<PAGE>
LOGO
THE TRIAD BUILDING
2200 RENAISSANCE BOULEVARD
SUITE 150
KING OF PRUSSIA, PENNSYLVANIA 19406
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 12, 1997
------
To the Shareholders of Owosso Corporation:
The Annual Meeting of Shareholders of Owosso Corporation, a Pennsylvania
corporation (the "Company") will be held at 9:00 a.m., local time, on March 12,
1997 at the Philadelphia Marriott - West, 111 Crawford Avenue, West
Conshohocken, Pennsylvania, for the following purposes:
1. To elect seven directors of the Company for a one-year term;
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending October 26, 1997;
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only holders of the Company's Common Stock or Class A Convertible Preferred
Stock at the close of business on February 7, 1997 are entitled to notice of,
and to vote at, the Annual Meeting and any adjournments or postponements
thereof. Such shareholders may vote in person or by proxy. The stock transfer
books of the Company will not be closed. The accompanying form of proxy is
solicited by the Board of Directors of the Company.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. YOU ARE
CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO
ATTEND IN PERSON, YOU ARE URGED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE SELF-ADDRESSED ENVELOPE, ENCLOSED FOR YOUR CONVENIENCE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU DECIDE TO ATTEND THE
MEETING AND WISH TO VOTE IN PERSON, YOU MAY REVOKE YOUR PROXY BY WRITTEN NOTICE
AT THAT TIME.
By Order of the Board of Directors
/s/ George B. Lemmon, Jr.
--------------------------------------
George B. Lemmon, Jr.
President and Chief Executive
Officer
February 14, 1997
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LOGO
THE TRIAD BUILDING
2200 RENAISSANCE BOULEVARD
SUITE 150
KING OF PRUSSIA, PENNSYLVANIA 19406
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MARCH 12, 1997
---------------
This Proxy Statement, which is first being mailed to shareholders on or about
February 14, 1997, is furnished in connection with the solicitation by the Board
of Directors of Owosso Corporation (the "Company") of proxies to be used at the
Annual Meeting of Shareholders of the Company (the "Annual Meeting"), to be held
at 9:00 a.m. on March 12, 1997 at the Philadelphia Marriott -- West, 111
Crawford Avenue, West Conshohocken, Pennsylvania, and at any adjournments or
postponements thereof. If proxies in the accompanying form are properly executed
and returned prior to voting at the meeting, the shares represented thereby will
be voted as instructed on the proxy. If no instructions are given on a properly
executed and returned proxy, the shares represented thereby will be voted for
the election of the nominees for director named below, for the ratification of
the appointment of Deloitte & Touche LLP as independent auditors, and in support
of management on such other business as may properly come before the Annual
Meeting or any adjournments thereof. Shareholders whose shares are held of
record by a broker or other nominee are nevertheless encouraged to fill in the
boxes of their choice on the proxy, as brokers and other nominees may not be
permitted to vote shares with respect to certain matters for which they have not
received specific instructions from the beneficial owners of the shares. Any
proxy may be revoked by a shareholder prior to its exercise upon written notice
to the Secretary of the Company, by delivering a duly executed proxy bearing a
later date, or by the vote of a shareholder cast in person at the Annual
Meeting.
VOTING
Holders of record of the Company's Common Stock or Class A Convertible
Preferred Stock on February 7, 1997 will be entitled to vote at the Annual
Meeting or any adjournments or postponements thereof. As of that date, there
were 5,808,676 shares of Common Stock and 1,071,428 shares of Class A
Convertible Preferred Stock outstanding and entitled to vote. The presence, in
person or by proxy, of holders of Common Stock and Class A Convertible Preferred
Stock entitled to cast at least a majority of the votes which all holders of
Common Stock and Class A Convertible Preferred Stock are entitled to cast will
constitute a quorum for purposes of the transaction of business. Each share of
Common Stock and each share of Class A Convertible Preferred Stock entitles the
holder thereof to one vote on the election of seven nominees for director and on
any other matter that may properly come before the Annual Meeting. Additionally,
holders of Class A Convertible Preferred Stock have the right, voting as a
separate voting group, to elect one director. Shareholders are not entitled to
cumulative voting in the election of directors.
Under Pennsylvania law and the By-laws of the Company, the presence of a
quorum is required for each matter to be acted upon at the Annual Meeting. The
presence at the Annual Meeting in person or by proxy, of shareholders entitled
to cast at least a majority of the votes that all shareholders are entitled to
cast on a particular matter shall constitute a quorum for the purposes of
consideration and action on the matter. Directors are elected by a plurality
vote. All other actions to be taken by the shareholders at the Annual Meeting
shall be taken by the affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon. Votes that are withheld and abstentions
will be counted in determining the presence of a quorum, but will not be counted
in determining the number of votes cast in connection with any particular
<PAGE>
matter. Broker non-votes, which occur when a broker or other nominee holding
shares for a beneficial owner does not vote on a proposal because the beneficial
owner has not checked one of the boxes on the proxy card, are not voted and will
therefore have no effect on the outcome of any of the matters to be voted upon
at the Annual Meeting.
The cost of solicitation of proxies by the Board of Directors will be borne
by the Company. Proxies may be solicited by mail, personal interview, telephone
or telegraph and, in addition, directors, officers and regular employees of the
Company may solicit proxies by such methods without additional remuneration.
Banks, brokerage houses and other institutions, nominees or fiduciaries will be
requested to forward the proxy materials to beneficial owners in order to
solicit authorizations for the execution of proxies. The Company will, upon
request, reimburse such banks, brokerage houses and other institutions, nominees
and fiduciaries for their expenses in forwarding such proxy materials to the
beneficial owners of the Company's stock.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Board of Directors consists of seven members, and all seven
seats for director are up for election. Unless otherwise specified in the
accompanying proxy, the shares of Common Stock voted pursuant thereto will be
cast for George B. Lemmon, Jr., John R. Reese, Eugene P. Lynch, Ellen D. Harvey,
Harry E. Hill and James A. Ounsworth, and the shares of Class A Convertible
Preferred Stock voted pursuant thereto will be cast for Lowell P. Huntsinger,
each for terms expiring at the Annual Meeting of Shareholders to be held in
1998. If, for any reason, at the time of election, any of the nominees named
should decline or be unable to accept his or her nomination or election, it is
intended that such proxy will be voted for the election, in the nominee's place,
of a substituted nominee, who would be recommended by the Board of Directors
(except in the case of a substituted nominee for Lowell P. Huntsinger, who would
be recommended by the holders of 25% of the Class A Convertible Preferred
Stock). The Board of Directors, however, has no reason to believe that any of
the nominees will be unable to serve as a director.
The following biographical information is furnished as to the current
directors of the Company, each of whom is a nominee for election:
NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK OR CLASS A CONVERTIBLE
PREFERRED STOCK
George B. Lemmon, Jr., 35, became President of the Company in May 1996,
and he has served as Chief Executive Officer of the Company since August 1995
and as a director of the Company since March 1994. Mr. Lemmon was also the
Company's Secretary and Treasurer from March 1994 until June 1996. From
January 1995 to August 1995, Mr. Lemmon served as Executive Vice President --
Corporate Development. From March 1994 until January 1995, Mr. Lemmon was the
Company's Executive Vice President and Chief Financial Officer. Mr. Lemmon
served as Chief Financial Officer of Brynavon Group, Inc., a corporation
controlled by certain members of the Company's Board of Directors or its
affiliates (collectively, "Brynavon Group") from 1990 to October 1994. He
held various managerial and sales positions with Brynavon Group since 1983.
Mr. Lemmon is the son of George B. Lemmon, Sr., the Chairman of the Company's
Board of Directors.
John R. Reese, 53, has served as a director of the Company since March 1994,
and served as a director of Brynavon Group from 1982 until October, 1994. Since
June 1996, Mr. Reese has served as the Vice Chairman of the Board of the
Company. Mr. Reese is also a Managing Director at Lazard Freres & Co., LLC, a
position he has held since 1995, where he is in charge of the Private Clients
Division, which provides investment advice to high net worth individuals. From
1986 to 1995, Mr. Reese was a partner at Lazard, Freres & Co.
Eugene P. Lynch, 35, has served as a director of the Company since the
reorganization of the Company which took place in connection with the public
offering of the Common Stock at the end of fiscal 1994 (the "Reorganization").
Since 1990, Mr. Lynch has been a partner of The Clipper Group, and he has been a
Managing Director of the firm since October 1993. The Clipper Group is a New
York-based private investment management firm which was formed in 1990 by
certain former employees of CS First Boston. Prior to that, he worked in the
merchant banking group of CS First Boston from 1987 to 1990, and served as a
Vice President of that firm in 1990. Mr. Lynch serves as a director of several
private companies.
2
<PAGE>
Ellen D. Harvey, 43, has served as a director of the Company since the
Reorganization. Since September 1996, she has been a principal of Morgan Stanley
& Co. From 1984 to September 1996, Ms. Harvey served as a portfolio manager for
Miller, Anderson & Sherrerd, a money management firm in West Conshohocken,
Pennsylvania, and she was a partner of that firm from 1986 to September 1996.
From 1981 to 1984, she served as Vice President of Morgan Futures Corporation.
In 1981, Ms. Harvey served as Director of Market Surveillance for the New York
Futures Exchange, and from 1980 to 1981 she was a financial economist for the
U.S. Department of the Treasury, Office of Capital Markets Policy.
Harry E. Hill, 48, has served as a director of the Company since January
1995. Since 1991, Mr. Hill has served as President and Chief Executive Officer
of Empire Abrasive Equipment Company, a corporation that manufactures portable,
cabinet and automated pneumatic blasting equipment. Since 1984 Mr. Hill has been
Managing Partner of H.E. Hill and Company and he has been the President and
Chief Executive Officer of Delaware Car Company since 1987. H.E. Hill and
Company offers consulting services to manufacturing and other companies, and
Delaware Car Company is engaged in the railroad repair and equipment
manufacturing business.
James A. Ounsworth, 54, has been a Senior Vice President of Safeguard
Scientifics, Inc. since November 1995 and Vice President, Secretary and General
Counsel of Safeguard Scientifics, Inc. since December 1991. Safeguard
Scientifics, Inc., the common stock of which is listed on the New York Stock
Exchange, is engaged primarily in the business of identifying, acquiring
interests in, and developing partnership companies, most of which are engaged in
information technology businesses. Prior to December 1991, Mr. Ounsworth was a
partner in the Business Department of Pepper, Hamilton & Scheetz, a law firm
based in Philadelphia, Pennsylvania, where he practiced business law for 16
years after graduating from the University of Virginia School of Law in 1975.
Before entering law school, Mr. Ounsworth was a nuclear engineer in the U.S.
Navy's Fleet Ballistic Missile Submarine program, where he served on two FBM
submarines, the second one as chief engineer, after graduating from the U.S.
Naval Academy in 1964.
NOMINEE FOR ELECTION BY HOLDERS OF CLASS A CONVERTIBLE PREFERRED STOCK,
VOTING AS A SEPARATE VOTING GROUP
Lowell P. Huntsinger, 64, has served as a director of the Company since
November, 1995. Mr. Huntsinger was the president of Stature Electric, Inc.
("Stature") until it was acquired by the Company in October 1995. Mr.
Huntsinger was elected to the Board of Directors by the owners of the
Company's Class A Convertible Preferred Stock which was issued in connection
with the Stature acquisition. In 1974, Mr. Huntsinger co-founded Stature with
its two other stockholders who remain with Stature. Prior to founding
Stature, Mr. Huntsinger worked at the Northland Electric division of the
Scott Fetzer Company.
The Board of Directors recommends a vote FOR all nominees.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the Company's 1996 fiscal year, which ended on October 27, 1996, the
Board of Directors held four meetings. Each director attended at least 75% of
the aggregate of the total number of meetings of the Board of Directors and
committees of the Board of Directors on which he or she served.
During fiscal 1996, the Audit Committee, which consists of Ms. Harvey, Mr.
Hill, Mr. Huntsinger and Mr. Lynch, met four times. The function of the Audit
Committee is to make recommendations to the Board of Directors regarding the
annual selection of independent public accountants to audit annually the
Company's books and records and to review recommendations made by such
accounting firm as a result of their audit. The Audit Committee also
periodically reviews the activities of the Company's audit staff and the
adequacy of the Company's internal controls.
During fiscal 1996, the Compensation Committee, which consists of Ms. Harvey,
George B. Lemmon, Sr. (the Chairman of the Company's Board of Directors, who
will not be seeking reelection at the Annual Meeting) and Mr. Reese, met one
time. The Compensation Committee is responsible for establishing the salaries of
the executive officers of the Company, incentives and other forms of
compensation and benefit plans, and also administers the Company's 1994 Stock
Option Plan.
The Company does not have a standing Nominating Committee.
3
<PAGE>
COMPENSATION OF DIRECTORS
The Company pays each director who is not also an employee of the Company an
annual fee of $5,000, plus $1,000 for each Board meeting and $250 each Committee
meeting attended by such director in person. The Company will also reimburse the
directors for their expenses incurred in connection with their activities as
directors. The Company has a stock option plan (the "1994 Stock Option Plan")
which provides for the automatic grant of an option to purchase 10,000 shares of
the Company's Common Stock to each person (other than an employee of the
Company) upon his election as a director of the Company by the shareholders at a
per share purchase price equal to the closing sale price of the Common Stock on
the date of grant. Each such option vests, on a cumulative basis, as to
one-fifth of the number of shares Common Stock underlying the option on each
anniversary of the grant date commencing on the first anniversary. The options
expire, as to each vested portion of the option, on the fifth anniversary of the
vest date. During fiscal 1995, Mr. Huntsinger received an automatic grant of an
option to purchase 10,000 shares of Common Stock at an exercise price of $8.875
per share under the 1994 Stock Option Plan. In addition, the following directors
received discretionary grants of options under the 1994 Stock Option Plan at an
exercise price of $8.875 per share during fiscal 1996: Mr. Huntsinger for 5,000
shares, Mr. Hill for 5,000 shares, Ms. Harvey for 5,000 shares, Mr. Lynch for
5,000 shares and George B. Lemmon, Jr. for 20,000 shares.
EXECUTIVE COMPENSATION
CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
Fiscal 1995 was the first year in which the Company paid cash compensation to
its executive officers. Prior to the Reorganization which occurred at the end of
fiscal 1994, all of the Company's executive officers were compensated by
Brynavon Group and its affiliates for services rendered in connection with the
management of the Company's businesses. The following table sets forth, with
respect to services rendered during fiscal 1996, 1995 and 1994, the total
compensation paid by the Company (as to fiscal 1995 and 1996 services) or
Brynavon Group (as to fiscal 1994 services) to or for the account of each
individual who served as the Company's Chief Executive Officer and the two other
executive officers whose total annual salary and bonus exceeded $100,000 during
fiscal 1996 (the "named executive officers"). The Company has no written
employment agreements with any of the named executive officers.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
--------------
Awards
--------------
Securities
Annual Compensation Underlying All Other
----------------------- Options SARs Compensation
Name and Principal Position Year Salary($) Bonus($) (#) ($)
-------------------------------------- --------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
George B. Lemmon, Jr 1996 $165,000 $ 2,459 20,000 $ 3,480(1)
President and Chief Executive Officer 1995 $112,539 $ 86,564 -- $ 7,704
1994 $ 88,451 $ 36,875 50,000 $17,364
Thomas L. French 1996(2) $165,000 $ 12,000 15,000 $13,579(3)
Former President and Chief Operating 1995 $165,000 $165,668 -- $14,459
Officer 1994 $165,000 $131,514 50,000 $18,383
John H. Wert, Jr. 1996 $113,416 $ 25,000 5,000 $ 5,369(4)
Senior Vice President -- Finance, 1995 $106,070 $ 41,130 -- $10,217
Chief Financial Officer, Secretary 1994 $ 63,385 $ 46,878 10,000 $50,260
and Treasurer
Brian Tidwell 1996(5) $ 87,308 $ 16,000 5,000 $ 2,713(6)
Vice President of Operations
</TABLE>
- ------
(1) The amount indicated includes $966 of insurance premiums paid with respect
to term life insurance and $2,514 in payments with respect to personal use
of a Company vehicle.
(2) Mr. French's employment with the Company terminated in May 1996.
(3) The amount indicated includes $4,665 of insurance premiums paid with respect
to term life insurance and $8,914 in payments with respect to personal use
of a Company vehicle.
(4) The amount indicated includes $66 of insurance premiums paid with respect to
term life insurance and $5,303 in payments with respect to personal use of a
Company vehicle.
(5) Mr. Tidwell was elected as an executive officer of the Company in June
1996.
(6) The amount indicated includes $66 of insurance premiums paid with respect to
term life insurance and $2,647 in payments with respect to personal use of a
Company vehicle.
STOCK OPTIONS GRANTED TO CERTAIN EXECUTIVE OFFICERS DURING LAST FISCAL YEAR
Under the 1994 Option Plan, options to purchase Common Stock are available
for grant to directors, officers and other key employees of the Company. The
following table sets forth certain information regarding options for the
purchase of Common Stock that were awarded to the Company's Chief Executive
Officer and the other named Company officers during fiscal 1996.
5
<PAGE>
OPTION GRANTS IN FISCAL YEAR ENDED OCTOBER 27, 1996
<TABLE>
<CAPTION>
Potential Realizable
Percent of Gain at Assumed Annual
Number of Total Options Rates of Stock
Securities Granted to Appreciation for
Underlying Employees in Exercise or Option Terms
Options Last Base Price Expiration Compounded
Name Granted (#) Fiscal Year ($/Sh) Date (1) Annually
--------------------- ------------ --------------- ------------- ------------ ------------------------
5% 10%
---------- ----------
<S> <C> <C> <C> <C> <C> <C>
George B. Lemmon, Jr 20,000 11.4% $8.875 12/13/05 $85,373 $206,452
Thomas L. French .... 15,000 8.5% $8.875 12/13/05 $64,030 $154,839
John H. Wert, Jr .... 5,000 2.8% $8.875 12/13/05 $21,343 $ 51,613
Brian Tidwell ....... 5,000 2.8% $8.875 12/13/05 $21,343 $ 51,613
</TABLE>
- ------
(1) The stock options were granted under the Company's 1994 Stock Option Plan.
The options vest equally over five years beginning with the first
anniversary of the grant date, and the options expire, with respect to each
vested portion of the options, five years after the vesting date of such
portion.
STOCK OPTIONS EXERCISED BY CERTAIN EXECUTIVE OFFICERS DURING FISCAL 1996
FISCAL YEAR AND HELD BY CERTAIN EXECUTIVE OFFICERS AT OCTOBER 27, 1996
No options granted by the Company were exercised by the named executive
officers during fiscal 1996. The following table sets forth certain information
regarding options for the purchase of Common Stock that were exercised and/or
held by the named executive officers:
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
Shares Number of Securities
Acquired on Value Unexercised Options at FY- Value of Unexercised In-the-
Name Exercise (#) Realized ($) End (#) Money Options at FY-End ($)
---------------------- ------------- ------------ -------------------------------- --------------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
George B. Lemmon, Jr. -- -- 24,000 46,000 0 0
Thomas L. French ..... -- -- 0 0 0 0
John H. Wert, Jr. .... -- -- 5,000 10,000 0 0
Brian Tidwell ........ -- -- 1,000 4,000 0 0
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company consists of George B. Lemmon,
Sr., John R. Reese and Ellen D. Harvey. Mr. Lemmon, Sr. is also the Chairman
of the Company's Board of Directors, and until August 1995, he served as the
Company's Chief Executive Officer. In addition, the Company is indebted to
Mr. Lemmon, Sr. for certain amounts. See "Certain Relationships and
Transactions."
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company, consisting of the Company's
Chairman and two non-employee directors, establishes the salaries of the
executive officers of the Company, incentives and other forms of compensation
and benefit plans, and also administers the Company's 1994 Stock Option Plan.
The Compensation Committee's policy regarding executive compensation reflects
a commitment to offer competitive compensation opportunities for its executive
officers, so as to attract and retain quality executives, to provide incentives
to such executives so as to achieve performance objectives that enhance
shareholder value, and to reward excellent performance. Accordingly, the
Compensation Committee has instituted a compensation program that provides the
Company's executives with (i) a competitive base salary, (ii) a bonus
arrangement that encourages individual achievement, and (iii) stock options
granted at market value in order to provide long-term incentives, thereby
encouraging long-term strategic management and enhancement of shareholder value.
6
<PAGE>
The Compensation Committee believes that the following current base salaries
for the Company's executive officers are appropriate in light of the executive
officers' contribution to the Company's operations and performance: George B.
Lemmon, Jr., $165,000, Harry Holiday III, $200,000, John H. Wert, Jr., $116,449
and Brian Tidwell, $100,000. In considering each officer's contribution to the
Company's success, the Compensation Committee considers, among other things,
such officer's role in enhancing the Company's growth, both internally and
through its acquisition program, controlling costs, making efficient use of the
Company's assets and employees, and monitoring the Company's operations. During
fiscal 1996, the Compensation Committee commissioned an independent study of the
compensation paid to executive officers of comparable publicly held companies.
The study showed that the compensation of the Company's executive officers is
below the average for the comparable companies. In consideration of the
Company's relatively recently acquired status as a publicly held company, the
Compensation Committee remains comfortable that the current levels are
appropriate.
The Committee believes that executive officers' compensation should correlate
with the Company's annual performance. Consequently, the officers receive a
relatively large proportion of their compensation pursuant to bonus
arrangements, which the Compensation Committee intends to continue. The bonuses
have been calculated based on a percentage of the Company's pre-tax profit
and/or its operating profit for the preceding fiscal year, with adjustments in
some cases based on subjective performance-based factors. In fiscal 1997, the
bonus arrangement for the Company's executive officers will be tied to matrices
incorporating Company performance compared to budget in the following
categories: sales, operating profit margin and economic value added. A smaller
portion of the bonus will be tied to achievement of specific individual goals.
The Compensation Committee may from time to time grant options to the
Company's executive officers to further align their long-term interests with
those of other shareholders. The Committee believes that such options encourage
the executives to employ strategies designed to enhance the long-term value of
the Company's Common Stock. During fiscal 1996, options were granted to the
following executive officers as follows: George B. Lemmon, Jr. (options on
20,000 shares), John H. Wert, Jr. (5,000) and Brian Tidwell (5,000). Such
options vest equally over five years beginning with the first anniversary of the
grant date, and are exercisable at the closing price of the Company's common
stock on the date of grant ($8.875 per share). The options expire, with respect
to each vested portion of the options, five years after the vesting date of such
portion. The Compensation Committee based the grants on a variety of factors,
including the financial performance of the Company in fiscal 1995, an assessment
of the personal performance of the officers and expected future contribution to
the Company's performance. The Compensation Committee may also grant stock
options in the future based on these and other factors. In November 1996, the
Compensation Committee granted stock options to Harry Holiday III in connection
with his election as the Company's Executive Vice President and Chief Operating
Officer.
At the time he became the Company's Chief Executive Officer in August 1995,
the base compensation of George B. Lemmon, Jr. was increased from $103,000 to
$165,000 by the Compensation Committee, in recognition of his increased duties
and responsibilities. Mr. Lemmon's bonus for fiscal 1996 was determined based on
the level at which certain pre-tax income targets were met, in accordance with a
formula established prior to fiscal 1996. The Compensation Committee believes
that Mr. Lemmon's compensation package is consistent with its compensation
policy as enumerated above.
George B. Lemmon, Sr.
John R. Reese
Ellen D. Harvey
7
<PAGE>
STOCK PERFORMANCE CHART
The following Stock Performance Chart compares the Company's cumulative total
shareholder return on its Common Stock for the period from October 25, 1994 (the
date the Common Stock commenced trading on the Nasdaq National Market) to
October 27, 1996 (the date the Company's 1996 fiscal year ended), with the
cumulative total return of the Standard & Poor's 500 Stock Index and the
Standard & Poor's Manufacturing (Diversified Industrials) Index. The comparison
assumes $100 was invested on October 25, 1994 in the Company's Common Stock and
in each of the foregoing indices and assumes reinvestment of dividends.
TOTAL SHAREHOLDER RETURNS
180 ----------------------------------------------------------------------------
#
160 ----------------------------------------------------------------------------
*
140 ----------------------------------------------------------------------------
#*
120 ----------------------------------------------------------------------------
100 @#*-------------------@#*---------------------------------------------------
@
80 ----------------------------------------------------------------------------
60 ----------------------------------------------------------------------------
@
40 ----------------------------------------------------------------------------
25Oct94 30Oct94 29Oct95 27Oct96
- --------------------------------------------------------------------------------
@ OWOSSO CORP # MANUFACTURING (DIVERS)-500 * S&P 500 INDEX
- -------------------------------------------------------------------------------
TOTAL SHAREHOLDER RETURNS
-------------------------
(Dividends Reinvested)
ANNUAL RETURN PERCENTAGE
Years Ending
Company / Index 30Oct94 29Oct95 27Oct96
- -------------------------------------------------------------------------------
OWOSSO CORP 2.08 -5.57 -45.31
MANUFACTURING (DIVERS)-500 1.23 25.91 37.16
S&P 500 INDEX 2.65 25.59 23.03
INDEX RETURNS
Base Years Ending
Period
Company / Index 25Oct94 30Oct94 29Oct95 27Oct96
- -------------------------------------------------------------------------------
OWOSSO CORP 100 102.08 96.39 52.72
MANUFACTURING (DIVERS)-5 100 101.23 127.46 174.83
S&P 500 INDEX 100 102.65 128.92 158.61
Prepared by Standard & Poor's Compustat
Custom Products Division - 1/28/97
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of February 1, 1997, with
respect to the beneficial ownership of shares of Common Stock and Class A
Convertible Preferred Stock of the Company by each person who is known to the
Company to be the beneficial owner of more than five percent of either class of
stock, by each director or nominee for director, by each of the named executive
officers, and by all directors and executive officers as a group. Unless
otherwise indicated, each person listed has sole voting power and sole
investment power over the shares indicated.
<TABLE>
<CAPTION>
Class A Convertible
Common Stock Preferred Stock (2)
-------------------------------- -----------------------------
Amount and Amount and
Nature of Percent of Nature of Percent of
Name and Address of Beneficial Class Beneficial Class Percent of Voting
Beneficial Owner (1) Ownership Outstanding Ownership Outstanding Power
------------------------------------ --------------- ------------- ------------ ------------- -----------------
<S> <C> <C> <C> <C> <C>
George B. Lemmon, Sr. .............. 589,927 (3) 36.0% -- -- 30.4%
John F. Northway, Sr. .............. 668,949 11.5% -- -- 9.7%
John R. Reese (4) .................. 2,095,401 (3) 10.2% -- -- 8.6%
Lowell P. Huntsinger ............... 3,000 (5) * 518,433 48.4% 7.6%
Randall V. James ................... -- -- 293,779 27.4% 4.3%
Morris R. Felt ..................... -- -- 259,216 24.2% 3.8%
George B. Lemmon, Jr. .............. 246,538 (6) 3.9% -- -- 3.4%
Thomas L. French ................... -- -- -- -- --
John H. Wert, Jr. (7) .............. 15,700 (8) * -- -- *
Ellen D. Harvey .................... 10,500 (8) * -- -- *
Eugene P. Lynch .................... 6,000 (8) * -- -- *
Harry E. Hill (9) .................. 12,500 * -- -- *
All directors and executive officers
as a group (10 persons) ........... 2,974,296(10) 50.7% 518,433 48.4% 50.4%
</TABLE>
- ------
* Less than 1%
(1) The address of each person named in the table is: c/o Owosso Corporation,
The Triad Building, 2200 Renaissance Boulevard, Suite 150, King of Prussia,
Pennsylvania 19406.
(2) Shares of Class A Convertible Preferred Stock are entitled to one vote per
share and vote with the Common Stock on all matters on which holders of
Common Stock are entitled to vote. Each share of Class Convertible
Preferred Stock is convertible into one share of Common Stock.
(3) Includes 4,000 shares of Common Stock purchasable upon the exercise of
stock options.
(4) Of these shares, 91,241 are held by Mr. Reese as trustee under a trust
under which the descendants of Mr. Lemmon, Sr. are beneficiaries. Also
includes 1,500,000 shares held by a limited partnership of which George
Lemmon, Sr. and family members are limited partners and of which the
general partners are trusts of which Mr. Reese is the trustee and family
members of Mr. Lemmon are beneficiaries.
(5) Includes 3,000 shares of Common Stock purchasable upon the exercise of
stock options.
(6) Includes 24,000 shares of Common Stock purchasable upon the exercise of
stock options. All of these shares (other than those issuable upon the
exercise of stock options) are held by Mr. Lemmon, Jr. jointly with his
wife. Except for shares issuable upon exercise of options, the shares
indicated are held jointly with Mr. Lemmon's wife.
(7) Of these shares, 1,000 are held by Mr. Wert as custodian for his children
and 1,700 are held by Mr. Wert's wife.
(8) Includes 5,000 shares of Common Stock purchasable upon the exercise of
stock options.
(9) Of these shares, 1,000 are held by Mr. Hill as custodian for his children.
(10) Includes 43,000 shares of Common Stock purchasable upon the exercise of
stock options.
9
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Prior to the Reorganization, certain companies affiliated with Brynavon Group
used the same computerized management information system as the Company's
businesses. This information system was leased by Brynavon Group and, in
connection with the Reorganization, that lease was assigned to the Company. The
Company has subsequently entered into a new lease for upgraded computer
equipment. In order to allow an orderly transition for the Other Companies to
transfer to a separate management information system, the Company has entered
into an agreement with Brynavon Group pursuant to which the Other Companies may
have access to and use the Company's management information system for up to
three years (subject to earlier termination at the option of any of the parties)
following the completion of the Offering. Under that agreement, Brynavon Group
pays the Company $12,500 per month for the term of the agreement.
The Company had notes payable to affiliates at the end of fiscal 1996 with an
outstanding balance of $3,071,774. The Company paid $348,731 in interest under
notes payable to affiliates during fiscal 1996. Included in the notes
outstanding at October 27, 1996 were $350,000 in subordinated notes, bearing
interest at 10% per year, maturing in December 1996, and payable to the
following persons in the following percentage amounts: 54.5% to George B.
Lemmon, Sr., 14.25% to John R. Reese, 23.75% to John F. Northway, Sr., 5.0% to
Thomas L. French and 2.5% to George B. Lemmon, Jr. These notes were repaid when
due after the end of fiscal 1996. Also included in the notes outstanding at
October 27, 1996 was a $2,721,774 subordinated promissory note, bearing interest
at 8% per year, which was issued to Lowell Huntsinger in connection with the
Company's acquisition of Stature. Subordinated notes in the principal amount of
$250,000 were repaid when due during fiscal 1996, to the following persons in
the following percentage amounts: 60.0% to George B. Lemmon, Sr., 40.0% to
family members and trusts for family members of George B. Lemmon, Sr. None of
these notes, which are prepayable without penalty at the option of the Company,
will be prepaid without the approval of a majority of the Company's
disinterested directors.
In October 1995, in connection with the Company's acquisition of Stature from
the shareholders of Stature, which included Lowell P. Huntsinger, the Company
entered into a consulting agreement Mr. Huntsinger. Mr. Huntsinger was elected
as a director of the Company in connection with the acquisition. Pursuant to the
agreement, which has a term expiring in October 1997, the Company has agreed to
pay Mr. Huntsinger $40,000 per year during the term of the agreement and
provides Mr. Huntsinger with certain insurance and fringe benefits, in exchange
for consulting services and an agreement on the part of Mr. Huntsinger not to
compete with the Company in the business of the manufacture and sale of electric
motors and parts during the term of the agreement and for three years
thereafter.
In connection his termination of employment as President and Chief Operating
Officer of the Company, Thomas L. French entered into an agreement with the
Company under which the Company agreed to continue to pay Mr. French s base
compensation and certain insurance and fringe benefits for one year after
termination. The Company paid Mr. French $12,000 as a pro rata portion of his
bonus for fiscal 1996. In addition, the Company repurchased the 131,324 shares
of Common Stock owned by Mr. French at a per share price of $7.98, the average
trading price of the Common Stock for a specified period commencing in June
1996. Of the total purchase price paid by the Company for the shares, $245,000
was paid in cash and the balance was paid through the issuance by the Company of
a two-year subordinated secured promissory note, bearing interest at a per annum
rate of 8%.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended October
10
<PAGE>
27, 1996, all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than ten-percent beneficial owners were
complied with, except that Mr. Lemmon, Sr., Mr. Lemmon, Jr., Mr. Huntsinger,
Ms. Harvey, Mr. Lynch, Mr. Wert and Mr. Tidwell each filed one report late
relating to one or two transactions, in each case reporting the grant of
stock options or gifts, Mr. Reese filed one report late relating to one
transaction reporting a purchase of Common Stock, and Mr. Hill filed two
reports late relating to two transactions reporting the grant of stock
options.
RATIFICATION OF
APPOINTMENT OF AUDITORS
(PROPOSAL 2)
The Board of Directors has selected Deloitte & Touche LLP, independent public
accountants, to audit the consolidated financial statements of the Company for
the fiscal year ending October 26, 1997 and recommends that the shareholders
ratify such selection. This appointment will be submitted to the shareholders
for ratification at the Annual Meeting.
The submission of the appointment of Deloitte & Touche LLP is not required by
law or by the By-laws of the Company. The Board of Directors is nevertheless
submitting it to the shareholders to ascertain their views. If the shareholders
do not ratify the appointment, the selection of other independent public
accountants will be considered by the Board of Directors. If Deloitte & Touche
LLP shall decline to accept or become incapable of accepting it appointment, or
if its appointment is otherwise discontinued, the Board of Directors will
appoint other independent public accountants.
A representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting, will have the opportunity to make a statement, and will be
available to respond to appropriate questions.
The Board of Directors recommends a vote FOR Proposal 2 to ratify the
appointment of Deloitte & Touche LLP as independent auditors for the year ending
October 26, 1997.
OTHER BUSINESS
Management knows of no other matters that will be presented at the Annual
Meeting. However, if any other matter properly comes before the meeting, or any
adjournment or postponement thereof, it is intended that proxies in the
accompanying form will be voted in accordance with the judgment of the persons
named therein.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended October 27, 1996 accompanies this Proxy Statement.
11
<PAGE>
SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for the 1997
Annual Meeting of Shareholders, a proposal intended to be presented by a
shareholder for action at that meeting must, in addition to meeting the
shareholder eligibility and other requirements of the Securities and Exchange
Commission's rules governing such proposals, be received not later than October
17, 1997 by the Chief Financial Officer of the Company at the Company's
principal executive offices, The Triad Building, 2200 Renaissance Boulevard,
Suite 150, King of Prussia, Pennsylvania 19406.
----------------
THE COMPANY WILL PROVIDE TO EACH PERSON SOLICITED, WITHOUT CHARGE EXCEPT FOR
EXHIBITS, UPON REQUEST IN WRITING, A COPY OF ITS ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED OCTOBER
27, 1996. REQUESTS SHOULD BE DIRECTED TO CHIEF FINANCIAL OFFICER, OWOSSO
CORPORATION, THE TRIAD BUILDING, 2200 RENAISSANCE BOULEVARD, SUITE 150, KING OF
PRUSSIA, PENNSYLVANIA 19406.
By Order of the Board of Directors
/s/ George B. Lemmon, Jr.
--------------------------------------
George B. Lemmon, Jr.
President and Chief Executive
Officer
Date: February 14, 1997
King of Prussia, Pennsylvania
12
<PAGE>
OWOSSO CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FROM HOLDERS OF COMMON STOCK
The undersigned, revoking all previous proxies, hereby appoints George B.
Lemmon, Jr. and Harry Holiday III, and each of them acting individually, as the
attorney and proxy of the undersigned, with full power of substitution, to vote,
as indicated below and in their discretion upon such other matters as may
properly come before the meeting, all shares of Common Stock which the
undersigned would be entitled to vote at the Annual Meeting of the Shareholders
of Owosso Corporation to be held on March 12, 1997, and at any adjournment or
postponement thereof.
1. Election of Directors:
/ / FOR the nominees listed below / / WITHHOLD AUTHORITY to vote for
the nominees listed below
Nominees: For a one-year term expiring at the Annual Meeting to be held in
1998: George B. Lemmon, Jr., John R. Reese, Eugene P. Lynch, Ellen
D. Harvey, Harry E. Hill and James A. Ounsworth
(Instruction: To withhold authority to vote for any nominee(s), write the
name(s) of such nominee(s) on the line below.)
----------------
2. Ratification of appointment of Deloitte & Touche LLP as independent auditors
for the Company for the fiscal year ending October 26, 1997:
/ / For / / Against / / Abstain
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS OTHERWISE
SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES FOR
DIRECTOR LISTED ON THE REVERSE SIDE HEREOF, AND "FOR" RATIFICATION OF
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
Please date and sign your Proxy on the reverse side and return it promptly.
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING OCTOBER 26, 1997. THIS PROXY
ALSO DELEGATES DISCRETIONARY AUTHORITY WITH RESPECT TO ANY OTHER BUSINESS WHICH
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT.
---------------------------------------
Signature of Shareholder
---------------------------------------
Signature of Shareholder
Date: --------------------------, 1997
NOTE: PLEASE SIGN THIS PROXY
EXACTLY AS NAME(S) APPEAR ON YOUR STOCK
CERTIFICATE. WHEN SIGNING AS
ATTORNEY-IN-FACT, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE ADD YOUR TITLE AS SUCH, AND IF
SIGNER IS A CORPORATION, PLEASE SIGN
WITH FULL CORPORATE NAME BY A DULY
AUTHORIZED OFFICER OR OFFICERS AND
AFFIX THE CORPORATE SEAL. WHERE STOCK
IS ISSUED IN THE NAME OF TWO (2) OR
MORE PERSONS, ALL SUCH PERSONS SHOULD
SIGN.
<PAGE>
OWOSSO CORPORATION
Proxy Solicited On Behalf Of The Board of Directors
from holders of Class A Convertible Preferred Stock
The undersigned, revoking all previous proxies, hereby appoints George B.
Lemmon, Jr. and Harry Holiday III, and each of them acting individually, as the
attorney and proxy of the undersigned, with full power of substitution, to vote,
as indicated below and in their discretion upon such other matters as may
properly come before the meeting, all shares of Common Stock and Class A
Convertible Preferred Stock which the undersigned would be entitled to vote at
the Annual Meeting of the Shareholders of Owosso Corporation to be held on March
12, 1997, and at any adjournment or postponement thereof.
1. Election of Directors:
FOR the nominees listed below WITHHOLD AUTHORITY to vote for
the nominees listed below
Nominees: For a one-year term expiring at the Annual Meeting to be held in 1998:
George B. Lemmon, Sr., George B. Lemmon, Jr., John R. Reese, Eugene P.
Lynch, Ellen D. Harvey, Harry E. Hill, Lowell P. Huntsinger and James
A. Ounsworth
(Instruction: To withhold authority to vote for any nominee(s), write the
name(s) of such nominee(s) on the line below.)
2. Ratification of appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending October 26, 1997:
For Against Abstain
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS
OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES
FOR DIRECTOR LISTED ON THE REVERSE SIDE HEREOF, AND "FOR" RATIFICATION OF
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
THE FISCAL YEAR ENDING OCTOBER 26, 1997. THIS PROXY ALSO DELEGATES DISCRETIONARY
AUTHORITY WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING AND PROXY STATEMENT.
__________________________________________________
Signature of Shareholder
__________________________________________________
<PAGE>
Signature of Shareholder
Date:_____________________________, 1997
NOTE: PLEASE SIGN THIS PROXY EXACTLY AS NAME(S) APPEAR ON YOUR STOCK
CERTIFICATE. WHEN SIGNING AS ATTORNEY-IN-FACT, EXECUTOR, ADMINISTRATOR, TRUSTEE
OR GUARDIAN, PLEASE ADD YOUR TITLE AS SUCH, AND IF SIGNER IS A CORPORATION,
PLEASE SIGN WITH FULL CORPORATE NAME BY A DULY AUTHORIZED OFFICER OR OFFICERS
AND AFFIX THE CORPORATE SEAL. WHERE STOCK IS ISSUED IN THE NAME OF TWO (2) OR
MORE PERSONS, ALL SUCH PERSONS SHOULD SIGN.
