EXHIBIT 10(a)
February 28, 1996
Mr. J. Peter Fobare
130 Kenwood Avenue
Oneida, New York 13421
Dear Mr. Fobare:
Oneida Ltd. (the "Company") considers it essential to the best interests of
its stockholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the
"Board") recognizes that the possibility of a change in control of the Company
may exist and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.
The Board has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of members of the Company's
management, including yourself, to their assigned duties without distraction in
the face of potentially disturbing circumstances arising from any possible
change in control of the Company.
In order to induce you to remain in the employ of the Company, the Company
agrees that you shall receive the severance benefits set forth in this letter
agreement (the "Agreement") in the event that your employment with the Company
is terminated subsequent to a Change in Control (as defined in Section 2).
1. Term of Agreement. The term of this Agreement (the "Term") shall
commence on the Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not been terminated in
accordance with its terms. In the event, however, that you attain the age of
sixty-five (65) during the Term, then this Agreement shall terminate on the last
day of the month in which you attain the age of sixty-five (65). For purposes of
this Agreement, the term "Operative Date" shall mean the date on which a Change
in Control occurs, provided that (i) you are then in the employ of the Company
and (ii) such Change in Control occurs before you reach age sixty-five (65).
2. Change in Control. No benefits shall be payable hereunder unless there
shall have been a Change in Control. For purposes of this Agreement, a "Change
in Control" shall be deemed to have occurred if:
(A) any "Person", as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than
the Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any company owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of sock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(B) during any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (A), (C) or (D) of this
Section) whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(C) the stockholders of the Company approve a merger or consolidation
of the Company with any other company, other than (1) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction in which no "person" (as
hereinabove defined) acquires more than 20% of the combined voting power of the
Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination Following Change in Control. If a Change in Control shall
have occurred, you shall be entitled to the benefits provided in Subsection 4(D)
upon the subsequent termination of your employment during the Term unless such
termination is because of your death or retirement, by the Company for cause or
disability, or by you other than for good reason. In the event your employment
with the Company is terminated for any reason prior to the Operative Date, you
shall not be entitled to any benefits hereunder.
(A) Disability; Retirement. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written Notice of Termination (as defined in
Subsection 3(D)) is given you shall not have returned to the
full-time performance of your duties, the Company may terminate your employment
for "Disability." Any question as to the existence of your Disability upon
which you and the Company cannot agree shall be determined by a qualified
independent physician selected by you (or, if you are unable to make such
selection, it shall be made by any adult member of your immediate family), and
approved by the Company. The determination of such physician made in writing to
the Company and to you shall be final and conclusive for all purposes of this
Agreement. Termination of your employment based on "Retirement" shall mean your
voluntary termination of employment on a Retirement Date as defined in the
Retirement Plan for Employees of Oneida Ltd. or any successor plan thereto (the
"Pension Plan") as in effect immediately prior to the occurrence of a Change in
Control (whether or not you are a participant in the Pension Plan) or in
accordance with any retirement arrangement established with your consent with
respect to you.
(B) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (i) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or from your
Retirement or any such actual or anticipated failure resulting from termination
by you for Good Reason (as hereinafter defined after a written demand for
substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, or (ii) the willful engaging by you in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Subsection, no act or failure to
act on your part shall be deemed "willful" unless done, or omitted to be done,
by you in other than good faith and without reasonable belief that your action
or omission was in the best interests of the Company. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to you a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board (after reasonable notice to
you and an opportunity for you, together with your counsel, to be heard before
the Board), finding that in the good faith opinion of the Board you were guilty
of conduct set forth above in clause (i) or (ii) of the first sentence of this
Subsection and specifying the particulars thereof in detail.
(C) Good Reason. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances:
(i) Inconsistent Duties. A meaningful and detrimental
alteration in your position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from those in effect
immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase Salary. A reduction by
the Company in your annual base salary as in effect on the date hereof or as the
same may be increased from time to time; a failure by the Company to increase
your salary at a rate commensurate with that of other key executives of the
Company; or a failure by the Company to increase your salary on an annual basis
to reflect the percentage increase in the cost of living (as determined in
accordance with such statistics or indices as the Board shall reasonably
consider appropriate for such purposes).
(iii) Relocation. The relocation of the office of the Company
where you are employed at the time of the Change in Control (the "CIC Location")
to a location which in your good faith assessment is an area not generally
considered conducive to maintaining the executive offices of a company such as
the Company because of hazardous or undesirable conditions, including, without
limitation, a high crime rate or inadequate facilities, or to a location which
is more than twenty-five (25) miles away from the CIC Location or the Company's
requiring you to be based more than twenty-five (25) miles away from the CIC
Location (except for required travel on the Company's business to an extent
substantially consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the Company to continue in
effect any material compensation, benefit or profit sharing plan in which you
were participating immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Company to
continue your participation therein (or in such substitute or alternative plan)
on at least as favorable a basis, both in terms of the amount of benefits
provided and the level of your participation relative to other participants, as
existed immediately prior to the Change in Control;
(v) Benefits and Perquisites. The failure by the Company to
continue to provide you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance, medical, health and
accident, disability or savings plans in which you were participating
immediately prior to the Change in Control; the taking of any action by the
Company which would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite enjoyed by you
immediately prior to the Change in Control; or the failure by the Company to
provide you with the number of paid vacation days to which you are entitled on
the basis of years of service with the Company in accordance with the Company's
normal vacation policy in effect immediately prior to the Change in Control;
(vi) No Assumption by Successor. The failure of the Company to
obtain a satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section 5 hereof or, if the business
of the Company for which your services are principally performed is sold at any
time after a Change in Control, the failure of the purchaser of such business to
agree to provide you with the same or a comparable position, duties,
compensation, benefits and perquisites (as described in clauses (iv) and (v)
above) as provided to you by the Company immediately prior to the Change in
Control; or
(vii) No Notice. Any purported termination of your employment that
is not effected pursuant to a Notice of Termination satisfying the requirements
of Subsection
(D) below (and, if applicable, the requirements of Subsection (B) above), which
purported termination shall not be effective for purposes of this Agreement.
(D) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. For
purposes of his Agreement, a "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(E) Date of Termination, Etc. For purposes of this Agreement, "Date
of Termination" shall mean (i) if your employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided
that you shall not have returned to the full-time performance of your duties
during such thirty (30) day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other reason (other than
Disability), the date specified in the Notice of Termination (which, in the
case of a termination pursuant to Subsection B) above shall not be less than
thirty (30) days from the date such Notice of Termination is given, and in the
case of a termination pursuant to Subsection (C) above shall not be less than
thirty (30) nor more than sixty (60) days from the date such Notice of
Termination is given); provided, however, that if within thirty (30) days after
any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court
of competent jurisdiction (which is not appealable or the time for appeal
therefrom having expired and no appeal having been perfected); Provided
further, however, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given and continue you as a participant in all compensation,
benefit and insurance plans and perquisites in which you were participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Subsection. Amounts paid under this
Subsection are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement and shall not be reduced by any compensation earned by you as the
result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a Change
in Control, you shall be entitled to the following benefits during a period
of Disability, or upon termination of your employment, as the case may be,
provided that such period or termination occurs during the Term:
(A) Disability. During any period that you fail to perform your full-
time duties with the Company as a result of your Disability, you shall continue
to receive your base salary at the rate in effect at the commencement of any
such period, together with compensation payable to you under the Company's
disability insurance coverage or other plan during such period, until your
employment is terminated pursuant to Subsection 3(A). Thereafter, your benefits
shall be determined in accordance with the Company's insurance programs and
other benefit or pension plans then in effect in accordance with the terms of
such programs and plans.
(B) Termination for Other than Good Reason or for Cause. If your
employment shall be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay you your full base
salary through the Date of Termination at the rate in effect at the time the
Notice of Termination is given, plus all other amounts to which you are
entitled pursuant to the Company's benefit and pension plans then in effect,
and the Company shall have no further obligations to you under this Agreement.
(C) Retirement; Death. If your employment shall be terminated for
Retirement, or by reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then in effect.
(D) Breach by the Company. If your employment by the Company shall
be terminated by the Company other than for Cause, Retirement or
Disability or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The Company shall pay you your full base salary
through the Date of Termination at the rate in effect at the time the Notice
of Termination is given;
(ii) Severance Payment. In lieu of any further salary payments to
you for periods subsequent to the Date of Termination, the Company shall pay as
severance pay to you, not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to 2.99 times the
average of the annual compensation which was payable to you by the Company (or
any corporation affiliated with the Company within the meaning of section 1504
of the Internal Revenue Code of 1986, as amended (the "Code"), determined
without regard to section 1504(b) of the Code) and includable in your gross
income for Federal income tax purposes for the five (5) taxable years preceding
your taxable year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance with the
regulations (including proposed regulations) promulgated under section 280G(d)
of the Code; provided, however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual compensation
shall be determined by including as compensation any contribution (a "401(k)
Contribution") pursuant to any cash or deferred arrangement (as described in
section 401(k) of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and (b) the amount of
any such
401(k) Contribution shall be treated as includable in your gross income in
the taxable year such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and Expenses. The Company shall also pay to you
all legal fees and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement (other than any such fees or expenses
incurred in connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a thirty-six (36)
month period after such termination, the Company shall arrange to provide you
with life, disability, accident and health insurance benefits substantially
similar to and at no greater cost to you than those which you were receiving
immediately prior to the Notice of Termination. Benefits otherwise receivable
by you pursuant to this Subsection 4(D)(iv) shall be reduced to the extent
comparable benefits are actually received by you during the thirty-six (36)
month period following your termination, and any such benefits actually
received by you shall be reported to the Company.
(v) Supplemental Pension. In addition to the Pension
benefits to which you are entitled under the Pension Plan, the Company shall
pay you in one sum in cash on the tenth (10th) business day following the Date
of Termination, a lump sum equal to the actuarial equivalent of the excess of
(1) the retirement pension (determined as a straight life annuity commencing at
age 65) which you would have accrued under the terms of the Pension Plan and
any other pension benefit program (without regard to any amendment to such
Pension Plan or other pension benefit program made subsequent to the Change in
Control and on or prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits thereunder),
determined as if you were fully vested thereunder and had accumulated (after
the Date of Termination thirty-six (36) additional months of service credit
thereunder at your highest annual rate of compensation (the "Compensation
Rate") during the twelve (12) months immediately preceding the Date of
Termination (but in no event shall you be deemed to have accumulated additional
months of service credit after your sixty-fifth (65th) birthday), over (2) the
retirement pension (determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the provisions of the
Pension Plan and any other pension benefit program. For purposes of clause (1)
above, the Compensation Rate shall be deemed to include amounts payable
pursuant to Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent thirty-six (36) months
of compensation (or such lesser number of months of compensation to your
sixty-fifth (65th) birthday) for purposes of determining benefits under the
Pension Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under the Pension
Plan immediately prior to the Change in Control.
(vi) Employee Benefit Plans. You shall be entitled to receive
all benefits payable to you under the Company's benefit and pension plans,
not otherwise specifically provided for in this Subsection 4(D).
(E) No Mitigation. You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 4 be reduced by any compensation earned by you as the result of
employment by another employer or by pension benefits after the Date of
Termination, or otherwise except as specifically provided in this Section 4.
(F) Reduction of Payments In Certain Cases. Notwithstanding anything
herein to the contrary, if any amounts due to you under this Agreement and any
other plan or program of the Company constitute a "parachute payment," as such
term is defined in Section 280G(b)(2) of the Code (the "Parachute Payment"), and
the amount of the Parachute Payment, reduced by all federal, state and local
taxes applicable thereto, including the excise tax imposed pursuant to Section
4999 of the Code, is less than the amount you would receive if you were paid
three times your "base amount," as defined in Section 280G(b)(3) of the
Code, less $1.00, reduced by all federal, state and local taxes applicable
thereto, then the aggregate of the amounts constituting the Parachute Payment
shall be reduced to an amount that will equal three times your base amount
less $1.00. The determinations to be made with respect to this Subsection 4(F)
shall be made by an accounting firm (the "Auditor") jointly selected by the
Company and you and paid by the Company. The Auditor shall be a nationally
recognized United States public accounting firm that has not during the two
years preceding the date of its selection acted in any way on behalf of the
Company or any of its subsidiaries. If you and the Company cannot agree on the
accounting firm to serve as the Auditor, then you and the Company shall each
select one accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor determines that a
reduction in the aggregate of the amounts constituting the Parachute Payment is
required by this Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under this Agreement and
each applicable plan or program of the Company, respectively. If you do not so
specify within, 60 days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall determine, in its sole
discretion, the portion of such reduction, if any, to be made under this
Agreement and each applicable plan or program of the Company, respectively.
5. Successors; Binding Agreement. (A) Assumption By Successor. The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you
to compensation from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your employment for Good
Reason following a Change in
Control, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "the Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(B) Enforceability By Beneficiaries. This Agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder had you continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or, if there is no such designee, to
your estate.
6. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
If to you: J. Peter Fobare
130 Kenwood Avenue
Oneida, New York 13421
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and this Agreement
shall supersede all Prior agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, with respect
to the subject matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York.
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. Contract of Employment. Nothing in this Agreement shall be
construed as giving you any right to be retained in the employ of the Company.
12. Headings. The headings contained in this Agreement are intended solely
for convenience and shall not affect the rights of the parties to this
Agreement.
If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter, which will
then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By: /s/ William D. Matthews
William D. Matthews
Title: Chairman of the Board
Agreed to this 28th day of February, 1996
/s/ J. Peter Fobare
J. Peter Fobare
February 28, 1996
Mr. Peter J. Kallet
552 Main Street
Oneida, New York 13421
Dear Mr. Kallet:
Oneida Ltd. (the "Company") considers it essential to the best interests of
its stockholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the
"Board') recognizes that the possibility of a change in control of the Company
may exist and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from
any possible change in control of the Company.
In order to induce you to remain in the employ of the Company, the Company
agrees that you shall receive the severance benefits set forth in this letter
agreement (the "Agreement") in the event that your employment with the Company
is terminated subsequent to a Change in Control (as defined in Section 2).
1. Term of Agreement. The term of this Agreement (the "Term") shall
commence on the Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not been terminated in
accordance with its terms. In the event, however, that you attain the age of
sixty-five (65) during the Term, then this Agreement shall terminate on the
last day of the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall mean the date on
which a Change in Control occurs, provided that (i) you are then in the employ
of the Company and (ii) such Change in Control occurs before you reach age
sixty-five (65).
2. Change in Control. No benefits shall be payable hereunder unless there
shall have been a Change in Control. For purposes of this Agreement, a "Change
in Control" shall be deemed to have occurred if:
(A) any "Person", as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities;
(B) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (A), (C) or (D) of
this Section) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
(C) the stockholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction in which no
''person" (as hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination Following Change in Control. If a Change in Control shall
have occurred, you shall be entitled to the benefits provided in Subsection
4(D) upon the subsequent termination of your employment during the Term unless
such termination is because of your death or retirement, by the Company for
cause or disability, or by you other than for good reason. In the event your
employment with the Company is terminated for any reason prior to the Operative
Date, you shall not be entitled to any benefits hereunder.
(A) Disability; Retirement. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written Notice of Termination (as defined in
Subsection 3(D)) is given you shall not have returned to the
full-time performance of your duties, the Company may terminate your
employment for "Disability." Any question as to the existence of your
Disability upon which you and the Company cannot agree shall be determined by
a qualified independent physician selected by you (or, if you are unable to
make such selection, it shall be made by any adult member of your immediate
family), and approved by the Company. The determination of such physician made
in writing to the Company and to you shall be final and conclusive for all
purposes of this Agreement. Termination of your employment based on
"Retirement" shall mean your voluntary termination of employment on a
Retirement Date as defined in the Retirement Plan for Employees of Oneida Ltd.
or any successor plan thereto (the "Pension Plan") as in effect immediately
prior to the occurrence of a Change in Control (whether or not you are a
participant in the Pension Plan) or in accordance with any retirement
arrangement established with your consent with respect to you.
(B) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (i) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or from
your Retirement or any such actual or anticipated failure resulting from
termination by you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board believes that you
have not substantially performed your duties, or (ii) the willful engaging by
you in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Subsection, no act or failure to
act on your part shall be deemed ''willful'' unless done, or omitted to be
done, by you in other than good faith and without reasonable belief that your
action or omission was in the best interests of the Company. Notwithstanding
the foregoing, you shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to you a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board at a meeting of the Board (after reasonable
notice to you and an opportunity for you, together with your counsel, to be
heard before the Board), finding that in the good faith opinion of the Board
you were guilty of conduct set forth above in clause (i) or (ii) of the first
sentence of this Subsection and specifying the particulars thereof in detail.
(C) Good Reason. You shall be entitled to terminate your
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence after a Change in
Control of any of the following circumstances:
(i) Inconsistent Duties. A meaningful and detrimental
alteration in your position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from those in effect
immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase Salary. A reduction by
the Company in your annual base salary as in effect on the date hereof or as the
same may be increased from time to time; a failure by the Company to
increase your salary at a rate commensurate with that of other key executives
of the Company; or a failure by the Company to increase your salary on an
annual basis to reflect the percentage increase in the cost of living (as
determined in accordance with such statistics or indices as the Board shall
reasonably consider appropriate for such purposes).
(iii) Relocation. The relocation of the office of the Company
where you are employed at the time of the Change in Control (the "CIC
Location") to a location which in your good faith assessment is an area not
generally considered conducive to maintaining the executive offices of a
company such as the Company because of hazardous or undesirable conditions,
including, without limitation, a high crime rate or inadequate facilities, or
to a location which is more than twenty-five (25) miles away from the CIC
Location or the Company's requiring you to be based more than twenty-five (25)
miles away from the CIC Location (except for required travel on the Company's
business to an extent substantially consistent with your present business
travel obligations);
(iv) Compensation Plans. The failure by the Company to continue
in effect any material compensation, benefit or profit sharing plan in which
you were participating immediately prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Company to
continue your participation therein (or in such substitute or alternative plan)
on at least as favorable a basis, both in terms of the amount of benefits
provided and the level of your participation relative to other participants, as
existed immediately prior to the Change in Control;
(v) Benefits and Perquisites. The failure by the Company to
continue to provide you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance, medical, health and
accident, disability or savings plans in which you were participating
immediately prior to the Change in Control; the taking of any action by the
Company which would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite enjoyed by you
immediately prior to the Change in Control; or the failure by the Company to
provide you with the number of paid vacation days to which you are entitled on
the basis of years of service with the Company in accordance with the Company's
normal vacation policy in effect immediately prior to the Change in Control;
(vi) No Assumption by Successor. The failure of the Company to
obtain a satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section 5 hereof or, if the business
of the Company for which your services are principally performed is sold at any
time after a Change in Control, the failure of the purchaser of such business to
agree to provide you with the same or a comparable position, duties,
compensation, benefits and perquisites (as described in clauses (iv) and (v)
above) as provided to you by the Company immediately prior to the Change in
Control; or
(vii) No Notice. Any purported termination of your employment that
is not effected pursuant to a Notice of Termination satisfying the
requirements of Subsection
(D) below (and, if applicable, the requirements of Subsection (B) above),
which purported termination shall not be effective for purposes of this
Agreement.
(D) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. For
purposes of his Agreement, a "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(E) Date of Termination, Etc. For purposes of this Agreement, "Date
of Termination" shall mean (i) if your employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided
that you shall not have returned to the full-time performance of your duties
during such thirty (30) day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other reason (other than
Disability), the date specified in the Notice of Termination (which, in the
case of a termination pursuant to Subsection B) above shall not be less than
thirty (30) days from the date such Notice of Termination is given, and in the
case of a termination pursuant to Subsection (C) above shall not be less than
thirty (30) nor more than sixty (60) days from the date such Notice of
Termination is given); provided, however, that if within thirty (30) days after
any Notice of Termination is given, the party receiving such Notice of
Termination. notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court
of competent jurisdiction (which is not appealable or the time for appeal
therefrom having expired and no appeal having been perfected); Provided
further, however, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given and continue you as a participant in all compensation,
benefit and insurance plans and perquisites in which you were participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Subsection. Amounts paid under this
Subsection are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement and shall not be reduced by any compensation earned by you as the
result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a Change
in Control, you shall be entitled to the following benefits during a period
of Disability, or upon termination of your employment, as the case may be,
provided that such period or termination occurs during the Term:
(A) Disability. During any period that you fail to perform your full-
time duties with the Company as a result of your Disability, you shall
continue to receive your base salary at the rate in effect at the commencement
of any such period, together with compensation payable to you under the
Company's disability insurance coverage or other plan during such period, until
your employment is terminated pursuant to Subsection 3(A). Thereafter, your
benefits shall be determined in accordance with the Company's insurance
programs and other benefit or pension plans then in effect in accordance with
the terms of such programs and plans.
(B) Termination for Other than Good Reason or for Cause. If your
employment shall be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay you your full base
salary through the Date of Termination at the rate in effect at the time the
Notice of Termination is given, plus all other amounts to which you are
entitled pursuant to the Company's benefit and pension plans then in effect,
and the Company shall have no further obligations to you under this Agreement.
(C) Retirement; Death. If your employment shall be terminated for
Retirement, or by reason of your death, your benefits shall be determined in
accordance with the Company's benefit and pension plans then in effect.
(D) Breach by the Company. If your employment by the Company shall
be terminated by the Company other than for Cause, Retirement or
Disability or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The Company shall pay you your full base salary
through the Date of Termination at the rate in effect at the time the Notice
of Termination is given;
(ii) Severance Payment. In lieu of any further salary payments to
you for periods subsequent to the Date of Termination, the Company shall pay as
severance pay to you, not later than the tenth (10th) business day following the
Date of Termination, a lump sum severance payment equal to 2.99 times the
average of the annual compensation which was payable to you by the Company (or
any corporation affiliated with the Company within the meaning of section 1504
of the Internal Revenue Code of 1986, as amended (the "Code"), determined
without regard to section 1504(b) of the Code) and includable in your gross
income for Federal income tax purposes for the five (5) taxable years preceding
your taxable year in which a Change in Control occurred. The amount of your
average annual compensation shall be determined in accordance with the
regulations (including proposed regulations) promulgated under section 280G(d)
of the Code; provided, however, that (a) notwithstanding any provision of such
regulations to the contrary, the amount of your average annual compensation
shall be determined by including as compensation any contribution (a "401(k)
Contribution") pursuant to any cash or deferred arrangement (as described in
section 401(k) of the Code) maintained by the Company which is not includable
in your gross income under section 402(a)(8) of the Code and (b) the amount of
any such
401(k) Contribution shall be treated as includable in your gross income in
the taxable year such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and Expenses. The Company shall also pay to you
all legal fees and expenses incurred by you as a result of such termination,
including all such fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement (other than any such fees or expenses
incurred in connection with any such claim which is determined to be frivolous).
(iv) Insurance Benefits for 36 Months. For a thirty-six (36)
month period after such termination, the Company shall arrange to provide you
with life, disability, accident and health insurance benefits substantially
similar to and at no greater cost to you than those which you were receiving
immediately prior to the Notice of Termination. Benefits otherwise receivable
by you pursuant to this Subsection 4(D)(iv) shall be reduced to the extent
comparable benefits are actually received by you during the thirty-six (36)
month period following your termination, and any such benefits actually
received by you shall be reported to the Company.
(v) Supplemental Pension. In addition to the Pension
benefits to which you are entitled under the Pension Plan, the Company shall
pay you in one sum in cash on the tenth (10th) business day following the Date
of Termination, a lump sum equal to the actuarial equivalent of the excess of
(1) the retirement pension (determined as a straight life annuity commencing at
age 65) which you would have accrued under the terms of the Pension Plan and
any other pension benefit program (without regard to any amendment to such
Pension Plan or other pension benefit program made subsequent to the Change in
Control and on or prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits thereunder),
determined as if you were fully vested thereunder and had accumulated (after
the Date of Termination thirty-six (36) additional months of service credit
thereunder at your highest annual rate of compensation (the "Compensation
Rate") during the twelve (12) months immediately preceding the Date of
Termination (but in no event shall you be deemed to have accumulated additional
months of service credit after your sixty-fifth (65th) birthday), over (2) the
retirement pension (determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the provisions of the
Pension Plan and any other pension benefit program. For purposes of clause (1)
above, the Compensation Rate shall be deemed to include amounts payable
pursuant to Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent thirty-six (36) months
of compensation (or such lesser number of months of compensation to your
sixty-fifth (65th) birthday) for purposes of determining benefits under the
Pension Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under the Pension
Plan immediately prior to the Change in Control.
(vi) Employee Benefit Plans. You shall be entitled to receive
all benefits payable to you under the Company's benefit and pension plans,
not otherwise specifically provided for in this Subsection 4(D).
(E) No Mitigation. You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for
in this Section 4 be reduced by any compensation earned by you as the result
of employment by another employer or by pension benefits after the Date of
Termination, or otherwise except as specifically provided in this Section 4.
(F) Reduction of Payments In Certain Cases. Notwithstanding anything
herein to the contrary, if any amounts due to you under this Agreement and any
other plan or program of the Company constitute a "parachute payment," as such
term is defined in Section 280G(b)(2) of the Code (the "Parachute Payment"), and
the amount of the Parachute Payment, reduced by all federal, state and local
taxes applicable thereto, including the excise tax imposed pursuant to Section
4999 of the Code, is less than the amount you would receive if you were paid
three times your "base amount," as defined in Section 280G(b)(3) of the
Code, less $1.00, reduced by all federal, state and local taxes applicable
thereto, then the aggregate of the amounts constituting the Parachute Payment
shall be reduced to an amount that will equal three times your base amount
less $1.00. The determinations to be made with respect to this Subsection 4(F)
shall be made by an accounting firm (the "Auditor") jointly selected by the
Company and you and paid by the Company. The Auditor shall be a nationally
recognized United States public accounting firm that has not during the two
years preceding the date of its selection acted in any way on behalf of the
Company or any of its subsidiaries. If you and the Company cannot agree on the
accounting firm to serve as the Auditor, then you and the Company shall each
select one accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor determines that a
reduction in the aggregate of the amounts constituting the Parachute Payment is
required by this Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under this Agreement and
each applicable plan or program of the Company, respectively. If you do not so
specify within, 60 days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall determine, in its sole
discretion, the portion of such reduction, if any, to be made under this
Agreement and each applicable plan or program of the Company, respectively.
5. Successors; Binding Agreement. (A) Assumption By Successor. The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you
to compensation from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your employment for Good
Reason following a Change in Control,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "the Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
(B) Enforceability By Beneficiaries. This Agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder had you continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or, if there is no such designee, to
your estate.
6. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
If to you: Peter J. Kallet
552 Main Street
Oneida, New York 13421
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and this Agreement
shall supersede all Prior agreements, negotiations, correspondence, undertakings
and communications of the parties, oral or written, with respect to the
subject matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York.
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that you
shall be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. Contract of Employment. Nothing in this Agreement shall be construed as
giving you any right to be retained in the employ of the Company.
12. Headings. The headings contained in this Agreement are intended solely
for convenience and shall not affect the rights of the parties to this
Agreement.
If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter, which will
then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By: /s/ William D. Matthews
William D. Matthews
Title: Chairman of the Board
Agreed to this 28th day of February, 1996
/s/ Peter J. Kallet
Peter J. Kallet