Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
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by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Oneida Ltd.
..................................................................
(Name of Registrant as Specified In Its Charter)
..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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and 0-11
(1) Title of each class of securities to which transaction
applies:
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applies:
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computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
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previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
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.......................................................
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.......................................................
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.......................................................
ONEIDA
ONEIDA LTD., ONEIDA, NY 13421
PETER J. KALLET
Chairman of the Board,
President and
Chief Executive Officer
April 30, 2004
TO OUR STOCKHOLDERS:
You are cordially invited to attend ONEIDA LTD.'S 123rd Annual Meeting on
May 26, 2004.
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,
Peter J. Kallet
TABLE OF CONTENTS
PAGE
----
Notice of 2004 Annual Meeting of Stockholders
Proxy Statement............................................. 1
General Information..................................... 1
Action to be Taken Under Proxy...................... 1
Revocation of Proxy................................. 1
Signatures on Proxy................................. 1
Proposal to Elect Directors............................. 1
Board of Directors.................................. 1
Nominees for Director............................... 2
Recommendation of the Board of Directors............ 3
Vote Required....................................... 3
Director Independence............................... 3
Meetings of the Board of Directors.................. 4
Committees of the Board of Directors................ 4
Meetings of Independent Directors................... 5
Attendance at Annual Meeting........................ 5
Directors' Compensation............................. 5
Communications with the Board of Directors.......... 5
Availability of Corporate Governance Documents...... 6
Compensation Committee Interlocks & Insider
Participation....................................... 6
Certain Relationships & Related Transactions........ 6
Security Ownership of Certain Beneficial Owners......... 6
Security Ownership of Management........................ 7
'SS'16(a) Beneficial Ownership Reporting............ 8
Executive Compensation.................................. 9
Summary Compensation Table.......................... 9
Stock Options....................................... 10
Pension Plan Table.................................. 11
Employment Agreements............................... 11
Equity Compensation Plans........................... 12
Report of the Management Development & Executive
Compensation Committee................................. 14
Report of the Audit Committee........................... 16
Independent Auditors.................................... 17
Proposal to Ratify Approval of Independent Auditors..... 17
Recommendation of the Board of Directors............ 17
Vote Required....................................... 18
Stockholders' Return Graph.............................. 18
Additional Information.................................. 19
Stockholder Proposals for Inclusion in 2005 Proxy
Statement........................................... 19
Stockholder Proposals for Presentation at 2005
Annual Meeting...................................... 19
Other Proposed Actions.............................. 19
Annual Report....................................... 19
Exhibit A: Audit Committee Charter...................... A-1
ONEIDA
ONEIDA LTD.
163-181 KENWOOD AVENUE
ONEIDA, NEW YORK 13421
-------------------
NOTICE OF 2004 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 2004
-------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ONEIDA LTD.
will be held in the Big Hall of the Mansion House located at 170 Kenwood Avenue
in the City of Oneida, New York, on May 26, 2004 at 2 p.m. local time. At the
Meeting, stockholders will be asked to:
1. elect four directors for three-year terms;
2. ratify the appointment of PricewaterhouseCoopers LLP as independent
auditors for the fiscal year ending January 29, 2005; and
3. 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 19,
2004 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
CATHERINE H. SUTTMEIER
CATHERINE H. SUTTMEIER
Secretary
Oneida, New York
April 30, 2004
ONEIDA LTD.
ONEIDA, NEW YORK 13421
--------------------------
PROXY STATEMENT
FOR
2004 ANNUAL MEETING OF STOCKHOLDERS
--------------------------
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. Regular employees of the Company may solicit proxies personally or
by mail or telephone. Expenses, including out-of-pocket expenses and charges
which may be incurred or made by nominees or custodians solicited in obtaining
authorization from their principals to execute proxies, will be borne by the
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.
Distribution of this Proxy Statement and related proxy soliciting materials
to stockholders is scheduled to begin on or about May 3, 2004.
Only holders of record of the Common Stock of the Company as of the close of
business on April 19, 2004 are entitled to vote at the Annual Meeting. As of
that date, there were outstanding 16,759,369 shares of Common Stock. Each share
is entitled to one vote. The presence, in person or by proxy, of the holders of
a majority of the outstanding shares entitled to vote is necessary for a quorum
at the Annual Meeting.
ACTION TO BE TAKEN UNDER THE PROXY
Unless the giver of the proxy directs otherwise, the shares represented by
the accompanying proxy will be voted (1) 'FOR' the election of the four
directors for three-year terms; and (2) 'FOR' the ratification of
PricewaterhouseCoopers LLP as independent auditors. In each case where the giver
of a proxy has directed that the proxy be voted otherwise, it will be voted
according to the direction given. As to any other business which properly comes
before the meeting or any adjournment of it, the persons acting under the proxy
intend to vote according to their judgment. As of the date hereof, management is
not aware of any such other matters of business.
REVOCATION OF PROXY
Anyone who gives a proxy may still vote in person. The giver may revoke the
proxy at any time before it has been exercised. In this event, written notice of
revocation should be filed with the Secretary of the Company.
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.
PROPOSAL TO ELECT DIRECTORS
BOARD OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation and amended
Bylaws specify that the Board of Directors of the Company shall consist of not
less than nine or more than fifteen Directors. These documents 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. The
Company's Board of Directors currently is comprised of ten members, divided into
two classes of three directors and one class of four directors serving staggered
three-year terms. Each Director holds office for a term ending on the date of
the third Annual Meeting following the
Annual Meeting at which such Director was elected. At the 2004 Annual Meeting,
stockholders are being asked to elect four directors, each for a three-year term
expiring at the 2007 Annual Meeting.
NOMINEES FOR DIRECTOR
The four nominees, William F. Allyn, Allan H. Conseur, Gregory M. Harden and
Catherine H. Suttmeier, are members of the present Board of Directors and each
was elected to a three-year term in 2001. Each of these nominees was recommended
by the Nominating and Corporate Governance Committee. 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 THREE YEAR TERMS EXPIRING MAY 30, 2007
WILLIAM F. ALLYN (b) (c) (d) ............................... Chairman and Chief Executive Officer,
Director since 1989, Age 68 Welch Allyn Ventures, LLC
In 2000 Mr. Allyn was appointed to this position and he retired as President of Welch Allyn, Inc.,
a position he held for more than five years. Mr. Allyn is a director of M&T Bank.
ALLAN H. CONSEUR (a) ....................................... Executive Vice President
Director since 2001, Age 55
Mr. Conseur was elected Executive Vice President in 1999. He has been President, THC Systems, Inc.
and President, Oneida International, Inc. for more than the past five years.
GREGORY M. HARDEN (a) (b) (c) .............................. President and Chief Executive
Director since 1998, Age 47 Officer, 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 Footware Co. and Utica Mutual Insurance Co.
CATHERINE H. SUTTMEIER (a) ................................. Corporate Vice President, Secretary
Director since 1998, Age 47 and General Counsel
Ms. Suttmeier was elected Corporate Vice President in 1999. She has been Vice President, Secretary
and General Counsel for more than the past five years.
DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE MAY 25, 2005
J.PETER FOBARE (a) ......................................... Senior Vice President and General
Director since 1998, Age 54 Manager, Oneida Consumer Retail and
Direct Divisions
Mr. Fobare assumed responsibility for the Consumer Direct Division in 1999. He has been Senior Vice
President and General Manager of the Consumer Retail Division for more than the past five years.
WHITNEY D. PIDOT (d) (e) ................................... Partner, Shearman & Sterling,
Director since 1996, Age 60 Attorneys, New York
Mr. Pidot has been a partner with Shearman & Sterling for more than the past five years.
WILLIAM M. TUCK (b) (c) (d) ................................ Former President, Crouse-Hinds
Director since 1996, Age 68 Division of Cooper Industries, Inc.
Mr. Tuck retired as President of Crouse-Hinds in 1998.
2
DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE MAY 31, 2006
GEORGIA S. DERRICO (b) (c) (d) ............................. Chairman of the Board and Chief
Director since 1982, Age 59 Executive Officer, Southern Financial
Bancorp, Inc.
Ms. Derrico has held the above position for more than the past five years.
PETER J. MARSHALL (b) (c) .................................. Vice President and Chief Finance
Director since August 2002, Age 50 Officer, Dover Technologies
International, Inc.
Mr. Marshall has held the above position for more than the past five years.
PETER J. KALLET (a) ........................................ Chairman of the Board, President and
Director since 1996, Age 57 Chief Executive Officer
Mr. Kallet was elected Chairman of the Board in May 2000. He has served as Chief Executive Officer
and President for more than the past five years.
---------
(a) Member of the Executive Committee.
(b) Member of the Audit Committee.
(c) Member of the Management Development and Executive Compensation Committee.
(d) Member of the Nominating and Corporate Governance Committee.
(e) Mr. Pidot attends meetings of the Audit Committee and the Management
Development and Executive Compensation Committee by invitation.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors unanimously recommends a vote 'FOR' each of the four
nominees.
VOTE REQUIRED
An affirmative vote of a majority of stockholders present in person or by
proxy is necessary for the election of these directors.
DIRECTOR INDEPENDENCE
The Board of Directors has determined that each of the current Directors,
except Messrs. Kallet, Conseur Fobare and Ms. Suttmeier, are 'independent' under
the current independence standards of both the New York Stock Exchange and 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. Allyn serves as a Director of M&T Bank, one of the group of lenders
participating in the Company's primary financing vehicle, its Amended and
Restated Credit Agreement. The Board of Directors reviewed all facts and
circumstances of the association between the Company, Mr. Allyn and M&T Bank,
including the nature and volume of services provided to the Company by M&T Bank,
and determined that Mr. Allyn has no material relationship with the Company
other than as a Director and that he is 'independent'.
Mr. Pidot is a partner in the law firm of Shearman & Sterling, a long-time
provider of legal services to the Company. The Board of Directors reviewed all
facts and circumstances of the association between the Company, Mr. Pidot and
Shearman & Sterling, including the nature and volume of services provided to the
Company by Shearman & Sterling, and determined that Mr. Pidot has no material
relationship with the Company other than as a Director and that he is
'independent'.
Messrs. Kallet, Conseur and Fobare and Ms. Suttmeier were not deemed
'independent' because they are current executive officers of the Company.
3
MEETINGS OF THE BOARD OF DIRECTORS
During the past fiscal year, the Board of Directors held sixteen 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, except for Mr. Conseur who attended only seven of the eleven Executive
Committee meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has four standing committees: an Audit
Committee, an Executive 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 met on six
occasions. 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 five members of the
Audit Committee, Messrs. Allyn, Harden, Marshall and Tuck and Ms. Derrico, 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 as defined in the New York Stock Exchange
Corporate Governance Standards. 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 met on 11
occasions. The Committee reviews and approves all capital expenditures of the
Company in excess of $100,000.
Management Development and Executive Compensation Committee. During the past
fiscal year, the committee met on two occasions. 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. As a result of the November 2003 consolidation of the Pension and Profit
Sharing Fund Investment Committee into the Management Development and Executive
Compensation Committee, the committee now 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 two meetings. 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
4
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
Beginning in fiscal year ended January 2005, the independent members of the
Board of Directors will 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. For the fiscal year ended January
2005, Mr. William F. Allyn has been elected to serve as Chairperson of the
meetings of independent directors.
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 2003 Annual Meeting of Stockholders.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive $19,000 on an annual
basis for serving as directors of the Company. They also receive $1,250 per
Board meeting, $750 each for the first two committee meetings held on the day of
regular Board meetings, $400 for the third committee meeting held on the day of
regular Board meetings and $750 for special committee meetings not held on the
day of regular Board meetings. Committee chairpersons receive an additional $50
per committee meeting. In lieu of the foregoing committee meeting and chair
fees, the Chairperson of the Audit Committee receives $1,200 for each Audit
Committee meeting.
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. This year three of the six non-employee
directors elected to receive a portion of his or her annual retainer in Common
Stock. Pursuant to these elections, non-employee directors received the
following shares pursuant to the Plan: William F. Allyn -- 3,417; Georgia S.
Derrico -- 3,417; and Peter J. Marshall -- 600.
Pursuant to the 2003 Non-Employee Directors Stock Option Plan, as amended,
each newly elected and continuing non-employee member of the Board of Directors
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.
Retiring non-employee directors who serve ten years or more on the Board
continue to receive their retainer for ten years following their retirement.
Non-employee directors who retire with five to ten years of service receive 50%
of their annual retainer for the ten-year period after retirement.
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
5
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's Corporate Governance Guidelines, Code of Business Conduct and
Ethics and the charters of the Audit Committee, Management Development and
Executive Compensation Committee, and Nominating and Corporate Governance
Committee are 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
Mr. Pidot attends meetings of the Audit Committee and the Management
Development and Executive Compensation Committee by invitation, but he is not a
voting member of the 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. Pidot is 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, 2003:
PERCENTAGE OF
TOTAL NUMBER OF
NAME AND ADDRESS NUMBER OF OUTSTANDING
OF BENEFICIAL OWNERS SHARES OWNED SHARES
-------------------- ------------ ------
Ariel Capital Management, Inc ................... 3,261,530 19.602%
200 E. Randolph Drive, Suite 2900
Chicago, IL 60601(1)(2)
Fidelity Management Trust Company ............... 1,835,565 11.02%
Trustee for the Benefit of the Oneida Ltd.
Employee Stock Ownership Plan
82 Devonshire Street
Boston, MA 02109(3)
Ironwood Capital Management, LLC ................ 1,507,225 9.06%
21 Custom House Street
Boston, MA 02110(4)
The TCW Group, Inc., on behalf of the TCW
Business Unit ............................... 1,436,844 8.6%
865 South Figueroa Street
Los Angeles, CA 90017(5)
U.S. Trust Corp., United States Trust Company of
New York and U.S. Trust Company, N.A. ....... 1,414,021 8.49%
114 West 47th Street
New York, NY 10036(6)
Royce & Associates, LLC ......................... 973,200 5.85%
1414 Avenue of the Americas
New York, NY 10019(7)
(footnotes on next page)
6
(footnotes from previous page)
(1) The Company has received a copy of a Schedule 13G filed with the Securities
and Exchange Commission by Ariel Capital Management, Inc. reporting
beneficial ownership. This stockholder is described in the Schedule as 'an
investment adviser in accordance with 'SS'240.13d-1(b)(ii)(E)'.
(2) On April 8, 2004, Ariel Capital Management filed a Schedule 13G/A filed with
the Securities and Exchange Commission reporting beneficial ownership of 0
shares of Company Common Stock as of March 31, 2004.
(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 13G filed with the Securities
and Exchange Commission by Ironwood Capital Management, LLC reporting
beneficial ownership. This stockholder is described in the Schedule as 'an
investment adviser in accordance with 'SS'240.13d-1(b)(ii)(E)'.
(5) The Company has received a copy of a Schedule 13G filed with the Securities
and Exchange Commission by The TCW Group, Inc., on behalf of the TCW
Business Unit, reporting beneficial ownership. This stockholder is described
in the Schedule as 'a parent holding company or control person in accordance
with 'SS'240.13d-1(b)(1)(ii)(G)'.
(6) The Company has received a copy of a Schedule 13G filed with the Securities
and Exchange Commission by U.S. Trust Corp., United States Trust Company of
New York and U.S. Trust Company, N.A. reporting beneficial ownership. This
stockholder is described in the Schedule as a 'bank as defined in section
3(a)(6) of the Act (15 U.S.C. 78c) and as 'a parent holding company or
control person in accordance with 'SS'240.13d-1(b)(1)(ii)(G)'.
(7) The Company has received a copy of a Schedule 13G filed with the Securities
and Exchange Commission by Royce & Associates, LLC reporting beneficial
ownership. This stockholder is described in the Schedule as 'an investment
advisor registered under Section 203 of the Investment Advisors Act of
1940'.
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, 2004:
NUMBER OF
NAME OF BENEFICIAL OWNER SHARES OWNED
------------------------ ------------
William F. Allyn............................................ 15,998(1)
Allan H. Conseur............................................ 77,754(3)(4)
Georgia S. Derrico.......................................... 34,061(1)
J. Peter Fobare............................................. 92,474(3)(4)
Gregory M. Harden........................................... 50,319(1)
James E. Joseph............................................. 18,466(3)(4)
Peter J. Kallet............................................. 201,271(3)(4)
Paul Masson................................................. 0
Peter J. Marshall........................................... 1,400(2)
Whitney D. Pidot............................................ 16,787(1)
Catherine H. Suttmeier...................................... 73,372(3)(4)
William M. Tuck............................................. 11,380(1)
Nominees for director and directors and officers as a
group..................................................... 866,122(1)(2)(3)(4)
The nominees and directors and officers as a group own 5.17% (1)(2)(3)(4)
(footnotes on next page)
7
(footnotes from previous page)
(1) Includes 6,000 shares which as of April 1, 2004 could be acquired within 60
days upon the exercise of options under the 1998 and 2003 Non-Employee
Directors Stock Option Plans, as amended.
(2) Includes 1,000 shares which as of April 1, 2004 could be acquired within 60
days upon the exercise of options under the 1998 and 2003 Non-Employee
Directors Stock Option Plans, as amended.
(3) Includes shares which as of April 1, 2004 could be acquired within 60 days
upon the exercise of options under the Oneida Ltd. 1998 and 2002 Stock
Option Plans and the Oneida Ltd. Employee Stock Purchase Plan in the
following amounts: A. Conseur -- 65,741; J.P. Fobare -- 62,047; J.
Joseph -- 15,011; P. Kallet -- 140,951; P. Masson -- 0; C.
Suttmeier -- 60,927; and other Executive Officers as a group -- 100,190.
(4) Includes shares held indirectly through the Company's Employee Stock
Ownership Plan, as amended, in the following amounts as of April 1, 2004: A.
Conseur -- 696; J. P. Fobare -- 7,688; J. Joseph -- 3,445; P.
Kallet -- 11,802; P. Masson -- 0; C. Suttmeier -- 4,945; and other Executive
Officers as a group -- 10,905.
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 2004, all of such forms were filed on a
timely basis by reporting persons.
8
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
-------------------------------------------------------------- ---------- -----------------------
NAME AND RESTRICTED SECURITIES
PRINCIPAL FISCAL YEAR CASH STOCK OTHER ANNUAL STOCK UNDERLYING LTIP
POSITION ENDED(1) SALARY(2) INCENTIVE INCENTIVE COMPENSATION AWARDS OPTIONS # PAYOUTS(3)
-------- -------- --------- --------- --------- ------------ ------ ---------- ----------
Peter J. Kallet, 2004 $366,923 $ 0 $0 $0 $0 50,000 $0
Chairman of the 2003(5) 340,614 0 0 0 0 50,000 0
Board, President 2002 354,000 0 0 0 0 50,000 0
and CEO
Allan H. Conseur, 2004 391,385 0 0 0 0 25,000 0
Executive 2003(5) 363,322 0 0 0 0 25,000 0
Vice President 2002 377,600 0 0 0 0 20,000 0
J. Peter Fobare 2004 202,827 0 0 0 0 15,000 0
Senior Vice 2003(5) 188,284 0 0 0 0 15,000 0
President 2002 195,683 0 0 0 0 15,000 0
and General
Manager, Consumer
Retail and Direct
Divisions
James E. Joseph, 2004 183,903 0 0 0 0 15,000 0
Senior Vice 2003(5) 157,112 0 0 0 15,000 0
President 2002 175,891 0 0 0 10,000 0
and General Manager
Foodservice Division
Paul Masson, Senior 2004 252,000(7) 36,000(8) 0 0 0 0 0
Vice President 2003 211,725(7) 32,000(8) 0 0 0 0 0
and General Manager 2002 160,994(7) 28,000(8) 0 0 0 0 0
International
Division(6)
NAME AND
PRINCIPAL ALL OTHER
POSITION COMPENSATION(4)
-------- ---------------
Peter J. Kallet, $3,884
Chairman of the 0
Board, President 0
and CEO
Allan H. Conseur, 1,787
Executive 0
Vice President 0
J. Peter Fobare 4,227
Senior Vice 0
President 0
and General
Manager, Consumer
Retail and Direct
Divisions
James E. Joseph, 2,739
Senior Vice 0
President 0
and General Manager
Foodservice Division
Paul Masson, Senior 0
Vice President 0
and General Manager 0
International
Division(6)
---------
(1) Fiscal year ended 2004 contained 53 weeks, while fiscal years ended 2003 and
2002 contained 52 weeks.
(2) Includes amounts deferred pursuant to salary reduction arrangements under
the Oneida Ltd. 401(k) Savings Plan, as amended and the Oneida Ltd. Deferred
Compensation Plan for Key Employees.
(3) LTIP: Long-Term Incentive Payments.
(4) 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 contributions for
fiscal years ended January 2002 or 2003.
(5) During the first half of fiscal year ended 2003, the salaries of all of the
Company's domestic senior executives, including Messrs. Kallet, Conseur,
Fobare and Joseph, were reduced by 10%.
(6) Mr. Masson was elected Senior Vice President and Managing Director,
International Division in March 2003. During the remainder of fiscal year
ended January 2004, all of fiscal year ended January 2003 and the later half
of fiscal year ended January 2002, Mr. Masson was Vice President,
International Division. During the first half of fiscal year ended January
2002, Mr. Masson was Managing Director, Europe, Africa and Asia.
(7) 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 2004, 2003 and 2002 was `L'140,000, `L'132,328 and
`L'114,996, respectively. Solely for the purposes of presentation in this
Summary Compensation table, Mr.
(footnotes continued on next page)
9
(footnotes continued from previous page)
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 2004, 2003 and 2002 were 1.8, 1.6 and 1.4, respectively.
(8) 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 2004, 2003 and 2002 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 2004, 2003 and 2002 were 1.8, 1.6 and 1.4,
respectively.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the Company's 1998 and 2002 Stock Option Plans to the Company's
Chief Executive Officer and each of the Company's four other most highly
compensated executive officers as of the end of the past fiscal year.
OPTION GRANTS IN PAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SHARES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR PRICE ($/SH) DATE 5%($) 10%($)
---- ---------- ----------- ------------ ---- ----- ------
P. Kallet............ 50,000 19.1% $11.00 2013 $346,000 $876,500
A. Conseur........... 25,000 9.6 11.00 2013 173,000 438,250
J. P. Fobare......... 15,000 5.7 11.00 2013 103,800 262,950
J. Joseph............ 15,000 5.7 11.00 2013 103,800 262,950
P. Masson............ 0 0 -- -- 0 0
NOTE: The 1998 and 2002 Stock Option Plans provide for grants of Common
Stock options to executive officers and key employees of the Company and its
subsidiaries. The exercise price for shares granted is the market value of the
shares on the date of the grant. The exercise price may be paid in cash; from
time to time payment has been allowed in other forms, including exchange of
Common Stock of the Company previously held by the executive. The vesting
schedule as well as the term during which an option may be exercised are
established at the time of the grant.
The following table sets forth information with respect to the named
executives concerning the exercise of options during the past fiscal year and
unexercised options held at the end of that fiscal year.
AGGREGATED OPTION EXERCISES IN PAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END FY-END($)
SHARES --------------- ---------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- ----------- ----------- ------------- -------------
P. Kallet........................ 0 0 140,600/112,400 $ 0/$0
A. Conseur....................... 0 0 64,300/54,200 0/ 0
J. P. Fobare..................... 0 0 61,300/34,200 0/ 0
J. Joseph........................ 0 0 14,400/28,600 0/ 0
P. Masson........................ 0 0 0/0 0/ 0
10
PENSION PLAN TABLE
The following table shows estimated annual retirement benefits payable at
age 65 under the Retirement Plan for Employees of Oneida Ltd., a qualified
defined benefit plan.
FINAL AVERAGE
EARNINGS 10 YEARS 20 YEARS 30 YEARS 40 YEARS
-------- -------- -------- -------- --------
$100,000.................................... $ 8,576 $17,152 $ 25,728 $ 34,304
120,000.................................... 10,476 20,952 31,428 41,904
150,000.................................... 13,326 26,652 39,978 53,304
200,000.................................... 18,076 36,152 54,228 72,304
250,000.................................... 22,826 45,652 68,478 91,304
300,000.................................... 27,576 55,152 82,728 110,304
350,000.................................... 32,326 64,652 96,978 129,304
400,000.................................... 37,076 74,152 111,228 148,304
500,000.................................... 46,576 93,152 139,728 186,304
600,000.................................... 56,076 112,152 168,228 224,304
700,000.................................... 65,576 131,152 196,728 262,304
800,000.................................... 75,076 150,152 225,228 300,304
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. 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; and J. Joseph -- 15 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 plan to $165,000
and the maximum compensation that can be taken into account in establishing
benefits to $205,000.
In addition to the Retirement Plan for Employees of Oneida Ltd., the named
executives also participate in the Oneida Ltd. Employee Stock Ownership Plan, a
defined contribution plan. Benefits received under the Employee Stock Ownership
Plan are offset against the benefits to be received under the Retirement Plan.
Allocations to the executives' Employee Stock Ownership Plan accounts for the
past fiscal year are reported in the Summary Compensation Table.
In addition to the retirement benefits described above, the Company
maintains a Restoration Plan for key employees and officers selected by the
Compensation Committee. The Chief Executive Officer and the other 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. The benefit is forfeited if the participant
retires or otherwise terminates employment before age 55. 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 executive officers of the Company, of whom
only Mr. Conseur is among the Company's four other most highly compensated
executive officers for the past fiscal year.
As an employee of the Company's Oneida U.K., Limited subsidiary, Mr. Masson
does not participate in the above described Retirement Plan for Employees of
Oneida Ltd., 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.
EMPLOYMENT AGREEMENTS
The Company has entered into Change in Control Agreements with Messrs.
Kallet, Conseur and Fobare dated November 15, 1999. These agreements, in
general, provide that in the event the officer's employment is
11
terminated as a result of a Change in Control, the officer will be entitled to a
severance payment equal to 2.99 times his or her average annual compensation (as
defined), health insurance for three years following termination and a
supplemental pension benefit.
These agreements define a 'Change in Control' as an event where (a) any
individual, partnership, firm, corporation, association, trust, unincorporated
organization or other entity or person, or any syndicate or group deemed to be a
person under Section 14(d)(2) of the Exchange Act is or becomes the 'beneficial
owner' (as defined in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company's then outstanding
securities entitled to vote in the election of directors of the Company;
(b) during any period of two consecutive years (not including any period prior
to the effective date of this Agreement), individuals who at the beginning of
such periods constituted the Board and any new directors, whose election by the
Board or nomination for election by the Company's stockholders was approved by a
vote of at least three-fourths of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a
majority thereof; (c) there occurs a reorganization, merger, consolidation or
other corporate transaction involving the Company (a 'Business Combination'), in
each case with respect to which stockholders of the Company immediately prior to
such transaction do not, immediately after such transaction, own directly or
indirectly more than 50% of the combined voting power of the Company or other
corporation resulting from such Business Combination in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the voting securities of the Company; (d) all or substantially all of the
assets of the Company are sold, liquidated or distributed; or (e) there occurs a
transaction that constitutes a change in the (i) ownership of the Company,
(ii) effective control of the Company or (iii) effective ownership of a
substantial portion of the assets of the Company, as determined pursuant to
Internal Revenue Code Section 280G and the regulations promulgated thereunder.
The agreements provide for a full tax gross up for all excise taxes incurred
under the 'golden parachute' rules of the Internal Revenue Code.
The Company's Oneida U.K. Limited subsidiary maintains an Employment
Agreement with Mr. Masson dated May 11, 2000. This Agreement establishes the
basic terms and conditions of Mr. Masson's employment, including salary, duties
and benefits and places specified confidentiality and non-compete obligations on
Mr. Masson. Other than in the event of certain specified bad acts, the Company
cannot terminate the Agreement except on 6 months prior notice. The Agreement
automatically expires when Mr. Masson reaches 65 years of age.
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.
EQUITY COMPENSATION PLANS
The following table Summarizes information about the Company's equity
compensation plans as of January 31, 2004. All outstanding awards relate to the
Company's common stock.
12
EQUITY COMPENSATION PLAN INFORMATION
(a) (b) (c)
------------------- ------------------- --------------------
NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR INSURANCE UNDER
NUMBER OF SECURITIES EQUITY
TO BE ISSUED UPON WEIGHTED-AVERAGE COMPENSATION PLANS
EXERCISE OF EXERCISE PRICE OF (EXCLUDING SECURITIES
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, REFLECTED IN
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS COLUMN (a))
------------- ------------------- ------------------- -----------
Equity Compensation Plans Approved by
Stockholders(1)...................... 1,684,200 $14.77 1,765,944(2)
Equity Compensation Plans Not Approved
by Stockholders(3)................... 0 0 0
Total.............................. 1,684,200 $14.77 1,765,944(2)
---------
(1) Includes the Employee Stock Purchase Plan, as amended, 1998 Stock Option
Plan, 2002 Stock Option Plan, 1998 Non-Employee Directors Stock Option
Plan, as amended, 2000 Non-Employee Directors Equity Plan, 2003
Non-Employee Directors Stock Option Plan, as amended, and Amended and
Restated Restricted Stock Award Plan.
(2) Includes shares remaining for issuance in the following amounts: Employee
Stock Purchase Plan -- 612,884; 1998 Stock Option Plan -- 0; 2002 Stock
Option Plan -- 921,590; 1998 Non-Employee Directors Stock Option
Plan -- 0; 2000 Non-Employee Directors Equity Plan -- 23,333; 2003
Non-Employee Directors Stock Option Plan -- 163,000; and Amended and
Restated Restricted Stock Award Plan -- 45,137.
(3) There are no equity compensation plans that have not been approved by the
Company's Stockholders.
13
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 ('Compensation Committee'). This committee currently consists of five
non-employee directors of the Company.
This Compensation Committee report provides the policies and philosophy
underlying decisions regarding executive compensation for fiscal year ended 2004
and how they affected Mr. Kallet, in particular, and in general Messrs. Conseur,
Fobare, Joseph and Masson -- the four executive officers other than Mr. Kallet
who for fiscal year ended 2004 were the Company's most highly paid executive
officers.
ONEIDA'S 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 2004 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 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.
14
These awards provide a long-term focus since, in general, the
stock is restricted from being sold, transferred or assigned and
is forfeitable until it vests.
THE CHIEF EXECUTIVE'S FISCAL YEAR ENDED 2004 COMPENSATION
SEC regulations require the Compensation Committee to discuss its basis for
decisions affecting the chief executive's compensation for the fiscal year ended
2004 in relation to the Company's performance during that fiscal year.
The Compensation Committee's general approach in setting the chief
executive'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 some
certainty in the level of his compensation through the non-performance based
elements.
The chief executive'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 past fiscal
year because its performance goals were not met.
The remainder of Mr. Kallet's performance-based compensation for fiscal year
ended 2004 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 past fiscal
year because its performance goals were not met.
Mr. Kallet, with other Company executives, participates in the stock option
plan discussed above.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND EXECUTIVE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
Georgia S. Derrico, Chairperson
William F. Allyn
Gregory M. Harden
Peter J. Marshall
William M. Tuck
15
REPORT OF THE AUDIT COMMITTEE
To the Board of Directors
The Audit Committee is currently comprised of the five directors named
below. Each member of the Audit Committee is an independent director as defined
by the current New York Stock Exchange rules. The Audit Committee has adopted a
written charter, attached hereto as Exhibit A, 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 31, 2004.
We have discussed with PricewaterhouseCoopers LLP ('PWC') 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
PWC required by Independence Standard No. 1, 'Independence Discussions with
Audit Committees', as amended, by the Independence Standards Board, and have
discussed with the auditors the auditors' independence.
We have also considered whether the provision of services by PWC 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 April 26, 2003, July 26, 2003 and October 25, 2003 is compatible
with maintaining PWC's independence and have concluded that PWC'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 financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 2004.
Peter J. Marshall, Chairperson
William F. Allyn
Georgia S. Derrico
Gregory M. Harden
William M. Tuck
16
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP ('PWC') was the Company's independent auditor for
the fiscal year ended January 31, 2004. The Company has been advised by PWC 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 prior fiscal
year, and that it has no connection with the Company or any of its subsidiaries
in any capacity other than as public accountants. PWC was paid fees for services
provided to the Company for the fiscal years ended January 31, 2004 and
January 25, 2003 as follows:
FEE TYPE JANUARY 31, 2004 JANUARY 25, 2003
-------- ---------------- ----------------
Audit Fees............................................ $ 656,650 $322,120
Audit-Related Fees.................................... 194,480 56,970
Tax Fees.............................................. 171,610 252,660
All Other Fees........................................ 110,720 121,250
---------- --------
Total Fees........................................ $1,133,470 $753,000
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.
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.
Representatives from PricewaterhouseCoopers LLP are expected to be present
at the 2004 Annual Meeting with the opportunity to make a statement and to
answer questions from stockholders.
PROPOSAL TO RATIFY APPROVAL OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has recommended, and the Board
of Directors has affirmed, the reappointment of PricewaterhouseCoopers LLP
('PWC') as independent certified public accountants for the Corporation's fiscal
year ended January 29, 2005, subject to ratification by the Corporation's
Stockholders. In the event the Stockholders fail to ratify the reappointment of
PWC, the selection of alternate independent auditors will be considered by the
Audit Committee and the Board of Directors. Since the Corporation's Certificate
of Incorporation and By-Laws do not require Stockholder approval or ratification
of the Board's appointment of independent auditors, the Audit Committee and the
Board of Directors may, in their discretion, appoint alternate independent
auditors at any time during the current or any subsequent fiscal year for any
reasons they deem in the best interests of the Company, notwithstanding
Stockholder ratification of the reappointment of PWC.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors considers PricewaterhouseCoopers LLP to be well
qualified and recommends a vote 'FOR' the ratification of the reappointment of
PricewaterhouseCoopers LLP.
17
VOTE REQUIRED
An affirmative vote of a majority of stockholders present in person or by
proxy is necessary for the ratification of the reappointment of
PricewaterhouseCoopers LLP.
1999-2004 STOCKHOLDERS' RETURN GRAPH
The following line graph compares the cumulative total stockholder return of
the Company's Common Stock with returns for the Russell 2000 Index and a
'Housewares Peer Group' for the period covering the Company's past five fiscal
years. Proxy statement disclosure rules adopted by the Securities and Exchange
Commission require such a total stockholder return comparison using both a
broad-based stock price index and a line-of-business comparator group. The
composition of the Russell 2000 Index meets the broad-based stock price index
requirement, which permits market capitalization to be a factor. The median
market capitalization of the Russell 2000 Index companies was approximately $497
million as of January 31, 2004. The Company's average start-of-year market
capitalization for the five-year performance period was $222.5 million.
The 'Housewares Peer Group' is comprised of those companies, included in the
Fall 2003 Investors Business Daily 'Household-Housewares' stock price index,
which had market capitalizations of less than $750 million at the start of each
of the fiscal years covered by the graph. These companies are: Home Products
International, Inc., Libbey Inc. and Lifetime Hoan Corp.
The return values set forth below and plotted on the graph are based on an
initial investment of $100 on January 31, 1999, in the Company's Common Stock,
and each of the two comparator investment groups, with all dividends treated as
reinvested, and each component company within an investment group weighted by
its start-of-year market capitalization.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100
JANUARY 2004
[LINE GRAPH]
1/31/00 1/31/01 1/31/02 1/31/03 1/31/04
ONEIDA LTD. 149.65 127.52 87.32 81.04 39.56
RUSSELL 2000 INDEX 117.86 122.37 118.14 92.29 145.87
PEER GROUP 97.54 102.23 111.46 83.09 114.96
18
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS FOR INCLUSION IN 2005 PROXY STATEMENT
In order to be considered for inclusion in the Company's proxy statement
relating to the 2005 Annual Meeting, stockholder proposals must be received at
the Company's principal executive offices no later than the close of business on
December 24, 2004. 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 2005 ANNUAL MEETING
For stockholder proposals that are not submitted for inclusion in the
Company's 2005 proxy statement, but are instead sought to be presented directly
at the Company's 2005 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 24, 2005. Notice of intention to
present stockholder proposals at the Company's 2005 Annual Meeting should be
addressed to Catherine H. Suttmeier, Secretary, 163-181 Kenwood Avenue, Oneida
Ltd., Oneida, New York 13421.
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.
ANNUAL REPORT
The Company's Annual Report on Form 10-K (the 'Annual Report') for the
fiscal year ended January 31, 2004, 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
CATHERINE H. SUTTMEIER
CATHERINE H. SUTTMEIER
Secretary
Oneida, New York
April 30, 2004
19
EXHIBIT A
AMENDED & RESTATED CHARTER
OF
THE ONEIDA LTD.
AUDIT COMMITTEE
PURPOSE
The Audit Committee (the 'Committee') of the ONEIDA LTD. (the 'Company')
Board of Directors (the 'Board') is established by the Board primarily for the
purpose of overseeing the accounting and financial reporting processes of the
Company and audits of the financial statements of the Company.
The Committee is responsible for assisting the Board's oversight of (1) the
quality and integrity of the Company's financial statements and related
disclosure, (2) the Company's compliance with legal and regulatory requirements,
(3) the independent auditor's qualifications and independence, and (4) the
performance of the Company's internal audit function and independent auditors.
COMPOSITION
1. Members. The Committee shall consist of as many members as the Board
shall determine, but in any event not fewer than three (3) members. The
members of the Committee shall be appointed annually by the Board upon
the recommendation of the Nominating and Corporate Governance Committee.
2. Qualifications. Each member of the Committee shall meet all applicable
independence, financial literacy and other requirements of law and the
New York Stock Exchange. At least one (1) member of the Committee must
meet the applicable Securities and Exchange Commission definition of
financial expert. As of the date of approval of this Charter by the
Board, director Peter J. Marshall has been deemed by the Board to qualify
as a 'financial expert', as defined by the Securities and Exchange
Commission.
3. Chair. One member of the Committee shall be appointed as the Chair of the
Committee by the Board upon recommendation of the Nominating and
Corporate Governance Committee.
4. Removal and Replacement. The members of the Committee may be removed or
replaced, and any vacancies on the Committee shall be filled, by the
Board upon the recommendation of the Nominating and Corporate Governance
Committee.
OPERATIONS
1. Meetings. The Chair of the Committee, in consultation with the Committee
members, shall determine the schedule and frequency of the Committee
meetings, provided that the Committee shall meet at least four (4) times
per year. The Committee shall meet separately, periodically, with
management, the general counsel, the internal auditors and the
independent auditor. The Committee shall also meet separately with the
independent auditor at every meeting of the Committee at which the
independent auditor is present.
2. Agenda. The Chair of the Committee shall develop and set the Committee's
agenda, in consultation with other members of the Committee, the Board
and management. The agenda and information concerning the business to be
conducted at each Committee meeting shall, to the extent practical, be
communicated to the members of the Committee sufficiently in advance of
each meeting to permit meaningful review.
3. Report to Board. The Committee shall report regularly to the entire Board
and shall submit to the Board the minutes of its meetings prior to the
date of the next scheduled Board meeting.
4. Self-Evaluation; Assessment of Charter. The Committee shall conduct an
annual performance self-evaluation and shall report to the entire Board
the results of the self-evaluation. The Committee shall assess the
adequacy of this Charter on an annual basis and recommend any changes to
the Board.
A-1
AUTHORITY AND DUTIES
INDEPENDENT AUDITOR'S QUALIFICATIONS AND INDEPENDENCE
1. The Committee shall be directly responsible for the appointment,
retention, compensation and oversight of the work of the independent
auditor employed by the Company to audit its financial statements.
2. The Committee shall have the sole authority to preapprove any non-audit
services to be provided by the independent auditor. The Committee shall
review with the lead audit partner whether any of the audit team members
receive any discretionary compensation from the audit firm with respect
to non-audit services performed by the independent auditor.
3. The Committee shall obtain and review with the lead audit partner and a
more senior representative of the independent auditor, annually or more
frequently as the Committee considers appropriate, a report by the
independent auditor describing: the independent auditor's internal
quality-control procedures; any material issues raised by the most recent
internal quality-control review, or peer review, of the independent
auditor, or by any inquiry, review or investigation by governmental,
professional or other regulatory authorities, within the preceding five
(5) years, respecting independent audits carried out by the independent
auditor, and any steps taken to deal with these issues; and (to assess
the independent auditor's independence) all relationships between the
independent auditor and the Company. The Committee shall, in addition to
assuring the regular rotation of the lead audit partner, consider whether
there should be regular rotation of the audit firm.
4. The Committee shall review the experience, qualifications and performance
of the senior members of the independent auditor team.
5. The Committee shall preapprove the hiring of any employee or former
employee of the independent auditor who was a member of the Company's
audit team during the preceding three (3) fiscal years. In addition, the
Committee shall preapprove the hiring of any employee or former employee
of the independent auditor (within the preceding three (3) fiscal years)
for senior positions within the Company, regardless of whether that
person was a member of the Company's audit team.
FINANCIAL STATEMENTS AND RELATED DISCLOSURE
1. The Committee shall review the annual audited financial statements and
quarterly financial statements with management and the independent
auditor, including the Company's disclosures under 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations,' before the filing of each of the Company's Form 10-K and
Form 10-Q.
2. The Chair of the Committee, or his or her designee, shall review with
management earnings press releases before they are issued. The Committee
shall review generally with management the nature of the financial
information and earnings guidance provided to analysts and rating
agencies.
3. The Committee shall review with the independent auditor: (a) all critical
accounting policies and practices to be used by the Company in preparing
its financial statements, (b) all alternative treatments of financial
information within GAAP that have been discussed with management,
ramifications of the use of these alternative disclosures and treatments,
and the treatment preferred by the independent auditor, and (c) other
material communications between the independent auditor and management,
such as any management letter or schedule of unadjusted differences. In
addition, the Committee shall review with the independent auditor any
audit problems or difficulties and management's response.
4. The Committee shall review with management, and any outside professionals
as the Committee considers appropriate, the effectiveness of the
Company's disclosure controls and procedures.
5. The Committee shall review with management, and any outside professionals
as the Committee considers appropriate, important trends and developments
in financial reporting practices and requirements and their effect on the
Company's financial statements.
6. The Committee shall prepare the report required by the Securities and
Exchange Commission to be included in the Company's annual proxy
statement.
A-2
PERFORMANCE OF THE INTERNAL AUDIT FUNCTION AND OF INDEPENDENT AUDITORS
1. The Committee shall review with management, the internal auditor and the
independent auditor the scope, planning and staffing of the proposed
audit for the current year. The Committee shall also review the internal
audit function's organization, responsibilities, plans, results, budget
and staffing. In addition, management shall consult with the Committee on
the appointment, replacement, reassignment or dismissal of the principal
internal auditor.
2. The Committee shall review with management, the internal auditor and the
independent auditor the quality, adequacy and effectiveness of the
Company's internal controls and any significant deficiencies or material
weaknesses in internal controls.
3. The Committee shall review the Company's policies with respect to risk
assessment and risk management.
COMPLIANCE WITH LEGAL AND REGULATORY REQUIREMENTS
1. The Committee shall review with management, and any internal or external
counsel as the Committee considers appropriate, any legal matters
(including the status of pending litigation) that may have a material
impact on the Company and any material reports or inquiries from
regulatory or governmental agencies.
2. The Committee shall review with the general counsel the adequacy and
effectiveness of the Company's procedures to ensure compliance with its
legal and regulatory responsibilities. The Committee shall also review
the legal and compliance function's organization, responsibilities,
plans, results, budget and staffing.
3. The Committee shall establish procedures for (a) the receipt, retention
and treatment of complaints received by the Company regarding accounting,
internal accounting controls, auditing matters or potential violations of
law and (b) the confidential, anonymous submission by employees of the
Company of concerns regarding questionable accounting or auditing matters
or potential violations of law.
4. The Committee shall obtain reports from management, the internal auditor
and the independent auditor regarding compliance with all applicable
legal and regulatory requirements, including the Foreign Corrupt
Practices Act.
The foregoing list of duties is not exhaustive, and the Committee may, in
addition, perform such other functions as may be necessary or appropriate for
the performance of its oversight function. The Committee shall have the power to
delegate its authority and duties to subcommittees or individual members of the
Committee as it deems appropriate. In discharging its oversight role, the
Committee shall have full access to all Company books, records, facilities and
personnel. The Committee may retain counsel, auditors or other advisors, in its
sole discretion.
CLARIFICATION OF AUDIT COMMITTEE'S ROLE
The Committee's responsibility is one of oversight. It is the responsibility
of the Company's management to prepare consolidated financial statements in
accordance with applicable law and regulations and of the Company's independent
auditor to audit those financial statements. Therefore, each member of the
Committee shall be entitled to rely, to the fullest extent permitted by law, on
the integrity of those persons and organizations within and outside the Company
from whom he or she receives information, and the accuracy of the financial and
other information provided to the Committee by such persons or organizations.
A-3
Appendix 1
ONEIDA LTD. - ANNUAL MEETING MAY 26, 2004
This Proxy is Solicited on Behalf of the Board of Directors
Annual Meeting of Stockholders ONEIDA LTD. -- May 26, 2004
The undersigned, a holder of Common Stock of ONEIDA LTD., hereby appoints
GEORGIA S. DERRICO, PETER J. KALLET and CATHERINE H. SUTTMEIER, 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 26, 2004 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)
ANNUAL MEETING OF STOCKHOLDERS OF
ONEIDA LTD.
May 26, 2004
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" PROPOSAL 2. 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 a three-year term
expiring May 20, 2007:
NOMINEES:
[ ] FOR ALL NOMINEES O W. Allyn
O A. Conseur
O G. Harden
[ ] WITHHOLD AUTHORITY O C. Suttmeier
FOR ALL NOMINEES
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: [X]
2. TO RATIFY the appointment of PricewaterhouseCoopers FOR AGAINST ABSTAIN
LLP as independent auditors; [ ] [ ] [ ]
3. To act in their discretion on such other matters as
may properly come before said meeting or any
adjournment thereof.
Shares will be voted as specified and where no specification is made the vote of
the undersigned will be cast FOR the election of directors and FOR the proposal
outlined in (2).
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.
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as................................ 'SS'