Participant's termination of
Continuous Employment under circumstances under which the
Participant is eligible for an immediate Plan Benefit under
Section 6 or 7.
"Retirement Plan" means the Retirement Plan for
Employees of Oneida Ltd., as amended from time to time.
"Social Security Act" or "Social Security" means the
Social Security Act of 1935, as amended, and the applicable
rulings and regulations thereunder.
"Spouse" means the spouse of a Participant who is
legally married to the Participant under the laws of the
jurisdiction in which the marriage was contracted prior to
the Participant's death or his Retirement.
"Subsidiary" means any corporation of which the Company
directly or indirectly controls 50% or more of the total
combined voting power entitled to vote in the election of
directors.
"Terminated Pension Plan" means the Pension Plan of
Oneida Ltd. (USA).
"Trust" means the grantor trust established by written
agreement between the Company and the Trustee for the
purpose of accumulating funds to assist the Company in
meeting its obligations under the Plan, of which the Company
is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Code. The
establishment of the Trust is not intended in any way to
affect the status of the Plan as "unfunded" for purposes of
ERISA and the Code.
"Trust Agreement" means the written agreement between
the Company and the Trustee, as amended from time to time.
"Trust Fund" means the assets of the Trust.
"Trustee" means any bank or trust company (i) that is
not affiliated with any of the Companies and that has, at
the time of appointment, trust assets under management of at
least $10 billion and (ii) with which the Company has
entered into the Trust Agreement pursuant to which such
institution has agreed to administer the Trust and to hold
and distribute the assets of the Trust Fund.
"Year of Vesting Service" means each calendar year in
which a Participant completes 1,000 Hours of Service
beginning with the calendar year in which such Participant's
employment commencement date with the Companies occurs and
ending with the calendar year in which his termination of
employment with the Companies occurs. In addition, if a
Participant does not complete at least 1,000 Hours of
Service during the calendar year in which his employment
commencement date with the Companies occurs, but does
complete at least 1,000 Hours of Service during the
twelve-consecutive month period beginning on his employment
commencement date, then such Participant shall be credited
with a Year of Vesting Service for such twelve-consecutive
month period. For purposes of calculating the amount of a
Participant's Years of Vesting Service, to the extent
provided by the Compensation Committee, employment with a
prior employer or corporation or other entity acquired by
any of the Companies may be taken into account.
(b) Construction. When used herein, unless the context
clearly requires otherwise, the masculine pronoun shall be deemed
to include the feminine, and a singular noun or pronoun shall be
deemed to include the plural form.
3. Eligibility.
(a) Initial Participants. The following individuals shall be the
Initial Participants in the Plan: Allan Conseur, Harold DeBarr,Thomas Fetzner,
J. Peter Fobare, Robert Houle, Peter Kallet, Robert Lupica, Matthew Smith,
Catherine Suttmeier and Edward Thoma. The Initial Participants shall commence
participation in the Plan as of the Effective Date.
(b) Other Participants. Other key employees and senior executives
of any of the Companies shall become Participants in the Plan if designated
by the CEO and approved by the Compensation Committee. Such Other Participants
shall participate in the Plan as of the date specified by the CEO and approved
by the Compensation Committee.
(c) Reemployment. If a Participant terminates
Continuous Employment without a vested right to receive a benefit
under this Plan and subsequently resumes Continuous Employment,
he shall not again become a Participant under the Plan, unless
designated by the CEO and approved by the Compensation Committee
on or after the date of such reemployment. Any such designated
Participant shall resume participation in the Plan as of the date
and pursuant to the terms specified by the CEO and approved by
the Compensation Committee.
(d) Plan Agreement. In order to be eligible to receive
a Plan Benefit, each Participant shall execute a Plan Agreement
with the Company. The Plan Agreement shall contain such terms
and provisions as required by the Compensation Committee and the
Plan Administrator.
4. Administration.
(a) General Authority. The general supervision of the
Plan shall be the responsibility of the Compensation Committee,
which, in addition to such other powers as it may have as
provided herein, shall have the power: (i) to make and enforce
such rules and regulations as it shall deem necessary or proper
for the efficient administration of the Plan; (ii) to interpret
and construe the Plan and the rules and regulations of the
Compensation Committee, to resolve ambiguities, inconsistencies
or omissions in the text of the Plan and to take such other
action as may be necessary or advisable for the orderly
administration of the Plan; (iii) to make any and all factual
determinations in connection with the administration and
implementation of the Plan; (iv) to delegate to any person the
authority to carry out such administrative duties, powers and
authority relative to the administration of the Plan as the
Compensation Committee may determine; and (v) to review actions
taken by the Plan Administrator or any other person to whom
authority is delegated under the Plan.
(b) Plan Administrator. The Plan Administrator shall
be responsible for the day-to-day operation of the Plan, having
the power (except to the extent such power is reserved to the
Compensation Committee) to take all action and to make all
decisions necessary or proper in order to carry out his duties
and responsibilities under the provisions of the Plan. If the
Plan Administrator is a Participant, the Plan Administrator shall
not resolve, or participate in the resolution of, any question
which relates directly or indirectly to him and which, if applied
to him, would significantly vary his eligibility for, or the
amount of, any benefit to him under the Plan. The Plan
Administrator shall report to the Compensation Committee at such
times as the Compensation Committee shall request concerning the
operation of the Plan.
(c) Actions; Indemnification. The members of the
Compensation Committee, the Plan Administrator and any officer or
employee of the Company to whom responsibilities are delegated by
the Compensation Committee or the Plan Administrator shall not be
liable for any actions or failure to act hereunder. The Company
shall indemnify and hold harmless, to the fullest extent
permitted by law, the Compensation Committee (and each member
thereof), the Plan Administrator and any officer or employee of
any of the Companies to whom responsibilities are delegated by
the Compensation Committee or the Plan Administrator from and
against any liabilities, damages, costs and expenses (including
attorneys' fees and amounts paid in settlement of any claims
approved by the Company) incurred by or asserted against it or
him by reason of its or his duties performed in connection with
the operation or administration of the Plan.
5. Vesting of Benefits.
(a) Vesting. Subject to Section 13(a), the Plan
Benefit of each Participant shall be fully vested and
nonforfeitable following the Participant's completion of five
Years of Vesting Service and the occurrence of any of the
following events: (i) death while in Continuous Employment;
(ii) Disability while in Continuous Employment; or
(iii) attainment of age fifty-five while in Continuous
Employment. Notwithstanding the foregoing, the Compensation
Committee may accelerate the vesting of any Participant's Plan
Benefit, if it determines such actions are in the best interests
of the Company.
(b) Forfeiture. Unless otherwise determined by the
Compensation Committee, any Participant who (i) terminates
Continuous Employment prior to vesting in his Plan Benefit or
(ii) is terminated by the Company for Cause at any time, shall
forfeit all rights to payments and benefits under the Plan.
(c) Forfeiture upon Certain Other. In order to
protect the Company's interest in non-public, confidential and
proprietary information and products and other commercial
interests, unless the Compensation Committee determines
otherwise, the Participant shall forfeit any Plan Benefit,
whether or not vested, if, while in Continuous Employment, or,
following the severance of the Participant's Continuous
Employment for any reason, any of the following events shall
occur:
(i) the Participant, while employed by the Companies
or within two years following the termination of his
Continuous Employment, directly or indirectly, whether as
principal or investor or as an employee, officer, director,
manager, partner, consultant, agent or otherwise, alone or
in association with any other person, firm, corporation or
other business organization, carries on a Competing Business
(as defined in Section 5(d)) in any geographic area in which
any of the Companies has engaged, or will engage during such
period (including, without limitation, any area in which any
customer of any of the Companies may be located), without
the prior written consent of the Company;
(ii) the Participant discloses Proprietary Information
(as defined in Section 5(d)) to any unauthorized person
outside the Companies or uses Proprietary Information other
than in connection with the business of the Companies where
such disclosure or use may be adverse to the interests of
the Companies;
(iii) the Participant, while employed by the
Companies or within one year following the termination of
his Continuous Employment, directly or indirectly hires or
attempts to hire any person who is, or during the six month
period preceding termination of the Participant's Continuous
Employment was, employed by the Companies; or
(iv) the Participant, while employed by the Companies,
or within one year following the termination of his
Continuous Employment, solicits any business of any person
or entity who is or was a customer or client of the
Companies.
(d) Definitions
(i) "Proprietary Information" means any information
that may have intrinsic value to any of the Companies, any
clients or other parties with which any of the Companies has
a relationship, or that may provide any of the Companies
with a competitive advantage, including, without limitation,
any trade secrets, formulas, flow charts, computer programs,
access codes or other systems information, algorithms,
business, product, or marketing plans; sales and other
forecasts, financial information, client lists, and
information relating to compensation and benefits; provided,
however, that such Proprietary Information does not include
any information which is available to the general public or
is generally available within the relevant business or
industry other than as a result of the Participant's
actions. Proprietary Information may be in any medium or
form, including, without limitation, physical documents,
computer files or discs, videotapes, audiotapes, and oral
communications.
(ii) "Competing Business" means to engage in the
manufacture of table top products or kitchen cutlery
products or any other business engaged in by the Companies
after the Effective Date; provided, however, that nothing
herein shall limit the right of the Participant to own not
more than one percent of any of the debt or equity
securities of any business organization that is then filing
reports with the Securities and Exchange Commission pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934.
6. Normal Retirement Benefit.
(a) Eligible Participants. A Participant who has a
vested Plan Benefit shall be entitled to retire under the Plan on
his Normal Retirement Date and receive a monthly benefit in the
form of a life annuity in accordance with Section 12 commencing
on his Normal Retirement Date.
(b) Amount of Normal Retirement Benefit. The monthly
amount payable under this Section 6 shall be equal to one-twelfth
of the annual amount determined in accordance with the formula [G
+ ((P x C) - R)] x E, except that the result of ((P x C) - R)
shall not be less than zero, where:
G equals the Participant's Government Restoration
Benefit, as determined in accordance with Section
9;
P equals (i) .5 for Mr. Kallet: (ii) .4 for each
other Initial Participant; and (iii) .3 for each
Other Participant or such other percentage as
specified by the Compensation Committee at the
time of such Other Participant's initial Plan
participation. The Compensation Committee may,
from time to time, increase (but not decrease) the
percentage applicable to any Participant;
provided, however, that such increase shall be
made prior to the date of such Participant's
Retirement;
C equals the Participant's average Plan Earnings for
the three consecutive Plan Years during the ten
consecutive Plan Years immediately preceding the
termination of his Continuous Employment that
produce the highest average; provided, however,
that if the Participant's Plan Earnings for the
Plan Year that includes the date of his
termination of Continuous Employment would result
in such Participant having the highest average
Plan Earnings, then such Plan Year shall be
included in the determination;
R equals the Participant's Other Retirement Income,
as determined in accordance with Section 10; and
E equals 1.0.
(c) Increase of Retirement Income Formula. The
Compensation Committee shall, in its sole discretion, have the
authority to increase the retirement income formula in Section
6(b); provided, however, that such increase shall be made prior
to the date of such Participant's Retirement;. Any such increase
may be limited to one Participant or to one group of Participants
and shall not create any obligation on the Compensation Committee
with respect to any Other Participants in the Plan, whether or
not such Participants are similarly situated to those
Participants benefitting from the increase.
7. Early Retirement Benefit.
(a) Eligible Participants. A Participant who
terminates Continuous Employment with a vested Plan Benefit on or
after attaining age fifty-five, but prior to attaining age sixty-
two, shall begin receiving an early retirement benefit hereunder
in the form of a single-life annuity commencing on the first day
of the month following his termination of Continuous Employment.
(b) Amount of Early Retirement Benefit. The monthly
amount of a Participant's early retirement benefit payable under
this Section 7 shall be equal to one-twelfth of the amount
determined in accordance with the formula [G + ((P x C) - R)] x
E, where G, P and C are as defined in Section 6, where R is as
determined in Section 10, and where:
E equals the applicable early retirement factor
specified in Appendix A.
8. Disability Benefit.
(a) Eligible Participants. If a Participant who has
completed at least five Years of Vesting Service terminates
active employment prior to his Normal Retirement Date by reason
of a Disability, such Participant shall be eligible to receive a
monthly Disability retirement benefit under the Plan in the
amount specified under Section 8(b), beginning on the first day
of the month following the month in which the Participant incurs
a Disability and ending as of the first day of the month in which
occurs the earliest of (i) the Participant's Death, (ii) the end
of the Participant's Disability, (iii) the Participant's return
to active employment with the Companies or any other employer,
(iv) the Participant's Retirement or (v) the Participant's Normal
Retirement Date.
(b) Amount of Disability Retirement. The monthly
amount of a Participant's Disability retirement benefit payable
under this Section 8 shall be equal to one-twelfth of the amount
determined in accordance with the formula (P x C) - R, where P
and C are as defined in Section 6, and where R is as determined
in Section 10.
(c) Vesting Service During Disability. A Participant's
Years of Vesting Service shall include each month for which the
Participant received a Disability benefit under this Section 8
plus all Years of Vesting Service otherwise credited under the
Plan (other than by operation of this Section 8).
(d) Death During Disability. If a Participant (i)
terminates active employment with the Company by reason of
Disability, (ii) dies prior to recovering from such Disability
and (iii) is survived by a Beneficiary, then such surviving
Beneficiary shall be entitled to a death benefit in accordance
with the terms of Section 11.
(e) Normal Retirement Date. A Participant whose
Disability retirement benefit terminates as a result of the
Participant attaining his Normal Retirement Date shall be
eligible to receive a Plan Benefit under Section 6; provided,
however, that "R" in the retirement income formula shall not
include any amount payable to him under the Company Long-Term
Disability Plan after the Participant's Normal Retirement Date.
9. Government Restoration Benefit.
For purposes of determining the Plan Benefit payable
under Section 6, Section 7 and Section 11, "G" in the retirement
income formula in each such section shall be calculated in
accordance with Section 5.1 of the Retirement Plan in an amount
equal to A minus B (provided that the difference is greater than
zero) where:
A equals the benefit that would be payable to the
Participant pursuant to Section 5.1 of the
Retirement Plan if the limitations imposed by
Section 415 and Section 401(a)(17) of the Code are
not imposed; and
B equals the benefit that is actually payable to the
Participant pursuant to Section 5.1 of the
Retirement Plan.
The Government Restoration Benefit will be payable at the time
and in accordance with the terms and conditions of Section 6,
Section 7 and Section 11, as applicable.
10. Other Retirement Income.
(a) From Retirement Plan, ESOP, Terminated Pension
Plan, Government Restoration Benefit and Company Long-Term
Disability Plan. For purposes of determining the Plan Benefit
payable under Section 6, Section 7, Section 8 and Section 11, "R"
in the retirement income formula in each such section shall
include the aggregate annual amount of the Other Retirement
Income a Participant would be entitled to receive as a single-
life annuity from the Retirement Plan, the ESOP, the Terminated
Pension Plan, Government Restoration Benefit, the Company Long-
Term Disability Plan and, if designated by the Compensation
Committee, the benefits payable to the Participant under any
other retirement plan or arrangement of a prior employer as
follows:
1. Calculations for Early Retirement, Normal
Retirement and Death. For purposes of determining
the retirement benefits payable under Section 6,
Section 7 or Section 11, Other Retirement Income
shall be equal to the amount of the retirement
income a Participant is entitled to receive at
Normal Retirement Age under the Retirement Plan,
the ESOP, the Terminated Pension Plan and such
other retirement plan or arrangement of a prior
employer as designated by the Compensation
Committee (calculated, in each case, as if any
prior distributions under such plans had not
occurred), in each case payable in the form of a
single life annuity; provided, however, that if a
Participant is entitled to receive at the time of
his termination of Continuous Employment a
supplemental retirement payment under Section 3 of
the Employee Security Agreement applicable to the
Participant, then "R" for purposes of the
Retirement Plan shall be determined as if the
retirement benefit payable under Section 3 of the
Employee Security Agreement were calculated and
payable at Normal Retirement Age under the
Retirement Plan. For purposes of Section 6,
Section 7 and Section 11, R shall also include the
Government Restoration Benefit in the form of a
single life annuity commencing at Normal
Retirement Date.
2. Calculations for Disability Retirement. For
purposes of determining the Disability benefit
paid under Section 8, Other Retirement Income
shall equal the actual amounts paid to the
Participant from time to time during the period of
Disability under the Retirement Plan, the
Terminated Pension Plan, the Company's Long-Term
Disability Plan and such other retirement plan or
arrangement of a prior employer as designated by
the Compensation Committee, but shall not include
amounts paid under the ESOP. In addition, the
Government Restoration Benefit shall not be
included in R for purposes of calculating the
benefit payable under Section 8.
With respect to the ESOP, the Actuary shall compute the single-
life annuity which is the Actuarial Equivalent of the ESOP's
normal form of benefit. If amounts determined under this Section
10(a) arise out of more than one plan, the provisions of this
Section 10(a) shall be applied separately with respect to each
such plan.
(b) From Social Security. For purposes of determining
the Plan Benefit under Section 6, Section 7 and Section 11, "R"
in the retirement income formula in each such section shall also
include fifty percent of the annual amount of the Primary
Insurance Benefit applicable to a Participant (excluding any
benefit payable on behalf of a spouse or other dependent) under
the Social Security Act as of the Participant's normal retirement
age under the Social Security Act. The Other Retirement Income
determined under this Section 10(b) shall be included in "R" in
the applicable retirement formula as of the Retirement Date and
shall not be redetermined subsequent to such date. For purposes
of determining the Disability benefit paid under Section 8, "R"
in the retirement income formula shall also include the annual
amount of disability benefit applicable to a Participant under
the Social Security Act as a result of such Participant's
Disability.
1. Use of Participant's Benefit at Social Security
Normal Retirement Age. If a Participant has not
delayed his retirement under Social Security
beyond his Social Security normal retirement age,
the Other Retirement Income shall be calculated at
the time such Participant's Plan Benefit is
payable and shall include the amount to be paid to
the Participant at such Participant's Social
Security normal retirement age, provided such
Participant provides the Company with a written
statement documenting the amount to be paid at his
Social Security normal retirement age.
2. Social Security Benefit Calculated by the Actuary.
If a Participant's Social Security benefit is not
determined in accordance with paragraph 1, the
Actuary shall estimate the amount and specify the
commencement date of the Other Retirement Income
as of the time such Participant's Plan Benefit is
payable on the basis of (A) such Participant's
actual earnings history immediately prior to the
commencement of his Plan Benefit or (B) if (i) the
Participant provides the Company with a written
acknowledgment that he will not supply the Company
with his actual earnings history or (ii) such
Participant does not provide such earnings history
to the Company within 90 days following his
termination of Continuous Employment, reasonable
actuarial assumptions as applied to such
Participant's earnings history with the Company.
The Actuary shall assume that the Participant
commences his Social Security benefit at the
earlier of such Participant's Social Security
normal retirement age or the commencement of any
Social Security disability benefit to such
Participant. The determination of the Actuary
with respect thereto shall be final and binding on
all interested persons absent manifest error.
11. Death Benefit to Surviving Beneficiary.
(a) Eligibility for Benefit. If (i) a Participant dies
while in Continuous Employment and prior to Retirement with a
vested Plan Benefit and (ii) at the time of such Participant's
death, the Participant is survived by a Beneficiary, then such
Participant's surviving Beneficiary shall be entitled to benefit
determined in accordance with this Section 11.
(b) Amount of Benefit Where Beneficiary Is a Surviving
Spouse. (i) If the Participant has ten or fewer Years of Vesting
Service at the date of his death while in Continuous Employment,
then the monthly amount of a Plan Benefit payable under this
Section 11 to a Beneficiary of such Participant who is a
surviving Spouse shall be equal to fifty percent of one-twelfth
of the amount of the Plan Benefit which would have been payable
to the Participant as if he had retired on the first day of the
month following the month in which his death occurred with an
annuity for the life of such Participant in accordance with the
formula [G + ((P x C) - R)] x E, where G, P, and C are as defined
in Section 6 and where:
E is calculated in accordance with Appendix A, based
on the age of the Participant at death; and
R equals the amount determined in accordance with
the provisions of Section 10.
(ii) If the Participant has more than ten Years of
Vesting Service at the time of his death while in Continuous
Employment, then the Plan Benefit payable to a Beneficiary of
such Participant who is a surviving Spouse shall be calculated in
accordance with Section 11(b)(i), except that "sixty percent"
shall be substituted for "fifty percent" in the first sentence
thereof.
(c) Amount of Benefit Where Beneficiary Is Not a
Spouse. (i) If a Participant has ten or fewer Years of Vesting
Services at the date of death while in Continuous Employment,
then the monthly amount of the Plan Benefit payable to a
Beneficiary of such Participant who is not a surviving Spouse
shall be an annuity for the life of such Beneficiary equal the
Actuarial Equivalent of fifty percent of one-twelfth of the Plan
Benefit that would have been payable to the Participant under the
Plan if the Participant had retired under Section 7 of the Plan
as of the first day of the month following the month in which the
Participant's date of death occurred (assuming, for this Section
11(c) only, that the requirement under Section 7 that the
Participant have attained age fifty-five did not apply).
(ii) If the Participant has more than ten Years of
Vesting Service at the time of death while in Continuous
Employment, then the Plan benefit payable to a Beneficiary of
such Participant who is not a spouse shall be calculated in
accordance with Section 11(c)(i), except that "sixty percent"
should be substituted for "fifty percent" therein.
(d) Duration of. The payment of the Beneficiary's
benefit shall commence on the first day of the month immediately
following the death of the Participant, with the last payment
being made on the first day of the month coinciding with or
preceding the death of the Beneficiary; provided, however, that
the Compensation Committee, may, in its sole discretion, pay the
Actuarial Equivalent of such Beneficiary's death benefit in a
single sum payment.
12. Forms of Payment.
(a) Married Participant. The Plan Benefit of a
Participant (i) who is married to a Spouse at the time of
Retirement and (ii) who has not made the election and received
the consent of such Spouse as contemplated by Section 12(c) shall
be paid as an annuity for the life of the Participant in the
amount determined under Section 6 or 7, as the case may be, and,
following the death of the Participant, in an annuity for the
life of the Participant's surviving Spouse equal to fifty percent
of the Plan Benefit paid to the Participant; provided, however,
that if the Participant had more than ten Years of Vesting
Service at the time of Retirement, "sixty percent" shall be
substituted for "fifty percent" in this sentence.
(b) Single Participant. The Plan Benefit of a
Participant (i) who is not married to a Spouse at the time of
Retirement and (ii) who has not made the election contemplated by
Section 12(c) shall be paid to the Participant in the form of a
single life annuity calculated in accordance with Section 6 or 7,
as the case may be.
(c) Election of Alternate Payment Form. A Participant
may, in lieu of the payment form contemplated by Section 12(a) or
12(b), as the case may be, elect to receive his Plan Benefit in
the form of a single life annuity determined in accordance with
Section 6 or 7, as applicable, or in the form of a joint and
survivor annuity payable over the combined lives of the
Participant and a non-Spouse Beneficiary which is the Actuarial
Equivalent of such life annuity. Any such election shall be made
on such form and in accordance with such procedures as the Plan
Administrator shall specify, and, in the case of the designation
of a Beneficiary who is not the surviving Spouse of the
Participant at the time of Retirement, such designation shall not
be effective without the written and signed consent of such
surviving Spouse.
13. Change of Control. Anything in the Plan to the
contrary notwithstanding, the provisions of this Section 13 shall
apply in the event of a Change of Control to each Participant who
is employed by the Company immediately prior to the Change of
Control.
(a) Changes to the Vesting. As of the date of a Change
of Control, each Participant shall be immediately vested in his
Plan Benefit.
(b) Elimination of Early Retirement Factors. If a
Participant has at least five Years of Vesting Service as of the
date of the Change of Control, the following shall apply:
(i) "E" in the formula in Section 7 shall equal "one" (1); and
(ii) the Participant shall be eligible to commence receiving his
Plan Benefit under Section 7 regardless of his age as of the
first day of any month following the date his Continuous
Employment terminates on or after the date of the Change of
Control.
(c) Effect on Section 5(c). On and after a Change of
Control, the provisions of Sections 5(c)(i) and 5(c)(iii) shall
cease to apply.
(d) Single Sum Payment. If, during the two-year period
following a Change of Control, a Participant's employment with
the Company is terminated other than for Cause or a Participant
resigns his employment with the Company for Good Reason, the
Actuarial Equivalent of a Participant's Plan Benefit shall be
paid to the Participant in a single sum cash payment within five
days following the date of such termination of employment.
(e) Required Trust Contribution. On the date of a
Change of Control, the Company shall contribute to the Trust a
lump sum cash amount that shall be sufficient to cause the fair
market value of the assets of the Trust Fund on the date of the
Change of Control to equal 110% of the amount that would be the
Plan's projected benefit obligation ("PBO") calculated as of such
date. For purposes of the previous sentence, the PBO of the Plan
shall be determined by the Actuary in accordance with the
directives of Statement of Financial Accounting Standards No. 87,
and after giving full effect to the provisions of this Section
13, except that the interest rate assumption used by the Actuary
for purposes of calculating the PBO of the Plan shall be the
lesser of (i) the interest rate utilized for purposes of
calculating the PBO in the financial statements of the Company
for the most recently completed fiscal year and (ii) 5%. The
determination of the Actuary shall, absent manifest error, be
final and binding on all interested persons. Thereafter, on each
anniversary of the date of the Change of Control, the Company
shall make an additional cash contribution to the Trust Fund in
an amount that shall be sufficient to cause the fair market value
of the assets of the Trust Fund as of such anniversary date to
equal 110% of the PBO calculated as of such date, determined in
accordance with the provisions of this Section 13(e).
14. Actuarial Equivalent. For purposes of
calculating optional forms of benefits under the Plan (including
the lump-sum payment contemplated by Section 13(c) above),
"Actuarial Equivalent" forms of benefit shall be determined in
accordance with the factors, assumptions and methodologies
applicable to such calculations under the Retirement Plan.
15. Amendment and Termination. The Board or the
Compensation Committee may, at any time and from time to time,
amend, modify or terminate the Plan, in whole or in part, in any
manner, whether prospectively or retroactively; provided,
however, that no amendment may reduce the vested accrued benefits
of any Participant without the Participant's written consent.
16. Claims Procedure.
(a) Initial Claim. All claims for benefits under the
Plan shall be submitted in writing to the Plan Administrator on
the form prescribed for that purpose by the Plan Administrator.
Written notice of the Plan Administrator's decision regarding the
application for benefits shall be furnished to the claimant
within ninety days after receipt of the claim; provided, however,
that, if special circumstances require an extension of time for
processing the claim, an additional ninety days from the end of
the initial period shall be allowed for processing the claim, in
which event the claimant shall be furnished with a written notice
of the extension prior to the termination of the initial ninety-
day period indicating the special circumstances requiring an
extension. Any written notice denying a claim shall set forth
the reasons for the denial, including specific reference to
pertinent provisions of the Plan on which the denial is based, a
description of any additional information necessary to perfect
the claim and information regarding review of the claim and its
denial.
(b) Appeal to the Compensation Committee. A claimant
may review all pertinent documents and may request a review by
the Compensation Committee of a decision denying the claim. Such
a request shall be made in writing and filed with the
Compensation Committee within sixty days after delivery to the
claimant of written notice of the decision of the Plan
Administrator. Such written request for review shall contain all
additional information that the claimant wishes the Compensation
Committee to consider. The Compensation Committee may hold a
hearing or conduct an independent investigation, and the decision
on review shall be made as soon as possible after the
Compensation Committee's receipt of the request for review.
Written notice of the decision on review shall be furnished to
the claimant within sixty days after receipt by the Compensation
Committee of a request for review, unless special circumstances
require an extension of time for processing, in which event an
additional sixty days shall be allowed for review, and the
claimant shall be so notified in writing. Written notice of the
decision on review shall include specific reasons for the
decision.
(c) Finality. For all purposes under the Plan, such decision
by the Plan Administrator on claims (where no review is requested) and
decision by the Compensation Committee on review (where review is requested)
shall be final, conclusive and binding on all interested persons
as to participation and benefits eligibility, the amount of
benefits and any other matter of fact or interpretation relating
to the Plan.
17. Miscellaneous.
(a) No Right to Continued Employment. To the extent of any
retirement benefits or other rights accrued
hereunder, the Plan shall be deemed to constitute a contract
between the Company and the Participant, and the Plan (to the
extent of such accrued or other benefits) shall be part of the
consideration or inducement for the employment of such
Participant by the Company. Notwithstanding the foregoing,
nothing contained in the Plan shall be deemed (i) to give any
person the right to be retained in the employ of the Company or
(ii) to interfere with the right of the Company to discharge any
person at any time without regard to the effect which such
discharge shall have upon his rights or potential rights, if any,
under the Plan. The provisions of the Plan are in addition to,
and not a limitation on, any rights which any Participant may
have against the Company by reason of any employment or other
agreement with the Company.
(b) Spendthrift Provision. To fully protect the benefits
hereunder against claims of all kinds, direct or otherwise, none of the
retirement benefits provided hereunder to any person shall be assignable or
transferable voluntarily, nor shall they be subject to the claims of any
creditor whatsoever, nor subject to attachment, garnishment or other legal
process by any creditor or to the jurisdiction of any bankruptcy court or
insolvency proceedings by operation of law or otherwise, and no person shall
have any right to alienate, anticipate, pledge, commute, or encumber any of
such benefits voluntarily or involuntarily; provided, however,
that, as long as no Change of Control has occurred, such payments may be
subject to set-off or counterclaim by, or on behalf of, the Company.
(c) Payment of Expenses. All expenses incurred in connection with the
operation and administration of the Plan or the investment of any assets of the
Trust Fund, if any, including, but not limited to, the compensation of any
Trustee, any Actuary, accountant, counsel, other experts or persons who shall
be employed by the Compensation Committee or the Plan Administrator in
connection with the operation or administration of the Plan, shall be paid
by the Company, unless, if applicable, such expenses are paid from the Trust
Fund in accordance with the provisions of the Trust Agreement.
(d) Payment of Taxes. If any amounts held in the Trust Fund are
found in a "determination," within the meaning of Section 1313(a) of the
Code, to have been includible in the gross income of a
Participant or the Participant's Beneficiary prior to the date
such amounts are otherwise payable to the Participant or the
Participant's Beneficiary under the Plan, then the Company will,
as soon as practicable, (i) pay such amounts to the applicable
Participant or Beneficiary or (ii) notify the Trustee to pay such
amounts to the Participant or the Participant's Beneficiary for
the assets of the Trust. The provisions of this Section 17(d)
shall not apply to any FICA and HI Taxes owed by the Participant
or the Participant's Beneficiary. Promptly after receipt by the
Participant or the Participant's Beneficiary of written notice of
the assertion of any claim, or the commencement of any suit,
action, proceeding, investigation or audit in respect of which
the Participant or the Participant's Beneficiary could receive a
distribution under this Section 17(d), the Participant or the
Participant's Beneficiary shall give written notice to the
Company of the assertion or commencement thereof. The Company
shall have the right (at its own expense) to participate in,
assume the defense of and control any such suit, action,
proceeding, investigation or audit. If the Company assumes the
defense of such an action, (a) no compromise or settlement
thereof may be effected by the Company without the Participant's
or the Beneficiary's consent (which shall not be unreasonably
withheld) and (b) no compromise or settlement thereof may be
effected by the Participant or the Participant's Beneficiary
without the consent of the Company (which shall not be
unreasonably withheld). If the Company elects to assume the
defense of such action, the Participant or the Participant's
Beneficiary may employ his own counsel, at his own expense, to
participate in a secondary role in such defense. If written
notice is given to the Participant or the Participant's
Beneficiary of the assertion of any claim, or the commencement of
any suit, action, proceeding, investigation or audit, and the
Company does not, within ten days after the Participant's or
Beneficiary's written notice to the Company together with
reasonably complete details of the claim, suit, action,
proceeding, investigation or audit, give written notice to the
Participant or the Participant's Beneficiary of its election to
assume the defense thereof, the Company shall be bound by any
determination made in such claim, suit, action, proceeding,
investigation or audit or any compromise or settlement thereof
effected by the Participant or the Participant's Beneficiary.
(e) Unfunded. It is intended that the Plan shall be
unfunded for purposes of the Code and ERISA.
(f) Unsecured Promise to Pay. The Plan shall constitute an
unsecured promise by the Company to make benefit payments in the
future pursuant to the terms hereof, and each Participant's
interest in the Plan shall be solely that of an unsecured general
creditor of the Company.
(g) Successors. The Company shall require any successor to all or
substantially all of its business or assets expressly to assume the Plan and
all of the Company's obligations under the Plan.
(h) Tax Withholding. There shall be deducted and withheld
from all benefit payments (and remitted to the appropriate taxing
authority) any taxes required, in the reasonable judgment of the
Plan Administrator, to be deducted and withheld for payment to
any federal, state, local or other taxing authority.
(i) Headings and Captions. The titles to the sections in the Plan
are for convenience of reference only, and, in case of any conflict, the text
of this instrument, rather than such titles or headings, shall control.
(j) Governing Law. This Plan, the Trust Agreement and
all provisions thereof shall be construed and administered according to the
laws of the State of New York without regard to the choice of law principles
thereof.
ONEIDA LTD.
By:________________________
Name:
Title:
<PAGE>
SCHEDULE A
Early Retirement Reduction Factors
The early retirement reduction table is:
Age Benefit % *
62 100
61 90
60 80
59 70
58 65
57 60
56 55
55 50
54 47.5
53 45
52 42.5
51 40
50 37.5
49 35
48 32.5
47 30
46 27.5
45 25
44 24
43 23
42 22
41 21
40 20
* Applicable benefit percentages shall be interpolated as necessary based on
the Participant's age in years and completed and partial Years of Vesting
Service.
NOTE: Early Retirement Reduction Factors for ages less than age 55 are for
certain death provisions only.
<PAGE>
EXHIBIT 13
CONSOLIDATED STATEMENTS OF OPERATIONS
ONEIDA LTD.
For the years ended January 2000, 1999 and 1998
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Year ended in January 2000 1999 1998
<S> <C> <C> <C>
Net sales $495,056 $465,913 $442,866
Cost of sales 299,071 292,898 274,808
Inventory writedown 3,000 _______ _______
Gross margin 192,985 173,015 168,058
Operating revenues 861 825 _______
193,846 173,840 168,058
Operating expenses:
Selling, distribution
and administrative charges 128,038 128,782 117,357
Restructuring costs and
unusual charges 41,300 4,980 _______
Total 169,338 133,762 117,357
Income from opertions 24,508 40,078 50,701
Other income (expense) 202 837 (1,554)
Interest expense 10,875 8,963 6,823
Income from continuing operations
before income taxes 13,835 31,952 42,324
Provision for income taxes 8,324 12,202 16,189
Income from continuing operations 5,511 19,750 26,135
Gain on disposal of discontinued
operations ______ ______ 2,566
Net income $ 5,511 $ 19,750 $ 28,701
Earnings per share of common stock
Continuing operations:
Basic $.33 $1.18 $1.57
Diluted .32 1.16 1.55
Net income:
Basic .33 1.18 1.73
Diluted .32 1.16 1.71
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Dollars in Thousands)
January 29, 2000 January 30, 1999
<S> <C> <C>
ASSETS
Cash $ 3,899 $ 1,913
Receivables 84,386 75,696
Inventories 183,512 190,112
Other current assets 9,946 8,217
Total current assets 281,743 275,938
Property, plant and equipment 106,277 95,028
Intangible assets-net of accumulated
amortization of $10,061 and $7,156 28,197 39,202
Deferred income taxes 23,042 19,004
Other assets 9,979 12,896
Total assets $449,238 $442,068
LIABILITIES
Short-term debt $31,652 $56,060
Accounts payable 31,585 26,638
Accrued liabilities 57,359 48,384
Current installments of long-term debt 16,010 4,790
Total current liabilities 136,606 135,872
Long-term debt 98,495 89,605
Accrued postretirement liability 57,000 54,264
Accrued pension liability 16,032 9,584
Other liabilities 7,798 12,495
Total liabilities 315,931 301,820
STOCKHOLDERS' EQUITY
Cumulative 6% preferred stock-$25
par value; authorized 95,660 shares,
issued 87,009 and 87,411 shares,
respectively; callable at $30 per share 2,175 2,185
Common stock-$l.00 par value; authorized
48,000,000 shares, issued 17,602,808
and 17,423,478 shares, respectively 17,603 17,423
Additional paid-in capital 81,887 79,737
Retained earnings 64,630 65,870
Accumulated other comprehensive loss (11,790) (11,079)
Less cost of common stock held in
treasury; 1,068,949 and 816,284
shares (19,712) (13,888)
Less unallocated ESOP shares of
common stock of 68,877 (1,486) _______
Stockholders' equity 133,307 140,248
Total liabilities and stockholders'
equity $449,238 $442,068
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
ONEIDA LTD.
for the years ended January 2000, 1999 and 1998
<TABLE>
<CAPTION>
(Thousands)
Accum.
Addt'l Other Unalloc.
Comp. Common Common Preferred Paid-in Retained Comp. Treasury ESOP
Income Shares Stock Stock Capital Earnings Inc.(loss) Stock Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 loss (201) (201)
Comprehensive income $28,500
Effect of 3-for-2 stock
split 5,627 5,627 (6,209)
ESOP activity-net (222)
Balance January 1998 17,091 17,091 2,200 76,007 54,620 (8,669) (5,632) (360)
Stock plan activity, net 369 369 3,729
Purchase/retirement of
treasury stock-net (16) (16) (8,503)
Cancelled stock (21) (21) (15) 1 247
Cash dividends declared
($.50 per share) (8,500)
Net income $19,750 19,750
Other comprehensive loss (2,410) (2,410)
Comprehensive income $17,340
ESOP activity-net 360
Balance January 1999 17,423 17,423 2,185 79,737 65,870 (11,079) (13,888)
Stock plan activity, net 187 187 2,151
Purchase/issuance of
treasury stock-net (6,471)
Cancelled stock (7) (7) (10) (1)
Cash dividends declared
($.40 per share) (6,751)
Net income $5,511 5,511
Other comprehensive loss (711) (711)
Comprehensive income $4,800
ESOP activity-net 647 (1,486)
Balance January 2000 17,603 $17,603 $2,175 $81,887 $64,630 $(11,790) $(19,712) $(1,486)
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
ONEIDA LTD.
for the years ended January 2000, 1999 and 1998
<TABLE>
<CAPTION>
(Thousands)
Year ended in January 2000 1999 1998
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $5,511 $19,750 $28,701
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 10,907 11,717 11,275
Amortization of intangibles 2,905 4,105 2,490
Impairment of assets 11,100
Deferred taxes and other
non-cash charges 1,294 3,077 (8,960)
Decrease (increase) in
operating assets:
Receivables (8,690) (11,775) (13,913)
Inventories 3,600 (53,959) (7,865)
Other current assets (1,729) 1,191 5,424
Other assets 3,092 1,240 412
Increase in accounts payable 4,947 5,557 6,359
Increase (decrease) in
accrued liabilities 8,975 (3,539) 14,029
Net cash provided by
(used in) operating
activities 41,912 (22,636) 37,952
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment
expenditures-net (22,156) (21,268) (13,616)
Other-net (1,020) (916) (105)
Purchase of subsidiaries and
minority interest (5,137) (19,433)
Proceeds from sale of discontinued
operations ______ _______ 33,762
Net cash provided by (used
in) investing activities (23,176) (27,321) 608
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock 2,320 4,098 10,206
Purchase of treasury stock-net (5,824) (8,306) (13,780)
Purchase/allocation of ESOP
Shares-net (1,486) 360 (222)
Payments (borrowings) of short
-term debt-net (24,408) 43,343 (3,182)
Proceeds from issuance of
long-term debt 25,790 24,928 6,000
Payment of long-term debt (5,680) (4,738) (29,704)
Dividends paid (6,751) (8,500) (7,765)
Net cash provided by (used
in) financing activities (16,039) 51,185 (38,447)
EFFECT OF EXCHANGE RATE CHANGES
ON CASH (711) (2,410) (201)
NET INCREASE (DECREASE) IN CASH 1,986 (1,182) (88)
CASH AT BEGINNING OF YEAR 1,913 3,095 3,183
CASH AT END OF YEAR $ 3,899 $ 1,913 $ 3,095
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $10,993 $ 8,562 $ 7,184
Income taxes paid 6,089 14,771 15,516
</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. Certain
reclassifications have been made to the financial statements for
prior years to conform to the presentation for 2000.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
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 29% 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 10-20 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 recorded values.
Revenue Recognition
For financial accounting purposes, 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 2000, 1999
and 1998 the Company purchased 305,000, 363,900 and, on a pre-
split basis, 560,400 shares of treasury stock at an average cost
of $22.27, $23.37 and $24.52, 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 2000, the
Company has been authorized by the Board of Directors to
repurchase up to 572,000 additional shares.
<PAGE>
Advertising Costs
Advertising costs are expensed as incurred. Advertising expenses
amounted to $3,817,000, $3,867,000 and $3,837,000 during 2000,
1999 and 1998, respectively.
Restructuring and Unusual Costs
In the current year, the Company recorded a $44,300,000 charge
for restructuring and other unusual items. This total includes
$3,000,000 of inventory writedowns due to discontinuing certain
product lines, $11,000,000 of charges related to operations
restructuring, $12,000,000 of long-term asset impairments and
$18,300,000 of other unusual charges. These charges reduced
current net earnings by $1.83 per share.
Key components of the restructuring included the closure of the
Company's flatware manufacturing facility in Niagara Falls,
Canada; consolidation of the Company's international operations;
and further elimination of positions and underperforming product
lines. The majority of the $11,000,000 restructuring charge
related to early retirement benefits, severance and associated
employee benefit costs. The closure of the Canadian
manufacturing facility, which was substantially completed in the
first quarter, resulted in the reduction of approximately 150
jobs. Through year-end, the Company actually paid $10,500,000 of
these restructuring costs.
The asset writedowns are related to goodwill associated with the
purchase of a subsidiary and the writedown of manufacturing fixed
assets that will no longer be utilized due to the closing of the
Oneida Canada plant and the exiting of certain product lines.
The full $12,000,000 of non-cash charges were recorded against
the respective assets to reduce them to net realizable value.
The Company recorded a $3,000,000 non-cash inventory reserve
charge as a component of cost of sales to reduce discontinued
product lines to net realizable value. This reserve was fully
utilized to dispose of the discontinued products in 2000.
In the year ended January 2000, the Company expensed $18,300,000
of unusual items. These were costs related to an unsolicited
takeover attempt, litigation costs and costs incurred to overcome
unique market barriers in the foodservice glassware segment.
Approximately $15,200,000 of these unusual expense payments were
made during the year.
In the year ended January 1999, the Company initiated
restructuring efforts by means of a workforce reduction that was
accomplished through job consolidation and early retirements.
The Company previously accrued $4,980,000 to account for the
severance and related employee benefits for this phase. This
charge decreased earnings per share for the year ended January
1999 by $.19. All benefits were paid in the year ended January
2000.
The remaining restructuring and unusual expense accruals will be
paid in the year ending January 2001. There are no anticipated
adjustments needed for any of the restructuring or unusual
expense accruals.
2. 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.
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.
<PAGE>
The components of the deferred tax assets and liabilities are as follows:
(Thousands)
2000 1999
Deferred income taxes:
Postretirement benefits $21,830 $20,818
Employee benefits 14,270 10,837
Other (1,249) 744
Total deferred tax assets 34,851 32,399
Depreciation 8,932 (9,415)
Net deferred tax assets 25,919 22,984
Current deferred tax assets 2,877 3,980
Non-Current deferred tax assets $23,042 $19,004
The provision for income taxes, in continuing operations, consists of the
following:
<TABLE>
<CAPTION>
(Thousands)
2000 1999 1998
<S> <C> <C> <C>
Current tax expense:
U.S. Federal $8,255 $11,106 $13,718
Foreign 2,502 2,945 2,584
State 643 1,027 1,022
11,400 15,078 17,324
Deferred tax benefit 3,076 2,876 1,135
Total $ 8,324 $12,202 $16,189
</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)
2000 1999 1998
<S> <C> <C> <C>
Statutory U.S. Federal taxes $4,842 $11,183 $14,813
Difference due to:
Foreign taxes 2,522 (154) 216
State taxes 418 668 187
Other 542 505 973
Provision for taxes $8,324 $12,202 $16,189
</TABLE>
The following presents the U.S. and non-U.S. components of income before income
taxes.
<TABLE>
<CAPTION>
(Thousands)
2000 1999 1998
<S> <C> <C> <C>
U.S. income $15,606 $23,314 $34,128
Non-U.S. income (1,771) 8,638 8,196
Income from continuing operations $13,835 $31,952 $42,324
</TABLE>
Discontinued operations are shown net of income tax expense of $3,716,000 for
1998.
4. RECEIVABLES
Receivables by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
2000 1999
<S> <C> <C>
Accounts receivable $83,996 $74,439
Other accounts and notes receivable 1,799 2,777
Less allowance for doubtful accounts (1,409) (1,520)
Receivables $84,386 $75,696
</TABLE>
5. INVENTORIES
Inventories by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
2000 1999
<S> <C> <C>
Finished goods $158,260 $160,888
Goods in process 10,885 14,339
Raw materials and supplies 14,367 14,885
Total $183,512 $190,112
Excess of replacement cost over
LIFO value of inventories $ 14,000 $ 20,000
</TABLE>
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
2000 1999
<S> <C> <C>
Land and buildings $ 67,034 $ 56,378
Machinery and equipment 165,391 161,660
Total 232,425 218,038
Less accumulated depreciation 126,148 123,010
Property, plant and equipment-net $106,277 $ 95,028
</TABLE>
7. LEASES
The Company leases factory stores, equipment, warehouses and
office facilities. Lease expense charged to operations was
$7,169,000, $6,193,000 and $5,806,000 for 2000, 1999 and 1998,
respectively.
Future minimum lease payments for all non-cancelable operating
leases having a remaining term in excess of one year at January
2000 are as follows:
<TABLE>
<CAPTION>
Lease
(Thousands) Commitment
<S> <C>
2001 $ 6,318
2002 5,351
2003 4,500
2004 3,658
2005 2,041
Remainder 2,510
Total $24,378
</TABLE>
Under the provisions of some leases, the Company pays taxes,
maintenance, insurance and other operating expenses related to
leased premises.
<PAGE>
8. 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 2000 totaled approximately $18,845. At January 2000, the
Company had lines of credit of $109,440,000 of which $77,788,000
was available.
The weighted average outstanding balances of short-term debt for
the fiscal years ending January 2000 and 1999 were $61,156,000
and $51,848,000; the weighted interest rates for the same periods
were 5.6% and 6.0%, respectively.
9. ACCRUED LIABILITIES
Accrued liabilities by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
2000 1999
<S> <C> <C>
Accrued vacation pay $ 5,607 $ 6,316
Accrued wage incentive 8,614 8,510
Accrued wages and commissions 7,361 4,316
Accrued income taxes 10,529 6,388
Accrued workers' compensation 10,493 11,043
Dividends payable 1,685 1,701
Other accruals 13,070 10,110
Total $57,359 $48,384
</TABLE>
10. LONG-TERM DEBT
Long-term debt at January 2000 and 1999 consisted of the following:
<TABLE>
<CAPTION>
(Thousands)
2000 1999
<S> <C> <C>
Senior notes, 8.52% due January 15,
2002, payable $4,285,710 annually $ 8,571 $12,857
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
(7.07%-7.19%), due February 20, 2001 45,000 41,000
Term loan, various interest rates
(7.41%-7.98%), due August 1, 2007 19,167
Other debt at various interest rates
(5.91%-9.25%) due through 2003 6,767 5,538
Total 114,505 94,395
Less current portion 16,010 4,790
Long-term debt $ 98,495 $89,605
</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 2000 approximates $113,813,000. The fair value
estimate is based on borrowing rates available to the Company
ranging from 7.40% to 8.10%. At January 1999, the carrying value
of the Company's long-term debt approximated fair value of
$97,225,000.
The aggregate amounts of long-term maturities due each fiscal year are as
follows:
<TABLE>
<CAPTION>
(Thousands)
<S> <C>
2001 $ 16,010
2002 55,605
2003 6,293
2004 5,990
2005 5,890
After 24,717
Total $114,505
</TABLE>
Total interest costs incurred by the Company are presented net of
capitalized interest of $1,346,000, $1,037,000 and $412,000 for
2000, 1999 and 1998, respectively.
11. 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 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 2000, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
(Thousands)
2000 1999 1998
<S> <C> <C> <C>
Service cost $1,697 $1,934 $1,892
Interest cost 2,710 2,499 2,680
Expected return on plan assets (2,611) (2,513) (2,133)
Net amortization (296) (291) (113)
Effect of settlement/curtailment 4,487 3,326 _____
Net periodic pension cost $5,987 $4,955 $2,326
</TABLE>
<PAGE>
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 2000
and 1999.
<TABLE>
<CAPTION>
(Thousands)
U.S. PLANS FOREIGN PLAN
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Change in benefit obligation
Benefit obligation-
beginning of year $(45,270) $(28,414) $(6,592) $(6,524)
Service cost (1,544) (1,724) (153) (210)
Interest cost (2,412) (2,083) (298) (416)
Benefits paid 2,657 640 468 433
Plan amendments (314) (578)
Employee contributions (8) (12)
One-time charge-early
retirement (3,875) (3,326) 515
Actuarial gain (loss) 17,783 (10,049) _____ 137
Benefit obligation-end
of year (32,661) (45,270) (6,646) (6,592)
Change in plan assets
Fair value of plan assets-
beginning of year 27,428 23,471 6,885 6,886
Actual return on plan assets 2,697 3,906 184 250
Employer contribution 60 691 37 190
Employee contribution 8 12
Benefits paid (2,657) (640) (468) (433)
Fair value of plan assets-
end of year 27,528 27,428 6,646 6,885
Funded status (5,133) (17,842) 293
Unrecognized net gains (losses) (11,435) 6,896 830
Unrecognized prior service cost 1,333 1,268 1
Unrecognized net asset (797) (948) (82)
Prepaid (accrued) benefit cost $(16,032) $(10,626) $ 0<F1> $1,042
Weighted average assumptions
as of January 29
Discount rate 7.8% 6.4% 5.5% 6.5%
Expected return on plan assets 8.4% 8.4% <F1> 8.5%
Rate of compensation increase 3.5% 3.5% <F1> 5.0%
<FN>
<F1> On August 31, 1999, the foreign plan was changed to a money purchase plan.
</FN>
</TABLE>
The net pension cost associated with the Company's defined
contribution plans was $1,854,000, $2,660,000 and $1,881,000 for
2000, 1999 and 1998, 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 included the following components:
<TABLE>
<CAPTION>
(Thousands)
2000 1999 1998
<S> <C> <C> <C>
Service cost $1,734 $1,273 $1,103
Interest cost 4,287 3,309 3,216
Net amortization (55) (666) (706)
Net periodic postretirement
benefit cost $5,966 $3,916 $3,613
</TABLE>
The following table sets forth the status of the Company's postretirement
plans, which are unfunded, at January 2000 and 1999:
<TABLE>
<CAPTION>
(Thousands)
2000 1999
<S> <C> <C>
Change in benefit obligation
Benefit obligation-beginning
of year $(53,628) $(48,653)
Service cost (1,734) (1,273)
Interest cost (4,287) (3,309)
Benefits paid 3,348 3,208
Employee contributions (521) (414)
Amendments 178
Actuarial loss (3,299) (3,187)
Benefit obligation-end of year $(59,943) $(53,628)
Funded status $(59,943) (53,628)
Unrecognized net losses 5,903 3,290
Unrecognized prior service cost (4,960) (5,926)
Accrued postretirement benefit cost (59,000) (56,264)
Less current portion 2,000 2,000
Accrued postretirement benefit cost $(57,000) $(54,264)
Weighted average assumptions as of
January 29
Discount rate 7.8% 6.5%
Healthcare inflation rate 7.0% 7.5%
</TABLE>
The 2000 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 2000 to increase by $9,232,000 and decrease
by $7,918,000. Additionally, this would increase and decrease
the net periodic postretirement benefit cost for 2000 by
$1,112,000 and $925,000 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.
12. STOCK PLANS
Stock Purchase Plan
At January 2000, under the terms of a stock purchase plan, the
Company has reserved 574,007 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
29, 1999 is $19.58.
<TABLE>
<CAPTION>
2000 1999 1998
<S> <C> <C> <C>
Outstanding at beginning of year 396,821 326,912 465,571
Exercised during the year (62,232) (201,120) (392,912)
Expired during the year (354,715) (176,201) (269,588)
Granted during the year 426,450 447,230 405,565
Adjustment for stock split ________ _______ 118,276
Outstanding at end of year 406,324 396,821 326,912
Average per share price of
rights exercised $22.28 $15.35 $19.99
</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 employee stock purchase plan is non-compensatory and
accordingly, the consolidated statement of operations does not
contain any charges as a result of accounting for this plan.
Stock Option Plan
At January 2000, 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 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 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
Granted 176,000 25.56-25.88 4,501
Exercised (127,338) 6.00-22.58 (1,491)
Expired (35,999) (641)
Outstanding at
January 2000 744,956 7.58-28.13 $14,046
</TABLE>
Options exercisable under the plan at January 2000, 1999 and 1998
amounted to 217,296, 210,538 and 286,490, respectively. The
weighted average exercise price of options exercisable at January
2000, 1999 and 1998 were$12.73, $9.60 and $8.88, 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>
$ 7.58 36,059 3.25 $ 7.58
9.08-12.42 221,918 5.50 10.84
21.88-28.13 486,979 8.88 23.34
744,956
</TABLE>
<TABLE>
<CAPTION>
Options Exercisable
Weighted
Average Weighted
Range of Number Average
Exercise Prices Exercisable Exercise Price
<S> <C> <C>
$ 7.58 36,059 $ 7.58
9.08-12.42 120,214 9.50
21.88-28.13 61,023 22.12
217,296
</TABLE>
<PAGE>
At the time options are exercised, the proceeds of the shares
issued are credited to the related stockholders' equity accounts.
There are no charges to income in connection with the options.
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.
Shareholder Rights Plan
The Company maintains a shareholder rights plan. The rights were
distributed to shareholders at the rate of one right per share.
The rights entitle the holder to purchase one unit of Series A
Preferred Stock at a substantial discount (each unit has the same
voting and economic rights as one share of common stock) 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 20% or
more of the Company's voting common stock. The rights will expire
on December 13, 2009.
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)
2000 1999 1998
<S> <C> <C> <C>
Net Income from Continuing
Operations:
As reported $5,511 $19,750 $26,135
Pro forma 2,667 17,965 24,585
Net Income:
As reported 5,511 19,750 28,701
Pro forma 2,667 17,965 27,151
Earnings Per Share from
Continuing Operations:
As reported: Basic .33 1.18 1.57
Diluted .32 1.16 1.55
Pro forma: Basic .15 1.07 1.46
Diluted .15 1.06 1.44
Earnings Per Share:
As reported: Basic .33 1.18 1.73
Diluted .32 1.16 1.71
Pro forma: Basic .15 1.07 1.62
Diluted .15 1.06 1.59
</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 2000, 1999 and 1998: risk-free
interest rates of 4.82%, 5.13% and 6.03%; dividend yields of
1.42%, 1.64% and 2.51%; volatility factors of the expected market
price of the Company's common stock of 58.5%, 25.9% and 29.7% and
a weighted average expected life of the option of 9 months. The
fair value per share for the options granted during 2000, 1999
and 1998 was $9.15, $7.31 and $4.40, 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 2000, 1999 and 1998,
respectively: risk free interest rate of 5.71%, 5.18% and 6.42%,
dividend yield of 2.0%, 2.0% and 3.33%, volatility factor of the
expected price of the Company's common stock of 33.2%, 29.6% and
26.2% and an expected life of 5.74, 5.99 and 6.50 years. The
fair value per share for the options granted during 2000, 1999
and 1998 was $6.83, $7.37 and $5.30, respectively. The estimated
fair value of the options is expensed over the five-year vesting
period in calculating pro forma amounts.
<PAGE>
13. EARNINGS PER SHARE
The following is a reconciliation of basic earnings per share to
diluted earnings per share for 2000, 1999 and 1998:
<TABLE>
<CAPTION>
Preferred
Net Stock Adjusted Average Earnings
(Thousands except per share amounts) Income Dividends Net Income Shares Per Share
<S> <C> <C> <C> <C> <C>
2000: Basic earnings per share $5,511 $(130) $5,381 16,524 $ .33<F1>
Effect of stock options 148
Diluted earnings per share 5,511 (130) 5,381 16,672 .32<F1>
1999: Basic earnings per share $19,750 (132) $19,618 16,670 1.18<F2>
Effect of stock options 218
Diluted earnings per share 19,750 (132) 19,618 16,888 1.16<F2>
1998: Basic earnings per share 28,701 (132) 28,569 16,507 1.73<F3>
Effect of stock options 233
Diluted earnings per share 28,701 (132) 28,569 16,740 1.71<F3>
<FN>
<F1>The year ended January 2000 includes an amount for
restructuring and unusual charges totaling $44,300,000 or $1.83
per share. See Note 1 of Notes to Consolidated Financial
Statements.
<F2>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.
<F3>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>
14. OPERATIONS BY INDUSTRY SEGMENT
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 customers 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, the United Kingdom and
China.
The accounting policies of the reportable segments are the same
as those described in Note 1 of the 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 2000, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
(Thousands)
Metal Dinnerware Glass Other Total
<S> <C> <C> <C> <C> <C>
2000: Net sales $337,600 $106,200 $37,100 $14,156 $495,056
Operating income 58,400 13,400 2,200 311 74,311
Depreciation and amortization 9,606 4,031 13,637
1999: Net sales $339,800 $92,400 $19,500 $14,213 $465,913
Operating income 41,500 8,500 700 139 50,839
Depreciation and amortization 11,618 4,204 15,822
1998: Net sales $341,336 $84,744 $13,966 $2,820 $442,866
Operating income 46,700 8,500 1,300 183 56,583
Depreciation and amortization 9,418 4,347 13,765
</TABLE>
<PAGE>
The following table reconciles segment operating income to pretax income:
<TABLE>
<CAPTION>
(Thousands)
2000 1999 1998
<S> <C> <C> <C>
Total segment operating income $74,311 $50,839 $56,583
Restructuring and unusual charges 44,300 4,980
Corporate expenses 5,503 5,781 5,882
Consolidated operating income 24,508 40,078 50,701
Interest expense 10,875 8,963 6,823
Miscellaneous income/(expense) 202 837 (1,554)
Pretax income $13,835 $31,952 $42,324
</TABLE>
Financial information relating to the Company's sales and long-
lived assets by geographic area is as follows:
<TABLE>
<CAPTION>
(Thousands)
2000 1999 1998
<S> <C> <C> <C>
Net Sales:
Domestic $426,121 $406,518 $389,598
Foreign operations 68,935 59,395 53,268
Total $495,056 $465,913 $442,866
Long-lived assets:
Domestic $148,310 $137,883 $129,347
Foreign operations 19,185 28,247 24,395
Total $167,495 $166,130 $153,742
</TABLE>
15. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Quarter Ended
May 1, July 31, October 30, January 29,
2000 1999 1999 1999 2000
<S> <C> <C> <C> <C>
Net sales $118,039 $112,073 $134,515 $130,429
Gross margin 43,916 46,186 51,761 51,122
Net income (loss) (18,431) 7,706 4,793 11,443
Earnings per share<F1>:
Basic (1.11) .46 .29 .69
Diluted (1.11) .46 .29 .68
Quarter Ended
May 2, August 1, October 31, January 30,
1999 1998 1998 1998 1999
Net sales $107,055 $104,216 $128,787 $125,855
Gross margin 41,619 39,254 45,683 46,459
Net income 5,555 5,087 5,694 3,414
Earnings per share<F2>:
Basic .33 .30 .34 .20
Diluted .32 .30 .34 .20
<FN>
<F1>The quarter ended May 1, 1999 included restructuring and unusual
charges totaling $35,800,000 or $1.51 per share. The quarter ended
October 30, 1999 included restructuring charges of $8,500,000 or $.32
per share.
<F2>Included in the quarter ended January 30, 1999 is a
restructuring charge of $4,980,000 or $.19 per share.
</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, changes in
stockholders' equity and cash flows present fairly, in all
material respects, the financial position of Oneida Ltd. at
January 29, 2000 and January 30, 1999 and the results of their
operations and their cash flows for each of the three years in
the period ended January 29, 2000, in conformity with accounting
principles generally accepted in the United States. 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 auditing standards
generally accepted in the United States 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 22, 2000
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
2000 1999 1998<F1>
<S> <C> <C> <C>
Net Sales:
Metal Products $337,600 $339,800 $341,336
Dinnerware Products 106,200 92,400 84,744
Glass Products 37,100 19,500 13,966
Other Products 14,156 14,213 2,820
Total 495,056 465,913 442,866
Gross Margin 195,985 173,015 168,058
% Net Sales 39.6% 37.1% 37.9%
Operating Expenses-recurring 128,038 128,782 117,357
% Net Sales 25.9% 27.6% 26.5%
<FN>
<F1> 53 week fiscal year
</FN>
</TABLE>
Fiscal year ended January 2000 compared with fiscal year ended
January 1999
Highlights
In line with the Company's objective of enhancing shareholder
value by becoming the world's most complete tabletop resource, a
series of moves was initiated beginning in 1996 to expand it
product base, secure new markets, reduce costs and strengthen its
global manufacturing, sourcing and distribution capabilities.
In order to accomplish the above goals, the company refocused on
its core competency in tableware through a combination of
acquisitions, divestitures, investments and distribution
agreements.
October 1996 - Adopted a plan to dispose of its industrial wire
subsidiary, Camden Wire Co., Inc. Sale was completed in February
1997.
November 1996 - Acquired Rego China, a leading supplier of
commercial dinnerware products to the foodservice industry. The
first full year of operational results was January 1998.
March 1997 - Acquired Encore Promotions, Inc. to market tabletop
products to the supermarket industry.
September 1997 - Acquired 25.1% interest in Schott Glass and
began distributing their glassware to consumer and foodservice
maerkets both domestically and internationally.
November 1997 - Signed licensing agreement with Robinson Knife
Manufacturing Co. for the sale of consumer kitchenware, utensils
and related accessories.
January 1998 - Acquired Table Top Engineering & Design (TTE&D),
an Italian company used to develop metal products for
international foodservice markets.
July 1998 - Acquired all of the assets of Stanley Rogers and
Westminster China, two Australian-based tabletop businesses.
August 1998 - Signed distribution agreement with CALP SpA of
Italy to market their crystal in both domestic consumer and
foodservice markets.
February 1999 - Completed construction of a 203,000-square-foot
warehouse/decorating facility in Buffalo, N.Y., for distribution
of all of Oneida's foodservice dinnerware products.
April 1999 - Closed its Canadian flatware manufacturing plant and
relocated production to its Oneida/Sherrill, N.Y. and Toluca,
Mexico plants.
January 2000 - Commenced operation of a new production facility
in China for the manufacture of foodservice metalware products.
March 2000 - Opened a new 206,000-square-foot
warehouse/distribution center in Oneida/Sherrill, N.Y., which
will consolidate several public and leased warehouses into one
modern facility to provide state-of-the-art customer service.
Operations
2000 consolidated net sales increased by $29,143 or 6.3% compared
to the previous year. Sales of the Company's metal tableware
products were flat compared to 1999. Sales of dinnerware
products grew 14.9% over 1999 levels. The current year was the
Company's first full year of distributing glass products to all
markets, as reflected by the 90% growth in that product segment.
Excluding a $3,000 restructuring charge related to discontinuance
of certain product lines, gross margin increased to 39.6% of net
sales from 37.1% in 1999. Including this special charge, the
gross margin percentage was 39.0% in the current year. The
increase in margin is attributable to enhanced manufacturing
efficiencies resulting from the Company's restructuring
activities.
<PAGE>
Operating expenses (excluding restructuring and unusual charges)
decreased by $744 or .6% from 1999 expenditures, primarily due to
savings generated by the Company's restructuring program. As a
percentage of net sales, recurring operating expenses decreased
to 25.9% from 27.6% in the prior year.
In the current year, the Company recorded a $44,300 charge for
restructuring and other unusual costs. This total includes
$3,000 of inventory writedowns due to discontinuing of certain
product lines (reported in cost of sales), $11,000 of charges
related to operations restructuring, $12,000 of long-term asset
impairments and $18,300 of other unusual charges. Key components
of the restructuring were the closure of the Company's flatware
manufacturing facility in Niagara Falls, Canada; consolidation of
the Company's international operations; and further elimination
of positions and underperforming product lines.
The majority of the $11,000 restructuring charge relates to early
retirement benefits, severance and associated employee benefit
costs. Through year-end, the Company has paid $10,500 of these
restructuring costs.
The asset writedowns are related to goodwill associated with the
purchase of a subsidiary and the writedown of manufacturing fixed
assets that will no longer be utilized due to the closing of the
Oneida Canada plant and the exiting of certain product lines.
The full $12,000 of non-cash charges were recorded against the
respective assets to reduce them to net realizable value. The
Company recorded a $3,000 non-cash inventory charge as a
component of cost of sales to reduce discontinued product lines
to net realizable value. This reserve was fully utilized to
dispose of the discontinued products.
The Company also expensed $18,300 of unusual items. These were
costs related to an unsolicited takeover attempt, litigation
costs and costs incurred to overcome unique market barriers in
the foodservice glassware market. Through year-end,
approximately $15,200 of these unusual expense payments were
made.
The Company expects to reduce expenses by $20,000 per year as a
result of its restructuring program. No anticipated adjustments
are needed for the remaining restructuring and unusual items
accruals, which will be paid in the year ended January 2001.
2000 interest expense (prior to capitalized interest) increased
by $2,221 or 22.2%. This increase was principally due to higher
debt levels. These borrowings were incurred to finance working
capital needs as well as construction of the Company's new
product distribution facilities in both Oneida/Sherrill and
Buffalo, New York and to fund certain restructuring and unusual
charges.
Year 2000.
Year 2000 issues relate to the ability of computer systems to
distinguish data that contains dates beyond December 31, 1999.
The Company created and implemented a comprehensive Year 2000
compliance plan.
As part of its compliance plan the Company reviewed all of its
software and information processing systems and identified date
sensitive functions. Those systems were then tested and, if
necessary, brought into compliance prior to January 1, 2000. The
Company also contacted and worked with its major customers,
suppliers, service providers and business partners to ensure year
2000 readiness. Finally, the Company developed and maintains a
Year 2000 contingency plan.
Based on the information available as of the date hereof, all of
the Company's critical systems successfully made the year 2000
transition and neither the Company nor its major customers,
suppliers, service providers or business partners experienced
significant events attributable to year 2000 issues. The Company
continues to monitor year 2000 developments closely to insure a
timely response to any issues that may arise.
Since 1998 the Company incurred a total of $500 in costs directly
related to year 2000 evaluation, preparation and compliance. The
Company does not expect to incur any additional, significant
direct costs related to the year 2000 issue.
<PAGE>
Notwithstanding the foregoing, the Company could still be
adversely affected if its customers, suppliers, service
providers, business partners and/or governmental agencies have
not yet brought all of their systems into year 2000 compliance.
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 Madison and Oneida,
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 OneidaValley
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 Company's headquarters and main manufacturing and
distribution facilities are located within this land claim area.
The Company 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 pending. Settlement discussions
continue between the Oneidas', Madison and Oneida counties and
the State of New York.
In addition to the foregoing, the Company is involved in various
routine legal proceedings incidental to the operation of its
business. Other than as discussed herein, the Company's
management does not believe there is any ongoing or pending
litigation with a possible material effect on the financial
position of the Company.
Liquidity and Financial Resources
During the current year, the Company invested approximately
$23,000 in capital additions, primarily in its distribution and
manufacturing facilities. Construction of a new 206,000 square
foot warehouse facility in Oneida/Sherrill, New York was
completed in March 2000. The new warehouse is expected to yield
significant logistical efficiencies and savings. Overall, the
Company plans to spend $14,000 on capital projects in the
upcoming year. The Company spent $9,811 in the current year to
purchase common shares as treasury shares or as a contribution to
its ESOP plan.
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
2000, the Company had unused short-term credit lines equal to
$77,788. Working capital as of January 2000 totaled $145,137.
The Company has foreign exchange exposure related to its foreign
operations in Mexico, Canada, Italy, Australia the United Kingdom
and China (see Note 14 for details on the Company's foreign
operations). Translation adjustments recorded in the income
statement were not of a material amount.
<PAGE>
Management's Discussion
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 were flat from 1998. 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 39.6% 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 channel.
Gross margin as a percent of net sales decreased to 37.1% from
37.9% in 1998. The decline was 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,
acquisitions and the start-up of new product lines. 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 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.
Forward Looking Information
With the exception of historical data, the information contained
in this report 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 customers; underutilization of the Company's plants and
factories; and the amount and rate of growth of the Company's
selling, general and administrative expenses.
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 2000 was 4,610. 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 2000 and 1999 fiscal years.
<TABLE>
<CAPTION>
JANUARY 2000 JANUARY 1999
Fiscal Dividends Dividends
Quarter High Low Per Share High Low Per Share
<S> <C> <C> <C> <S> <C> <C> <C>
First $25.63 $13.06 $.10 First $31.81 $25.31 $.10
Second 31.38 23.25 .10 Second 31.31 25.13 .20
Third 26.19 23.25 .10 Third 26.44 12.94 .10
Fourth 23.94 20.69 .10 Fourth 19.13 13.50 .10
</TABLE>
<PAGE>
FIVE YEAR SUMMARY
ONEIDA LTD.
(Millions except per share amounts)
<TABLE>
<CAPTION>
Year ended January 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net sales $495.1 $465.9 $442.9 $376.9 $363.8
Gross margin<F1> 196.0 173.0 168.1 133.0 127.3
Depreciation and
amortization expense 13.8 15.8 13.8 12.0 10.6
Operating income 68.8 45.1 50.7 35.9 33.2
Income from continuing
operations<F1> 35.9 22.8 26.1 17.3 15.4
Income (loss) from
discontinued operations 2.6 (.3) 2.7
Net income<F1> 35.9 22.8 28.7 17.0 18.1
Cash dividends declared
Preferred stock .1 .1 .1 .1 .1
Common stock 6.6 8.4 7.6 5.9 5.3
PER SHARE OF COMMON STOCK
Continuing
operations<F1><F2> 2.15 1.35 1.55 1.02 .93
Discontinued
operations<F1><F2> .16 (.02) .16
Net income<F1><F2> 2.15 1.35 1.71 1.00 1.09
Dividends declared .40 .50 .45 .35 .32
FINANCIAL POSITION
Total assets 449.2 442.1 363.6 350.2 306.6
Working capital 145.1 140.1 119.3 122.9 140.1
Total debt 146.2 150.5 86.8 113.4 91.9
Stockholders' equity 133.3 140.3 135.3 118.3 106.3
SHARES OF CAPITAL STOCK
Outstanding at end
of year
Preferred 87 87 88 89 89
Common 16,465 16,607 16,609 16,640 16,499
Weighted average number
of common shares
outstanding during the
year<F2> 16,672 16,888 16,740 16,775 16,529
SALES OF MAJOR PRODUCTS BY
PERCENT OF TOTAL SALES
Metal products 68% 73% 77% 83% 83%
Dinnerware products 21% 20% 19% 13% 12%
Glass products 8% 4% 3% 3% 3%
Other product 3% 3% 1% 1% 2%
<FN>
<F1> Amounts are before restructuring and other unusual charges of
$44.3 and $5.0 in the years ended January 2000 and 1999,
respectively. In 2000, restructuring charges included in cost of
sales were $3.0. These charges reduced net income by $30.4, or
$1.83 per share, and $3.1, or $.19 per share in 2000 and 1999,
respectively.
<F2>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 International, Inc. Delaware 94
Oneida Mexicana, S.A. de C.V. Mexico 100
Oneida, 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 FINANCIAL SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM ONEIDA LTD.'S ANNUAL REPORTS FOR THE FISCAL YEARS ENDED JANUARY
29, 2000, JANUARY 30, 1999 AND JANUARY 31, 1998 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-29-2000 JAN-30-1999 JAN-31-1998
<PERIOD-START> JAN-31-1999 FEB-1-1998 JAN-26-1997
<PERIOD-END> JAN-29-2000 JAN-30-1999 JAN-31-1998
<CASH> 3,899 1,913 3,095
<SECURITIES> 0 0 0
<RECEIVABLES> 84,386 77,216 65,818
<ALLOWANCES> 1,409 1,520 1,896
<INVENTORY> 183,512 190,112 133,419
<CURRENT-ASSETS> 281,743 275,938 209,844
<PP&E> 232,425 218,038 206,272
<DEPRECIATION> 126,148 123,010 121,460
<TOTAL-ASSETS> 449,238 442,068 363,586
<CURRENT-LIABILITIES> 136,606 135,872 90,510
<BONDS> 98,495 89,605 69,415
0 0 0
2,175 2,185 2,200
<COMMON> 17,603 17,423 17,091
<OTHER-SE> 113,529 120,640 115,966
<TOTAL-LIABILITY-AND-EQUITY> 449,238 442,608 363,586
<SALES> 495,056 465,913 442,866
<TOTAL-REVENUES> 495,917 466,783 442,866
<CGS> 299,071 292,898 274,808
<TOTAL-COSTS> 299,071 292,898 274,808
<OTHER-EXPENSES> 169,338 133,762 117,357
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 10,875 8,963 6,823
<INCOME-PRETAX> 13,835 31,952 42,324
<INCOME-TAX> 8,324 12,202 16,189
<INCOME-CONTINUING> 5,551 19,750 26,135
<DISCONTINUED> 0 0 2,566
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 5,511 19,750 28,701
<EPS-BASIC> .33<F1> 1.18<F1> 1.73<F1>
<EPS-DILUTED> .32 1.16 1.71
<FN>
<F1> The amount reported as ESP-PRIMARY is actually Earnings Per Share - Basic,
as the corporation adopted SFAS 128 "Earnings Per Share" as of January 31, 1998.
</FN>
</TABLE>
