UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
Oneida Ltd.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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[ONEIDA LOGO]
ONEIDA LTD., ONEIDA, NY 13421
PETER J. KALLET TERRY G. WESTBROOK
Chairman of the Board President and
Chief Executive Officer
April 25, 2005
TO OUR STOCKHOLDERS:
You are cordially invited to attend ONEIDA LTD.'S 124th Annual Meeting on
May 25, 2005.
Details regarding time and place as well as the matters which will be
considered at the meeting are described in the accompanying Notice and Proxy
Statement.
We hope that you can attend. However, whether or not you plan to attend,
please sign and date the enclosed proxy card and return it promptly in the
postpaid envelope we have provided. This will enable you to vote on the business
to be transacted, whether or not you attend the meeting.
Sincerely,
/s/ Peter J. Kallet /s/ TERRY G. WESTBROOK
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TABLE OF CONTENTS
Page
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Notice of 2005 Annual Meeting of Stockholders
Proxy Statement ................................................................ 1
General Information ......................................................... 1
Proxy Solicitation .................................................... 1
Who May Vote .......................................................... 1
Voting by Proxy ....................................................... 1
Voting Shares Held in "Street Name" ................................... 1
Voting in Person ...................................................... 1
Signatures on Proxy ................................................... 1
Revocation of Proxy ................................................... 1
Effect of Proxy Voted in Blank ........................................ 2
Quorum ................................................................ 2
Required Votes ........................................................ 2
Board of Directors' Voting Recommendations ............................ 3
Other Proposed Actions ................................................ 3
Stockholder Proposals for Inclusion in 2006 Proxy Statement ........... 3
Stockholder Proposals for Presentation at 2006 Annual Meeting ......... 3
Stockholder Attendance at Annual Meeting .............................. 3
Election of Directors (Proxy Item 1) ........................................ 4
Board of Directors .................................................... 4
Nominees for Director ................................................. 4
Recommendation of the Board of Directors .............................. 6
Corporate Governance ........................................................ 7
Director Independence ................................................. 7
Meetings of the Board of Directors .................................... 7
Committees of the Board of Directors .................................. 7
Meetings of Independent Directors ..................................... 8
Attendance at Annual Meeting .......................................... 8
Directors' Compensation ............................................... 9
Communications with the Board of Directors ............................ 9
Availability of Corporate Governance Documents ........................ 10
Compensation Committee Interlocks and Insider Participation ........... 10
Certain Relationships and Related Transactions ........................ 10
Security Ownership of Certain Beneficial Owners ............................. 10
Security Ownership of Management ............................................ 12
'SS' 16(a) Beneficial Ownership Reporting ............................. 12
Change in Control During Last Fiscal Year ............................. 13
Executive Compensation ...................................................... 13
Summary Compensation Table ............................................ 13
Stock Options ......................................................... 14
Pension Plan Table .................................................... 15
Agreements with Named Executives ...................................... 17
Report of the Management Development and Executive Compensation Committee ... 18
Report of the Audit Committee ............................................... 20
Independent Auditors ........................................................ 21
Amendment to Certificate of Incorporation to Reduce Minimum Required Size of
Board of Directors (Proxy Item 2) ........................................ 22
Vote Required ......................................................... 22
Recommendation of the Board of Directors .............................. 22
Amendment to Certificate of Incorporation to Increase Number of Authorized
Shares of Common Stock (Proxy Item 3) .................................... 22
Vote Required ......................................................... 23
Recommendation of the Board of Directors .............................. 23
Amendment to Certificate of Incorporation to Increase Number of Authorized
Shares of Series Preferred Stock (Proxy Item 4) .......................... 23
Vote Required ......................................................... 23
Recommendation of the Board of Directors .............................. 23
Stock Performance Graph ..................................................... 24
Other Matters ............................................................... 25
Incorporation by Reference ............................................ 25
Annual Report ......................................................... 25
Exhibit A: Proposed Amendment to the Certificate of Incorporation of Oneida
Ltd. to Reduce Minimum Required Size of Board of Directors ............... 26
Exhibit B: Proposed Amendment to the Certificate of Incorporation of Oneida
Ltd. to Increase Number of Authorized Shares of Common Stock ............. 27
Exhibit C: Proposed Amendment to the Certificate of Incorporation of Oneida
Ltd. to Increase Number of Authorized Shares of Series Preferred Stock ... 28
ONEIDA
ONEIDA LTD.
163-181 Kenwood Avenue
Oneida, New York 13421
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NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 25, 2005
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ONEIDA LTD.
will be held at the Hyatt Regency Chicago, 151 East Wacker Drive, Chicago,
Illinois 60601, on May 25, 2005 at 9:00 a.m. local time. At the Meeting,
stockholders will be asked to:
1. elect two directors for one-year terms, one director for a two-year
term and three directors for three-year terms;
2. consider and vote upon a proposal to approve the amendment to the
Oneida Ltd. Certificate of Incorporation to reduce the minimum
required size of the Board of Directors from nine to five Directors;
3. consider and vote upon a proposal to approve the amendment to the
Oneida Ltd. Certificate of Incorporation to increase to 100,000,000
the number of authorized shares of Common Stock;
4. consider and vote upon a proposal to approve the amendment to the
Oneida Ltd. Certificate of Incorporation to increase to 10,000,000 the
number of authorized shares of Series Preferred Stock;
5. transact such other business as may properly come before the Meeting
or any adjournment thereof.
Only holders of Common Stock of record at the close of business on April
18, 2005 are entitled to notice of and to vote at the Annual Meeting. Whether or
not you plan to attend the Annual Meeting in person, please sign and date the
enclosed proxy and return it promptly in the enclosed envelope so your stock can
be voted in accordance with the terms of the Proxy Statement.
By Order of the Board of Directors
/s/ Catherine H. Suttmeier
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CATHERINE H. SUTTMEIER
Secretary
Oneida, New York
April 25, 2005
ONEIDA LTD.
Oneida, New York 13421
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PROXY STATEMENT
for
2005 ANNUAL MEETING OF STOCKHOLDERS
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GENERAL INFORMATION
The solicitation of the enclosed proxy is made on behalf of the Board of
Directors of Oneida Ltd. (the "Company"), which will bear the cost of the
solicitation. Distribution of this Proxy Statement and related proxy soliciting
materials to stockholders is scheduled to begin on or about April 27, 2005.
Proxy Solicitation
Officer, directors or employees of the Company may solicit proxies by
communicating with stockholders personally or by telephone, facsimile, e-mail,
telegraph or mail. Expenses, including out-of-pocket expenses and charges which
may be incurred or made by nominees or custodians solicited in obtaining
authorization from their principals to execute proxies, will be borne by the
Company. The Company has retained The Altman Group, Inc. to assist in the
solicitation of proxies from banks, brokers and nominees for an estimated fee of
$4,500, plus other costs and expenses, to be paid by the Company.
Who May Vote
Only holders of record of the Common Stock of the Company as of the close
of business on April 18, 2005 are entitled to vote at the Annual Meeting.
Voting by Proxy
To vote by proxy complete, sign and date the enclosed proxy card and return
it in the prepaid envelope provided.
Voting Shares Held in "Street Name"
If your shares are held in a brokerage account in the name of your bank,
broker or other nominee (which is referred to as "street name"), your bank,
broker or other nominee will send you directions on who to vote those shares.
Voting in Person
If you are a shareholder of record and prefer to vote your shares at the Annual
Meeting, you should bring the enclosed proxy card, or the proxy card you
received from your bank, broker or other nominee and valid photo identification.
Signatures on Proxies
If stock is registered in the name of two or more trustees or other
persons, the proxy should be signed by each of them. If stock is registered in
the name of a decedent, the proxy should be signed by an executor or
administrator, whose title should follow the signature. If a stockholder is a
corporation, the enclosed proxy should be signed by an executive officer, whose
title should be indicated.
Revocation of Proxy
A stockholder of record may revoke a proxy at any time before the vote is
taken at the Annual Meeting by sending written notice of the revocation to the
Corporate Secretary of the Company, by submitting another proxy that is properly
signed and bears a later date, or by voting in person at the Annual Meeting. All
properly executed proxies not revoked will be voted at the Annual Meeting in
accordance with their instructions.
Effect of Proxy Voted in Blank
A proxy that is signed and returned by a stockholder of record without
specifications marked in the instruction boxes will be voted as follows (1)
"FOR" the election of two directors for one-year terms, one director for a
two-year term and three directors for three-year terms; (2) FOR" the approval of
amendment to the Oneida Ltd. Certificate of Incorporation to reduce the minimum
required size of the Board of Directors from nine to five Directors; (3) "FOR"
the approval of amendment to the Oneida Ltd. Certificate of Incorporation to
increase to 100,000,000 the number of authorized shares of Common Stock; and (4)
"FOR" the approval of the amendment to the Oneida Ltd. Certificate of
Incorporation to increase to 10,000,000 the number of authorized shares of
Series Preferred Stock. In each case where the giver of a proxy has directed
that the proxy be voted otherwise, it will be voted according to the direction
given. If any other proposals are properly brought before the Annual Meeting and
submitted to a vote, all proxies will be voted on those other proposals in
accordance with the judgment of the persons voting the proxies.
Quorum
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the shares of Company Common Stock outstanding on April 18,
2005, in the aggregate, will constitute a quorum, permitting the stockholders to
conduct business at the meeting. We will include abstentions and broker
non-votes in the calculation of the number of shares considered to be present at
the meeting. A broker non-vote occurs when a nominee holding shares in street
name for a beneficial owner has not received instructions from the beneficial
owner and does not have discretionary authority to vote the shares. As of that
date, there were outstanding 46,631,924 shares of Common Stock. Each share is
entitled to one vote.
Required Votes
Election of Directors. An affirmative vote of a majority of stockholders
present in person or by proxy is necessary for the election of directors. An
abstention is treated as present and entitled to vote on each proposal and
therefore has the effect of a vote against each proposal. A nominee holding
shares in street name does not have discretionary voting power with respect to
this proposal and may not vote shares unless the nominee receives voting
instructions from the beneficial owner. Accordingly, a broker non-vote is not
counted for voting purposes with respect to this proposal.
Approval of Amendment to Certificate of Incorporation to Reduce Size of
Board. An affirmative vote of the holders of a least 80% of all Company Common
Stock issued and outstanding is necessary for the approval of the amendment to
the Oneida Ltd. Certificate of Incorporation to reduce the minimum required size
of the Board of Directors from nine to five Directors. An abstention has the
effect of a vote against each proposal. A nominee holding shares in street name
does not have discretionary voting power with respect to these proposals and may
not vote shares unless the nominee receives voting instructions from the
beneficial owner. Accordingly, a broker non-vote has the effect of a vote
against these proposals.
Approval of Amendments to Certificate of Incorporation to Increase
Authorized Shares. An affirmative vote of a majority of the holders of all
Company Common Stock issued and outstanding is necessary for the approval of the
amendments to the Oneida Ltd. Certificate of Incorporation to increase to
100,000,000 the number of authorized shares of Common Stock and to 10,000,000
the number of authorized shares of Series Preferred Stock. An abstention has the
effect of a vote against each proposal. A nominee holding shares in street name
does not have discretionary voting power with respect to these proposals and may
not vote shares unless the nominee receives voting instructions from the
beneficial owner. Accordingly, a broker non-vote has the effect of a vote
against these proposals.
Board of Directors Voting Recommendations
The Company's Board of Directors unanimously recommends voting as follows:
1. "FOR" the election of the two nominees for director for one-year terms, the
one nominee for director for a two-year term and the three nominees for
director for three-year terms;
2. "FOR" the approval of amendment to the Oneida Ltd. Certificate of
Incorporation to reduce the minimum required size of the Board of Directors
from nine to five Directors;
3. "FOR" the approval of amendment to the Oneida Ltd. Certificate of
Incorporation to increase to 100,000,000 the number of authorized shares of
Common Stock; and
4. "FOR" the approval of amendment to the Oneida Ltd. Certificate of
Incorporation to increase to 10,000,000 the number of authorized shares of
Series Preferred Stock
Other Proposed Actions
Other than the foregoing, the Board of Directors knows of no matters which
will be presented at the Annual Meeting for action by stockholders. However, if
any other matters properly come before the meeting, or any adjournment thereof,
it is anticipated that the proxies will be voted according to the best judgment
of the persons acting by authorization of the proxies.
Stockholder Proposals for Inclusion in 2006 Proxy Statement
In order to be considered for inclusion in the Company's proxy statement
relating to the 2006 Annual Meeting, stockholder proposals must be received at
the Company's principal executive offices no later than the close of business on
December 24, 2005. Stockholder proposals should be addressed to Catherine H.
Suttmeier, Secretary, 163-181 Kenwood Avenue, Oneida Ltd., Oneida, New York
13421.
Stockholder Proposals for Presentation at 2006 Annual Meeting
For stockholder proposals that are not submitted for inclusion in the
Company's 2006 proxy statement, but are instead sought to be presented directly
at the Company's 2006 Annual Meeting of Stockholders, Securities and Exchange
Commission rules permit management to vote proxies using their discretionary
voting authority if notice of the stockholder proposal is not received on or
prior to the close of business on February 28, 2006. Notice of intention to
present stockholder proposals at the Company's 2006 Annual Meeting should be
addressed to Catherine H. Suttmeier, Secretary, 163-181 Kenwood Avenue, Oneida
Ltd., Oneida, New York 13421.
Stockholder Attendance at Annual Meeting
The Company's Annual Meeting is open to all holders of record of Oneida
Ltd. common stock as of April 18, 2005, the record date of the Annual Meeting.
To attend the meeting you will need to register upon your arrival. At that time
you may be asked to present valid picture identification, such as a driver's
license or passport, before being admitted. If your shares are held in a
brokerage account in the name of your bank or broker, you should bring a recent
brokerage account statement reflecting your stock ownership as of April 18,
2005. If we cannot verify that you own Oneida Ltd. shares, it is possible that
you may not be admitted to the Annual Meeting. Cameras, recording devices, and
other electronic devices will not be permitted at the meeting.
ELECTION OF DIRECTORS (PROXY ITEM 1)
Board of Directors
As of the date of this Proxy Statement, the Company's Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws specify that the
Board of Directors of the Company shall consist of not less than nine nor more
than fifteen Directors. Subject to stockholder approval of Proxy Item 2 at the
2005 Annual Meeting of Stockholders, the minimum required size of the Board of
Directors of the Company shall be reduced to five. The Company's Bylaws and
Certificate of Incorporation also provide that the Board of Directors is divided
into three classes of Directors, each consisting, as nearly as possible, of one
third of the entire Board.
On August 9, 2004 the Company completed the comprehensive restructuring of
its existing indebtedness with its lenders which included the conversion of $30
million of principal amount of debt into an issuance of a total of 29,852,907
shares of the common stock of the Company to the individual members of the
lender group or their respective nominees. As part of this debt to equity
conversion the Company's Board of Directors was reorganized in October 2004
with the stockholder-lenders designating six of the Board's nine members. As a
result, effective October 25, 2004, the following Company Board members
voluntarily resigned their positions as directors of the Company: William F.
Allyn, Georgia S. Derrico, J. Peter Fobare, Whitney D. Pidot, Catherine H.
Suttmeier and William M. Tuck. In their places, the following individuals
were appointed directors of the Company effective October 25, 2004:
William C. Langley, Hugh R. Rovit, Christopher H. Smith, Fred Spivak,
Terry G. Westbrook and Nick White.
As of April 11, 2005 the Company's Board of Directors was comprised of nine
members, divided into three classes of directors serving staggered terms. As of
that date no family relationships existed among any of the Directors, nor is
there any arrangement or understanding pursuant to which any person was selected
as a Director. Directors hold office for a term ending on the date of the first,
second or third Annual Meeting following the Annual Meeting at which such
Director was elected. At the 2005 Annual Meeting, stockholders are being asked
to elect two directors for one-year terms expiring at the 2006 Annual Meeting,
one director for a two-year term expiring at the 2007 Annual Meeting and three
directors for three-year terms expiring at the 2008 Annual Meeting.
Nominees for Director
The six nominees are members of the present Board of Directors. Messrs.
Langley, Rovit, Smith, Spivak, Westbrook and White were each appointed to the
Board in October 2004 for terms expiring in May 2005. Each of these nominees was
recommended by the Nominating and Corporate Governance Committee. Peter J.
Kallet, the Company's current Chairman of the Board and former President and
Chief Executive Officer, was elected to a three-year term in 2003. Mr. Kallet
has announced that he will retire from his Board position effective May 25,
2005. Mr. Kallet's seat will not be filled at the time of his retirement.
Each nominee has consented to being named in this Proxy Statement and to
serve if elected. The Management has no reason to believe that any of the
nominees will be unable or unwilling to serve. Should any nominee named in the
table become unable or unwilling to accept nomination or election as a director,
the persons acting under the proxy intend to vote for the election in his or her
stead of such other person as the Nominating and Corporate Governance Committee
may recommend.
Nominees for a one-year terms expiring in May 2006 and Director continuing
in office whose term expires in May 2006
Peter J. Marshall (a)(b)............ Vice President and Chief Finance
Director since August 2002, Age 51 Officer, Dover Technologies
International, Inc.
Mr. Marshall has held the above position for more than the past five years.
Hugh R. Rovit (a)(c)(e)............. Consultant
Director since October 2004, Age 44
Mr. Rovit was a principal of the turnaround management firm Masson & Company
from 2001 through 2005. Previously Mr. Rovit held the position of Chief
Financial Officer of Best Manufacturing, Inc., a manufacturer and distributor of
institutional service apparel and textiles, from 1998 through 2001; Chief
Financial Officer of Royce Hosiery Mills, Inc., a manufacturer and distributor
of men's and women's hosiery, from 1991 through 1998; Assistant to the Chairman
of The Natori Company, Inc., a manufacturer of intimate apparel and accessories,
from 1998 through 1991; and Analyst and Associate with Lehman Brothers from 1983
through 1985, and 1987 through 1988, respectively.
Terry G. Westbrook (b)(c)........... President and Chief Executive Officer of
Director since October 2004, Age 58 Oneida Ltd.
Mr. Westbrook was named President and Chief Executive Officer of Oneida Ltd. in
March 2005. Since 2003, Mr. Westbrook has been a Managing Director of Foundation
Equity Investors Ltd., a private investment firm. Mr. Westbrook held the
positions of Executive Vice President and Chief Financial Officer of Amrita
Holdings, LLC, a private equity holding company, from 2002 to 2003; Senior Vice
President and Chief Financial Officer, General Binding Corporation, an office
products manufacturer and supplier, from 1999 through 2002; Senior Vice
President and Chief Financial Officer of Utilicorp United, an energy company,
from 1996 through 1998; Senior Vice President and Chief Financial Officer of the
Quaker Oats Company from 1991 through 1996, and other executive positions with
the Quaker Oats Company from 1984 through 1991; and Vice President, Corporate
Development, Stokely-Van Camp, Inc., a consumer foods and edible oils
manufacturer, from 1982 through 1984. Previously, Mr. Westbrook also held
corporate and operating management positions within General Mills, Inc.
Nominee for a two-year term expiring in May 2007 and Director continuing
in office whose term expires in May 2007
Gregory M. Harden (d)(e)............ President and Chief Executive Officer,
Director since 1998, Age 48 Harden Furniture Co., Inc.
Mr. Harden has held the above position for more than the past five years. Mr.
Harden is a director of Phoenix Footwear Group, Inc.
Fred Spivak......................... Senior Managing Director of the
Director since October 2004, Age 53 restructuring firm of Management
Services Consultants, LLC
Mr. Spivak has been Senior Managing Director of the restructuring firm of
Management Services Consultants, LLC since 2004. Mr. Spivak held the positions
of Executive Vice President and Chief Financial Officer of Colorado Prime Foods,
a telemarketer and distributor of food products, appliances and housewares, from
2000 through 2004; Managing Director and Chief Operating Officer of Morgan-Walke
Associates, a public relations firm, from 1997 through 2000; Vice President,
Finance & Administration and Chief Financial Officer of Lifetime Hoan
Corporation, a distributor of household cutlery and kitchenware, from 1984
through 1997; and Controller, Vida Shoes International, an importer and
distributor of women's footwear, from 1981 through 1984. Previously Mr. Spivak
held various financial positions with Olivetti Corporation and was a member of
the amounting firm of KPMG LLP.
Nominees for three-year terms expiring in May 2008
William C. Langley (a)(c)........... Former Executive Vice President and
Director since October 2004, Age 66 Chief Credit and Risk Policy Officer of
Mr. Langley is a Director of the banking corporation now known as
Singer N.V., a Netherlands Antilles JPMorgan Chase & Co.
corporation.
From 1961 through 1996 Mr. Langley held various executive positions with Hanover
Bank, Manufacturers Hanover Corporation, Chemical Banking Corporation and Chase
Manhattan Corporation, including most recently, Executive Vice President and
Chief Credit and Risk Policy Officer of the banking corporation now known as
JPMorgan Chase & Co.
Christopher H. Smith (a)(b)(c)(d)... Managing Principal of Alexander, Smith &
Director since October 2004, Age 66 Company, Inc.
Mr. Smith has been Managing Principal of Alexander, Smith & Company, Inc., a
merchant banking firm, since 1986. In the context of his work with Alexander,
Smith and Company, Inc., Mr. Smith has held executive positions with a variety
of Alexander, Smith and Company clients, including London Fog Industries, Inc.,
Escada AG and Puma USA, Inc. Previously Mr. Smith was of counsel to the law firm
of Foley & Lardner from 1994 through 1999; President and Chief Executive Officer
of Barnes Engineering Company, a designer and manufacturer of electro-optics for
defense and commercial applications, from 1977 through 1986; held several legal
and executive positions, including General Counsel and Chief Executive Officer,
with FAG Bearings Corporation from 1968 through 1997; and a member of the law
firm of Whitman & Ransom from 1966 through 1993.
Nick White (d)(e)................... President and Chief Executive Officer of
Director since October 2004, Age 60 White & Associates
Mr. White has been President and Chief Executive Officer of White & Associates,
a management consulting firm, since 2000. From 1973 through 2000 Mr. White held
numerous executive and management positions with Wal*Mart, including Executive
Vice President, Wal*Mart, Inc. and General Manager of Supercenter division from
1989 to 2000; and Executive Vice President and General Manager of Sam's
Wholesale Club from 1985 through 1989. From 1968 through 1973 Mr. White held a
management position with Spartan-Atlantic Department Stores. Mr. White served in
the United States Marine Corps from 1963 through 1966.
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(a) Member of the Audit Committee.
(b) Member of the Executive Committee.
(c) Member of the Finance Committee.
(d) Member of the Management Development and Executive Compensation
Committee.
(e) Member of the Nominating and Corporate Governance Committee.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends a vote "FOR" the election of
the two nominees for director for one-year terms, the one nominee for director
for a two-year term and the three nominees for director for three-year terms.
CORPORATE GOVERNANCE
Director Independence
The Board of Directors has determined that each of the current Directors,
except Messrs. Kallet, Spivak and Westbrook, are "independent" under the current
independence standards of the Securities and Exchange Commission, and have no
material relationships with the Company (either directly or as a partner,
shareholder or officer of any entity) which could be inconsistent with a finding
of independence. In making these determinations, the Board of Directors has
broadly considered all relevant facts and circumstances, recognizing that
material relationships can include commercial, banking, consulting, legal,
accounting, and familial relationships, among others.
Mr. Kallet was not deemed "independent" because he was an executive officer
of the Company until March 2005 and will remain an employee of the Company
thereafter. Mr. Westbrook is not deemed "independent" because he became an
executive officer of the Company in March 2005.
Meetings of the Board of Directors
During the past fiscal year, the Board of Directors held 28 meetings. All
directors attended more than seventy-five percent of the total number of
meetings of the Board of Directors and of the standing committees on which they
served held during the periods of their tenure during the past fiscal year.
Committees of the Board of Directors
The Company's Board of Directors has five standing committees: an Audit
Committee, an Executive Committee, a Finance Committee, a Management Development
and Executive Compensation Committee and a Nominating and Corporate Governance
Committee. All members of the Audit, Management Development and Executive
Compensation and Nominating and Corporate Governance Committees have been
determined by the Board to be "independent" under the above-referenced director
independence standards. The Audit, Management Development and Executive
Compensation and Nominating and Corporate Governance Committees operate under
written charters that are available, without cost, on the "Investor Information"
section of the Company's Internet website at www.oneida.com.
Audit Committee. During the past fiscal year, the Committee held six
meetings. The Committee's primary responsibility is oversight of the accounting
and financial reporting processes of the Company and the audits of the Company's
financial statements. In particular, the Committee continually reviews and
provides guidance on the organization, quality and integrity of the Company's
accounting systems and internal controls, reviews and preapproves all annual and
quarterly financial statements and reports, press releases and related
disclosures, ensures the Company's compliance with legal and regulatory
requirements, tracks important trends and developments in financial reporting
practices and provides guidance relative to their effects on the Company's
financial statements, discusses with the independent auditors all critical
accounting policies and practices to be used by the Company in preparing its
financial statements, appoints the independent auditor and periodically
reevaluates the independent auditors' qualifications and independence, approves
all audit and non-audit work to be performed by the independent auditors,
supervises the internal audit function's organization, responsibilities, plans,
results, budget and staffing supervises, reviews and makes recommendations to
the Board of Directors with respect to the independent auditors' management
letter and prepares an annual Committee Report for inclusion in the Company's
proxy statement. The Committee's responsibilities are set forth in more detail
in the Amended and Restated Audit Committee Charter attached to this Proxy as
Exhibit A.
The Board of Directors has determined that each of the four current members
of the Audit Committee, Messrs. Langley, Marshall, Rovit and Smith, meets the
Securities and Exchange Commission criteria to qualify as an audit committee
financial expert, is financially literate and has accounting or related
financial management expertise. In making recommendations and determinations
regarding audit committee financial experts, the Audit Committee and Board of
Directors considered all relevant academic and professional experience of the
Committee members.
Executive Committee. During the past fiscal year, the Committee held eight
meetings. The Committee has authority to exercise all powers of the Board
Directors of the Company when it is not practical or not feasible for the full
Board to meet.
At the present time the Executive Committee has established subcommittees
to deal with the following, specific Company matters: Logistics, Information
Technology, Legal Processes and Costs, Human Resources, Consumer Division
Reorganization, Oneida Home Stores, International, Financial and Cash Flow
Reporting, and Sourcing and Supply Chain Management.
Finance Committee. The Finance Committee was formed in February 2005. As
such, the Committee held no meetings during the past fiscal year. The Committee
advises and assists the Board with respect to all aspects of financing and
financial planning for the Company, including but not limited to, the
investigation of all inquiries received by the Company that involve proposals to
acquire the Company's debt, equity or otherwise arrange a business combinations.
The Committee also has responsibility for communications from the Board to any
lender or prospective lender to the Company.
Management Development and Executive Compensation Committee. During the
past fiscal year, the Committee held three meetings. The Committee reviews and
establishes the salaries of the officers who are compensated at an annual basic
rate of $150,000 or more. The committee also makes recommendations to the Board
of Directors with respect to the organization, management and personnel of the
Company and has responsibility for administering the Company's stock option
plans, restricted stock awards, deferred compensation and incentive compensation
plans. In addition, the committee also makes recommendations to the Board of
Directors with respect to the investment of funds held in the pension and profit
sharing plans of the Company and its subsidiaries.
Nominating and Corporate Governance Committee. During the past fiscal year,
the committee held one meeting. The Committee has responsibility for
recommending to the Board of Directors: (i) an annual slate of directors to be
elected at the Annual Meeting of Stockholders, (ii) as needed, candidates to
fill vacancies on the Board, and (iii) compensation to be paid to non-employee
Directors. In addition, the Committee advises the Board periodically with
respect to significant developments in the law and practice of corporate
governance as well as the Company's compliance with the Company's Corporate
Governance Guidelines and applicable laws and regulations, and makes
recommendations to the Board on all matters of corporate governance and on any
corrective action to be taken, as the Committee may deem appropriate.
The Nominating and Corporate Governance Committee will consider Director
nominations timely made by stockholders pursuant to the requirements of the
Company's "Stockholder Proposals" provision located in the "Other Matters"
section of this Proxy Statement. As with candidates recommended by the
Nominating and Corporate Governance Committee, Director candidates nominated by
stockholders must be highly qualified and be willing, able and expressly
interested in serving on the Company's Board of Directors.
Meetings of Independent Directors
The independent members of the Board of Directors meet without members of
management or directors not determined to be independent at least once each
Company fiscal quarter. The Board of Directors has determined that a presiding
director should chair all such meetings of the independent directors. In
December 2004, Mr. Christopher H. Smith was elected to serve as Chairperson of
the meetings of independent directors through May 25, 2005.
Attendance at Annual Meeting
The Company expects all directors to attend the Annual Meeting of
Stockholders each year. All of the Company's then-current directors attended the
Company's 2004 Annual Meeting of Stockholders.
Directors' Compensation
Prior to October 25, 2004, Directors who were not employees of the Company
received $19,000 on an annual basis for serving as directors of the Company.
They also received $1,250 per Board meeting, $750 each for the first two
committee meetings held on the day of regular Board meetings, $400 for the third
committee meeting held on the day of regular Board meetings and $750 for special
committee meetings not held on the day of regular Board meetings. Committee
chairpersons received an additional $50 per committee meeting. In lieu of the
foregoing committee meeting and chair fees, the Chairperson of the Audit
Committee received $1,200 for each Audit Committee meeting.
Effective October 25, 2004, Directors who are not employees of the Company
receive $36,000 on an annual basis for serving as Directors of the Company.
Non-employee Directors who chair a Board committee receive an additional annual
retainer of $6,000. Non-employee Directors who serve on a Subcommittee receive
an additional retainer of $500 per month. Non-employee Directors also receive
$1,500 per each Board, Committee and Subcommittee meeting. The total of the
monthly Subcommittee retainer and meeting fees cannot exceed $1,500 for any
single Director. In addition to the foregoing retainer and meeting fees, such
Directors will also receive $200 per each hour, up to a maximum of $1,500 per
each day, they spend outside of normal Board, Committee and Subcommittee
meetings in furtherance of the discharge of their fiduciary duties.
On April 5, 2005 the Board of the Company approved a stock-based
compensation arrangement for the non-employee members of the Board. Under this
arrangement, each non-employee Director as of October 25, 2004 was granted
10,000 shares of "phantom stock". The value of one share of "phantom stock" will
be equal to the value of one share of the Company's Common Stock on the relevant
determination date. Each grant will vest at a rate of 20% on the date of grant,
30% on October 25, 2005 and October 25, 2006, respectively, and 20% on October
25, 2007.
Under the Oneida Ltd. 2000 Non-Employee Directors' Equity Plan, each
non-employee director may elect to receive all or a portion of his or her annual
retainer in Common Stock of the Company. The total number of shares is
determined by dividing the portion of the annual retainer that the director has
elected to receive in Common Stock by the average closing price of the stock for
the five day period immediately preceding the Board of Directors meeting at
which annual retainers are paid. During the past year none of the non-employee
directors elected to receive a portion of his or her annual retainer in Common
Stock.
Pursuant to the 2003 Non-Employee Directors Stock Option Plan, as amended,
each newly elected non-employee member of the Board of Directors is granted an
option to purchase 3,000 shares of the Company's Common Stock upon his or her
election or appointment to the Board. Thereafter, each continuing non-employee
member of the Board is granted an annual option to purchase 1,000 shares of the
Company's Common Stock. All Director options have a per share exercise price
equal to the fair market value of the shares on the date of grant. Director
options automatically vest and become exercisable twelve months from date of
grant. All Director options expire ten years from date of grant.
Communications with the Board of Directors
The Board of Directors has approved a process for stockholders, Company
employees and other interested parties to send communications to the Board of
Directors, committee chairs and/or individual directors. Stockholders, Company
employees and other interested parties may communicate with the full Board of
Directors, a specified committee of the Board, the chair of any Board committee,
the independent directors and/or a specified individual director by United
States mail addressed to P.O. Box 935, Oneida, New York 13421, via the Internet
at www.ci-wackenhut.com/oneida.htm, or by telephone at (877) 209-3664. The Board
has instructed the Secretary of the Company to forward all United States mail
promptly to the relevant addressee. Telephone calls and Internet communications
will be handled by The Wackenhut Corporation, a third party service provider,
who will summarize the information provided in a report that is promptly
provided to the appropriate individual.
Availability of Corporate Governance Documents
The Company has adopted Corporate Governance Guidelines, a Code of Business
Conduct and Ethics and charters of the Audit Committee, Management Development
and Executive Compensation Committee, and Nominating and Corporate Governance
Committee of its Board of Directors. Each of these documents is available,
without cost, on the "Investor Information" section of the Company's Internet
website at www.oneida.com. Copies of these materials are also available in print
upon receipt of written request addressed to Oneida Ltd., Investor Relations
Department, 163-181 Kenwood Avenue, Oneida, New York 13421. The Company intends
to promptly disclose all amendments to, and waivers of any of the provisions of,
these documents on the Company's website.
Compensation Committee Interlocks and Insider Participation
During the last fiscal year from February through October 2004, Ms. Georgia
S. Derrico and Messrs. William F. Allyn, Gregory M. Harden, Peter J. Marshall
and William M. Tuck served as members of the Company's Management Development
and Executive Compensation Committee. None of these Committee members was,
during or prior to that period, an officer or employee of the Company or its
subsidiaries, and no such member had any interlocking relationships with the
Company that was subject to disclosure under the rules of the SEC relating to
compensation committees.
From October 2004 through the end of the fiscal year ended January 2005,
Messrs. Peter J. Marshall, Terry G. Westbrook and Nick White served as members
of the Company's Management Development and Executive Compensation Committee.
None of these Committee members was, during or prior to that period, an officer
or employee of the Company or its subsidiaries, and no such member had any
interlocking relationships with the Company that was subject to disclosure under
the rules of the Securities and Exchange Commission relating to compensation
committees
Certain Relationships and Related Transactions
The Company has, for over 75 years, used the services of the law firm of
Shearman & Sterling, in which Mr. Whitney D. Pidot, a Board member until October
2004, was a partner and member of the Executive Group, for a variety of matters.
Management believes that the Company's relationship with Shearman & Sterling
during the past fiscal year was on terms that were reasonable and in the best
interests of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists the only stockholders known to the Company to be
beneficial owners of more than five percent of the Company's Common Stock as of
December 31, 2004:
Shares
Owned and
Nature of
Name and Address Beneficial Percent of
of Beneficial Owner Ownership Class
------------------- ---------- ----------
JP Morgan Chase Bank................................... 7,378,612 15.8%
270 Park Avenue (1)
New York, NY 10017
Bank of America Corporation............................ 5,574,226 11.9%
100 N. Tryon Street (2)
Floor 25, Bank of America Corporate Center
Charlotte, NC 28255
Fidelity Management Trust Company...................... 1,544,436 11.02%
Trustee for the Benefit of the Oneida Ltd. (3)
Employee Stock Ownership Plan
82 Devonshire Street
Boston, MA 02109
Anchorage Capital Master Offshore, Ltd................. 3,351,636 7.2%
650 Madison Avenue, 26th Floor (4)
New York, NY 10022
QDRF Master Ltd........................................ 3,180,912 6.8%
375 Park Avenue, 14th Floor (5)
New York, NY 10152
Barclays Bank PLC...................................... 3,007,993 6.45%
200 Park Avenue (6)
New York, NY 10166
(1) The Company has received a copy of a Schedule 13D dated August 9, 2004 and
filed with the Securities and Exchange Commission by JPMorgan Chase Bank
reporting beneficial ownership of shares received as a result of the
comprehensive restructuring of the Company's existing indebtedness with its
lenders. This Schedule indicates that shared voting and dispositive power
for all 7,378,612 shares are held JPMorgan Chase Bank.
(2) The Company has received copies of a Schedule 13D dated August 9, 2004 and
a Schedule 13G dated December 31, 2005 filed with the Securities and
Exchange Commission by Bank of America Corporation reporting beneficial
ownership of shares received as a result of the comprehensive restructuring
of the Company's existing indebtedness with its lenders. This Schedule
indicates that shared voting and/or dispositive power for the 5,574,226
shares are held by Bank of America Corporation, NB Holdings Corporation,
Bank of America, N.A., NationsBanc Montgomery Holdings Corporation, Banc of
America Securities LLC, Fleet National Bank, and Banc of America Strategic
Solutions, Inc.
(3) On June 8, 1987, the Company established an Employee Stock Ownership Plan
for the benefit of its Oneida Ltd. employees. The individual employee
participants have sole voting power for the shares. The Company is the
named fiduciary and administrator of the plan, and a committee appointed by
the Board of Directors has sole dispositive power with regard to the
shares, except that the individual employee participants have dispositive
powers with regard to the shares in the event of a tender offer or any
other offer or option to buy or exchange a significant number of shares in
the trust. Fidelity Management Trust Company, as trustee for the plan, has
no discretionary power over the shares.
(4) The Company has received a copy of a Schedule 13D dated August 9, 2004 and
filed with the Securities and Exchange Commission by Anchorage Capital
Masters Offshore, Ltd. reporting beneficial ownership of shares received as
a result of the comprehensive restructuring of the Company's existing
indebtedness with its lenders. This Schedule indicates that shared voting
and/or dispositive power for all 3,351,636 shares are held by Anchorage
Capital Masters Offshore, Ltd., Anchorage Advisors, L.L.C., Anchorage
Advisors Management, L.L.C., and Mr. Kevin M. Ulrich and Mr. Anthony L.
Davis, managing members of Anchorage Advisors, L.L.C.
(5) The Company has received a copy of a Schedule 13D dated August 9, 2004 and
filed with the Securities and Exchange Commission by QDRF Masters Ltd.
reporting beneficial ownership of shares received as a result of the
comprehensive restructuring of the Company's existing indebtedness with its
lenders. This Schedule indicates that shared voting and dispositive power
for the 3,180,912 shares are held by QDRF Master Ltd., Quadrangle Debt
Opportunities Fund Master Ltd., QDRA LLC and Mr. Andrew Herenstein, Mr.
Christopher Santana and Mr. Michael Weinstock, managing members of QDRA
LLC.
(6) The Company has received a copy of a Schedule 13D dated August 9, 2004 and
filed with the Securities and Exchange Commission by Barclays Bank PLC
reporting beneficial ownership of shares received as a result of the
comprehensive restructuring of the Company's existing indebtedness with its
lenders. This Schedule indicates that shared voting and dispositive power
for all 3,007,994 shares are held Barclays Bank PLC and Barclays PLC.
SECURITY OWNERSHIP OF MANAGEMENT
The following table lists the Company's Common Stock beneficially owned by
the management and directors of the Company as of April 1, 2005:
Shares Owned
and Nature of
Beneficial Percent of
Name of Beneficial Owner Ownership Class
------------------------ --------------- ----------
Allan H. Conseur............................................. 70,583(1)(2)
J. Peter Fobare.............................................. 104,927(1)(2)
Gregory M. Harden............................................ 54,319(3)(4)
James E. Joseph.............................................. 33,455(1)(2)
Peter J. Kallet.............................................. 252,671(1)(2)
William C. Langley........................................... 0(4)
Paul Masson.................................................. 0
Peter J. Marshall............................................ 6,000(4)(5)
Hugh R. Rovit................................................ 0(4)
Christopher H. Smith......................................... 0(4)
Fred Spivak.................................................. 0(4)
Dominick Trapasso............................................ 0(1)(2)
Terry G. Westbrook........................................... 0(4)
Nick White................................................... 0(4)
Nominees for director and directors and officers as a group.. 604,900(1)(2)(3)(4)(5)
The nominees and directors and officers as a group own approximately 1.3%
(1)(2)(3)(4)(5)
(1) Includes shares which as of April 1, 2005 could be acquired within 60 days
upon the exercise of options under the Oneida Ltd. 1987, 1998 and 2002
Stock Option Plans in the following amounts: A. Conseur -- 58,570; J.P.
Fobare--74,500; J. Joseph--30,000; P. Kallet--192,000; P. Masson--0; and D.
Trapasso--0; and other Executive Officers as a group--78,000.
(2) Includes shares held indirectly through the Company's Employee Stock
Ownership Plan, as amended, in the following amounts as of April 1, 2005:
A. Conseur - 696; J. P. Fobare--7,688; J. Joseph--3,445; P. Kallet--11,802;
P. Masson--0; Dominick Trapasso --0; and other Executive Officers as a
group--4,945.
(3) Includes 7,000 shares which as of April 1, 2005 could be acquired within 60
days upon the exercise of options under the 1998 and 2003 Non-Employee
Directors Stock Option Plans, as amended.
(4) On December 22, 2004 this Director was granted options to purchase 3,000
shares under the 2003 Non-Employee Directors Stock Option Plans, as
amended. These options cannot be exercised until October 25, 2005.
(5) Includes 2,000 shares which as of April 1, 2005 could be acquired within 60
days upon the exercise of options under the 1998 and 2003 Non-Employee
Directors Stock Option Plans, as amended.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports with the Securities and
Exchange Commission disclosing their ownership, and changes in their ownership,
of the Company's stock. Copies of these reports must also be furnished to the
Company. Based solely upon its review of these copies, the Company believes that
during the fiscal year ended in January 2005, all of such forms were filed on a
timely basis by reporting persons.
Change in Control During Last Fiscal Year
On August 9, 2004 the Company completed the comprehensive restructuring of its
existing indebtedness with its lenders. This restructuring included the
conversion of $30 million of principal amount of debt into an issuance of a
total of 29,852,907 shares of the Common Stock of the Company to the individual
members of the lender group or their respective nominees. The Common Shares were
issued to the respective lenders or their respective nominees in blocks of
shares proportionate to the amount of debt held by each lender at the time of
the restructuring. As of August 9, 2004, these 29,852,907 shares of common stock
represented approximately 62% of the outstanding shares of Common Stock of the
Company. As part of this debt to equity conversion the Company's Board of
Directors was also reorganized with the lenders who became shareholders
designating six of the Board's nine members.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table shows for the past three fiscal years the cash
compensation paid by the Company and its subsidiaries, as well as certain other
compensation paid or accrued, to the Company's Chief Executive Officer and each
of the Company's four other most highly compensated executive officers.
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
---------------------------------------------------- ---------- -----------------------
Securities
Name and Fiscal Year Restricted Underlying
Principal Ended Other Annual Stock Options LTIP All Other
Position January (1) Salary (2) Bonus Compensation Awards SARs Payouts(3) Compensation
--------- ------------ ---------- ------- ------------ ---------- ---------- ---------- ------------
Peter J. Kallet, 2005 $332,307 0 0 0 0 0 0
Chairman of the 2004 366,923 0 0 0 50,000 0 3,884(5)
Board and 2003 340,614 0 0 0 50,000 0 0
Former
President and
CEO (4)
Allan H. Conseur, 2005 298,892 0 0 0 0 0 213,460(7)
Executive Vice 2004 391,385 0 0 0 25,000 0 1,787(5)
President (6) 2003 362,322 0 0 0 25,000 0 0
J. Peter Fobare 2005 187,978 0 0 0 0 0 0
Senior Vice 2004 202,827 0 0 0 15,000 0 4,227(5)
President 2003 188,284 0 0 0 15,000 0 0
and General
Manager,
Consumer Retail
and Direct
Divisions
James E. Joseph, 2005 176,922 0 0 0 0 0 0
Executive Vice 2004 183,903 0 0 0 15,000 0 2,739(5)
President, 2003 157,112 0 0 0 15,000 0 0
Worldwide
Sales and
Marketing (8)
Paul Masson, 2005 266,000(9) 38,000(10) 0 0 0 0 0
Senior Vice 2004 252,000(9) 36,000(10) 0 0 0 0 0
President, 2003 211,725(9) 32,000(10) 0 0 0 0 0
Global
Procurement
Dominick Trapasso 2005 176,922 0 0 0 0 0 0
Senior Vice 2004 0 0 0 0 0 0 0
President, 2003 0 0 0 0 0 0 0
Supply
Chain (11)
----------
(1) Fiscal year ended January 2004 contained 53 weeks, while fiscal years ended
January 2003 and 2005 contained 52 weeks.
(2) Includes amounts deferred pursuant to salary reduction arrangements under
the Oneida Ltd. 401(k) Savings Plan and the Oneida Ltd. Deferred
Compensation Plan for Key Employees.
(3) LTIP: Long-Term Incentive Payments.
(4) Mr. Kallet resigned from his position as President and Chief Executive
Officer effective March 23, 2005. On that date Mr. Terry G. Westbrook was
appointed President and Chief Executive Officer, succeeding Mr. Kallet.
(5) Includes allocation of shares to the executives' accounts under the Oneida
Ltd. Employee Stock Ownership Plan, a defined contribution retirement plan,
for fiscal year ended January 2004 in the following amounts: P.
Kallet--641; A. Conseur--292; J. P. Fobare--737; J. Joseph--479; and P.
Masson--0. Shares are valued at the market price on the dates of
allocations. There were no Employee Stock Ownership Plan allocations for
fiscal years ended January 2003 and 2005.
(6) Mr. Conseur retired from the Company effective July 23, 2004.
(7) Following Mr. Conseur's retirement from the Company, but during the
Company's fiscal year ended January 2005, Mr. Conseur received consulting
fees totaling $192,500 and sales commissions totaling $20,960. Such fees
and commissions were paid pursuant to the Letter Agreement between Mr.
Conseur and the Company dated July 22, 2004 and November 22, 2004,
respectively.
(8) Mr. Joseph was elected Executive Vice President, Worldwide Sales and
Marketing in April 2005. During fiscal years ended January 2005, 2004 and
2003, Mr. Joseph was Senior Vice President and General Manager,
Foodservice Division.
(9) As an employee of the Company's Oneida U.K., Limited subsidiary, Mr.
Masson's salary is paid in English Pounds. Mr. Masson's salary for fiscal
years ended January 2005, 2004 and 2003 was 'L'140,000, 'L'140,000, and
'L'132,328, respectively. Solely for the purposes of presentation in this
Summary Compensation table, Mr. Masson's salary was translated into U.S.
dollars using the exchange rate in effect on the last day of the fiscal
year during which such salary was paid. The exchange rates used to convert
Mr. Masson's salary for fiscal years ended January 2005, 20043 and 2004
were 1.9, 1.8 and 1.6 1.4, respectively.
(10) As an employee of the Company's Oneida U.K., Limited subsidiary, Mr. Masson
is paid in English Pounds. Mr. Masson's cash incentive for each of fiscal
years ended January 2005, 2004 and 2003 was 'L'20,000. Solely for the
purposes of presentation in this Summary Compensation table, Mr. Masson's
cash incentive was translated into U.S. dollars using the exchange rate in
effect on the last day of the fiscal year during which such cash incentive
was paid. The exchange rates used to convert Mr. Masson's cash incentive
for fiscal years ended January 2005, 2004 and 2003 were 1.9, 1.8 and 1.6,
respectively.
(11) Mr. Trapasso joined the Company on March 15, 2004.
Stock Options
The 2002 Stock Option Plan provides for grants of Common Stock options to
executive officers and key employees of the Company and its subsidiaries. The
exercise price for shares granted is the market value of the shares on the date
of the grant. The exercise price may be paid in cash; from time to time payment
has been allowed in other forms, including exchange of Common Stock of the
Company previously held by the executive. The vesting schedule as well as the
term during which an option may be exercised are established at the time of the
grant.
The following table contains information concerning the grant of stock
options under the Company's 2002 Stock Option Plan to the Company's Chief
Executive Officer and each of the Company's other named executive officers as of
the end of the fiscal year ended January 2005.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual
Grants
------ Potential Realizable
Number of % of Total Value at Assumed
Securities Options/ Annual Rates of
Underlying SARs Stock Price Appreciation
Options/ Granted to Exercise for Option Term
SARs Employees in or Base Expiration ---------------
Name Granted Fiscal Year Price Date 5% 10%
---- ------- ----------- ----- ---- -- ---
P. Kallet...... 0 0 -- -- $0 $0
A. Conseur..... 0 0 -- -- 0 0
J. P. Fobare... 0 0 -- -- 0 0
J. Joseph...... 0 0 -- -- 0 0
P. Masson...... 0 0 -- -- 0 0
D. Trapasso.... 0 0 -- -- 0 0
The following table sets forth information with respect to the named
executives concerning the exercise of options during the fiscal year ended
January 2005 and unexercised options held at the fiscal year ended January 2005.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs
FY-End at FY-End
Shares --------------- -------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
---- ----------- -------- --------------- -------------
P. Kallet...... 0 $0 192,000/60,000 $0/$0
A. Conseur..... 0 0 58,570/20,140 0/ 0
J. P. Fobare... 0 0 74,500/18,000 0/ 0
J. Joseph...... 0 0 30,000/17,000 0/ 0
P. Masson...... 0 0 0/0 0/ 0
D. Trapasso.... 0 0 0/0 0/ 0
Pension Plan Table
The Company maintains the Retirement Plan for Employees of Oneida Ltd., a
qualified defined benefit plan (the "Retirement Plan"). Compensation covered by
the Retirement Plan includes base salary and cash incentives reported in the
Summary Compensation Table. The normal retirement benefit at age 65 is based on
years of service and the average annual compensation during the three highest
paid consecutive calendar years from the ten years of employment preceding
retirement. The Retirement Plan was frozen in April 2004 to prevent the addition
of new participants into the plan, the vesting of participants not vested as of
that date and the gain by vested participants of additional credited years of
service. Years of service for the purpose of determining benefits for the named
executives are P. Kallet--35 years, A. Conseur--7 years; J. P. Fobare--30 years;
J. Joseph--15 years; and D. Trapasso--0 years.
The Internal Revenue Code and the Employee Retirement Income Security Act
of 1974 limits the amount of benefit that can be paid under the Retirement Plan
to $170,000 and the maximum compensation that can be taken into account in
establishing benefits to $210,000.
The following table shows estimated annual retirement benefits payable in
the form of a straight life annuity beginning at age 65 under the Retirement
Plan assuming retirement during fiscal year ended January 2005 of participants
who have met eligibility requirements for unreduced benefits.
Final
Average
Annual
Earnings 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
-------- -------- -------- -------- -------- -------- -------- --------
$100,000 $ 9,500 $ 14,250 $ 19,000 $ 23,750 $ 28,500 $ 33,250 $ 38,000
120,000 11,400 17,100 22,800 28,500 34,200 39,900 45,600
150,000 14,250 21,375 28,500 35,625 42,750 49,875 57,000
200,000 19,000 28,500 38,000 47,500 57,000 66,500 76,000
250,000 23,750 35,625 47,500 59,375 71,250 83,125 95,000
300,000 28,500 42,750 57,000 71,250 85,500 99,750 114,000
350,000 33,250 49,875 66,500 83,125 99,750 116,375 133,000
400,000 38,000 57,000 76,000 95,000 114,000 133,000 152,000
500,000 47,500 71,250 95,000 118,750 142,500 166,250 190,000
600,000 57,000 85,500 114,000 142,500 171,000 199,500 228,000
700,000 66,500 99,750 133,000 166,250 199,500 232,750 266,000
800,000 76,000 114,000 152,000 190,000 228,000 266,000 304,000
In addition to the Retirement Plan, the named executives also participate
in the Oneida Ltd. Employee Stock Ownership Plan, a qualified defined
contribution plan. Benefits under the Employee Stock Ownership Plan are in the
form of allocations of Company Common Stock pursuant to a formula considers a
participant's compensation during the six-month period prior to the allocation
date and the participant's years of credited service. Employee Stock Ownership
Plan benefits are offset against the benefits to be received under the
Retirement Plan. There were no allocations to the Employee Stock Ownership Plan
accounts of plan participants, including the named executives, for the fiscal
year ended January 2005.
In addition to the benefits provided by the Retirement Plan and Employee
Stock Ownership Plan, the Company maintains a non-qualified Restoration Plan for
key employees and officers selected by the Management Development and Executive
Compensation Committee of the Company's Board of Directors. The Chief Executive
Officer and other current and former officers and key employees, including
certain of the named executives, are participants. The Restoration Plan
guarantees (a) the benefit under the Retirement Plan described above as if the
limitations imposed by the Internal Revenue Code did not apply, plus (b) an
annual retirement allowance equaling 50% for Mr. Kallet and 40% for other
participants of their average annual compensation, actuarially reduced if the
participant retires before age 62, and offset by the participating officer's
other retirement benefits, including restoration benefits. Restoration Plan
benefits are forfeited if the participant retires or otherwise terminates
employment before age 55. The Restoration Plan was frozen in July 2005 to
prevent the addition of new participants and the vesting of existing
participants. Amendments to the Company's Retirement Plan provide a mechanism
for the payment through the Retirement Plan of all or a portion of the benefits
due under the Restoration Plan to Mr. Kallet and certain other former executive
officers of the Company, of whom only Mr. Conseur is among the Company's most
highly compensated executive officers for the fiscal year ended January 2005.
As an employee of the Company's Oneida U.K., Limited subsidiary, Mr. Masson
does not participate in the above described Retirement Plan, Oneida Ltd.
Employee Stock Ownership Plan or Restoration Plan. Rather, Mr. Masson
participates in the Oneida International Retirement Benefit Scheme, a
broad-based, defined contribution group money purchase scheme open to all Oneida
U.K., Limited employees who meet specified participation requirements. The
benefit contribution formula under this plan is a percentage of each
participant's base salary, with executive and managerial employees receiving
higher percentages. The plan currently provides Mr. Masson a monthly
contribution equal to 15% of his monthly base salary.
Agreements with Named Executive Officers
The Company had entered into Change in Control Agreements with Messrs.
Kallet, Conseur and Fobare dated November 15, 1999. These agreements, in
general, provided that in the event the officer's employment was terminated as a
result of a Change in Control, as defined in the Agreement, the officer will be
entitled to a severance payment equal to 2.99 times his or her average annual
compensation, health insurance for three years following termination and a
supplemental pension benefit. In July 2004 these Change in Control Agreements
were voluntarily terminated by the Company and Messrs. Kallet, Conseur and
Fobare and replaced with new agreements with each of those individuals dated
July 28, 2004, July 22, 2004 and July 28, 2004, respectively. These agreements
were filed as Exhibits to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 31, 2004.
Mr. Kallet's Agreement dated as of July 28, 2004 provided that Mr. Kallet
would be employed as Chairman of the Board, President and Chief Executive
Officer for a three year term commencing on July 30, 2004, at a base salary of
not less than $300,000. In the event the Agreement was terminated by the Company
other than for "cause", as defined in the Agreement, the Company was required to
continue to pay Mr. Kallet his base salary through the end of the term. This
Agreement was replaced and superseded on March 23, 2005 when the Company and Mr.
Kallet entered into a new agreement of that date setting forth the details of
Mr. Kallet's resignations from his positions of President and Chief Executive
Officer effective March 23, 2005 and Chairman of the Board effective May 25,
2005. This Agreement continues Mr. Kallet's employment by the Company in the
non-officer position of Vice Chairman - Strategic Alliances and Corporate
Development through July 30, 2007 at Mr. Kallet's current annual base salary of
$300,000. In addition, this Agreement makes Mr. Kallet eligible for bonuses in
the amount of $85,000 during each of fiscal years ended January 2006 and 2007,
in the event that certain performance criteria specified in the Agreement are
achieved.
Mr. Conseur's Agreement dated as of July 22, 2004 provided that Mr. Conseur
would resign from his position of Executive Vice President effective July 23,
2004. Pursuant to the Agreement Mr. Consuer will provide various consulting
services, as defined in the Agreement, to the Company during the period July 23,
2004 through March 31, 2005. In exchange for these consulting services, Mr.
Conseur received a consulting fee of $33,000 per month and was eligible for
performance bonuses and sales commissions. The Agreement also provides Mr.
Consuer with severance payments in the amount of $33,000 per month during the
period April 1, 2005 through September 30, 2006 and a schedule for the
accelerated pay out of Mr. Conseur's balance under the Amended and Restated
Oneida Ltd. Deferred Compensation Plan for Key Employees. Subsequently, by
letter agreement dated November 22, 2004, the Company agreed to pay Mr. Conseur
commissions on sales to a specified Company customer during the period October
2004 through January 2006. This letter agreement is attached as an Exhibit
to the Company's Annual Report on Form 10-K for the fiscal year ended
January 29, 2005.
Mr. Fobare's Agreement dated as of July 28, 2004 provides that Mr. Fobare
will be employed as Senior Vice President and General Manager, Consumer Retail
Markets for a two year term commencing on July 30, 2004, at an annual base
salary of not less than $175,120. In the event the Agreement is terminated by
the Company other than for "good cause", or by Mr. Fobare for "Good Reason", as
such terms are defined in the Agreement, the Company must continue to pay Mr.
Fobare his base salary until the later of the end of the term or six months
after the termination date.
In addition to the above arrangements with named executive officers, the
Company has also entered into agreements with Messrs. Joseph and Masson. Mr.
Joseph's agreement was filed as an Exhibit to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended July 31, 2004, with an amendment thereto
filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended January 29, 2005. A letter agreement covering Mr. Masson's relocation
to Thailand, as well as Mr. Masson's Deed of Agreement, are filed as Exhibits
to the Company's Annual Report on Form 10-K for the fiscal year ended
January 29, 2005.
Mr. Joseph's Agreement dated as of July 28, 2004 provides that Mr. Joseph
will be employed as Senior Vice President and General Manager, Foodservice for a
two year term commencing on July 30, 2004, at an annual base salary of not less
than $187,400. In the event the Agreement is terminated by the Company other
than for "good cause", as such term is defined in the Agreement, the Company
must continue to pay Mr. Joseph his base salary until the later of the end of
the term or six months after the termination date. Subsequently, in February
2005, by First Amendment to Letter Agreement dated July 28, 2004, the Company
clarified that Mr. Joseph's July 28, 2004 Agreement did not supersede the
Company's prior arrangement to pay Mr. Joseph a specified retention bonus.
On January 17, 2005 the Company entered into a letter agreement with Mr.
Masson covering the terms of Mr. Masson's relocation to Thailand. This letter
agreement requires the Company to pay or reimburse Mr. Masson for various
housing, travel, education and insurance expenses associated with his relocation
to and stay in Thailand. On April 15, 2005 the Company and the Company's Oneida
International Limited subsidiary entered into a Deed of Agreement with Mr.
Masson. This Deed of Agreement, which supersedes the January 17, 2005 letter
agreement, provides that Mr. Masson will be employed by the Company's
subsidiary, Oneida International, Limited as Senior Vice President, Global
Procurement for a two year term expiring February 28, 2007, at an annual base
salary and annual bonus of not less than 'L'152,000 and 'L'20,000, respectively.
In addition, the Agreement requires the Company to pay or reimburse Mr. Masson
for various housing, travel, education and insurance expenses associated with
his relocation to Thailand. In the event the Company is terminated prior to
the end of the term, the Company must continue to pay Mr. Masson his base salary
and annual bonus through the end of the term, as well as a termination bonus
equal to 'L'36,000 multiplied by a fraction, the numerator of which is the
number of complete calendar months worked by Mr. Masson during the year in
which his employment is terminated and the denominator of which is 12. The
Company has guaranteed Oneida International Limited's performance under this
Deed of Agreement.
In 1989 the Board of Directors also approved an Employee Security Plan
which provides severance benefits for all eligible employees of the Company who
lose their jobs in the event of a Change in Control. Employees are eligible for
these benefits if they have one year or more of service. Executive officers who
are parties to the agreements described above are not eligible for Employee
Security Plan benefits.
REPORT OF THE MANAGEMENT DEVELOPMENT &
EXECUTIVE COMPENSATION COMMITTEE
Decisions on compensation of the Company's executives generally are made by
the Management Development and Executive Compensation Committee of the Board of
Directors (the "Compensation Committee"). The Compensation Committee currently
consists of the three non-employee directors of the Company named at the end of
this Report.
This Compensation Committee Report summarizes the policies and philosophy
underlying decisions regarding executive compensation for fiscal year ended
January 2005 and how those policies and philosophy affected Mr. Kallet, in
particular, and in general Messrs. Conseur, Fobare, Joseph, Masson and
Trapasso--the named executive officers other than Mr. Kallet who for fiscal year
ended January 2005 were the Company's most highly compensated executive
officers.
Executive Compensation Policies
The Company's executive compensation programs are designed to retain and
reward executives who are capable of leading the Company to achieve its business
objectives in an industrial and market environment characterized by growth,
complexity, competition and change.
Increasingly, compensation is provided in the form of cash or stock-based
incentive plans intended to integrate pay with the Company's annual and
long-term performance goals, recognizing both individual initiative and
achievements as well as contributions toward overall divisional and corporate
performance.
Executives other than the named executive officers are eligible for
selection as participants in the Company's executive incentive plans. Moreover,
all employees of the Company's Oneida Silversmiths Division participate in an
annual profit sharing plan based on the performance of that business unit.
However, these employees typically receive a larger percentage of their
compensation in wages or salary than do senior executives.
As a result of the emphasis on tying executive compensation to business
performance, compensation may fluctuate from year to year. Historically, in
successful years, a substantial portion of executives' total compensation was
earned through incentives. In less profitable years, less or no incentive
compensation is paid.
Annual compensation for Oneida's executive management consists of three
elements:
1. Salary--In general, salaries are influenced by compensation paid to
executives of corporations with similar revenues and scopes of operation.
Within that framework, individual salaries reflect personal contribution
and performance as well as experience and years of service. In evaluating
an executive's personal contribution and performance, the Company considers
the individual's contribution to the overall performance of the Company or
division; effectiveness in budget management; performance in assigned
special projects; and managerial ability.
2. Annual Cash Incentive--These annual cash incentive payments are
tied directly to corporate or business unit performance:
a. Corporate--For executives with corporate responsibilities,
their incentive measurements for fiscal year ended January
2005 were Return on Equity and Income before Taxes. These
two factors reflect the Company's relative emphasis on
return and growth; and
b. Other--For executives whose responsibilities are limited to
a division or subsidiary, incentives are based on their
business unit's operating income and cash flow.
3. Stock Awards and Options--The Company believes its senior
executives should have a greater equity interest in the Company as a way of
aligning their interests with those of stockholders. Long-term stock
incentive programs have been designed with this interest in mind:
a. 2002 Stock Option Plan--This Plan, like its predecessors,
provides an incentive that focuses executives' attention on
managing the Company from the perspective of an owner with
an equity stake in the business. Because the option price is
the fair market value of a share at the time of the grant,
stock options are tied to the future performance of stock
and will provide value to the recipient only when the price
of the stock rises above the option grant price; and
b. Amended and Restated Restricted Stock Award Plan--This Plan
is intended to promote the growth and profitability of the
Company by providing long-term equity rewards to key
employees who are expected to have a significant impact on
the performance of the Company.
These awards provide a long-term focus since, in general,
the stock is restricted from being sold, transferred or
assigned and is forfeitable until it vests.
Chief Executive Officer's Fiscal Year Ended January 2005 Compensation
Securities and Exchange Commission regulations require the Compensation
Committee to discuss its basis for decisions affecting the chief executive's
compensation for the fiscal year ended January 2005 in relation to the Company's
performance during that fiscal year.
The Compensation Committee's general approach in setting the Chief
Executive Officer's annual compensation seeks to reflect compensation levels of
other corporations with similar revenues and scopes of operation, but to provide
a large percentage of his target compensation based on objective long-term
performance criteria. This provides an incentive to work toward clearly defined
long-term goals while providing stability by giving the Chief Executive Officer
some certainty in the level of his compensation through the non-performance
based elements.
In addition to base salary and eligibility to participate in the Company's
Stock Option Plan and Restoration Plan, the Chief Executive Officer's
compensation package includes two performance-based incentive programs--one
based on the long-term performance of the Company's stock and the other based on
corporate performance during the previous year. These incentive programs have
had the effect of more directly tying compensation to the Company's performance.
In the stock performance-based program, payouts are determined by the
average annual growth in earnings per share of the Company's Common Stock over
the prior three-year period. In years when the performance goals are met, the
chief executive officer may elect to receive his award in cash, restricted stock
through the Company's Amended and Restated Restricted Stock Award Plan, or a
combination of both. A stock selection is encouraged by setting the election
price at 80 percent of the average Common Stock prices on the last day of each
of the preceding four fiscal quarters.
Mr. Kallet earned no incentive under this program during the fiscal year
ended January 2005 because its performance goals were not met.
The remainder of Mr. Kallet's performance-based compensation for fiscal
year ended January 2005 derived from the program for the Chief Executive Officer
which provides for annual cash incentives as well as restricted stock awards
based on corporate performance during the preceding fiscal year. The features of
this program are:
1. Payouts are based on a formula of 50 percent Return on Equity and
50 percent Income before Taxes, reflecting the Company's present relative
emphasis on return and growth;
2. The program incorporates base or platform performance objectives
which must be met before any payments are made. These performance
objectives are set for a two-year period. They are based on goals for good
performance, rather than levels which happen to be attainable in a given
year; and
3. In years when performance goals are met, in addition to his cash
incentive, the Chief Executive Officer will be considered for a restricted
stock award under the Company's Amended and Restated Restricted Stock Award
Plan. The value of the stock award will be one-third of the profit sharing
payout, with the number of shares determined by market price.
Mr. Kallet earned no incentives under this program during the fiscal year
ended January 2005 because its performance goals were not met.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND EXECUTIVE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
Gregory M. Harden, Chairperson
Christopher H. Smith
Nick White
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is currently comprised of the four directors named
below. Each member of the Audit Committee is an independent director as
determined by the Company's Board of Directors based upon the requirements of
the Audit Committee's Charter, the current New York Stock Exchange rules and
Securities and Exchange Commission requirements. The Audit Committee has adopted
a written charter which has been approved by the Board of Directors.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the fiscal year ended January 29, 2005.
We have discussed with BDO Seidman, LLP ("BDO") the matters required to be
discussed by Statement on Auditing Standards No 61, "Communication with Audit
Committees", as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
BDO required by Independence Standard No. 1, "Independence Discussions with
Audit Committees", as amended, by the Independence Standards Board, and have
discussed with BDO their independence.
We have also considered whether the provision of services by BDO not
related to the audit of the financial statements referred to above and to the
reviews of the interim financial statements included in the Company's Forms 10-Q
for the quarters ended May 1, 2004, July 31, 2004 and October 30, 2004 is
compatible with maintaining BDO's independence and have concluded that BDO's
independence has not been impaired by their engagement to perform these
unrelated services.
The Audit Committee pre-approves all audit and permissible non-audit
services to be provided by the independent auditor. As part of this approval
process, the Audit Committee considers whether such services are consistent with
the Securities and Exchange Commission rules on auditor independence, as well as
whether the independent auditor is best suited to provide the most effective and
efficient services, for reasons such as familiarity with the Company's business,
operations, staff, accounting systems and the like.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the audited financial statements referred to above be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 29, 2005.
SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Peter J. Marshall, Chairperson
William C. Langley
Hugh R. Rovit
Christopher H. Smith
INDEPENDENT AUDITORS
On May 6, 2004 PricewaterhouseCoopers, LLP advised the Company that it
declined to stand for re-election as the Company's independent auditor for the
fiscal year ended January 29, 2005. On July 7, 2004, the Audit Committee of the
Company's Board of Directors approved the appointment of the accounting firm of
BDO Seidman, LLP ("BDO") as the Company's independent auditor for the fiscal
year ended January 29, 2005, subject to the favorable completion by BDO of its
internal approval process. On August 3, 2004 BDO accepted the appointment as the
Company's independent auditor for the Company's fiscal year ended January 29,
2005.
The Company has been advised by BDO that no member of the firm has or had
any financial interest, either direct or indirect, in the Company or any of its
subsidiaries during the fiscal year ended January 2005, and that it has no
connection with the Company or any of its subsidiaries in any capacity other
than as public accountants.
The service fees billed to the Company by BDO for the fiscal year ended
January 29, 2005 and the service fees billed to the Company by its previous
independent auditor, PricewaterhouseCoopers, LLP, for the fiscal year ended
January 31, 2004 are as follows:
Fee Type January 29, 2005 January 31, 2004
--------- ---------------- ---------------
Audit Fees................................ $830,000 $ 656,650
Audit-Related Fees........................ 0 194,480
Tax Fees.................................. 0 171,610
All Other Fees............................ 0 110,720
-------- ----------
Total Fees............................. $830,000 $1,133,470
Audit Fees includes fees for services related to the audit of the Company's
annual financial statements and review of the Company's quarterly financial
statements that are normally provided by the auditor in connection with
statutory and regulatory filings or engagements for those fiscal years. For
fiscal year ended January 29, 2005, Audit Fees also includes work related to the
audit of the Company's internal controls and procedures required pursuant to the
Sarbanes Oxley Act of 2002.
Audit-Related Fees include fees for assurance and related services that are
reasonable related to the performance of the audit or review of Oneida's
financial statements and are not reported under Audit Fees. The Company's
Audit-Related Fees include, primarily, services provided in connection with
audits of, and other work related to, the Company's various benefits plans.
Tax Fees include fees for tax compliance, tax advice and tax planning
services. The Company's Tax Fees include, primarily, services provided in
connection with the preparation of certain of the Company's and its
international subsidiaries' tax returns, as well as preparation of tax returns
for certain of the Company's expatriate employees.
All Other Fees include fees for all other products and services not
included in Audit Fees, Audit-Related Fees or Tax Fees. The Company's All Other
Fees include services provided in connection with actuarial work related to the
Company's various benefit plans, and for Fiscal Year Ended January 2004,
services provided in connection with the Company's response to a Securities and
Exchange Commission review of the Company's Annual Report for the Fiscal Year
Ended January 2003.
The Audit Committee of the Company's Board of Directors pre-approves all
audit and permissible non-audit services to be provided by the independent
auditor. As part of this approval process, the Audit Committee considers whether
such services are consistent with the Securities and Exchange Commission rules
on auditor independence, as well as whether the independent auditor is best
suited to provide the most effective and efficient services, for reasons such as
familiarity with the Company's business, operations, staff, accounting systems
and the like. All of the services provided in connection with the Audit-Related
Fees, Tax Fees and All Other Fees described in the table above were pre-approved
by the Audit Committee.
Representatives from BDO Seidman LLP are expected to be present at the
Company's 2005 Annual Meeting and will have an opportunity to make a statement
and to answer appropriate questions from stockholders.
AMENDEMENT TO CERTIFICATE OF INCORPORATION TO REDUCE MINIMUM REQUIRED SIZE
OF BOARD OF DIRECTORS (PROXY ITEM 2)
The Company's Certificate of Incorporation currently requires that the
Company's Board of Directors consist of no fewer than nine and no more than
fifteen members. The Company's Board of Directors currently consists of nine
members. The Board's membership will be reduced to eight Directors upon the
retirement of Chairman Peter J. Kallet on May 25, 2005. To account for Mr.
Kallet's retirement and to provide the Company with future flexibility relative
to the composition of its Board of Directors, the Board believes it is prudent
to reduce the minimum number of required Directors.
The text of the proposed amendment is set forth as Exhibit A to the Proxy
Statement.
Vote Required
The vote required to effect the amendment to the Certificate of
Incorporation to reduce the minimum required size of the Board of Directors is
the affirmative vote of the holders of 80% of all of the Common Stock of the
Corporation issued and outstanding.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends a vote "FOR" the approval of
Amendment to the Oneida Ltd. Certificate of Incorporation to reduce the minimum
required size of the Board of Directors.
AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK (PROXY ITEM 3)
There are presently 48,000,000 authorized shares of Common Stock, of which
46,631,924 shares were issued and outstanding on April 11, 2005. On that same
date there were an additional 1,149,364 treasury shares, of which 889,920 shares
are reserved for issuance upon exercise of options granted under the 1987, 1998
and 2002 Oneida Ltd. Stock Option Plans, and 67,000 shares are reserved for
issuance upon exercise of options granted under the 2003 Non-Employee Directors'
Stock Option Plan. The amount of authorized but unissued and unreserved Common
Stock as of April 11, 2005 was 218,712 shares. Assuming stockholder approval of
the proposal, the amount of authorized but unissued and unreserved Common Stock
will be 52,218,712.
While the Board of Directors does not have any specific plans for the
issuance or sale of any additional shares of Common Stock, the Board believes it
only prudent to have a reasonable number of shares available for issuance in
appropriate circumstances. Assuming the proposal is approved by the
stockholders, no further or additional vote of the stockholders of the Company
is required for the Board of Directors to issue Common Stock.
Stockholders do not have any preemptive rights with respect to such
additional shares nor do they have any rights of appraisal should they dissent
from the proposed amendment.
The text of the proposed amendment is set forth as Exhibit B to the Proxy
Statement.
Vote Required
The vote required to effect the amendment to the Certificate of
Incorporation to increase the number of authorized shares of Common Stock is the
affirmative vote of a majority of all of the Common Stock of the Corporation
issued and outstanding.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends a vote "FOR" the approval of
Amendment to the Oneida Ltd. Certificate of Incorporation to increase the number
of authorized shares of Common Stock.
AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES OF SERIES PREFERRED STOCK (PROXY ITEM 4)
There are presently 1,000,000 authorized shares of Series Preferred Stock,
of which no shares are issued and outstanding. Assuming stockholder approval of
the proposal, the amount of authorized but unissued and unreserved Series
Preferred Stock will be 10,000,000.
While the Board of Directors does not have any specific plans for the
issuance or sale of any additional shares of Series Preferred Stock, the Board
believes it only prudent to have a reasonable number of shares available for
issuance in appropriate circumstances. Assuming the proposal is approved by the
stockholders, no further or additional vote of the stockholders of the Company
is required for the Board of Directors to issue Series Preferred Stock.
Stockholders do not have any preemptive rights with respect to such
additional shares nor do they have any right of appraisal should they dissent
from the proposed amendment.
The text of the proposed amendment is set forth as Exhibit C to the Proxy
Statement.
Vote Required
The vote required to effect the amendment to the Certificate of
Incorporation to increase the number of authorized shares of Series Preferred
Stock is the affirmative vote of a majority of all of the Common Stock of the
Corporation issued and outstanding.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends a vote "FOR" the approval of
Amendment to the Oneida Ltd. Certificate of Incorporation to increase the number
of authorized shares of Series Preferred Stock.
STOCK PERFORMANCE GRAPH
The following performance graph compares the cumulative total stockholder
return of the Company's Common Stock for the five-year period approximating the
Company's past five fiscal years (January 31, 2001 through January 31, 2005)
with the cumulative total returns of the Russell 2000 Index and a "Housewares
Peer Group" index. The "Housewares Peer Group" index is comprised of those
companies included in the Fall/Winter 2004 Investors Business Daily
"Household-Housewares" industry group list (other than Oneida Ltd.) which had
market capitalizations of less than $750 million on January 31, 2005. These
companies are: Home Products International, Inc., Libbey Inc., Lifetime Hoan
Corp. and Waterford Wedgwood PLC.
The return values set forth below and plotted on the performance graph are
based on an initial investment of $100 on January 31, 2000, in the Company's
Common Stock and each index, with all dividends treated as reinvested.
1/31/00 1/31/01 1/31/02 1/31/03 1/31/04 1/31/05
---------------------------------------------------------------------------------
ONEIDA LTD. $100 $ 85.21 $ 58.36 $54.15 $ 26.43 $ 11.83
---------------------------------------------------------------------------------
RUSSELL 2000 INDEX 100 103.69 100.05 78.16 123.52 134.23
---------------------------------------------------------------------------------
HOUSEWARES PEER GROUP 100 118.77 99.77 65.11 81.28 59.06
---------------------------------------------------------------------------------
OTHER MATTERS
Incorporation by Reference
The Report of the Management Development and Executive Compensation
Committee and the Report of the Audit Committee and the Performance graph
contained in this Proxy Statement are not deemed filed with the Securities and
Exchange Commission and shall not be deemed incorporated by reference into any
prior or future filings made by the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporate those items by reference.
Annual Report
The Company's Annual Report on Form 10-K (the "Annual Report") for the
fiscal year ended January 29, 2005, including the Company's audited financial
statements, is included with this mailing. The Company's Annual Report is also
available without cost on the "Investor Information" section of the Company's
Internet website at www.oneida.com. A print copy of the Annual Report is also
available without cost upon receipt of written request submitted to Oneida Ltd.,
Investor Relations Department, 163-181 Kenwood Avenue, Oneida, New York 13421.
By Order of the Board of Directors
/s/ Catherine H. Suttmeier
-------------------------------------
CATHERINE H. SUTTMEIER
Secretary
Oneida, New York
April 25, 2005
EXHIBIT A
Proposed Amendment to the Certificate of Incorporation of Oneida Ltd. to reduce
the minimum required size of the Board of Directors from nine (9) to five (5)
directors.
Article NINTH, SECTION 1 of the Certificate of Incorporation, dealing with
the Number, Election and Terms of Directors and specifying the minimum and
maximum size of the Company's Board of Directors, is hereby amended to read as
follows:
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 five nor more than fifteen persons. The
exact number of directors within the minimum and maximum
limitations specified in the preceding sentence shall be fixed from
time to time by the Board of Directors pursuant to a resolution
adopted by a majority of the entire Board of Directors. The
directors shall be divided into three classes, as nearly equal in
number as possible, with the term of office of each class to be
determined at the 2005 Annual Meeting of Stockholders.
EXHIBIT B
Proposed Amendment to the Certificate of Incorporation of Oneida Ltd. to
increase the number of authorized Shares of Common Stock to 100,000,000.
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 48,000,000 shares
of Common Stock, is hereby amended to read as follows:
FOURTH. The said authorized Capital Stock of the Corporation shall consist of
one hundred million (100,000,000) 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 $25.00 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.
EXHIBIT C
Proposed Amendment to the Certificate of Incorporation of Oneida Ltd. to
increase the number of authorized Shares of Series Preferred Stock to
10,000,000.
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 1,000,000 shares of
Series Preferred Stock, is hereby amended to read as follows:
FOURTH. The said authorized Capital Stock of the Corporation shall consist of
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 $25.00 per share; and ten million (10,000,000) 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.
Appendix 1
0 [GRAPHIC]
ONEIDA LTD.
ANNUAL MEETING MAY 25, 2004
This Proxy is Solicited on Behalf of the Board of Directors
Annual Meeting of Stockholders ONEIDA LTD. - May 25, 2005
The undersigned, a holder of Common Stock of ONEIDA LTD., hereby appoints
PETER J. MARSHALL, CHRISTOPHER H. SMITH AND TERRY G. WESTBROOK, as Proxies of
the undersigned with full power of substitution and revocation, to vote all
shares of the stock of Oneida Ltd. which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders of Oneida Ltd.
to be held May 25, 2005 and at any adjournments thereof, hereby revoking any
other Proxy heretofore given. A majority of said Proxies or their substitutes as
shall be present and acting at the said meeting shall have and may exercise all
the powers of said Proxies hereunder. The said Proxies are instructed:
(Continued and to be signed on the reverse side)
[GRAPHIC] 14475 [GRAPHIC]
ANNUAL MEETING OF STOCKHOLDERS OF
ONEIDA LTD.
May 25, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
[GRAPHIC] Please detach along perforated line and mail in the envelope provided. [GRAPHIC]
[GRAPHIC]
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2, 3 AND 4.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
-----------------------------------------------------------------------------------------------------------------------------
|
1. ELECTION of the following nominees as directors for the | 2. TO VOTE on the proposal to approve FOR AGAINST ABSTAIN
terms set forth in the Notice and Proxy Statement dated | the amendment to the Oneida Ltd. [_] [_] [_]
April 25, 2005: | Certificate of Incorporation to
| reduce the minimum required size of
NOMINEES: | the Board of Directors from nine to
[_] FOR ALL NOMINEES [_] H. Rovit | five Directors;
[_] T. Westbrook |
[_] WITHHOLD AUTHORITY [_] F. Spivak | 3. TO VOTE on the proposal to approve [_] [_] [_]
FOR ALL NOMINEES [_] W. Langley | the amendment to the Oneida Ltd.
[_] C. Smith | Certificate of Incorporation to
[_] FOR ALL EXCEPT [_] N. White | increase to 100,000,000 the number of
(See instructions below) | authorized shares of Common Stock;
|
| 4. TO VOTE on the proposal to approve [_] [_] [_]
| the amendment to the Oneida Ltd.
| Certificate of Incorporation to
| increase to 10,000,000 the number of
| authorized shares of Series
| Preferred;
|
| 5. To act in their discretion on such other matters as may
| properly come before said meeting or any adjournment
| thereof.
|
INSTRUCTION: To withhold authority to vote for any individual | Shares will be voted as specified and where no specification
nominee(s), mark "FOR ALL EXCEPT" and fill in the | is made the vote of the undersigned will be cast FOR the
circle next to each nominee you wish to withhold, | election of directors and FOR the proposals outlined in (2),
as shown here: [X] | (3) and (4).
---------------------------------------------------------------|
| IMPORTANT: Please sign, date, and return this Proxy promptly
| in the accompanying envelope.
|
|
|
|
|
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To change the address on your account, please check the |
box at right and indicate your new address in the address |
space above. Please note that changes to the registered [_] |
name(s) on the account may not be submitted via this |
method. |
---------------------------------------------------------------|
| | | | | | | |
Signature of Stockholder | | Date: | | Signature of Stockholder | | Date: | |
--------------------- -------- ---------------- -------
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
[GRAPHIC] [GRAPHIC]
STATEMENT OF DIFFERENCES
The British pound sterling sign shall be expressed as................... 'L'
The section symbol shall be expressed as................................ 'SS'