[ONEIDA LETTERHEAD]
September 6, 2005
Mr. Terry G. Westbrook
c/o Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13421
Dear Terry:
This letter agreement (the "Employment Agreement") sets forth our mutual
understanding concerning your employment as President and Chief Executive
Officer of Oneida Ltd., a New York corporation, and any of its subsidiaries or
affiliates (the "Company"), effective as of March 23, 2005 (the "Effective
Date").
1. Term. The initial term of this Employment Agreement shall commence on
the Effective Date, and shall end on May 31, 2006, unless earlier terminated in
accordance with Section 5 below. This Employment Agreement shall be
automatically renewed for additional one year terms thereafter, unless the
Company delivers notice of termination at least 60 days prior to the end of the
initial term or any renewal term. The period during which this Agreement remains
in effect is hereinafter referred to as the "Term".
2. Title; Reporting; Duties. You shall serve as the President and Chief
Executive Officer of the Company, reporting to the Company's Board of Directors
(the "Board"). You shall also be renominated for election to the Board at the
2005 annual general meeting of shareholders of the Company. You shall have such
duties and responsibilities, commensurate with your position, as may be assigned
to you from time to time by the Board.
3. Compensation and Benefits. Subject to the provisions of this Employment
Agreement, the Company shall pay and provide you the following compensation and
benefits during the Term:
(a) Base Salary. The Company shall pay you a base salary (the "Base
Salary") of $400,000 per annum, payable in accordance with the Company's regular
payroll practices, subject to review and increase by the Company's Board of
Directors in any extended term of this Agreement.
(b) Sign-On Bonus. As inducement for your acceptance of employment with the
Company, you shall receive a one-time bonus in the amount of $65,000 upon
execution of this Employment Agreement.
(c) Annual Cash Bonus. You shall participate in the Company's Fiscal 2006
Annual Incentive Plan-Cash Bonus Plan (the "AIP") at the same level as other
Group 1 employees. For purposes of the AIP and the equity plan described in
Section 3(d) below, your initial Base Salary shall be deemed to be $465,000 per
annum.
(d) Equity Incentive Compensation; Change in Control. The Company is
currently in the process of establishing a new equity plan to incentivize Senior
Executives of the Company. When such equity plan is established, and upon each
subsequent grant under such equity plan, you shall be entitled to an award grant
at a level appropriate to your position at the Company based upon your Base
Salary under Section 3(c) of this Agreement. All unvested awards granted to you
under such equity plan shall automatically vest and be delivered upon a Change
in Control (as defined in the relevant equity plan and award agreements under
which such awards are granted to you) and shall otherwise be subject to such
other terms and conditions as are from time to time generally applicable to
Senior Executives of the Company. Except in the case of your voluntary election
to terminate, if your employment terminates prior to a vesting date, upon such
termination you shall be entitled to receive a pro rata portion of the
applicable fiscal year's award grant (calculated through the date of
termination) which shall vest on the applicable vesting date and be delivered to
you on the applicable delivery date under the terms of the equity plan.
(e) Housing/Rental Car. The Company shall provide you with a furnished
apartment and a rental car (or a leased car, if determined by the Company to be
more cost-effective), in Oneida, New York ("Oneida").
(f) Reimbursement of Expenses. The Company shall reimburse you for the cost
of air and ground travel for commuting from and to your home in Chicago,
Illinois and the Company's headquarters in Oneida, plus the cost of subsistence
while in Oneida and the amount of certain incremental costs, up to $500 per
month, related to your home in Chicago while in Oneida. In addition, the Company
shall reimburse you, upon presentation of written documentation thereof, in
accordance with the applicable expense reimbursement policies and procedures of
the Company as in effect from time to time, for any reasonable and customary
expenses, including without limitation the cost of any travel expenses, incurred
by you in the fulfillment of your duties hereunder.
(g) Vacation. You shall be entitled to four (4) weeks paid vacation in
accordance with the plans, policies, programs and practices of the Company in
effect from time to time and applicable generally to other Senior Executives of
the Company.
(h) Benefits. You shall be included, to the extent eligible, in all the
employee benefit plans or programs of the Company as available to other Senior
Executives of the Company and such other benefit plans or programs as may be
specified by the Board, but in no event shall you participate in, or receive
benefits under, the Company's QSERP or Restoration Plan.
4. Other Payments.
(a) Extraordinary Services. You shall receive a payment equal to $15,000
for extraordinary services rendered by you as a Director of the Company prior to
your becoming President and Chief Executive Officer pursuant to this Employment
Agreement, payable in a lump-sum as soon as practicable following the execution
of this Employment Agreement.
(b) Legal Fees and Expenses. The Company shall reimburse you, as soon as
practicable upon presentation of written documentation thereof, in accordance
with the applicable expense reimbursement policies and procedures of the
Company, for any reasonable legal fees and expenses up to a total of $7,500,
incurred by you in connection with the review and negotiation of this Employment
Agreement.
5. Termination of Employment.
(a) Death or Disability. Upon your death or Disability this Agreement shall
automatically terminate. For the purposes of this Agreement, "Disability" is
defined as Executive's physical or mental inability to perform his material
duties for a period of thirty (30) days.
(b) Termination Generally. The Company shall have the right to terminate
your employment at any time and for any reason, and you shall have the right to
terminate your employment with the Company at any time and for any reason,
provided that thirty (30) days advance notice is provided by the party electing
to terminate the Agreement.
(c) Payments Upon Disability, Termination Without Cause, Resignation for
Good Reason, and Failure to Renew. Subject to your execution of a release of
claims against the Company in the form attached hereto which you represent has
been reviewed by your attorney, if (i) you are terminated due to Disability,
(ii) the Company terminates your employment during the Term for any reason other
than for Cause or (iii) you resign from employment with the Company for Good
Reason, the Company shall continue to pay you your Base Salary for a period of
180 days following such termination or resignation; provided, however, that only
if you are terminated at the end of the initial term pursuant to notice
delivered in accordance with Section 1 of this Agreement, the Company shall
continue to pay you your Base Salary for a period of only 120 days following
such termination. Upon termination for any of the reasons stated in this
subsection (c), subject to approval of the Board of Directors of the payment of
bonuses under the AIP generally, you shall receive such cash annual bonus
amounts that have been earned by you and that are payable to you in accordance
with the terms of the AIP. You shall also receive any long term incentive
amounts due you and payable in accordance with the terms of any plan related
thereto. Notwithstanding the foregoing, any payments you receive pursuant to any
short or long term disability benefit plan maintained for you by the Company
shall be deducted from the payments that would otherwise be payable to you in
the event of your termination by reason of your Disability.
For purposes of this Employment Agreement, "Cause" shall mean (i) your
engaging in illegal conduct or misconduct which is materially and demonstrably
injurious to the financial condition or business reputation of the Company; (ii)
your conviction of, or plea of nolo contendere to, a felony, or any perpetration
of a common law fraud; (iii) your continued failure or refusal to substantially
perform your duties with the Company; or (iv) your material breach of the terms
of this Employment Agreement; provided, however, that no event or condition
described in (iii) or (iv) above shall constitute Cause unless (x) the Company
first gives the Executive written notice of its intention to terminate his
employment for Cause and the grounds for such termination and (y) such grounds
for termination (if susceptible to correction) are not corrected by you within
30 days of your receipt of such notice (or, in the event that such grounds
cannot be corrected within such 30-day period, you have not taken reasonable
steps within such 30-day period to correct such grounds as promptly as
practicable thereafter).
For purpose of this Employment Agreement, "Good Reason" shall mean the
occurrence of any of the following events or conditions without your prior
written consent: (i) any material breach by the Company of this Employment
Agreement; (ii) any reduction in the salary or any material reduction in the
benefits made available to you by the Company; (ii) a material diminution of
your responsibilities, position or titles set forth in this Employment Agreement
or a change in your reporting responsibility such that you report to someone
other than the Board; (iii) failure of the Company to continue to maintain
directors and officer's liability insurance Directors and Officers insurance
coverage at the present level of coverage; provided, however, that no event or
condition described in clauses (i) or (ii) above shall constitute Good Reason
unless (x) you give the Company written notice of your intention to
terminate your employment for Good Reason and the grounds for such
termination and (y) such grounds for termination (if susceptible to correction)
are not corrected by the Company within 30 days of its receipt of such notice
(or, in the event that such grounds cannot be corrected within such 30-day
period, the Company has not taken reasonable steps within such 30-day period to
correct such grounds as promptly as practicable thereafter).
(d) Payments Upon Termination For Cause or Resignation Without Good Reason.
If your employment is terminated by the Company for Cause or if you resign from
employment for other than Good Reason, you shall only be entitled to any earned
and unpaid Base Salary and any accrued, but unpaid vacation through the date of
such termination or resignation, as applicable, as well as any amounts earned
and accrued under any bonus or other benefit plan or program and then-payable
under the terms of such plan or program.
6. Restrictive Covenants.
(a) Non-Competition. You agree for a period of one (1) year from the
termination of your employment with the Company, whichever is later, not to work
for, consult for, or be employed by any entity or a subsidiary or affiliate of
such entity that sells products which are substantially the same as the products
manufactured or sold by the Company during the time of your employment by the
Company.
(b) Non-Solicitation. You agree that during your employment with the
Company and for one (1) year following your termination of employment for any
reason, you shall not, directly or indirectly, whether as a proprietor, partner,
principal, joint venturer, employer, agent, employee, consultant, officer,
director or investor, alone or in association with any other person, firm,
corporation or other entity, (i) solicit or attempt to solicit, induce to leave,
or hire or attempt to hire any person or entity who is at such time, or was
during your employment with the Company, an employee, officer, consultant,
representative or agent of the Company or (ii) otherwise interfere or attempt to
interfere in the relationship of such person with the Company.
(c) Confidentiality. Except as required by the performance of your duties
to the Company or by applicable law, you agree not to, at any time, except with
the prior written consent of the Company, (i) directly or indirectly, reveal to
any person, entity or other organization (other than the Company or its
designated agents) or (ii) use for your own benefit, or for the benefit of a
third party, any confidential proprietary or trade secret information, or any
other information of the Company that is not generally known or used by the
Company's competitors or others in the Company's industry ("Confidential
Information") relating to the assets, liabilities, employees, directors,
goodwill, business or affairs of the Company, including, without limitation, any
information concerning past, present or prospective customers, marketing data,
or other Confidential Information used by, or useful to, the Company and known
by you by reason of your employment by, or other association with, the Company.
Notwithstanding the foregoing, Confidential Information shall not include
information that is or becomes publicly known, other than as a result of a
breach of this Agreement by you.
(d) Blue Penciling. If any court determines that any covenant (or a part
thereof) in this Section 6 is uneforceable because of the duration or scope of
such provision, then the duration or scope of such provision, as the case may
be, shall be reduced so that such provision becomes enforceable and in its
reduced form, such provision shall then be enforced.
7. Representations. You represent and warrant that you are free of all
non-compete agreements and all other agreements or restrictions, whether in
writing or oral, that would prevent you from becoming the full-time President
and Chief Executive Officer of the Company. You further agree and warrant that
you are currently able to perform and fulfill all of
the anticipated duties and responsibilities of your position, including without
limitation, a substantial amount of business travel.
8. Indemnification. You shall be entitled to indemnification by the Company
to the fullest extent of the law. In addition, the Company shall use its best
efforts to continue to maintain through the Term Directors and Officers
insurance coverage at the present level of coverage.
9. Officer Certifications. You understand that as Chief Executive Officer
of the Company you may be required to execute a representation letter addressed
to the Company's auditors with respect to fiscal years 2005 and 2006 and you
hereby agree to do so at the request of the Board. You further agree to execute
all reports and financial statements of the Company that are now or may
hereafter be required by the Sarbanes-Oxley Act of 2002, including the rules and
regulations promulgated thereunder, and all other federal, state or local
regulatory authorities. The parties acknowledge and agree that your predecessor
as President and Chief Executive Officer shall, to the extent legally
permissible, execute representation letters and certifications before you are
required to do so by the Company. All of the foregoing certifications shall be
subject to your review and revision to account for your reasonable comments and
your consultation with counsel for the Company regarding the requirements of
applicable law.
10. Governing Law. This Employment Agreement shall be governed and
construed in accordance with the laws of the State of New York, without regard
to the choice of law provisions thereof.
11. Notices. Any notices required or made pursuant to this Employment
Agreement shall be in writing and shall be deemed to have been given when
personally delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, as follows:
If to Terry G. Westbrook:
Mr. Terry G. Westbrook
1160 Pelham Road
Winnetka, Illinois 60093
If to the Company:
Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13421
Attention: Chairman
or to such other address as either party may furnish to the other in writing in
accordance with this Section 11. Notice of change of address shall be effective
only upon receipt.
12. Successors. This Employment Agreement shall inure to the benefit of and
be binding upon and enforceable by the Company and its successors, permitted
assigns, heirs, legal representatives, executors and administrators.
13. Counterparts. All executed copies of this Employment Agreement shall
have the same force and effect and shall be as legally binding and enforceable
as the original. This Employment Agreement may be executed in counterparts, each
of which shall constitute a single enforceable instrument.
14. Entire Agreement. All prior negotiations and agreements between the
parties hereto with respect to the matters contained herein are superseded by
this Employment
Agreement, and there are no representations, warranties, understandings or
agreements other than those expressly set forth herein.
15. Withholding. Any payments made or benefits provided to you under this
Employment Agreement shall be reduced by any applicable withholding taxes or
other amounts required to be withheld by law or contract.
Your signature below constitutes your agreement with each provision
contained in this Employment Agreement.
ONEIDA LTD.
By /s/ Nick White
--------------------------
Name: Nick White
Title: Director
Accepted and agreed:
/s/ Terry G. Westbrook
Terry G. Westbrook
Date: September 6, 2005