<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
OUTBOARD MARINE CORPORATION
(Name of Registrant as Specified In Its Charter)
OUTBOARD MARINE CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
LOGO
- --------------------------------------------------------------------------------
OUTBOARD MARINE CORPORATION
December 16, 1994
Dear Shareholder:
You are cordially invited to the Annual Meeting of Shareholders of Outboard
Marine Corporation to be held on Thursday, January 19, 1995, commencing at 9:00
a.m., local time, at the Grove Park Inn, 290 Macon Avenue, Asheville, North
Carolina. The Board of Directors and Management look forward to greeting those
shareholders able to attend the meeting.
At the Annual Meeting you will be asked to consider and vote upon the
election of three directors for a three year term and the ratification of
appointment of independent auditors of the Company.
Your Board of Directors unanimously recommends a vote FOR the election of
directors and the ratification of auditors.
Regardless of the number of shares you own and whether or not you plan to
attend, it is important that your shares are represented and voted at the
meeting. Accordingly, you are requested to sign, date and mail the enclosed
proxy at your earliest convenience.
On behalf of the Board of Directors, thank you for your cooperation and
support.
Sincerely,
LOGO
James C. Chapman
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
OUTBOARD MARINE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------
TO BE HELD JANUARY 19, 1995
The 1995 Annual Meeting of Shareholders of Outboard Marine Corporation will
be held at the Grove Park Inn, 290 Macon Avenue, Asheville, North Carolina, on
Thursday, January 19, 1995, at 9:00 a.m., local time, for the following
purposes:
1.To elect three directors for a three year term;
2.To ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants; and
3. To consider and act upon such other matters as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on November 22, 1994 are
entitled to notice of and to vote at the meeting. A list of such shareholders
shall be open to examination by every shareholder at the meeting and for a
period of ten days prior to the meeting during the Company's normal business
hours, for any purpose germane to the meeting.
Holders of a majority of the Company's outstanding voting shares must be
present in person or by proxy for the meeting to be properly held. Please sign,
date and return the enclosed proxy promptly in the envelope provided. You may
revoke any proxy previously voted by attending the meeting and voting your
shares personally at any time before the voting is closed.
If you plan on attending the Annual Meeting, please make sure to check the
appropriate box on the proxy card.
By order of the Board of Directors
LOGO
Howard Malovany
Secretary
Waukegan, Illinois
December 16, 1994
<PAGE>
PROXY STATEMENT
------------
PROXY SOLICITATION BY BOARD OF DIRECTORS
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Outboard Marine Corporation, a Delaware
corporation and its subsidiaries (the "Company"), of proxies to be used at the
Annual Meeting of Shareholders of the Company to be held on January 19, 1995,
commencing at 9:00 a.m., local time, at the Grove Park Inn, 290 Macon Avenue,
Asheville, North Carolina, or any adjournment thereof. The principal executive
offices of the Company are at 100 Sea Horse Drive, Waukegan, Illinois 60085.
This Proxy Statement and the proxy, accompanied by the Company's 1994 Annual
Report to Shareholders, are being mailed to shareholders on or about December
16, 1994. The Company will bear the cost of soliciting proxies. In addition to
mail solicitation, there may be incidental personal solicitation made by
Officers and employees of the Company. The Company has engaged, at its expense,
the services of D. F. King & Co., Inc., 77 Water Street, New York, New York
10005, to assist in the solicitation of proxies at an estimated fee of $6,000
plus out-of-pocket expenses. A proxy may be revoked, in writing, at any time
prior to its exercise.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The only issued class of capital stock of the Company is $.15 par value
common stock (the "Common Stock"). On November 22, 1994 (the "Record Date"),
there were 19,920,563 shares of Common Stock outstanding. Each share of Common
Stock is entitled to one vote. Only shareholders of record at the close of
business on the Record Date will be entitled to notice of and to vote at the
Annual Meeting.
A majority of the issued and outstanding shares of Common Stock if present in
person or by proxy will constitute a quorum for the transaction of business at
the Annual Meeting of Shareholders. The inspectors of election appointed at the
meeting will determine the existence of a quorum and tabulate the votes cast at
the meeting. Shareholders may withhold authority to vote for one or more of the
nominees for director and may abstain on one or more of the other questions
that may come before the meeting. Shares for which authority is withheld or
abstentions are indicated will be counted as present for general quorum
purposes. Directors are elected by a majority of those shares present in person
or by proxy and entitled to vote at the meeting; votes withheld will be
excluded entirely from the vote and will have no effect. The other questions
expected to come before the meeting require the approval of a majority of the
shares represented in person or by proxy and entitled to vote at the meeting,
and, therefore, abstentions will have the effect of a negative vote. If a
broker indicates on a proxy that it does not have discretionary authority to
vote on a particular question, under applicable Delaware law, those shares will
be counted as present for general quorum purposes, but will not be counted as
votes cast on the question and will have no effect on the outcome of the vote
on such question.
The First Chicago Trust Co. of New York (the "Bank") is the record holder of
shares of Common Stock for participants in the Outboard Marine Corporation
Automatic Dividend Reinvestment and Cash Stock Purchase Plan. The Bank has
advised the Company that it intends to tender its proxy only as directed by
each participant.
NBD Bank, N.A. ("NBD") is the record holder of shares of Common Stock for
participants in the OMC Employee Stock Purchase Plan, the OMC Employees Stock
Ownership and Tax Deferred Savings Plan and the OMC Boat Group 401(k) Plan. NBD
has advised that it intends to tender its proxy only as directed by each
participant.
1
<PAGE>
The following tables set forth information with respect to (i) persons or
groups who are known to the Company to be beneficial owners, as of November 22,
1994, of more than 5% of the outstanding Common Stock (the "Investor Table")
and (ii) beneficial ownership of Common Stock held, as of November 22, 1994, by
each of the Company's Directors, Named Executives and all the Company's
Directors and the Company's elected Officers (the "Executive Officers") as a
group (the "Director and Executive Officer Table"). Beneficial ownership is
defined as the sole or shared power to vote, or direct the disposition of a
security. Except as otherwise indicated, beneficial ownership in the following
tables includes sole voting and dispositive power.
INVESTOR TABLE
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED (1) CLASS
---------------- ------------ -------
<S> <C> <C>
Loomis, Sayles & Company, Inc.
One Financial Center
Boston, Massachusetts 02111-2660..................... 1,906,093 9.58%
Sanford C. Bernstein Co., Inc.
767 Fifth Avenue
New York, New York 10153............................. 1,814,543 9.12%
Fidelity Management & Research
82 Devonshire Street
Boston, Massachusetts 02109-3614..................... 1,677,208 8.43%
NM Capital Management, Inc.
5917 Lookout Mountain Drive
Austin, Texas 78731.................................. 997,530 5.02%
</TABLE>
- --------
(1) Owned by the named company or its affiliates which are registered
investment advisers and held for the benefit of one or more persons.
DIRECTOR AND EXECUTIVE OFFICER TABLE
<TABLE>
<CAPTION>
SHARES OPTION SHARES
BENEFICIALLY BENEFICIALLY
OWNED (1) OWNED (2)
------------ -------------
<S> <C> <C>
DIRECTORS
---------
James C. Chapman............................... 47,065 130,550
Frank Borman................................... 2,100 --
William C. France.............................. 835 --
Urban T. Kuechle............................... 3,338(3) --
Richard T. Lindgren............................ 24,738 --
J. W. Marriott, Jr............................. 5,838 --
Richard J. Stegemeier.......................... 1,738 --
Charles D. Strang.............................. 21,478 --
Richard F. Teerlink............................ 1,735 --
NAMED EXECUTIVES AND EXECUTIVE OFFICERS (4)
-------------------------------------------
L. Earl Bentz.................................. 8,500 5,415
Ronald J. Jensen .............................. 9,362 10,825
D. Jeffrey Baddeley ........................... 8,300 9,750
William T. Ek.................................. 6,725 10,725
Robert D. Randolph (5)......................... 3,437 64,600
Directors and Executive Officers as a group
(20 persons).................................. 185,169 212,535
</TABLE>
- --------
(1) Except as otherwise noted, the named individuals and members of the group
have sole voting and investment power as to the shares they own
beneficially except for restricted shares, which are included, over which
they currently have voting power only. All Directors and Executive Officers
as a group own
2
<PAGE>
approximately 1% of the Company's outstanding Common Stock. No Director or
Executive Officer owns beneficially more than 1% of such stock.
(2) Shares that could be acquired within 60 days following November 22, 1994
through the exercise of stock options prior to any cancellation thereof, as
described herein.
(3) This does not include 200 shares beneficially owned by Mr. Kuechle's wife
as to which Mr. Kuechle disclaims beneficial ownership.
(4) Mr. Chapman, as Chief Executive Officer, is a Named Executive and
information with respect to his beneficial holdings of Common Stock is set
forth above under the heading "Directors".
(5) Mr. Randolph resigned his positions effective August 1, 1994.
1. ELECTION OF DIRECTORS
The Board presently consists of nine members, one of whom is an Executive
Officer of the Company.
The Directors are divided into three classes. At each Annual Meeting of
Shareholders, Directors of a given class are elected for a three year term. The
current term of office of the Class III Directors is to expire on the date of
the 1995 Annual Meeting of Shareholders.
It is intended that votes will be cast, pursuant to the accompanying proxy,
FOR the election of Richard T. Lindgren, Richard J. Stegemeier and Richard F.
Teerlink as Class III Directors ("Nominees"). In the event any of the Nominees
should become unavailable, it is intended that votes will be cast, unless
otherwise instructed pursuant to the enclosed proxy, for such substitute
nominee or nominees as may be nominated by the Board. The Board is unaware of
any need for substitution of Nominees.
NOMINEES AND DIRECTORS
Names of and information concerning the Nominees, and the other Directors
whose terms will continue after the 1995 Annual Meeting of Shareholders,
together with certain additional information, are set forth below. All persons
listed are now serving as Directors and have been previously elected by the
shareholders. To the knowledge of the Company, there are no family
relationships between any Director or Executive Officer and any other Director
or Executive Officer. An affirmative vote of a majority of those shares
represented and entitled to vote at the meeting where a quorum is present is
required to elect Directors.
NOMINEES
Class III Directors
Richard T. Lindgren
President, The Lorr Corporation (Detroit, MI), a private investment company.
Mr. Lindgren has been President since 1989. Mr. Lindgren was President, Chief
Executive Officer and a Director of Cross and Trecker Corporation (Bloomfield
Hills, MI) from 1982 until 1988. Mr. Lindgren is also Chairman of the Board of
Robert Sinto Corporation (Lansing, MI), a foundry engineering and equipment
manufacturer, a Director of Sinto America, Inc. parent of Robert Sinto
Corporation and a Trustee of Suomi College (Hancock, MI).
A Director since 1980. Mr. Lindgren is a member of the Compensation and
Nominating Committees. Age 67.
Richard J. Stegemeier
Chairman of the Board of Unocal Corporation (Los Angeles, CA), an integrated
petroleum company. Mr. Stegemeier has been Chairman since April 1989 and was
Chief Executive Officer from 1988 through 1994. From December 1985 to June 1992
he was President, and from December 1985 to July 1988 he was
3
<PAGE>
Chief Operating Officer. Mr. Stegemeier is also a director of First Interstate
Bancorp (Los Angeles, CA), Northrop Corporation (Los Angeles, CA), Halliburton
Company (Dallas, TX) and Foundation Health Corporation (Rancho Cordova, CA).
A Director since 1990. Mr. Stegemeier is Chairman of the Compensation
Committee and a member of the Audit, Nominating and Search Committees. Age 66.
Richard F. Teerlink
President and Chief Executive Officer of Harley-Davidson, Inc. (Milwaukee,
WI), a manufacturer of specialty motor vehicles. Mr. Teerlink was Chief
Financial Officer from 1981 until 1987; President and Chief Operating Officer
from 1988 until 1989 and President and Chief Executive Officer since 1989. From
1987 until 1988 Mr. Teerlink was President and Chief Operating Officer of
Harley-Davidson, Inc.'s Motorcycle Division.
A Director since 1990. Mr. Teerlink is Chairman of the Nominating and Search
Committees and a member of the Compensation Committee. Age 58.
YOUR BOARD RECOMMENDS YOU VOTE "FOR" ALL NOMINEES. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY
CHOICE IN THEIR PROXIES.
OTHER DIRECTORS
Frank Borman
Chairman of the Board and Chief Executive Officer of Patlex Corporation (Las
Cruces, NM), a laser technology patent royalty company. Mr. Borman has been
Chairman and Chief Executive Officer since 1988. Mr. Borman was Chairman of the
Board and Chief Executive Officer of Eastern Airlines, Inc. from 1976 until he
retired in 1986. He is also a Director of AutoFinance Group, Inc. (Westmont,
IL), American Superconductor Corp. (Watertown, MA), Home Depot Companies
(Atlanta, GA) and Thermo Instrument Systems, Inc. (Boston, MA) and is a member
of the Board of Trustees of the National Geographic Society.
A Director since 1985 (present term expires in 1997). Mr. Borman is a member
of the Audit, Compensation and Search Committees. Age 66.
James C. Chapman
Chairman of the Board, President and Chief Executive Officer of the Company.
Mr. Chapman has been President since 1985, Chief Executive Officer since 1990
and Chairman of the Board of Directors since 1993. Mr. Chapman was Vice
President, Manufacturing of the Company from 1978 until 1985. Mr. Chapman is
also a Director of Clark Equipment Company (South Bend, IN) and University of
Detroit Mercy (Detroit, MI).
A Director since 1985 (present term expires in 1997). Age 63.
William C. France
Chairman of the Board, President and Chief Executive Officer of International
Speedway Company (Daytona Beach, FL), an owner and operator of three automobile
racing facilities. Mr. France has been President and Chief Executive Officer
since 1981 and Chairman since 1987. Mr. France is also President of the
National Association of Stock Car Automobile Racing (Daytona Beach, FL).
4
<PAGE>
A Director since 1985 (present term expires in 1996). Mr. France is a member
of the Audit and Nominating Committees. Age 61.
Urban T. Kuechle
Consultant. Mr. Kuechle has been a consultant since 1980. Mr. Kuechle was
previously Senior Vice President, The Laub Group, Inc. (Milwaukee, WI), an
insurance brokerage firm and prior to that, President and then Vice Chairman of
A.O. Smith Company (Milwaukee, WI).
A Director since 1968 (present term expires in 1996). Mr. Kuechle is Chairman
of the Audit Committee and a member of the Compensation and Nominating
Committees. Age 84.
J. W. Marriott, Jr.
Chairman of the Board, President and Chief Executive Officer of Marriott
International, Inc. (Washington, DC), a diversified lodging and services
management company. Mr. Marriott became Chief Executive Officer of Marriott
Corporation in 1972 and was named Chairman of the Board in 1985. Mr. Marriott
is also a Director of Host Marriott Corporation (formerly Marriott Corporation;
Washington, D.C.) and General Motors Corporation (Detroit, MI), a Trustee of
the Mayo Foundation and the National Geographic Society and a member of The
Conference Board, The Business Council and The Business Roundtable.
A Director since 1986 (present term expires in 1997). Mr. Marriott is a
member of the Compensation and Nominating Committees. Age 62.
Charles D. Strang
Consultant. Mr. Strang has been a consultant since 1990. Mr. Strang was
Chairman of the Board of Directors from 1982 to 1993, Chief Executive Officer
from 1980 to 1990 and President of the Company from 1974 until 1985.
A Director since 1970 (present term expires in 1996). Mr. Strang is a member
of the Audit and Search Committees. Age 73.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met seven times during the 1994 fiscal year. Board
Committees included Audit, Compensation, Finance, Management Review and
Nominating which during the year met two, four, two, one and one times,
respectively. At the Board meeting held September 7, 1994 the Finance Committee
and the Management Review committee were discontinued and their
responsibilities have been absorbed by the Board. In addition, the Board
established a Search Committee for the sole purpose of searching for a
candidate to become the Company's next President and Chief Operating Officer.
The members of the Search Committee are Richard F. Teerlink, Chairman, Frank
Borman, Richard J. Stegemeier and Charles D. Strang.
The Audit Committee consists of five non-employee Directors. This Committee
oversees the Company's financial reporting process and internal controls,
reviews any significant issues concerning litigation and contingencies, meets
with independent public accountants and internal auditors to discuss the
results of their examinations, reviews the insurance programs of the Company,
and monitors compliance with the Company's Code of Conduct and other policies
on ethical business practices. This Committee also consults with management,
the internal auditors and the independent public accountants on matters related
to the annual audit plan, audit procedures applied, audit and non-audit fees,
status of federal tax returns and related reserves, the published financial
statements, the accounting principles applied and any material changes thereto.
5
<PAGE>
The Compensation Committee consists of six non-employee Directors. This
Committee reviews and approves management's recommendations with respect to a
competitive, fair and equitable compensation and benefits policy designed to
retain personnel, stimulate their useful and profitable efforts on behalf of
the Company and attract necessary and qualified additions to staff; reviews,
approves and administers the Company's executive compensation plans and, after
taking into consideration the recommendations of management, determines the
salaries and incentive compensation of the Executive Officers of the Company
and its foreign and domestic subsidiaries, including but not limited to annual
bonuses and grants of stock options, restricted stock and performance units or
shares; carries out the administrative responsibilities for the Company's
compensation programs applicable to executives; reviews annually the
performance of the Company's Chief Executive Officer vis-a-vis the Company's
performance and based upon such review, recommends to the Board appropriate
compensation adjustments and bonus awards, if any; and acts on, reports to and
makes recommendations with respect to specific matters within delegated
authority.
The Nominating Committee consists of seven non-employee Directors. This
Committee develops and recommends the criteria for the selection of candidates
to serve on the Board which include whether the potential candidate's principal
employment, occupation or association involves an active leadership role,
whether the potential candidate has expertise or experience relevant to the
Company's business that would not be otherwise readily available to the Board,
whether the potential candidate brings diversity to the Board, and with respect
to incumbent directors, how the potential candidate performed and contributed
during his or her most recent term; develops and recommends the procedure for
the selection of candidates to serve on the Board; reviews and recommends the
number of members of the Board; recommends the slate of nominees to be proposed
for election by the shareholders of the Company at the Company's annual
meeting; recommends nominees to fill vacancies on the Board; considers and
recommends the number, size and composition of committees of the Board; reviews
and recommends the compensation and retirement programs for members of the
Board; reviews the performance of the members of the Board; reviews the
performance of the Chief Executive and Chief Operating Officers; reviews,
develops and recommends plans and proposals for management succession with
respect to the Chief Executive and Chief Operating Officers; and acts on,
reports to and makes recommendations with respect to specific matters within a
delegated authority. The Committee will consider nominees recommended by
shareholders for existing vacancies. For a shareholder to properly bring a
nomination for a Director before the Annual Meeting of Shareholders, such
shareholder must give the Company written notice, received by the Secretary of
the Company, at least sixty (60) days prior to the date one year from the date
of the immediately preceding annual meeting of shareholders. Such notice must
contain, for each person such shareholder intends to nominate, the name, age,
business address and residence address of the person, the principal occupation
or employment of the person, the class and number of shares of stock of the
Company which are beneficially owned by the person and any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of Directors pursuant to Rule 14a under the Securities
Exchange Act of 1934. The shareholder must provide such shareholder's name and
address and the class and number of shares such shareholder beneficially owns
as of the record date for the shareholder's meeting.
In fiscal year 1994, no Director attended fewer than 75 percent of the
aggregate number of meetings of the Board and the Board Committees on which
such Director served except for Richard F. Teerlink.
Directors who are not employees of the Company receive an annual retainer of
$25,000 and a fee of $1,000 for each Board and Board Committee meeting
attended, provided no Director will be paid for more than two meetings held in
any one day. Directors who are employees of the Company receive no remuneration
or fees, as such, for serving as Directors.
Beginning April 14, 1993, Mr. Strang agreed not to compete with the Company
for up to ten years, for which the Company is paying Mr. Strang $100,000 per
year.
Each Director is a participant in the Retirement Plan for Non-Employee
Directors (the "Director's Retirement Plan"). The Director's Retirement Plan
provides an annual retirement benefit equal to ten percent (10%) of the
Director's retainer, as of the date of retirement, times the years of service
as a Director, up to a
6
<PAGE>
maximum of 100% of the retainer. The benefit begins to vest after six (6) years
of service (10% per year) and is payable for the life of the Director.
Under the Stock Purchase Plan for Non-Employee Directors, non-employee
Directors of the Company are entitled to have all or a portion of their
retainer used to purchase Common Stock at a price not less than eighty-five
percent (85%) of the fair market value of the Common Stock on the date of
purchase. Receipt of the Common Stock may be deferred for any period of time
chosen by the Director. The Director must make the election to receive or defer
receipt of stock, or change any such election, no less than six (6) months
prior to the date the retainer would ordinarily have been received. As long as
the stock is held or deferred, the Director will receive dividends, as and if
declared, and will have the right to vote the stock. Payment of deferred
amounts may be altered by the Committee in the case of financial hardship or
change of control.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and long-
term compensation paid or to be paid to those persons who were, at September
30, 1994, (i) the chief executive officer, (ii) the other four most highly
compensated Executive Officers of the Company and (iii) individuals who would
have been one of the four most highly paid Executive Officers but for the fact
that they were not serving as an Executive Officer on September 30, 1994 (the
"Named Executives") for services rendered in all capacities to the Company for
the 1994, 1993 and 1992 fiscal years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------- -------------------------------
OTHER
ANNUAL RESTRICTED SECURITIES
NAME AND COMPEN- STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL SALARY BONUS SATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($)(1) ($)(2) # ($) ($)(3)
--------- ---- ------ ----- ------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. C. Chapman, 1994 467,000 424,833 55,915 0 30,600 126,419 48,496
Chairman,
President and 1993 459,388 0 40,027 456,950 67,100 69,970 52,129
Chief Execu-
tive Officer 1992 400,000 600,000 39,285 0 21,100 310,923 7,934
L. E. Bentz, 1994 201,500 104,022 (1) 0 6,400 0 5,589
Vice President
and 1993 201,500 0 11,670 157,200 17,100 0 826
President, OMC
Fishing 1992 188,300 160,288 3,000 0 3,800 0 0
Boat Group,
Inc.
R. J. Jensen, 1994 193,333 112,980 (1) 0 7,900 21,007 4,028
Vice President
and 1993 169,202 0 14,272 170,200 14,300 11,226 3,787
President, In-
ternational 1992 133,000 111,383 8,139 0 3,500 36,078 339
Group
D. J.
Baddeley, 1994 175,000 92,273 (1) 0 6,100 21,382 20,871
Vice President
and 1993 155,208 0 24,977 153,550 12,300 11,380 20,656
General Coun-
sel 1992 135,000 113,063 22,000 0 3,600 0 636
W. J. Ek, 1994 158,600 101,084 (1) 0 6,400 0 6,634
Vice President
and 1993 161,308 0 5,287 123,950 13,500 0 0
President, OMC 1992 147,500 182,410 2,827 0 3,800 0 0
Aluminum Boat
Group,
Inc.
R. D. Ran-
dolph, 1994 187,500 188,313 (1) 0 0 64,127 26,879
Former Execu-
tive Vice 1993 250,000 0 26,272 244,200 31,700 37,523 26,668
President and
Chief 1992 215,000 241,875 30,425 0 11,300 90,118 2,985
Operating Of-
ficer (4)
</TABLE>
7
<PAGE>
NOTES TO SUMMARY COMPENSATION TABLE
(1) With the exception of Mr. Chapman, no other Named Executive's Other Annual
Compensation reached the level required for disclosure. The amount listed
for Mr. Chapman includes amounts paid by the Company for financial and
estate planning and tax preparation advice of $30,488 and amounts paid by
the Company representing the allocable expense for a leased automobile of
$20,249.
(2) In September 1993, for fiscal 1994, most Executive Officers were granted
Restricted Stock at a value of $18.50 per share on the date of grant in
lieu of a salary increase. The number of shares granted were 131,000,
having an aggregate value on the date of grant of $2,425,350. Based on the
value of a share of Common Stock as of September 30, 1994 the aggregate
value of all outstanding shares of Restricted Stock granted to Executive
Officers was $2,127,125. The Restricted Stock will not vest for five years
from the date of grant. During the restricted period, the Executive
Officers will receive dividends and will have the right to vote the stock.
If the Executive Officer (including a Named Executive) does not remain in
the employ of the Company for the entire five year period other than for
retirement, death, disability or a change of control, such Executive
Officer's restricted stock will be forfeited.
(3) Includes matching contributions to the OMC Employee Stock Ownership and
Taxed Deferred Savings Plan in the amount of $1,320, $1,414, $0, $1,312,
$1,083 and $1,320 and the dollar value of insurance premiums paid by the
Company of $47,176, $4,175, $4,028, $19,559, $5,551 and $25,559 for the
benefit of Messrs. Chapman, Bentz, Jensen, Baddeley, Ek and Randolph,
respectively. Mr. Randolph received compensation from the Company as a
result of an agreement with the Company as further described below under
the heading "Severance Agreements".
(4) Mr. Randolph resigned his positions effective August 1, 1994.
OPTION EXERCISES IN THE 1994 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table shows information on the exercise in the 1994 fiscal year
of options to purchase Common Stock by the Named Executives, all current
Executive Officers as a group and all other employees as a group. Also shown
are the unexercised options to purchase Common Stock as of September 30, 1994
and the value of in-the-money options as of such date.
<TABLE>
<CAPTION>
VALUE OF IN-THE-MONEY
NUMBER OF OPTIONS UNEXERCISED OPTIONS
SHARES UNEXERCISED AT YEAR END AT YEAR END (1)
ACQUIRED OR VALUE ------------------------- -------------------------
EXERCISED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. C. Chapman........... 0 0 116,345 56,655 1,480,937 1,086,988
L. E. Bentz............. 4,760 20,860 2,175 13,965 40,238 267,143
R. J. Jensen............ 2,000 29,750 8,325 11,775 142,775 224,663
D. J. Baddeley.......... 2,800 42,000 7,495 10,305 130,781 196,832
W. J. Ek................ 0 0 7,935 11,265 139,739 216,011
R. D. Randolph ......... 0 0 57,335 27,165 734,079 522,471
All current Executive
Officers
as a group............. 9,560 92,610 170,155 136,260 2,515,646 2,611,836
All other employees as a
group.................. 181,855 2,040,730 327,020 219,450 5,365,872 4,221,356
</TABLE>
- --------
(1) Value of in-the-money options determined by multiplying the number of
exercisable or unexercisable options by $22.75, the closing price of the
Company's Common Stock on September 30, 1994, and subtracting the option
price.
8
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL YEAR 1994
The following table describes the performance shares granted to the Named
Executive Officers during the Company's 1994 fiscal year under the 1994 OMC
Long-Term Incentive Plan (the "LTIP"). With respect to the LTIP, the grants
cover the three year award cycle October 1, 1994 through September 30, 1997. No
distribution of performance shares, whether in cash or stock, will be made
until after the end of the three year award cycle and the Compensation
Committee has determined the extent to which the Company has achieved the
performance goals set at the beginning of each award cycle. The initial value
of each performance share granted under the LTIP was $24.208. The initial value
was the average of the closing price for a share of Common Stock on the New
York Stock Exchange for the month of September 1994. The performance goals set
for these performance shares are (1) the average of the absolute return on
investment for the three year award cycle, (2) return on investment improvement
for the three year award cycle over the prior three year award cycle and (3)
total shareholder return on the Common Stock as compared to the return on the
S&P 400 measured over the three year award cycle. For a complete description of
these performance goals, see the Report of the Compensation Committee under the
heading "Long-Term Incentive Compensation" beginning on page 14 of this Proxy
Statement. The performance shares will be paid in stock or cash at the
discretion of the Compensation Committee.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
NUMBER OF PERFORMANCE (1) (POTENTIAL SHARES)
PERFORMANCE PERIOD ------------------------
SHARES UNTIL THRESHOLD TARGET MAXIMUM
NAME GRANTED (2) PAYOUT (#) (#) (#)
- ---- ----------- ----------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
J. C. Chapman.................. 15,600 3 Years 15.6 15,600 23,400
L. E. Bentz.................... 3,100 3 Years 3.1 3,100 4,650
R. J. Jensen................... 4,000 3 Years 4.0 4,000 6,000
D. J. Baddeley................. 3,100 3 Years 3.1 3,100 4,650
W. J. Ek....................... 3,100 3 Years 3.1 3,100 4,650
R. D. Randolph................. 0 -- 0 0 0
</TABLE>
- --------
(1) The number of shares to be paid upon the completion of an award cycle will
depend entirely on the extent to which the Company achieves the performance
goals set at the beginning of the award cycle. The payout at the Threshold
level will be 0.1%, the payout at the Target level will be 100% and the
payout at the Maximum level will be 150% of the number of performance
shares originally granted. If the payment is in cash, as determined by the
Compensation Committee, the amount of the payout will be the number of
performance shares earned, as set forth above, times the closing price of a
share of Common Stock on September 30, 1997.
(2) Performance shares granted at $24.208 in September 1994 for the three year
award cycle October 1, 1994 through September 30, 1997.
OPTION GRANTS IN THE 1994 FISCAL YEAR
The following table provides information on the grants of options to purchase
Common Stock given to the Named Executives on September 7, 1994.
<TABLE>
<CAPTION>
% OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED EXERCISE POTENTIAL
UNDERLYING TO ALL PRICE REALIZABLE VALUE($)
OPTIONS/SARS EMPLOYEES PER (4)
GRANT GRANTED (#) IN 1994 SHARE($) EXPIRATION ---------------------
NAME DATE (1) (2) (3) DATE 0% 5% 10%
- ---- ------ ------------ --------- -------- ---------- -- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. C. Chapman........... 9/7/94 30,600 15% 24.625 9/8/2005 0 535,255 1,396,370
L. E. Bentz............. 9/7/94 6,400 3% 24.625 9/8/2005 0 111,949 292,051
R. J. Jensen............ 9/7/94 7,900 4% 24.625 9/8/2005 0 138,187 360,500
D. J. Baddeley.......... 9/7/94 6,100 3% 24.625 9/8/2005 0 106,701 278,361
W. J. Ek................ 9/7/94 6,400 3% 24.625 9/8/2005 0 111,949 292,051
</TABLE>
9
<PAGE>
- --------
(1) All options vest over a four-year period; 25% of the option grant being
exercisable at the end of the first year after the grant date, and an
additional 25% each year thereafter.
(2) In the 1994 fiscal year 130 employees received stock options.
(3) Exercise Price is the closing price of a share of the Common Stock on the
grant date.
(4) The amounts set forth reflect the potential realizable value of the options
granted at assumed annual rates of stock price appreciation of 5% and 10%
through the expiration date of the options (eleven years). The use of 5%
and 10% is pursuant to Securities and Exchange Commission requirements and
is not intended by the Company to forecast possible future appreciation.
BENEFIT PLANS
RETIREMENT PLANS
OUTBOARD MARINE CORPORATION
The Outboard Marine Corporation Employees Retirement Plan (the "Retirement
Plan") provides a fixed benefit determined on the basis of years of service and
final average base earnings. In addition to the benefits from the Retirement
Plan, participants in the Company's annual incentive compensation plan(s) are
eligible for retirement benefits from a supplemental non-qualified retirement
plan. The retirement benefits under the non-qualified plan are based upon
amounts paid under the annual bonus plan as well as salary, and the total
retirement benefits payable under the plans may exceed the maximum benefits
payable under the Employee Retirement Income Security Act of 1974, as amended.
Upon a change of control of the Company and certain other actions by an
acquirer, all participants of the Retirement Plan would become vested in any
excess of plan assets over total accumulated benefit obligations.
Participants in the plans who are not Executive Officers receive an aggregate
benefit equal to 1.7% for each year of credited service times the average of
the five highest consecutive annual earnings (base annual salary rate plus
incentive compensation earned in the same year under an annual incentive
compensation plan) during such participant's last ten years of employment. An
Executive Officer who participates in the plans will receive a benefit equal to
1.7% for each year of credited service as a non-Executive Officer and 2.55% for
each year of credited service as an Executive Officer times the average of the
three highest annual earnings during the last ten years of such participant's
tenure with the Company. The total annual benefit payable from these two plans
is shown in the table below for selected average base earnings levels and years
of service based upon certain assumptions including all years of credited
service as an Executive Officer, retirement at age 65 and election of a single
life annuity for the benefit payment.
The approximate annual benefits shown in the table below are for the Named
Executive participants and are not subject to social security offset but are
subject to offset for any benefits payable from retirement programs of the
Company's foreign subsidiaries.
ANNUAL BENEFIT FOR NAMED EXECUTIVE PARTICIPANTS FOR SELECTED YEARS OF SERVICE
<TABLE>
<CAPTION>
AVERAGE ANNUAL 10 15 20 OR
BASE EARNINGS 5 YEARS YEARS YEARS MORE YEARS
-------------- ------- ----- ----- ----------
<S> <C> <C> <C> <C>
$ 150,000 19,000 38,500 57,500 76,500
250,000 32,000 64,000 95,500 127,500
300,000 38,000 76,500 115,000 153,000
500,000 64,000 127,500 191,000 255,000
900,000 115,000 229,500 344,500 459,000
1,300,000 166,000 331,500 497,000 663,000
</TABLE>
As of December 31, 1994, Messrs. Chapman, Bentz, Jensen, Baddeley, Ek and
Randolph will have 16.92, 2.0, 20.33, 4.92, 8.17 and 10.17 respectively,
credited years of service under the Company's retirement plans of which 16.25,
2.0, 3.9, 4.92, 1.9 and 8.25, respectively, credited years of service will be
as an Executive
10
<PAGE>
Officer of the Company. The total estimated annual benefit payable from these
two plans for Messrs. Chapman, Bentz, Jensen, Baddeley, Ek and Randolph based
upon certain assumptions including actual years of credited service as a non-
Executive Officer and Executive Officer, as the case may be, current age and
base earning levels, and election of a single life annuity for the benefit
payment is $292,114, $10,196, $83,555, $25,498, $21,914 and $80,342
respectively, which payments are not subject to social security offset but are
subject to offset for any benefits payable from retirement programs of the
Company's foreign subsidiaries.
SEVERANCE AGREEMENTS
The Company has entered into a severance agreement with Mr. Chapman, which
has a one year term and is automatically extended from year to year. This
severance agreement, which applies only upon a change of control of the
Company, provides that if Mr. Chapman (i) elects to resign, or (ii) is
terminated by the Company other than for cause, the Company will pay Mr.
Chapman an amount, in cash, equal to (1) a fraction, the numerator of which is
equal to the lesser of thirty-six or the number of full and partial months
existing between the date Mr. Chapman terminates employment and his 65th
birthday and the denominator of which is twelve, multiplied by (2) his then
current base salary plus the highest amount of incentive compensation received
by him in the five years preceding the change of control. In addition, the
Company will pay Mr. Chapman, in cash, amounts accelerated, earned, allocated
or deferred under the Company's pension, retirement, compensation or Annual and
Long-Term Incentive Plans, plus an amount, if applicable, required to be paid
by Mr. Chapman pursuant to the application of Section 4999 of the Code.
The Company has also entered into severance agreements with its other current
Executive Officers, including the Named Executives. Each of these agreements
has a one year term which is automatically extended from year to year. These
severance agreements, which apply only upon a change of control of the Company,
provide that if such Executive Officer (i) elects to resign his employment for
certain specified reasons, or (ii) is terminated by the Company other than for
cause, the Company will pay such Executive Officer an amount, in cash, equal to
(1) a fraction, the numerator of which is equal to the lesser of twenty-four
and the number of full and partial months existing between the date such
Executive Officer terminates employment and his 65th birthday and the
denominator of which is twelve, multiplied by (2) such Executive Officer's then
current base salary plus the highest amount of incentive compensation received
by such Executive Officer in the five years preceding the change in control. In
addition, the Company will pay such Executive Officer, in cash, amounts
accelerated, earned, allocated or deferred under the Company's pension,
retirement, compensation or Annual and Long-Term Incentive Plans.
No amounts are expensed by the Company for financial reporting purposes with
respect to any severance agreement.
For purposes of the severance agreements referred to above, a change of
control of the Company shall generally be deemed to have occurred if (1) any
person, other than the Company or fiduciaries holding securities under an
employee benefit plan of the Company, is or becomes the beneficial owner of
securities of the Company representing 15% or more of the combined voting power
of the Company's then outstanding securities; (2) during any period of two
consecutive years, individuals, who, at the beginning of such period,
constitute the Board and certain new Directors (other than certain Directors
designated by a person who has entered into certain change of control
transactions), whose election by the Board or nomination for election by the
Company's shareholders is approved by a vote of at least two-thirds of the
Directors then still in office, cease for any reason to constitute a majority
thereof; (3) the shareholders of the Company approve a merger or consolidation
of the Company with any other company, other than certain transactions in which
the voting securities of the Company continue to represent at least 80% of the
combined voting power of the Company or such surviving entity following such
transaction or certain recapitalizations in which no person acquires more than
15% of the combined voting power of the Company's then outstanding securities;
(4) the shareholders of the Company approve a plan of complete liquidation of
the Company; or (5) the Company enters into an agreement for the disposition of
all or substantially all the Company's assets or the Company otherwise disposes
of such assets.
11
<PAGE>
On August 1, 1994 (the "Termination Date") Robert D. Randolph resigned as
Executive Vice President, Chief Operating Officer and Director of the Company.
Mr. Randolph and the Company entered into an agreement pursuant to which the
Company would provide certain benefits to Mr. Randolph. Pursuant to the
agreement, the Company would (1) through July 31, 1997 continue to pay Mr.
Randolph's salary in effect on the Termination Date, (2) through July 31, 1997
provide the medical, health and life insurance coverage in existence as of the
Termination Date, (3) for the 1994 fiscal year, to the extent the Company
otherwise pays an annual bonus under its Executive Bonus Plan, pay an amount to
Mr. Randolph equal to the amount to which he would have been entitled as if he
were an employee of the Company through the end of such fiscal year, (4) pro
rate the amount of performance units and shares earned for the 1994, 1995 and
1996 fiscal years based on the Termination Date, (5) continue to accrue
benefits under its retirement and supplemental retirement plans through July
31, 1997 and (6) pay certain life insurance premiums for a period ending
October 1, 2001. In consideration of these benefits, Mr. Randolph agreed (1)
the Severance Agreement he previously held would terminate as of August 1,
1994, (2) all shares and benefits of Restricted Stock granted to him in
September 1993 would be forfeited and (3) he would not compete with the Company
for a period of time ending January 31, 1999.
REPORT OF THE COMPENSATION COMMITTEE
GOALS OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is made up of six non-employee
Directors. Its charter is to:
1. Review and approve a competitive, fair and equitable compensation and
benefits policy designed to retain personnel, to stimulate their useful
and profitable efforts on behalf of the Company and to attract necessary
additions to the staff with appropriate qualifications;
2. Review, approve and administer the Company's executive compensation
plans and determine the salaries and incentive compensation of the
Executive Officers of the Company and its foreign and domestic
subsidiaries; and
3. Review annually the performance of the Company's Chief Executive Officer
vis-a-vis the Company's performance and, based upon such review,
recommend to the Board appropriate compensation adjustments and bonus
awards, if any.
To carry out this charter, the Committee's current objectives are to use
incentives to support the Company's strategies and provide executives ownership
opportunities for their successful execution. The Committee will, if necessary
to satisfy Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), certify the attainment of these incentives.
Section 162(m) of the Code denies a tax deduction to any publicly held
corporation such as the Company for compensation in excess of $1 million paid
to any Named Executive. Certain performance-based compensation, however, is
specifically exempt from the deduction limit. The determination of whether
compensation is performance-based depends on several factors including: whether
the compensation is payable solely on account of the attainment of one or more
nondiscretionary objective performance goals established by an independent
compensation committee of the board of directors; whether there has been
disclosure to and approval by the shareholders of performance standards to be
used in determining awards under the plan; whether the company's compensation
committee is composed solely of "outside" directors; and whether prior to the
payment of such compensation, the compensation committee has certified that
applicable performance standards have been satisfied. Section 162(m) became
effective January 1, 1994 and is applicable to the Company's fiscal year that
commenced October 1, 1994.
The Committee met four times in the 1994 fiscal year.
12
<PAGE>
In addition to reports and recommendations from senior management, the
Committee has relied on the services of Frederick W. Cook & Co., Inc. and
Hewitt Associates as well as other nationally known compensation consulting
firms, for information regarding appropriate compensation levels and programs.
The Committee's compensation philosophy is based on several criteria,
including, but not limited to, the financial and operational goals recommended
by the Company's senior management and approved by the Board for the Company,
as a whole, as well as significant business units; performance by the
executives in achieving these goals; and the need to attract, retain and
motivate executives to execute and exceed the Company's plans and programs.
For the Company's 1994 fiscal year, the primary criteria used in evaluating
Company performance were (i) return on investment, both in absolute terms and
as compared to prior years, (ii) the total shareholder return of the Company's
stock compared to the total return of the S&P 400 Index and (iii) business unit
profitability for evaluating business unit performance. The Company's
performance for the fiscal year just ended met or exceeded the goals set at the
beginning of the year.
BASE SALARY
For three of the last four years, the Company's financial performance failed
to meet its goals. For two of those years, 1991 and 1993, the Company reported
substantial losses with a small profit being reported for fiscal 1992. For
fiscal 1991 and 1992 the Company gave no salary increases to exempt employees,
including the Named Executives. For fiscal 1993, salary increases for all
exempt employees, including the Named Executives, averaged approximately 7%. In
fiscal 1994 most Executive Officers received a grant of restricted stock in
lieu of a salary increase in order to encourage them to remain with the Company
and to increase their stock ownership. The amount of the restricted stock
grants attempted to take into account the cumulative effect of the loss of the
single year salary increase. The restricted stock will not vest for five years
and during that period, dividends will be paid to the Executive Officer and the
Executive Officer will be able to vote the shares. For fiscal 1995, salary
increases for all exempt employees, including the Named Executives, averaged
approximately 4.2%.
It is the Committee's practice to target base annual salary at the 50th
percentile of executives at other manufacturing companies and competitors with
comparable levels of responsibility and individual performance. Individual
performance is evaluated each year by the Committee and recommendations for
salary adjustments, for all Executive Officers, are made by the Committee to
the Board each September. The Committee has the authority, without Board
approval, to set the salary ranges and adjustments for all other employees.
ANNUAL INCENTIVE COMPENSATION
The Executive Bonus Plan is designed to add incentive for executives to
execute and exceed the Company's plans and receive annual rewards for that
execution. Under the Executive Bonus Plan 50% of the reward is based on
absolute return on investment for the fiscal year and 50% on the improvement in
return on investment over the average of the prior three fiscal years. The
target amount of annual incentive compensation is determined by the executive's
salary grade. The Named Executives' target bonus amounts range from 35% to 60%
of base annual salary. The Chief Executive Officer's target bonus amount equals
60% of salary. The target award, when added to base annual salary, is intended
to result in total annual compensation at approximately the 50th percentile of
competitive annual compensation, as discussed under the heading "Base Salary"
above. Each executive can earn up to 175% of that target amount depending on
the extent to which the Company achieves its annual performance targets and the
individual performs vis-a-vis pre-determined annual goals. There will be no
corporate bonus paid unless absolute return on investment ("AROI") exceeds 3%
and a maximum award if AROI exceeds 15%. There will be no corporate award for
the annual return on investment improvement goals ("ROII") unless ROII is
greater than 0% and there will be a maximum award if ROII exceeds 4%.
13
<PAGE>
No annual incentive compensation was earned in the 1993 fiscal year by any
employee, including the Named Executives. For fiscal 1994 incentive
compensation was earned at 150.6% of target as a result of an AROI of 10.8% and
an ROII of 10.8%.
LONG-TERM INCENTIVE COMPENSATION
The 1994 Long-Term Incentive Plan ("the LTIP") provides for the grant of
stock options, restricted stock, performance units and performance shares. The
purpose of the plan is to create an opportunity for executives to share in the
enhancement of shareholder value through equity based awards. The overall goal
is to create a link between the Company's management and its shareholders
through stock ownership and incentive compensation based on the achievement of
specific financial measures.
Each Executive Officer has a target amount of performance shares, ranging
between 25% and 70% of annual salary, with a maximum amount that can be earned
equal to 150% of the target amount depending on the extent to which performance
targets are achieved over a three year award cycle. The Chief Executive
Officer's target award equals 70% of salary. In addition, stock options are
granted to Executive Officers in amounts ranging between 50% and 140% of
salary, depending solely on such Executive Officer's salary grade. The Chief
Executive Officer's option grant equals 140% of salary. The stock option and
performance share grants, when added to base annual salary (when the
performance share grant is paid at the target level), are intended to result in
total long-term incentive compensation at approximately the 50th percentile of
executives at other manufacturing companies and competitors with comparable
levels of responsibility and individual performance.
It is intended that payment for the achievement of the performance goals set
with respect to performance shares be paid in shares of Common Stock. The
performance goals for the outstanding award cycles are: (1) three year average
of AROI, (2) three year average of ROII and (3) the monthly average of total
shareholder return on the Common Stock versus the total return of the S&P 400
Index for the three year award cycle ("TSR"). Under the LTIP 50% of the award
will be based upon the TSR goal, 25% on the AROI goal and 25% on the ROII
goals. The AROI and ROII thresholds for payment and the maximum award are the
same as those for Annual Incentive Compensation above, determined, however, on
a cumulative basis for the three year award cycle. Under the TSR goals, there
will be no award until the total shareholder return of the Common Stock is
greater than 80% of the S&P 400 Index's total return and there will be a
maximum award if the Company's TSR exceeds 120% of the S&P 400's total return.
EXECUTIVE OFFICER BENEFITS
In addition to base salary and annual and long-term incentive compensation,
the Company also provides Executive Officers with a broad range of benefits
available to all employees as well as specific, supplemental benefits, designed
to be comparable to those offered to executives with similar levels of
responsibility and individual performance. These supplemental benefits include
a Company-leased automobile, financial and estate planning and tax preparation
and advice and supplemental life insurance coverage.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The salary, annual and long-term incentive compensation and executive
benefits for the Chief Executive Officer ("CEO") are determined by the
Committee substantially in conformance with the policies described above for
all other senior executives of the Company. In addition, the Committee
evaluates the CEO's contribution to the Company's achievement of its long-term
financial and non-financial objectives on an on-going basis. The Committee also
evaluates the CEO's performance at least annually based upon a variety of
factors including the extent to which strategic and business plan goals are met
and targets for earnings per share, return on investment, growth in sales and
earnings, market share and total return to shareholders are achieved.
14
<PAGE>
Mr. Chapman received no salary increases for the 1991 or 1992 fiscal years.
For the 1993 fiscal year, Mr. Chapman's salary increased 17.5% which reflected
the Company's improvement in the 1992 fiscal year and his promotion to Chairman
of the Board. For the 1994 fiscal year, the Committee granted to Mr. Chapman
restricted stock in lieu of a salary increase. This restricted stock grant
reflects the Committee's belief that Mr. Chapman's strategic vision will
position the Company for solid financial performance in the future, to
encourage Mr. Chapman to remain with the Company to execute the plans resulting
from his strategic vision and to increase his stock ownership in the Company.
For the 1995 fiscal year, Mr. Chapman received a salary increase of 7.45%.
Submitted by the Compensation Committee of the Company's Board of Directors:
Richard J. Stegemeier, Chairman
Frank Borman
Urban T. Kuechle
Richard T. Lindgren
J. Willard Marriott, Jr.
Richard F. Teerlink
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common Stock
with the cumulative returns of the Standard & Poor's 500 Stock Index and
Standard & Poor's Leisure Time Index weighted by the year-end market value of
each company. "Cumulative total return" is defined as stock price appreciation
plus dividends paid, assuming reinvestment of all such dividends.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG OUTBOARD MARINE, S&P INDUSTRIES AND S&P LEISURE TIME
<CAPTION>
Measurement Period OUTBOARD S&P S&P
(Fiscal Year Covered) MARINE INDUSTRIES LEISURE TIME
- ------------------- ---------- ---------- ------------
<S> <C> <C> <C>
Measurement Pt-
9/89 $100 $100 $100
FYE 9/90 $ 39 $ 93 $ 41
FYE 9/91 $ 58 $122 $ 66
FYE 9/92 $ 56 $134 $ 64
FYE 9/93 $ 67 $145 $ 77
FYE 9/94 $ 84 $158 $ 95
</TABLE>
15
<PAGE>
2. RATIFICATION OF APPOINTMENT OF AUDITORS
Arthur Andersen LLP, P. O. Box 1215, Milwaukee, Wisconsin 53201, served as
independent auditors and accountants of the Company for the 1994 fiscal year.
The Audit Committee has recommended to the Board, and the Board in turn, having
approved such appointment at its November 2, 1994 meeting, recommends to the
shareholders, that Arthur Andersen LLP's appointment as the Company's
independent auditors and accountants for the 1995 fiscal year be confirmed.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting of Shareholders, with the opportunity to make a statement if he
desires to do so, and is expected to be available to respond to appropriate
questions. If the shareholders disapprove, the Company may or may not
reconsider the appointment.
YOUR BOARD RECOMMENDS YOU VOTE "FOR" THIS PROPOSAL. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY
CHOICE IN THEIR PROXIES.
SHAREHOLDER PROPOSAL PROCEDURE
Any shareholder who intends to present a proposal at the Company's 1996
Annual Meeting of Shareholders and who wishes to have such proposal included in
the Company's proxy soliciting material for that meeting must submit the
proposal(s) in writing to the Secretary of the Company on or before August 10,
1995.
OTHER MATTERS
The Board knows of no matters, other than those specified above, to be
brought before the meeting. However, if any other matters properly come before
the meeting, or any adjournments thereof, it is the intention of the persons
named in the enclosed proxy form to vote the same in accordance with their
judgment on such matters.
For shareholders who require information regarding the registration of their
shares, the payment of dividends, details regarding the transfer of their
shares or other similar information, they should call the Company's Transfer
Agent, First Chicago Trust Co. of New York, P.O. Box 2500, Jersey City, New
Jersey 07303-2500, Shareholder Services Division, 1-800-446-2617.
THE COMPANY WILL PROVIDE WITHOUT CHARGE, UPON WRITTEN REQUEST, TO ANY PERSON
WHO WAS A BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK ON THE RECORD DATE, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED SEPTEMBER
30, 1994, WITHOUT EXHIBITS, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. REQUESTS SHOULD BE SENT TO THE COMPANY TO: CORPORATE SECRETARY, 100
SEA HORSE DRIVE, WAUKEGAN, ILLINOIS 60085.
16
<PAGE>
OUTBOARD MARINE CORPORATION
ANNUAL MEETING -- JANUARY 19, 1995
P
R PROXY SOLICITED BY BOARD OF DIRECTORS
O
X JAMES C. CHAPMAN, D. JEFFREY BADDELEY and HOWARD MALOVANY and
Y each of them, are appointed Proxies, with power of substitution, to vote
all stock of the undersigned at the Annual Meeting of Shareholders to be
held January 19, 1995 at 9:00 a.m., (local time) at Grove Park Inn,
Asheville, North Carolina, and at any adjournment thereof, upon the
matters mentioned hereafter and, in their discretion, upon such other
matters as may come before said meeting.
UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
-------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-------------
<PAGE>
X Please mark your
vote as in this
example
FOR WITHHELD Election of three Class III Directors for
a three year term.
1. Election of [_] [_]
Directors. Nominees: Richard T. Lindgren, Richard
J. Stagemeier, Richard F. Teerlink
For, except vote withheld from the following nominee(s):
- -------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratify the appointment of [_] [_] [_]
Auditors.
MARK HERE FOR ADDRESS
CHANGE AND NOTE BELOW [_]
YES NO
I will attend the annual meeting [_] [_]
Please date and sign exactly as your name appears.
If acting as attorney, executor, trustee, or in a
representative capacity, also indicate title.
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SIGNATURE(S) DATE
