March 23, 2005

 

 

Mr. Peter J. Kallet

c/o Oneida Ltd.

163-181 Kenwood Avenue

Oneida, New York 13421

 

Dear Peter:

 

         This letter agreement, dated as of March 23, 2005 (the "Agreement")

sets forth our mutual understandings and agreements concerning your resignation

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 the

close of business on March 23, 2005 (the "CEO Resignation Date").

Notwithstanding your resignation, following the CEO Resignation Date you shall

continue to be an employee of the Company until July 30, 2007, the expiration of

the Term (as defined in the July 28, 2004 Letter Agreement (the "Letter

Agreement")) (the "Transition Period"), and you shall continue to serve as

Chairman of the Board of Directors of the Company (the "Board") following the

CEO Resignation Date until the Company's 2005 annual general meeting (the

"Annual Meeting"), on which date you shall be deemed to resign as a director and

Chairman of the Board. Thereafter, you shall serve as Vice Chairman - Strategic

Alliances and Corporate Development, a non-officer position, until the

expiration of the Term.

 

         During the period through May 25, 2005, the anticipated date of the

Annual Meeting, you agree to remain available, on a regular and continuous

basis, to work with the Board on matters relating to your transition.

Thereafter, as Vice Chairman, you agree to advise the Company in dealing with

the New York State Business Council, the Table Top Association and such other

related trade associations as well as to provide assistance and consultation to

the Company in connection with activities relating to acquisitions, mergers and

refinancing of corporate debt. Furthermore, in such capacity as Vice Chairman,

you agree to advise the Company regarding its licensing activities and product

expansion efforts and, as and when directed, to serve as a liaison for

communications between the Company and any of its customers and suppliers.

Finally, you agree to advise and/or assist the Company on such other special

projects upon which you and the Board may mutually agree. The hours and schedule

for the performance of your obligations hereunder shall be mutually agreed in

good faith by you and the President and Chief Executive Officer.

 

         1. Transition Period. (a) Salary. Subject to your execution of (i) a

unanimous written consent of the Board approving this Agreement, accepting your

resignation as President and Chief Executive Officer pursuant to this Agreement,

and electing your successor as President and Chief Executive Officer, and (ii)

this Agreement, which contains a release of claims against the Company as set

forth in Section 5 below, as well as the Company's release of claims against

you, you shall continue to receive your Base Salary (as such term is defined in

Section 6 of the Letter Agreement) during the Transition Period at the rate in

effect on the CEO Resignation Date. Additionally, for such period you

 

 

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shall be reimbursed by the Company for such reasonable and necessary business

related expenses incurred by you in your capacity as Vice Chairman - Strategic

Alliances and Corporate Development. Furthermore, the Board specifically agrees

that during the period you are receiving compensation pursuant to this

Agreement, you shall be permitted to seek and accept employment, and work

elsewhere, in any capacity, subject to the limitations set forth in Section 7(a)

of the Letter Agreement, as modified by Section 3(a) below.

 

         (b) Benefits. During the Transition Period, you shall continue to

participate, to the extent eligible, in all the employee benefits plans or

programs of the Company as are generally available to other similarly situated

employees. Specifically, and without limitation, you shall continue to receive

all medical, health, dental and vision plan coverages currently available to you

and your lawful dependents at no additional cost to you (beyond what is

currently charged to you) until the later of (i) the expiration of the

Transition Period or (ii) the expiration of the applicable period of

continuation coverage under COBRA; provided, however, that any such coverage

shall cease upon your employment with an employer with which you are eligible

for any health benefits.

 

         (c) Bonus for Fiscal Years Ending January 2006 and January 2007; No

Participation in Other Incentive Arrangements. You shall be eligible for a bonus

of up to $85,000 for the fiscal year ending January 2006 (even if you secure

other employment during such fiscal year), which shall be paid at the same times

as bonuses are generally paid under the Company's Fiscal 2006 Annual Incentive

Plan-Cash Bonus Plan (the "AIP"). One half of such amount shall be earned based

upon the attainment of EBITDAR goals as follows: at $28.2 million of EBITDAR and

above, the full amount ($42,500) shall be earned; at $25.38 million of EBITDAR,

one-half ($21,250) shall be earned; below $25.38 million of EBITDAR, no portion

shall be earned; and between $25.38 and $28.2 million of EBITDAR, the bonus

shall be linearly interpolated between $21,250 and $42,500. The amount, if any,

of the remaining one half of your potential bonus for fiscal 2006 (up to

$42,500) shall be determined in the full discretion of the President and Chief

Executive Officer and the Compensation Committee of the Board, based upon its

assessment of your overall contribution and efforts made on behalf of the

Company. Provided that you have not commenced employment with any other

employer, you will also be eligible for a bonus of up to $85,000 for the fiscal

year ending January 2007, one half of which will be based on the attainment of

the Company-wide goals established for use under the AIP for that year, and one

half of which shall be subject to the discretion of the President and Chief

Executive Officer and the Compensation Committee. Other than as provided above,

you shall not participate in any annual or long-term incentive plans, programs

or arrangements of the Company, whether formal or informal, written or unwritten

after the CEO Resignation Date.

 

         (d) Unpaid Vacation Leave. Within 10 days of execution of this

Agreement, you shall be reimbursed at your daily rate, for three weeks of

accrued and/or earned vacation, which the parties hereby agree represents all

accrued and/or earned vacation leave existing as of the date of execution of

this Agreement. You shall not earn or accrue any vacation during the Transition

Period.

 

         (e) Reimbursement for Other Non-Specified Expenses. The Company agrees

to reimburse you, within 10 days of execution of this Agreement, in the amount

of $25,000 for unspecified expenses, which shall be subject to withholding.

 

         (f) Office Space; Home Telecommunication Equipment. The Company shall

provide you with office space and secretarial assistance during the Transition

Period. During the Transition Period,

 

 

<PAGE>

 

the Company also shall continue to furnish and support your current home

telecommunication equipment.

 

         2. Duties. During your service as Chairman and Vice Chairman of the

Board, you shall report to the Company's Board and the President and Chief

Executive Officer.

 

         3. Restrictive Covenants. (a) In General. You agree and acknowledge

that the terms of the restrictive covenants set forth in Section 7 of the Letter

Agreement shall remain in full force and effect; provided, however, that the

"Restricted Period" thereunder shall be deemed to expire on July 30, 2007.

 

                  (b) Non-Disparagement. The parties agree not to criticize,

denigrate or disparage each other, including your work record and the operations

and policies of the Company, its parent, directors, officers, agents, employees,

successors and assigns.

 

         4. Releases. (a) General Release. In consideration of the payments

provided to you herein, and after consultation with counsel, you and each of

your heirs, executors, administrators, representatives, agents, successors and

assigns (collectively, the "Releasors") hereby irrevocably and unconditionally

release and forever discharge the Company and each of its officers, employees,

directors, shareholders and agents from any and all claims, actions, causes of

actions, rights, judgments, obligations, damages, demands, accountings or

liabilities of whatever kind or character (collectively, "Claims"), including,

without limitation, any Claims under federal, state, local or foreign law, that

the Releasors may have, or in the future may possess, arising out of (i) your

employment relationship with and service as an employee, officer or director of

the Company, and the termination thereof, (ii) the Letter Agreement, or (iii)

any event, condition, circumstance or obligation that occurred, existed or arose

on or prior to the date hereof; provided, however, that the release set forth in

this Section 4(a) shall not apply to the obligations of the Company under this

Agreement. The Releasors further agree that the payments described in this

Agreement shall be in full satisfaction of any and all Claims for payments or

benefits, whether express or implied, that the Releasors may have against the

Company arising out of your employment relationship with the Company, your

service as an employee, officer or director of the Company and the termination

thereof. The foregoing release of claims shall not apply to any pre-existing

obligations of the Company with respect to any retirement plan, SERP, QSERP or

401(K) plan or benefit in which you participate.

 

         (b) Specific Release of ADEA Claims. In further consideration of the

payments provided to you under this Agreement, the Releasors hereby

unconditionally release and forever discharge the Company and each of its

officers, employees, directors, shareholders and agents from any and all Claims

that the Releasors may have as of the date you sign this Agreement arising under

the Federal Age Discrimination in Employment Act of 1967, as amended, and the

applicable rules and regulations promulgated thereunder ("ADEA"). By signing

this Agreement, you hereby acknowledge and confirm the following: (i) you were

advised by the Company in connection with your resignation to consult with any

attorney of your choice prior to signing this Agreement and to have such

attorney explain to you the terms of this Agreement, including, without

limitation, the terms relating to your release of claims arising under ADEA;

(ii) you were given a period of not fewer than 21 days to consider the terms of

this Agreement and to consult with an attorney of your choosing with respect

thereto; (iii) you are providing the release and discharge set forth in this

Section 4(b) only in exchange for consideration

 

 

<PAGE>

 

in addition to anything of value to which you are already entitled; and (iv)

that you knowingly and voluntarily accept the terms of this Agreement.

 

         (c) Representations. You hereby represent that you have not filed any

action, complaint, charge, grievance or arbitration against the Company or any

of its officers, employees, directors or agents.

 

         (d) Company Release of Claims. In exchange for the benefits and

consideration provided to it pursuant to the terms of this Agreement, the

Company, hereby waives, releases and forever discharges you, your heirs,

representatives, successors and assigns, from any and all claims, known or

unknown, that it has or may have against you arising from any event, condition,

circumstance or obligation that occurred, existed or arose on or prior to the

date hereof, including, but not limited to, any claims relating to, arising out

of, or resulting from your employment by the Company, and/or separation

therefrom.

 

         5. Revocation. This Agreement may be revoked by you within the

seven-day period commencing on the date you sign this Agreement (the "Revocation

Period"). In the event of any such revocation by you, all obligations of the

Company under this Agreement shall terminate and be of no further force and

effect as of the date of such revocation. No such revocation by you shall be

effective unless it is in writing and signed by you and received by the Company

prior to the expiration of the Revocation Period. Notwithstanding anything to

the contrary herein, in the event of any such revocation by you, your

resignation as President and Chief Executive Officer of the Company shall

continue to be effective as of the CEO Resignation Date.

 

         6. Cooperation. You understand that you may be required to execute a

representation letter addressed to the Company's auditors with respect to fiscal

year 2005, as well as other certifications or representations under

Sarbanes-Oxley or other applicable law or regulations (to the extent you are

legally permitted to execute such documents), and you hereby agree to do so at

the request of the Board in connection with your service as President and Chief

Executive Officer during such fiscal year. Your obligation to execute such

representation letter and other certifications or representations shall be

conditioned upon your good faith belief that all necessary underlying reports

made by others in connection with such year-end representations, certifications

and disclosures have also been made in good faith. You agree that, following the

CEO Resignation Date, you shall in good faith use your best efforts to make

yourself available to assist and cooperate with the Company, in connection with

any pending or future governmental or regulatory investigation, civil or

administrative proceeding, litigation or arbitration related to the business of

the Company or to your services as an employee or officer of the Company.

 

         7. Governing Law. This Agreement shall be governed and construed in

accordance with the laws of the State of New York applicable to contracts

executed in and to be performed entirely within the state (without regard to the

choice of law provisions thereof).

 

         8. Public Information Release. The parties agree that a mutually

agreed-to press release/public information statement, in the form of the

attached Exhibit "A," shall be released concerning your separation from the

Company.

 

 

<PAGE>

 

         9. Notices. Any notices required or made pursuant to this 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 Peter J. Kallet:

         At the address and/or facsimile number maintained

         by the Company in its records

 

         If to the Company:

         Oneida Ltd.

         c/o General Counsel

         163-181 Kenwood Avenue

         Oneida, New York 13421

 

or to such other address as either party may furnish to the other in writing in

accordance with this Section 9. Notice of change of address shall be effective

only upon receipt.

 

         10. Successors. This 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. The Company

agrees that in the event of your death, your personal representative(s) shall be

entitled to receive any and all payments then due under this Agreement, and any

and all payments due hereunder through July 28, 2007 (the expiration of the

Transition Period).

 

         11. Miscellaneous Agreements. (a) Notwithstanding any other provision,

the Board and the Company acknowledge that there did not exist at the time of

execution of this Agreement any reason to terminate your services for Cause (as

such term is defined in the Letter Agreement).

 

         (b) The Company agrees that during your services as Vice Chairman you

shall, at your election, be entitled to exclusively utilize your current office

and receive such clerical and administrative support as you deem appropriate.

 

         12. Counterparts. All executed copies of this Agreement shall have the

same force and effect and shall be as legally binding and enforceable as the

original. This Agreement may be executed in counterparts, each of which shall

constitute a single enforceable instrument.

 

         13. Entire Agreement. All prior negotiations and agreements between the

parties hereto with respect to the matters contained herein (including without

limitation, the Letter Agreement) are superseded by this Agreement, and there

are no representations, warranties, understandings or agreements other than

those expressly set forth herein.

 

         Your signature below constitutes your agreement with each provision

contained in this Agreement.

 

 

                                                     ONEIDA LTD.

 

<PAGE>

 

                              By: /s/ FRED SPIVAK

                                 -----------------------

                                 Name: Fred Spivak

                                 Title: Chairman of the Management Development

                                        And Executive Compensation Committee

 

Accepted and agreed:

 

/s/ PETER J. KALLET

------------------------------------

Peter J. Kallet

Date:     3/23/05

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