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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended January 25, 2003 Commission File Number 1-5452
ONEIDA LTD.
163-181 KENWOOD AVENUE
ONEIDA, NEW YORK 13421-2899
(315) 361-3000
NEW YORK 15-0405700
(State of Incorporation) (I.R.S. Employer Identification No.)
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of exchange on which registered
-------------- ------------------------------------
Common Stock, par value $1.00 per share with New York Stock Exchange attached
Preferred Stock purchase rights
Securities registered pursuant to Section 12(g) of the Act:
6% Cumulative Preferred Stock, par value $25 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES [X] NO [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on a closing price of $14.90 per share reported on the New York
Stock Exchange Composite Index on July 26, 2002 was approximately $237,532,418.
For this calculation, registrant assumed its directors and executive officers
are affiliates.
The number of shares of Common Stock ($1.00 par value) outstanding as of April
14, 2003, was 16,610,971.
Documents Incorporated by Reference
1. Portions of Oneida Ltd.'s Annual Report to Stockholders for the fiscal year
ended January 25, 2003 (Parts I and II of Form 10-K).
2. Portions of Oneida Ltd.'s Definitive Proxy Statement dated April 25, 2003
(Part III of Form 10-K).
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Page 0 of 22. See list of Exhibits on pages 12-16.
PART I
ITEM 1. BUSINESS.
a. General.
The Company (unless otherwise indicated by the context, the term "Company" means
Oneida Ltd. and its consolidated subsidiaries) was incorporated in New York in
1880 under the name Oneida Community, Limited. In 1935, the Company's name was
changed to Oneida Ltd. It maintains its executive offices in Oneida, New York.
Since its inception, the Company has manufactured and marketed tableware -
initially silverplated and, later, sterling and stainless steel products. By
acquiring subsidiaries, entering into strategic distributorship arrangements and
expanding its own tableware lines, the Company has diversified into the
manufacture and distribution of commercial and retail china dinnerware and the
distribution of other tableware, kitchenware and gift items, most notably
crystal and glass stemware, barware and giftware.
The Company's Form 10-K, Form 10-Q and other filings with the Securities and
Exchange Commission may be accessed at the Company's website, www.oneida.com.
b. Industry Segments.
The Company's operations and assets are in one principal industry: tableware
products. The Company's principal industry segments are grouped around the
manufacture and distribution of three major product categories: metalware,
dinnerware and glassware. The Company also distributes a variety of other
tabletop accessories, kitchen utensils and giftware.
Information regarding the Company's operations by industry segment for the years
ended January 25, 2003, January 26, 2002 and January 27, 2001 is set forth on
page 29 of the Company's Annual Report to Stockholders for the year ended
January 25, 2003, parts of which are incorporated herein by reference.
c. Narrative Description of Business.
Principal Products.
Metalware:
Metalware is comprised of stainless steel, silverplated and sterling silver
flatware (forks, knives, spoons and related serving pieces), stainless steel and
silverplated holloware (bowls, trays, tea and coffee sets and related items),
cutlery and cookware.
The principal source of the Company's flatware is the Company's Sherrill, New
York manufacturing facility. In addition, the Company also utilizes the
facilities of Oneida Mexicana, S.A., its wholly owned subsidiary located in
Toluca, Mexico, to manufacture flatware patterns that are not produced in
Sherrill, New York. The Company also imports flatware and cutlery from numerous
international sources.
The Company, through its Oneida Italy, S.r.l and Oneida International, Inc.
subsidiaries, manufactures stainless steel and silverplated holloware in
Vercelli, Italy and Shanghai, China, respectively. The Company also imports
stainless steel and silverplated holloware products from several international
sources.
The Company imports its cutlery and aluminum and stainless steel cookware from
several international sources.
Dinnerware:
Dinnerware includes domestic and imported ceramic, porcelain and stoneware
plates, bowls, cups, mugs, and a variety of related serving pieces.
1
In June 2000, the Company acquired substantially all of the assets of Sakura,
Inc., a leading marketer of consumer dinnerware and accessories. In business for
over 40 years, Sakura's focus is on ceramic, porcelain and melamine dinnerware
and accessories. Sakura's products carry both proprietary designs and designs
licensed from a wide spectrum of leading artists and designers, including Mary
Engelbreit and Warren Kimble. The Company imports its consumer dinnerware from
several international sources.
Buffalo China, Inc. is a leading manufacturer of vitreous china for the
foodservice industry. Buffalo China also operates a subsidiary, Ceramica de
Juarez, S.A. de C.V., located in Juarez, Mexico. Ceramica de Juarez produces
holloware and other specialty china pieces that are not manufactured in Buffalo,
including fully finished items and bisque china which is then finished in
Buffalo. THC Systems, Inc., another of the Company's subsidiaries, is a leading
importer and marketer of vitreous china and porcelain dinnerware for the
foodservice industry. THC does business under the REGO tradename.
The Company is also the exclusive distributor of certain china dinnerware
products manufactured by Schonwald and Noritake Co., Inc. for the United States
foodservice and institutional markets.
Glassware:
The Company's Glassware segment includes glass and crystal stemware, barware,
serveware, giftware and decorative pieces.
In September 1997, the Company became the exclusive distributor of Schott
Zwiesel crystal products in the foodservice and consumer markets of the United
States, Mexico and the Caribbean. Subsequently, this distribution relationship
was extended to include the foodservice and consumer markets of Canada,
Australia, New Zealand, and Central and South America. Schott Zwiesel is a
German manufacturer of fine crystal stemware, barware and giftware. The Company
markets Schott Zwiesel's crystal products under both the Schott Zwiesel and
Oneida names.
In addition to the distribution of Schott crystal, the Company significantly
expanded its self-branded glassware lines in 1998 with the introduction of
Oneida glassware for both foodservice and consumer use. Oneida imports its
glassware from several foreign sources, but is supplied primarily by Pasabahce
Cam Sanayii ve Ticaret A.S., a Turkish glassware manufacturer. In April 2000,
the Company and Pasabahce formalized their relationship whereby the Company
will act as Pasabahce's exclusive foodservice distributor in the United States,
Canada, Mexico and the Caribbean, and for certain products in Australia and
New Zealand.
The Company has and will continue to import other glass and crystal stemware,
barware, serveware, giftware and decorative pieces from several international
sources.
Other Tabletop Accessories:
The Company, in recent years, expanded its product offerings beyond its main
metalware, dinnerware and glassware segments. These other products include
ceramic and plastic serveware, kitchen and table linens, picture frames and
decorative pieces distributed primarily by the Company's Encore Promotions and
Kenwood Silver subsidiaries.
The percentages of metalware, dinnerware, glassware and other tabletop
accessories sales to total consolidated sales for the fiscal years, which end in
January, are as follows:
2003 2002 2001
---- ---- ----
Metalware: 60% 65% 66%
Dinnerware: 31% 27% 25%
Glassware: 7% 7% 8%
Other Tabletop Accessories: 2% 1% 1%
2
Principal Markets.
Consumer:
Consumer marketing focuses on individual consumers, and the Company's
wide-ranging consumer marketing activities include both retail and direct
operations. The Company's retail accounts include national and regional
department store chains, mass merchandise and discount chains, specialty shops
and local establishments. The Company's direct accounts serve business customers
in the premium, incentive, mail order and direct selling markets. The Company
also reaches consumers with its Kenwood Silver Company, Inc. and Encore
Promotions, Inc. subsidiaries, both of which play a significant role in the
marketing of the Company's products. Kenwood Silver Company, Inc. operates a
chain of 64 Oneida Home outlet stores in resort and destination shopping areas
across the United States, while Encore Promotions, Inc. runs supermarket
redemption programs featuring a variety of tableware and household items. The
Company also markets its products via its web site, www.oneida.com.
Most consumer orders are filled directly by the Company from its primary
distribution center located in Sherrill, New York. For some accounts, however,
orders are filled by one of the Company's two other distribution centers which
are located in Ontario, California and Nashville, Tennessee or by a third party
warehouse located in Charlotte, North Carolina.
Foodservice:
The Company serves foodservice and institutional accounts of all kinds,
including restaurants, hotels, resorts, convention centers, food distributors,
airlines, cruise lines, hospitals and educational institutions.
In August 2000, the Company acquired all outstanding shares of Delco
International, Ltd., a leading marketer of foodservice tableware products for
more than 60 years. Delco's mass-market customer base includes distributors,
restaurant and hotel chains and institutional accounts, while Delco's ABCO
division is the tableware source for over 40 airlines worldwide.
While most foodservice orders are filled directly by the Company from its
primary distribution centers in Sherrill and Buffalo, New York, some orders are
filled by the Company's other distribution center located in Ontario,
California. The Company also utilizes third party warehouses located in Miami,
Florida, Hawthorne, California, Dallas, Texas, Wood Dale, Illinois and Atlanta,
Georgia to service certain foodservice customers.
International:
International activities span both the consumer and foodservice markets
described above, and include the marketing and sale of the Company's products
throughout the world.
All sales and marketing functions in the Canadian market are served by the
Company's Oneida Canada, Limited subsidiary while all sales and marketing
functions in the Mexican, Central and South American and Caribbean markets are
served by the Company's Oneida, S.A. de C.V. subsidiary.
In June 2000, the Company's English subsidiary, Oneida U.K. Limited, acquired
all outstanding shares of London-based Viners of Sheffield Limited, the leading
marketer of consumer flatware and cookware in the U.K. Oneida U.K. Limited
currently serves the Company's European, African, Middle and Far Eastern and
Asian and Pacific markets.
The Australian and New Zealand markets are served by the Company's subsidiary,
Oneida Australia, Pty Ltd. In addition to marketing the Company's existing
products, Oneida Australia Pty Ltd. continues the businesses of two 1998
acquisitions: Stanley Rogers & Son, a leading importer and marketer of stainless
steel and silverplated flatware to retail customers in Australia and New
Zealand, and Westminster China, a leading importer and marketer of porcelain
dinnerware to the foodservice industry in Australia and New Zealand.
3
The Company owns approximately 97% of Oneida International, Inc., a corporation
formed to market tabletop products of Italian design, some of which are
manufactured in Italy while others are manufactured in Shanghai, China or
sourced internationally. Oneida International, Inc. develops and markets these
and other of the Company's products in the international foodservice market
through its Italian subsidiary, Oneida Italy, S.r.l.
In addition to the foregoing, the Company also uses a network of independent
representatives and distributors to market and sell the Company's products in
countries where the Company does not have offices or employees of its own.
International orders for both foodservice and consumer products are filled by
the Company from a variety of locations, including the Company's United States
distribution centers in Sherrill, New York and Nashville, Tennessee, as well as
the Company's international facilities in Niagara Falls, Canada, Toluca, Mexico,
Melbourne, Australia and Vercelli, Italy. In addition, many orders are shipped
directly from the suppliers to the Company's international customers.
Raw Materials.
The principal raw materials used by the Company in its manufacture of metalware
are stainless steel, brass, silver and gold. For china, they are various clays,
flint, aluminum oxide and glass frite. These materials are purchased in the open
market to meet current requirements and have historically been available in
adequate supply from multiple sources. The Company experienced no significant or
unusual problems in the purchase of raw materials during the fiscal year ended
January 2003. Although the Company has successfully met its raw materials
requirements in the past, there may in the future be temporary shortages or
sharp increases in the prices of raw materials due to a number of factors such
as transportation disruptions, or production or processing delays. For example,
the price of nickel, one of the components of stainless steel, a principal
ingredient of the Company's metalware products, has been volatile since late
1999. In addition, each of the past several years has seen a significant
increase in the cost of natural gas, a significant fuel used in the Company's
domestic flatware and dinnerware manufacturing operations. While it is
impossible to predict the timing or impact of future shortages and price
increases, such shortages and increases have not in the past had any material
adverse effects on the Company's operations.
Intellectual Property.
The Company owns and maintains many design patents in the United States and
Canada. These patents, along with numerous copyrights, protect the Company's
product designs and decorations. In addition, the Company has registered its
most significant trademarks in the United States and many foreign countries. The
consumer, foodservice and international operations use a number of trademarks
and trade names which are extensively advertised and promoted, including ONEIDA,
ABCO, BUFFALO CHINA, COMMUNITY, DELCO, HEIRLOOM, LTD, REGO, ROGERS, SAKURA,
SANT'ANDREA and VINERS OF SHEFFIELD. Taken as a whole, the Company's
intellectual property, especially the market recognition associated with the
ONEIDA name, is a material, although intangible, corporate asset.
Licenses.
The Company continues to explore opportunities to capitalize on the ONEIDA name
in new product categories. One vehicle for this expansion has been licensing the
ONEIDA name for use by third parties on products complementary to the Company's
own core tableware lines. Examples include agreements with Connoisseurs Products
Corporation, Robinson Knife Manufacturing Co., Inc. and Trendex Home Designs,
Inc. for the manufacture and marketing of ONEIDA silver and metal polishes,
ONEIDA kitchen tools and accessories and ONEIDA kitchen and table linens,
respectively. In addition, the Company also maintains license agreements that
allow it to market lines of flatware under the WEDGWOOD and ROYAL DOULTON names,
lines of dinnerware, flatware, glassware and related accessories under the
COCA-COLA name and lines of dinnerware, flatware and glassware under the RUSSEL
WRIGHT name. Neither the terms nor the effects of any of the Company's license
agreements are material.
4
Seasonality of Business.
Although consumer operations normally do a greater volume of business during
October, November and December primarily because of holiday-related orders for
metalware, dinnerware and glassware products, the Company's businesses are not
considered seasonal.
Customer Dependence.
No material part of the Company's business is dependent upon a single customer,
the loss of which would have a materially adverse effect. Sufficient inventories
of metalware, dinnerware, glassware and other products are maintained by the
Company to respond promptly to orders.
Backlog Orders.
Tableware operations had order backlogs of $32,674,127 as of March 16, 2003 and
$26,238,300 as of March 13, 2002. This backlog is expected to be filled during
the current fiscal year, principally in the first quarter. The amount of backlog
is reasonable for the tableware industry.
Market Conditions and Competition.
The Company is the only domestic manufacturer of a complete line of stainless
steel, silverplated and sterling flatware. The Company believes that it is the
largest producer of stainless steel and silverplated flatware in the world. The
Company's dinnerware, holloware and crystal and glass lines, along with its
flatware lines, make the Company a truly complete tableware supplier. The
Company faces competition from a number of domestic companies that market both
imported and domestically manufactured lines and from hundreds of importers
engaged exclusively in marketing foreign-made tableware products. In recent
years, there is also competition from department and specialty stores and
foodservice distributors and establishments that import foreign-made tableware
products under their own private labels for their sale or use. The Company
strives to maintain its market position through product diversity, design
innovation, and brand strength, especially among consumers.
The metalware, dinnerware and glassware businesses are each highly competitive.
The principal factors affecting domestic consumer competition are design, price,
quality and packaging. Other factors that have an effect on consumer competition
are availability of replacement pieces, and product warranties. In the opinion
of the Company, no one factor is dominant and the significance of the different
competitive factors varies from customer to customer.
The principal factors affecting domestic foodservice competition are price,
service and quality. The Company's foodservice products and service are highly
regarded in this industry, and the Company is one of the largest sources of
commercial china dinnerware and stainless steel and silverplated tableware in
the United States.
The principal factors affecting international competition are brand recognition,
design and quality. Other factors affecting the Company's participation in the
international market include competition with local suppliers and high import
duties, both of which increase the Company's costs relative to local producers.
Research and Development.
The Company places a considerable emphasis on excellence in development and
design. To achieve this end, the Company maintains full time in-house design and
engineering departments that continuously develop, test and improve products and
manufacturing methods. Independent designers and collaborative efforts with
other companies contribute to the Company's emphasis on development and design.
The Company's actual expenditures on research and development activities during
the past three fiscal years, however, have not been material.
Environmental Compliance.
The Company does not anticipate that compliance with federal, state and local
environmental laws and regulations will have any material effect upon the
capital expenditures, earnings or competitive position of the Company. The
Company does not anticipate any material capital expenditures for environmental
control facilities for the remainder of the current fiscal year or the
succeeding fiscal year.
5
Employment.
The Company and its subsidiaries employed approximately 2,610 employees in
domestic operations and 1,180 employees in foreign operations as of March 1,
2003. The Company maintains positive relations with its domestic and foreign
employees. With the exception of its Buffalo China, Inc. subsidiary, the
Company's facilities are not unionized. The employees of Buffalo China Inc.'s
manufacturing and distribution facility in Buffalo, New York are represented by
the Glass, Molders, Pottery, Plastics & Allied Workers International Union
AFL-CIO, CLC and its local union No. 76A. The current collective bargaining
agreement between Buffalo China, Inc. and the Glass, Molders, Pottery, Plastics
& Allied Workers International Union AFL-CIO, CLC and its local union No. 76A
expires on July 31, 2005. The Company has experienced no work stoppages or
strikes in the past five years.
Forward Looking Information.
With the exception of historical data, the information contained in this Form
10-K, as well as those other documents incorporated by reference herein, may
constitute forward-looking statements, within the meaning of the Federal
securities laws, including but not limited to the Private Securities Litigation
Reform Act of 1995. As such, the Company cautions readers that changes in
certain factors could affect the Company's future results and could cause the
Company's future consolidated results to differ materially from those expressed
or implied herein. Such factors include, but are not limited to: changes in
national or international political conditions; terrorist attacks; general
economic conditions in the Company's own markets and related markets;
difficulties or delays in the development, production and marketing of new
products; the impact of competitive products and pricing; certain assumptions
related to consumer purchasing patterns; significant increases in interest rates
or the level of the Company's indebtedness; foreign currency fluctuations; major
slowdowns in the retail, travel or entertainment industries; the loss of several
of the Company's major customers; underutilization of the Company's plants and
factories; impact of changes in accounting standards; potential legal
proceedings; changes in pension and retiree medical costs; and the amount and
rate of growth of the Company's selling, general and administrative expenses.
ITEM 2. PROPERTIES.
The principal properties of the Company and its subsidiaries are situated at the
following locations and have the following characteristics:
Approximate Square Footage
--------------------------
Ontario, California Warehouse 206,000
Buffalo, New York Manufacturing China 257,000
Buffalo, New York Offices, Warehouse and China Decorating Facility 203,000
Buffalo, New York Offices and Warehouse 88,000
Buffalo, New York Warehouse 262,095
Oneida, New York Executive Administrative Offices 95,000
Sherrill, New York Manufacturing Stainless Steel, Silverplated
and Sterling Flatware 1,082,000
Sherrill, New York Offices and Warehouse 206,000
Sherrill, New York Manufacturing Knives 135,000
Nashville, Tennessee Warehouse 123,000
Melbourne, Australia Offices and Warehouse 60,000
6
Approximate Square Footage
--------------------------
Niagara Falls, Ontario, Offices and Warehouse 120,000
Canada
Shanghai, China Manufacturing Foodservice Holloware 55,000
London, England Offices 30,000
Vercelli, Italy Offices, Warehouse and Manufacturing
Stainless Steel Holloware 84,000
Juarez, Mexico Manufacturing China 65,000
Mexico City, Mexico Offices and Warehouse 32,000
Toluca, Mexico Manufacturing Stainless Steel Flatware 75,000
Toluca, Mexico Warehouse 25,000
All of these buildings are owned by the Company with the following exceptions:
o Ownership of the 206,000 square foot Sherrill, New York warehouse and
office property was transferred to the Oneida County Industrial Development
Agency on February 25, 2000 in exchange for various tax concessions from the
county. The property will remain in the ownership of the Oneida County
Industrial Development Agency for a term of fifteen years, upon the expiration
of which the property will be conveyed back to the Company.
o Ownership of the 203,000 square foot Buffalo, New York office, warehouse
and decorating property was transferred to the Erie County Industrial
Development Agency on February 29, 2000 in exchange for various tax concessions
from the county. The property will remain in the ownership of the Erie County
Industrial Development Agency for a term of fifteen years, upon the expiration
of which the property will be conveyed back to Buffalo China.
o The 262,095 square foot warehouse in Buffalo, New York and the offices
and warehouses in Ontario, California; Nashville, Tennessee; Melbourne,
Australia; Mexico City and Toluca Mexico; and London, England are leased.
In addition to the land primarily associated with its manufacturing operations,
the Company owns approximately 600 additional acres in the cities of Sherrill
and Oneida and the town of Vernon, New York.
The Company leases sales offices and/or showrooms in New York City, Malta and
Melville, New York and Toronto, Canada. The Company also leases retail outlet
space in numerous locations throughout the United States through its subsidiary,
Kenwood Silver Company, Inc., and in several locations in the United Kingdom
through its subsidiary, Oneida U.K. Limited.
All of the Company's buildings are located on sufficient property to accommodate
any further expansion or development planned over the next five years. The
properties are served adequately by transportation facilities, are well
maintained and are adequate for the purposes for which they are intended and
used.
7
ITEM 3. LEGAL PROCEEDINGS.
On December 8, 1998, the Oneida Indian Nation of New York, the Oneida Tribe of
Indians of Wisconsin and the Oneida of the Thames, as Plaintiffs, along with The
United States of America, as Intervenor, moved to amend their Complaint filed on
May 3, 1974 in the United States District Court for the Northern District of New
York against the Counties of Madison and Oneida, New York. The Amended Complaint
sought to add the State of New York, New York State Thruway Authority,
Utica-Rome Motorsports, Inc., Niagara Mohawk Power Corporation and the Oneida
Valley National Bank, individually and as representatives of the class of
similarly situated private landowners in Madison and Oneida Counties. The
Complaint alleged that during the nineteenth century the Oneidas' lands were
improperly transferred. The Oneidas sought title to the property as well as
monetary damages. The Company's headquarters and main manufacturing and
distribution facilities are located within this land claim area. On September
25, 2000 the Judge ruled that the private landowners, including the Company,
could not be added as Defendants in this action.
On February 16, 2002, the Oneida Indian Nation of New York, the State of New
York and Madison and Oneida Counties announced an agreement in principle to
resolve the longstanding land claim. Later that month, to demonstrate their
opposition to the announced settlement, the Oneida Tribe of Indians of Wisconsin
began filing suits against private owners of commercial property within the land
claim area. During February and March 2002 approximately 40 such suits were
filed by the Oneida Tribe of Indians of Wisconsin. The Company was not made the
subject of such a suit. The suits remain pending.
On December 5, 2002, the Company announced in a press release that it was
restating earnings for the quarters ended April 2002 and July 2002 and fiscal
years ended January 2002 and January 2001. The SEC notified the Company on
December 13, 2002 that it was conducting an informal inquiry regarding the
restatement. The Company is fully cooperating with the SEC on the informal
inquiry.
In addition to the foregoing, the Company is involved in various routine legal
proceedings incidental to the operation of its business. Other than as discussed
herein, the Company's Management does not believe there is any ongoing or
pending litigation with a possible material effect on the financial position of
the Company.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF STOCKHOLDERS.
None.
PART II
Information required to be furnished under Items 5 through 9 of this Part is set
forth in, and incorporated by reference to, the Company's Annual Report to
Stockholders for the year ended January 25, 2003, at the respective pages
indicated.
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS.
Stock Exchange Listing
Page 37 of the Company's Annual Report.
Price Range of Common Stock
Page 37 of the Company's Annual Report.
Dividends
Page 37 of the Company's Annual Report.
8
Equity Compensation Plans
The following table Summarizes information about the Corporation's equity
compensation plans as of January 25, 2003. All Outstanding awards relate to the
Corporation's common stock.
Equity Compensation Plan Information
(a) (b) (c)
----------------------- -------------------- --------------------------
Number of Securities
Remaining Available for
Number of Securities to Weighted-Average Issuance Under Equity
be issued Upon Exercise Exercise Price of Compensation Plans
Plan of Outstanding Options, Outstanding Options, (Excluding Securities Plan
Category Warrants and Rights Warrants and Rights Reflected in Column (a))
-------- ----------------------- -------------------- --------------------------
Equity Compensation
Plans Approved by
Stockholders (1)..... 1,778,814 $17.14 1,866,278 (2)
Equity Compensation
Plans Not Approved
by Stockholders (3).. 0 0 0
Total................... 1,778,814 $17.14 1,866,278 (2)
(1) Includes the Employee Stock Purchase Plan, as amended, 1987 Stock Option
Plan, 1998 Stock Option Plan, 2002 Stock Option Plan, 1998 Non-Employee
Directors Stock Option Plan, as amended, 2000 Non-Employee Directors Equity
Plan and Amended and Restated Restricted Stock Award Plan.
(2) Includes shares remaining for issuance in the following amounts: Employee
Stock Purchase Plan - 558,414; 1987 Stock Option Plan - 0; 1998 Stock
Option Plan - 0; 2002 Stock Option Plan - 1,157,000; 1998 Non-Employee
Directors Stock Option Plan - 70,000; 2000 Non-Employee Directors Equity
Plan - 35,727; and Amended and Restated Restricted Stock Award Plan -
45,137.
(3) There are no equity compensation plans that have not been approved by the
Corporation's Stockholders.
ITEM 6. SELECTED FINANCIAL DATA.
Page 38 of the Company's Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Pages 32 through 37 of the Company's Annual Report.
ITEM 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.
Page 36 of the Company's Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 14 through 37 of the Company's Annual Report.
9
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Information required to be furnished under Items 10 through 13 of this Part is
set forth in, and incorporated by reference to, the Company's definitive Proxy
Statement dated April 28, 2003 (File 1-5452), at the respective pages indicated.
Information required to be furnished under Item 14 of this Part is set forth in,
and incorporated by reference to, the Company's Annual Report to Stockholders
for the year ended January 25, 2003, at the pages indicated.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Pages 2 through 5 of the Company's definitive Proxy Statement.
Executive Officers of the Registrant
As of April 14, 2003, the persons named below are the executive officers of the
Company and all have been elected to serve in the capacities indicated at the
pleasure of the Oneida Ltd. Board of Directors. No family relationships exist
among any of the executive officers named, nor is there any arrangement or
understanding pursuant to which any person was selected as an officer.
Principal Business Affiliations During
Name, Age and Positions with Company Past Five Years
------------------------------------ -----------------------------------------
Allan H. Conseur, 54 Mr. Conseur was elected Executive Vice
Executive Vice President and President in 1999. He has been
a Director President, Oneida International, Inc.
since 1998 and President, THC Systems,
Inc. for more than the past five years.
Harold J. DeBarr, 58 Mr. DeBarr was elected Corporate Senior
Corporate Senior Vice President, Vice President in 1999. He has been
Manufacturing and Engineering Senior Vice President, Manufacturing and
Engineering for more the past five years.
Gregg R. Denny, 46 Mr. Denny was elected Chief Financial
Chief Financial Officer Officer in June 2000. He had been Vice
President of Purchasing from April
through June 2000, Managing Director of
Oneida's Australian operation from August
1998 through April 2000, Director of
Traffic and Purchasing from March 1998
through August 1998 and Manager of
Purchasing from March 1996 through
March 1998.
Thomas A. Fetzner, 55 Mr. Fetzner has been Vice President and
Vice President and Corporate Corporate Controller for more than the
Controller past five years.
J.Peter Fobare, 53 Mr. Fobare assumed responsibility for
Senior Vice President and General the Consumer Direct Division in 1999. He
Manager, Consumer Retail and has been Senior Vice President and
Direct Divisions and a Director General Manager of the Consumer Retail
Division for more than the past five
years.
10
Principal Business Affiliations During
Name, Age and Positions with Company Past Five Years
------------------------------------ -----------------------------------------
James E. Joseph, 42 Mr. Joseph was elected Senior Vice
Senior Vice President and General President and General Manager,
Manager, Foodservice Division Foodservice Division in August 2000. He
had been Senior Vice President,
International Division from March through
August 2000, and Vice President and
Managing Director of Oneida's European,
African and Asian operations from 1998
through March 2000.
Peter J. Kallet, 56 Mr. Kallet was elected Chairman in 2000.
Chairman of the Board, President He has been Chief Executive Officer
and Chief Executive Officer and a since 1998 and President and Chief
Director Operating Officer for more than the past
five years.
Thomas E. Lowe, 52 Mr. Lowe was elected President of Encore
President, Encore Promotions, Promotions, Inc. in 2001. He had been
Inc. Senior Vice President, Marketing from
2000 through 2001. Mr. Lowe joined the
Company in 2000.
Robert L. Lupica, 41 Mr. Lupica was elected Senior Vice
Senior Vice President and President in 1999. He has been General
General Manager, Buffalo Manager of the Company's Buffalo
Operations Operations for more than the past five
years.
Catherine H. Suttmeier, 46 Ms. Suttmeier was elected Corporate Vice
Corporate Vice President, President in 1999. She has been Vice
Secretary and General Counsel President, Secretary and General Counsel
and a Director for more than the past five years.
ITEM 11. EXECUTIVE COMPENSATION.
Pages 6 through 11 of the Company's definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Pages 1, 2, 4, 6 and 7 of the Company's definitive Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Pages 1 through 5 and 13 of the Company's definitive Proxy Statement.
ITEM 14. CONTROLS AND PROCEDURES.
Pages 36 through 37 of the Company's Annual Report.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.
(a) 1. Financial statements incorporated by reference from the Company's 2003
Annual Report to Stockholders and filed as part of this Report:
Consolidated Statements of Operations for the fiscal years ended 2003,
2002 and 2001 (page 14 of the Company's Annual Report).
11
Consolidated Balance Sheets for the fiscal years ended 2003 and 2002
(page 15 of the Company's Annual Report).
Consolidated Statements of Changes in Stockholders' Equity for the
fiscal years ended 2003, 2002 and 2001 (page 16 of the Company's
Annual Report).
Consolidated Statements of Cash Flows for the fiscal years ended 2003,
2002 and 2001 (page 17 of the Company's Annual Report).
Notes to Consolidated Financial Statements (pages 18 through 30 of the
Company's Annual Report).
Report of Independent Accountants (page 31 of the Company's Annual
Report).
2. Financial Statement Schedule:
Schedule II, Valuation and Qualifying Accounts, for fiscal years ended
2003, 2002 and 2001 (page 22 of this Report).
Report of Independent Accountants on Financial Statement Schedule
(page 21 of this Report).
All other schedules have been omitted because of the absence of conditions under
which they are required or because the required information is included in the
financial statements submitted.
3. Exhibits:
(3)(i) The Company's Restated Articles of Incorporation, as
amended, which are incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended
January 29, 2000.
(ii) The Company's By-Laws, as amended and restated, which are
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 29, 2000.
(4)(a)(i) Amended and Restated Credit Agreement dated as of April 27,
2001, between Oneida Ltd., The Chase Manhattan Bank and the
various lenders named in the Agreement, which is
incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 28, 2001.
(ii) Security Agreement dated as of April 27, 2001 between Oneida
Ltd., THC Systems, Inc., the subsidiaries of Oneida Ltd.
which are signatories to the Agreement and The Chase
Manhattan Bank, as collateral agent for the Secured Parties
named in the Agreement, which is incorporated by reference
to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended April 28, 2001.
(iii) Amendment No. 1 to the Security Agreement dated as of April
27, 2001 between Oneida Ltd., THC Systems, Inc., the
subsidiaries of Oneida Ltd. which are signatories to the
Agreement and The Chase Manhattan Bank, as collateral agent
for the Secured Parties named in the Agreement, which is
incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 28, 2001.
Amendment No. 1 is dated as of April 27, 2001.
12
(iv) Pledge Agreement dated as of April 27, 2001 between Oneida
Ltd., the subsidiaries of Oneida Ltd. which are signatories
to the Agreement and The Chase Manhattan Bank, as collateral
agent for the Secured Parties named in the Agreement, which
is incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 28, 2001.
(v) Amendment No. 1 to Amended and Restated Credit Agreement
dated as of April 27, 2001, between Oneida Ltd., The Chase
Manhattan Bank and the various lenders named in the
Agreement, which is incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 28, 2001. Amendment No. 1 is dated as of May 31,
2001.
(vi) Waiver and Amendment No. 2 to Amended and Restated Credit
Agreement dated as of April 27, 2001, between Oneida Ltd.,
JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank) and the various lenders named in the Agreement, which
is incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended October 27, 2001.
Waiver and Amendment No. 2 is dated as of December 7, 2001.
(vii) Amendment No. 3 to Amended and Restated Credit Agreement
dated as of April 27, 2001, between Oneida Ltd., JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank) and
the various lenders named in the Agreement, which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 26, 2002. Amendment
No. 3 is dated as of April 23, 2002.
(viii) Amended and Restated Collateral Agency and Intercreditor
Agreement dated as of April 23, 2002 between Allstate Life
Insurance Company, Allstate Insurance Company, Pacific Life
Insurance Company, JPMorgan Chase Bank and the various
lenders named in the Agreement, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 26, 2002.
(ix) Amendment No. 1 to Pledge Agreement dated as of April 27,
2001 between Oneida Ltd., the subsidiaries of Oneida Ltd.
which are signatories to the Agreement and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as
collateral agent for the Secured Parties named in the
Agreement, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended
January 26, 2002. Amendment No. 1 is dated as of April 23,
2002.
(x) Security Agreement dated as of April 23, 2002 between
Kenwood Silver Company, Inc. and JPMorgan Chase Bank, as
collateral agent for the Secured Parties named in the
Agreement, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended
January 26, 2002.
(xi) Pledge Agreement dated as of April 23, 2002 between Kenwood
Silver Company, Inc. and JPMorgan Chase Bank, as collateral
agent for the Secured Parties named in the Agreement, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xii) Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of April 23, 2002 between Buffalo China,
Inc., The Erie County Industrial Development Agency and
JPMorgan Chase Bank, as collateral agent for the Secured
Parties named in the Agreement, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 26, 2002.
13
(xiii) Mortgage Spreader Agreement dated as of April 23, 2002
between Buffalo China, Inc., The Erie County Industrial
Development Agency and JPMorgan Chase Bank, as collateral
agent for the Secured Parties named in the Agreement, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xiv) Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of April 23, 2002 between Buffalo China,
Inc., The Erie County Industrial Development Agency and
JPMorgan Chase Bank, as collateral agent for the Secured
Parties named in the Agreement, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 26, 2002.
(xv) Mortgage Spreader Agreement dated as of April 23, 2002
between Buffalo China, Inc., The Erie County Industrial
Development Agency and JPMorgan Chase Bank, as collateral
agent for the Secured Parties named in the Agreement, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xvi) Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of April 23, 2002 between Oneida Ltd.,
The Oneida County Industrial Development Agency and JPMorgan
Chase Bank, as collateral agent for the Secured Parties
named in the Agreement, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year
ended January 26, 2002.
xvii) Mortgage Spreader Agreement dated as of April 23, 2002
between Oneida Ltd., The Oneida County Industrial
Development Agency and JPMorgan Chase Bank, as collateral
agent for the Secured Parties named in the Agreement, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xviii) Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of April 23, 2002 between Oneida Ltd.,
The Oneida County Industrial Development Agency and JPMorgan
Chase Bank, as collateral agent for the Secured Parties
named in the Agreement, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year
ended January 26, 2002.
(ixx) Mortgage Spreader Agreement dated as of April 23, 2002
between Oneida Ltd., The Oneida County Industrial
Development Agency and JPMorgan Chase Bank, as collateral
agent for the Secured Parties named in the Agreement, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xx) Waiver to Amended and Restated Credit Agreement dated as of
April 27, 2001, between Oneida Ltd., JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank) and the various
lenders named in the Agreement. The Waiver is dated as of
December 9, 2002.
(xxi) Waiver to Amended and Restated Credit Agreement dated as of
April 27, 2001, between Oneida Ltd., JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank) and the various
lenders named in the Agreement. The Waiver is dated as of
March 7, 2003.
14
(xxii) Amendment No. 4 to Amended and Restated Credit Agreement
dated as of April 27, 2001, between Oneida Ltd., JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank) and
the various lenders named in the Agreement. Amendment No. 4
is dated as of April 24, 2003.
(xxiii) Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of April 24, 2003 between Oneida Ltd. and
JPMorgan Chase Bank, as collateral agent for the Secured
Parties named in the Agreement.
(xxiv) 2001 Amended and Restated Note Purchase Agreement dated as
of May 31, 2001, between Oneida Ltd., THC Systems, Inc.,
Allstate Life Insurance Company, Allstate Insurance Company
and Pacific Life Insurance Company, which is incorporated by
reference to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended April 28, 2001.
(xxv) Waiver and Amendment No. 1 to 2001 Amended and Restated Note
Purchase Agreement dated as of May 31, 2001, between Oneida
Ltd., THC Systems, Inc., Allstate Life Insurance Company,
Allstate Insurance Company and Pacific Life Insurance
Company, which is incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended October 27, 2001. Waiver and Amendment No. 1 is dated
as of December 7, 2001.
(xxvi) Amendment No. 2 to 2001 Amended and Restated Note Purchase
Agreement dated as of May 31, 2001, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company, Allstate
Insurance Company and Pacific Life Insurance Company, which
is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
Amendment No. 2 is dated as of April 23, 2002.
(xxvii) Second Waiver to 2001 Amended and Restated Note Purchase
Agreement dated as of May 31, 2001, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company, Allstate
Insurance Company and Pacific Life Insurance Company. The
Second Waiver is dated as of December 6, 2002.
(xxviii) Third Waiver to 2001 Amended and Restated Note Purchase
Agreement dated as of May 31, 2001, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company, Allstate
Insurance Company and Pacific Life Insurance Company. The
Third Waiver is dated as of February 28, 2003.
(xxix) Amendment No. 3 to 2001 Amended and Restated Note Purchase
Agreement dated as of May 31, 2001, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company, Allstate
Insurance Company and Pacific Life Insurance Company.
Amendment No. 3 is dated as of April 24, 2003.
(b) Amended and Restated Rights Agreement adopted by the Board
of Directors on October 27, 1999 and dated December 3, 1999,
which is incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 29,
2000.
(10)(a)(i) Employment Agreement with one (1) executive employee of the
Company dated March 12, 1999, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 29, 2000.
(ii) Employment Agreements with six (6) executive employees of
the Company dated November 15, 1999.
15
(b) Oneida Ltd. Management Incentive Plan adopted by the Board
of Directors on February 24, 1988, as amended, which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1999.
(c) Oneida Ltd. 2002 Stock Option Plan adopted by the Board of
Directors and approved by stockholders on May 29, 2002.
(d) Oneida Ltd. 1998 Non-Employee Director Stock Option Plan, as
amended. The original Plan was adopted by the Board of
Directors and approved by stockholders on May 27, 1998. The
Plan was amended by the Board of Directors on March 26,
2003.
(e) Oneida Ltd. Employee Security Plan adopted by the Board of
Directors on July 26, 1989, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 29, 2000.
(f) Amended and Restated Oneida Ltd. Restricted Stock Award Plan
adopted by the Board of Directors on March 29, 2000 and
approved by the stockholders on May 31, 2000, which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 27, 2001.
(g) Amended and Restated Oneida Ltd. Deferred Compensation Plan
for Key Employees adopted by the Board of Directors on
October 27, 1999 and effective November 1, 1999, which is
incorporated by reference to the Registrant's Annual Report
on Form 10-K for the year ended January 29, 2000.
(h) Oneida Ltd. Restoration Plan adopted by the Board of
Directors on February 28, 2000, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 29, 2000.
(i) Oneida Ltd. 2000 Non-Employee Directors' Equity Plan adopted
by the Board of Directors on March 29, 2000 and approved by
the stockholders on May 31, 2000, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the year ended January 27, 2001.
(j) 1st Amendment to the Retirement Plan for Employees of Oneida
Ltd. dated as of December 11, 2002 and adopted by the Board
of Directors on December 11, 2002.
(13) Portions of the Oneida Ltd. Annual Report to Stockholders
for the fiscal year ended January 25, 2003, which have been
incorporated by reference in this Form 10-K.
(21) Subsidiaries of the Registrant.
(99.2) Certification of Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, as adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(99.3) Certification of Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(b) During the quarter ended January 25, 2003 Reports on Form 8-K were filed by
the Registrant dated November 14, 2002 and December 6, 2002.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ONEIDA LTD.
By: /s/ PETER J. KALLET
----------------------------
Peter J. Kallet
Chairman of the Board, President
and Chief Executive Officer
Date: March 26, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
Principal Executive Officer
Chairman of the Board, President and March 26, 2003
/s/ PETER J. KALLET Chief Executive Officer
----------------------------
Peter J. Kallet
Principal Financial Officer
/s/ GREGG R. DENNY Chief Financial Officer March 26, 2003
----------------------------
Gregg R. Denny
Principal Accounting Officer
/s/ THOMAS A. FETZNER Vice President and Corporate Controller March 26, 2003
----------------------------
Thomas A. Fetzner
The Board of Directors
/s/ WILLIAM F. ALLYN Director March 26, 2003
----------------------------
William F. Allyn
/s/ R. QUINTUS ANDERSON Director March 26, 2003
----------------------------
R. Quintus Anderson
/s/ ALLAN H. CONSEUR Director March 26, 2003
----------------------------
Allan H. Conseur
/s/ GEORGIA S. DERRICO Director March 26, 2003
----------------------------
Georgia S. Derrico
17
Signature Title Date
--------- ----- ----
/s/ J. PETER FOBARE Director March 26, 2003
----------------------------
J. Peter Fobare
/s/ GREGORY M. HARDEN Director March 26, 2003
----------------------------
Gregory M. Harden
/s/ PETER J. KALLET Director March 26, 2003
----------------------------
Peter J. Kallet
/s/ PETER J. MARSHALL Director March 26, 2003
----------------------------
Peter J. Marshall
/s/ WHITNEY D. PIDOT Director March 26, 2003
----------------------------
Whitney D. Pidot
/s/ CATHERINE H. SUTTMEIER Director March 26, 2003
----------------------------
Catherine H. Suttmeier
/s/ WILLIAM M. TUCK Director March 26, 2003
----------------------------
William M. Tuck
18
CERTIFICATION
I, Peter J. Kallet certify that:
1. I have reviewed this annual report on Form 10-K of Oneida Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize, and report financial data
and have identified for the registrant's auditors any material
weakness in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 25, 2003 By: /s/ PETER J. KALLET
--------------------------------
Peter J. Kallet
Chairman of the Board, President
and Chief Executive Officer
19
CERTIFICATION
I, Gregg R. Denny certify that:
1. I have reviewed this annual report on Form 10-K of Oneida Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize, and report financial data
and have identified for the registrant's auditors any material
weakness in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 25, 2003 By: /s/ GREGG R. DENNY
--------------------------------
Gregg R. Denny
Chief Financial Officer
20
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors and Stockholders of Oneida Ltd.
Our audits of the consolidated financial statements referred to in our report
dated February 26, 2003, except for Note 11, as to which the date is April 24,
2003 appearing in the 2003 Annual Report to Shareholders of Oneida Ltd. (which
report and consolidated financial statements are incorporated by reference in
this Annual Report on Form 10-K) also included an audit of the financial
statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion,
this financial statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
/s/ PRICEWATERHOUSECOOPERS LLP
Syracuse, New York
February 26, 2003, except for Note 11, as to which the date is April 24, 2003
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 2-84304, 33-49462, 333-10795, 333-66425,
333-87007 and 333-97491) and Form S-3 (File No. 33-64608) of Oneida Ltd. of our
report dated February 26, 2003, except for Note 11, as to which the date is
April 24, 2003 relating to the financial statements, which appears in the 2003
Annual Report to Shareholders, which is incorporated in this Annual Report on
Form 10-K. We also consent to the incorporation by reference of our report dated
February 26, 2003, except for Note 11, as to which the date is April 24, 2003
relating to the financial statement schedule, which appears in this Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP
Syracuse, New York
April 24, 2003
21
SCHEDULE II
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 2003, 2002 AND 2001
(Thousands)
Column A Column B Column C Column D Column E
-------- ---------- ---------- ---------- ----------
Additions
Balance at Charged to Balance at
Beginning Cost and End of
Description of Period Expenses Deductions Period
----------- ---------- ---------- ---------- ----------
YEAR ENDED JANUARY 25, 2003:
Reserves deducted from assets
to which they apply:
Accounts receivable reserves .... $ 3,475 $ 3,548 $ 4,060(a) $ 2,963
======= ======= ======= =======
Inventory reserves .............. 4,594 610 2,138(b) 3,066
======= ======= ======= =======
YEAR ENDED JANUARY 26, 2002:
Reserves deducted from assets to
which they apply:
Accounts receivable reserves .... $ 3,072 $ 2,797 $ 2,394(a) $ 3,475
======= ======= ======= =======
Inventory reserves .............. 13,323 435 9,164(b) 4,594
======= ======= ======= =======
YEAR ENDED JANUARY 27, 2001:
Reserves deducted from assets to
Which they apply:
Accounts receivable reserves .... $ 1,409 $ 2,802(c) $ 1,139(a) $ 3,072
======= ======= ======= =======
Inventory reserves .............. 1,172 26,021(d) 13,870(b) 13,323
======= ======= ======= =======
----------
(a) Adjustments and doubtful accounts written off.
(b) Adjustments and inventory disposals.
(c) Includes $1,319 of reserve additions from acquisitions. These amounts were
not charged to expense.
(d) Includes restructuring charges of $24,000 in 2001.
22
Exhibits: Index to Exhibits
(3)(i) The Company's Restated Articles of Incorporation, as amended, which
are incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended January 29, 2000.
(iii) The Company's By-Laws, as amended and restated, which are
incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended January 29, 2000.
(4)(a)(i) Amended and Restated Credit Agreement dated as of April 27, 2001,
between Oneida Ltd., The Chase Manhattan Bank and the various
lenders named in the Agreement, which is incorporated by reference
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 28, 2001.
(ii) Security Agreement dated as of April 27, 2001 between Oneida Ltd.,
THC Systems, Inc., the subsidiaries of Oneida Ltd. which are
signatories to the Agreement and The Chase Manhattan Bank, as
collateral agent for the Secured Parties named in the Agreement,
which is incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 28, 2001.
(iii) Amendment No. 1 to the Security Agreement dated as of April 27,
2001 between Oneida Ltd., THC Systems, Inc., the subsidiaries of
Oneida Ltd. which are signatories to the Agreement and The Chase
Manhattan Bank, as collateral agent for the Secured Parties named
in the Agreement, which is incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
April 28, 2001. Amendment No. 1 is dated as of April 27, 2001.
(iv) Pledge Agreement dated as of April 27, 2001 between Oneida Ltd.,
the subsidiaries of Oneida Ltd. which are signatories to the
Agreement and The Chase Manhattan Bank, as collateral agent for the
Secured Parties named in the Agreement, which is incorporated by
reference to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended April 28, 2001.
(v) Amendment No. 1 to Amended and Restated Credit Agreement dated as
of April 27, 2001, between Oneida Ltd., The Chase Manhattan Bank
and the various lenders named in the Agreement, which is
incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended April 28, 2001. Amendment No. 1 is
dated as of May 31, 2001.
(vi) Waiver and Amendment No. 2 to Amended and Restated Credit Agreement
dated as of April 27, 2001, between Oneida Ltd., JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank) and the various
lenders named in the Agreement, which is incorporated by reference
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended October 27, 2001. Waiver and Amendment No. 2 is dated as of
December 7, 2001.
(vii) Amendment No. 3 to Amended and Restated Credit Agreement dated as
of April 27, 2001, between Oneida Ltd., JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank) and the various
lenders named in the Agreement, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended
January 26, 2002. Amendment No. 3 is dated as of April 23, 2002.
23
(viii) Amended and Restated Collateral Agency and Intercreditor Agreement
dated as of April 23, 2002 between Allstate Life Insurance Company,
Allstate Insurance Company, Pacific Life Insurance Company,
JPMorgan Chase Bank and the various lenders named in the Agreement,
which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(ix) Amendment No. 1 to Pledge Agreement dated as of April 27, 2001
between Oneida Ltd., the subsidiaries of Oneida Ltd. which are
signatories to the Agreement and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as collateral agent for the
Secured Parties named in the Agreement, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the
year ended January 26, 2002. Amendment No. 1 is dated as of April
23, 2002.
(x) Security Agreement dated as of April 23, 2002 between Kenwood
Silver Company, Inc. and JPMorgan Chase Bank, as collateral agent
for the Secured Parties named in the Agreement, which is
incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended January 26, 2002.
(xi) Pledge Agreement dated as of April 23, 2002 between Kenwood Silver
Company, Inc. and JPMorgan Chase Bank, as collateral agent for the
Secured Parties named in the Agreement, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the
year ended January 26, 2002.
(xii) Mortgage, Assignment of Leases and Rents and Security Agreement
dated as of April 23, 2002 between Buffalo China, Inc., The Erie
County Industrial Development Agency and JPMorgan Chase Bank, as
collateral agent for the Secured Parties named in the Agreement,
which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xiii) Mortgage Spreader Agreement dated as of April 23, 2002 between
Buffalo China, Inc., The Erie County Industrial Development Agency
and JPMorgan Chase Bank, as collateral agent for the Secured
Parties named in the Agreement, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended
January 26, 2002.
(xiv) Mortgage, Assignment of Leases and Rents and Security Agreement
dated as of April 23, 2002 between Buffalo China, Inc., The Erie
County Industrial Development Agency and JPMorgan Chase Bank, as
collateral agent for the Secured Parties named in the Agreement,
which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(xv) Mortgage Spreader Agreement dated as of April 23, 2002 between
Buffalo China, Inc., The Erie County Industrial Development Agency
and JPMorgan Chase Bank, as collateral agent for the Secured
Parties named in the Agreement, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended
January 26, 2002.
(xvi) Mortgage, Assignment of Leases and Rents and Security Agreement
dated as of April 23, 2002 between Oneida Ltd., The Oneida County
Industrial Development Agency and JPMorgan Chase Bank, as
collateral agent for the Secured Parties named in the Agreement,
which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
24
(xvii) Mortgage Spreader Agreement dated as of April 23, 2002 between
Oneida Ltd., The Oneida County Industrial Development Agency and
JPMorgan Chase Bank, as collateral agent for the Secured Parties
named in the Agreement, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January
26, 2002.
(xviii) Mortgage, Assignment of Leases and Rents and Security Agreement
dated as of April 23, 2002 between Oneida Ltd., The Oneida County
Industrial Development Agency and JPMorgan Chase Bank, as
collateral agent for the Secured Parties named in the Agreement,
which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 26, 2002.
(ixx) Mortgage Spreader Agreement dated as of April 23, 2002 between
Oneida Ltd., The Oneida County Industrial Development Agency and
JPMorgan Chase Bank, as collateral agent for the Secured Parties
named in the Agreement, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January
26, 2002.
(xx) Waiver to Amended and Restated Credit Agreement dated as of April
27, 2001, between Oneida Ltd., JPMorgan Chase Bank (formerly known
as The Chase Manhattan Bank) and the various lenders named in the
Agreement. The Waiver is dated as of December 9, 2002.
(xxi) Waiver to Amended and Restated Credit Agreement dated as of April
27, 2001, between Oneida Ltd., JPMorgan Chase Bank (formerly known
as The Chase Manhattan Bank) and the various lenders named in the
Agreement. The Waiver is dated as of March 7, 2003.
(xxii) Amendment No. 4 to Amended and Restated Credit Agreement dated as
of April 27, 2001, between Oneida Ltd., JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank) and the various
lenders named in the Agreement. Amendment No. 4 is dated as of
April 24, 2003.
(xxiii) Mortgage, Assignment of Leases and Rents and Security Agreement
dated as of April 24, 2003 between Oneida Ltd. and JPMorgan Chase
Bank, as collateral agent for the Secured Parties named in the
Agreement.
(xxv) 2001 Amended and Restated Note Purchase Agreement dated as of May
31, 2001, between Oneida Ltd., THC Systems, Inc., Allstate Life
Insurance Company, Allstate Insurance Company and Pacific Life
Insurance Company, which is incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
April 28, 2001.
(xxv) Waiver and Amendment No. 1 to 2001 Amended and Restated Note
Purchase Agreement dated as of May 31, 2001, between Oneida Ltd.,
THC Systems, Inc., Allstate Life Insurance Company, Allstate
Insurance Company and Pacific Life Insurance Company, which is
incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended October 27, 2001. Waiver and
Amendment No. 1 is dated as of December 7, 2001.
25
(xxvi) Amendment No. 2 to 2001 Amended and Restated Note Purchase
Agreement dated as of May 31, 2001, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company, Allstate Insurance
Company and Pacific Life Insurance Company, which is incorporated
by reference to the Registrant's Annual Report on Form 10-K for the
year ended January 26, 2002. Amendment No. 2 is dated as of April
23, 2002.
(xxvii) Second Waiver to 2001 Amended and Restated Note Purchase Agreement
dated as of May 31, 2001, between Oneida Ltd., THC Systems, Inc.,
Allstate Life Insurance Company, Allstate Insurance Company and
Pacific Life Insurance Company. The Second Waiver is dated as of
December 6, 2002.
(xxviii) Third Waiver to 2001 Amended and Restated Note Purchase Agreement
dated as of May 31, 2001, between Oneida Ltd., THC Systems, Inc.,
Allstate Life Insurance Company, Allstate Insurance Company and
Pacific Life Insurance Company. The Third Waiver is dated as of
February 28, 2003.
(xxix) Amendment No. 3 to 2001 Amended and Restated Note Purchase
Agreement dated as of May 31, 2001, between Oneida Ltd., THC
Systems, Inc., Allstate Life Insurance Company, Allstate Insurance
Company and Pacific Life Insurance Company. Amendment No. 3 is
dated as of April 24, 2003.
(b) Amended and Restated Rights Agreement adopted by the Board of
Directors on October 27, 1999 and dated December 3, 1999, which is
incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended January 29, 2000.
(10)(a)(i) Employment Agreement with one (1) executive employee of the Company
dated March 12, 1999, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January
29, 2000.
(ii) Employment Agreements with six (6) executive employees of the
Company dated November 15, 1999.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board of
Directors on February 24, 1988, as amended, which is incorporated
by reference to the Registrant's Annual Report on Form 10-K for the
year ended January 30, 1999.
(c) Oneida Ltd. 2002 Stock Option Plan adopted by the Board of
Directors and approved by stockholders on May 29, 2002.
(d) Oneida Ltd. 1998 Non-Employee Director Stock Option Plan, as
amended. The original Plan was adopted by the Board of Directors
and approved by stockholders on May 27, 1998. The Plan was amended
by the Board of Directors on March 26, 2003.
(e) Oneida Ltd. Employee Security Plan adopted by the Board of
Directors on July 26, 1989, which is incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended
January 29, 2000.
(f) Amended and Restated Oneida Ltd. Restricted Stock Award Plan
adopted by the Board of Directors on March 29, 2000 and approved by
the stockholders on May 31, 2000, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the
year ended January 27, 2001.
26
(g) Amended and Restated Oneida Ltd. Deferred Compensation Plan for Key
Employees adopted by the Board of Directors on October 27, 1999 and
effective November 1, 1999, which is incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended
January 29, 2000.
(h) Oneida Ltd. Restoration Plan adopted by the Board of Directors on
February 28, 2000, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January
29, 2000.
(ii) Oneida Ltd. 2000 Non-Employee Directors' Equity Plan adopted by the
Board of Directors on March 29, 2000 and approved by the
stockholders on May 31, 2000, which is incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended
January 27, 2001.
(j) 1st Amendment to the Retirement Plan for Employees of Oneida Ltd.
dated as of December 11, 2002 and adopted by the Board of Directors
on December 11, 2002.
(13) Portions of the Oneida Ltd. Annual Report to Stockholders for the
fiscal year ended January 25, 2003, which have been incorporated by
reference in this Form 10-K.
(21) Subsidiaries of the Registrant.
(99.2) Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(99.3) Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
27
STATEMENT OF DIFFERENCES
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The degree symbol shall be expressed as................................. [d]
The less-than-or-equal-to sign shall be expressed as.................... <=