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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
OWOSSO CORPORATION
(Exact Name of Registrant as Specified in Charter)
PENNSYLVANIA 23-2756709
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
The Triad Building, 2200 Renaissance Boulevard, Suite 150
King of Prussia, Pennsylvania 19406
(610) 275-4500
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
1998 LONG-TERM INCENTIVE PLAN
1994 STOCK OPTION PLAN
(Full title of the plans)
George B. Lemmon, Jr.
The Triad Building, 2200 Renaissance Boulevard, Suite 150
King of Prussia, Pennsylvania 19406
(610) 275-4500
(Name, address and telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of shares Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per share(1) aggregate offering price(1) registration fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock 500 shares $ 5.8800 $ 2,940
($.01 par value) 50,000 shares $ 5.9400 $ 297,000
50,500 shares $ 6.1250 $ 309,313
7,500 shares $ 7.5000 $ 56,250
10,000 shares $ 7.6300 $ 76,300
86,000 shares $ 7.7500 $ 666,500
200,000 shares $ 7.9375 $ 1,587,500
15,000 shares $ 8.0000 $ 120,000
90,000 shares $ 8.8800 $ 799,200
10,000 shares $11.3800 $ 113,800
144,340 shares $12.0000 $ 1,732,080
336,160 shares $ 6.8750 $ 2,311,100
- ----------------------------------------------------------------------------------------------------------------
Total 1,000,000 shares $ 8,071,983 $2,382
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</TABLE>
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(1) Estimated solely for the purposes of calculating the registration fee on the
basis of and in accordance with Rule 457(h), (i) the option exercise price with
respect to outstanding options to purchase 663,840 shares and (ii) the average
of the high and low prices per share of the registrant's Common Stock on the
Nasdaq National Market on June 1, 1998 with respect to the remaining 336,160
shares subject to future grant under the Plans.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by Owosso
Corporation ("registrant" or the "Company") with the Securities and Exchange
Commission (the "Commission") are incorporated by reference into this
Registration Statement:
(a) the Company's Annual Report on Form 10-K for the year
ended October 26, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the
quarter ended January 25, 1998;
(c) the Company's Current Report on Form 8-K dated March 31,
1998;
(d) the Company's Current Report on Form 8-K dated April 8,
1998;
(e) the Company's Current Report on Form 8-K dated April 26,
1998; and
(f) the description of the Common Stock contained in the
Company's Registration Statement on Form 8-A filed
with the Commission on September 28, 1994, including
any amendments or reports filed for the purpose of
updating such description.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
after the date hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered pursuant to this Registration
Statement have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
The Common Stock, which is the class of securities offered
pursuant to this Registration Statement, is registered under the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
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Item 6. Indemnification of Directors and Officers.
Sections 1741-1750 of the Pennsylvania Business Corporation
Law of 1988 (the "BCL") and the Company's By-Laws provide for indemnification of
the Company's directors and officers and certain other persons.
Under Sections 1741-1750 of the BCL, directors and officers of
the Company may be indemnified by the Company against all expenses incurred in
connection with actions (including, under certain circumstances, derivative
actions) brought against such director or officer by reason of his or her status
as a representative of the Company, or by reason of the fact that such director
or officer serves or served as a representative of another entity at the
Company's request, so long as the director or officer acted in good faith and in
a manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Company.
The Company's Bylaws provide that the Company shall indemnify,
to the fullest extent authorized by the Pennsylvania Business Corporation Law of
1988, any person who is or was a director or officer of the Company or who is or
was serving at the request of the Company as a director or officer of another
corporation or of a partnership, joint venture, trust or other enterprise, and
that the Company may indemnify, by action of the Board of Directors of the
Company, any person who is or was an employee or agent of the Company or who is
or was serving at the request of the Company as an employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise, in
the event of personal liability or expenses incurred by them as a result of
certain litigation against them, including claims, actions, suits or proceedings
involving an alleged violation of the Securities Act.
The Company's Articles of Incorporation also limit the
personal liability of the Company's directors for monetary damages for any
action taken, or any failure to take action, unless such director has breached
or failed to perform such director's fiduciary duty and the breach or failure to
perform constitutes self-dealing, willful misconduct or recklessness, or unless
such liability is imposed pursuant to a criminal statute or for the payment of
taxes pursuant to local, state or federal law.
The directors and officers of the Company are covered by
insurance indemnifying them against certain civil liabilities, including
liabilities under the federal securities laws, which might be incurred by them
in such capacities.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
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Item 7. Exemption from Registration Claimed.
No restricted securities are being reoffered or resold
pursuant to this Registration Statement.
Item 8. Exhibits.
Exhibit No. Description
- ----------- -----------
4.1 1998 Long-Term Incentive Plan
* 4.2 1994 Stock Option Plan (Exhibit 10.1 to the Company's Annual
Report on Form 10-K for the year ended October 30, 1994).
5 Opinion of Pepper Hamilton LLP
23.1 Consent of Deloitte & Touche, LLP (See "Independent Auditors'
Consent" at page 7)
23.2 Consent of Pepper Hamilton LLP (Included in Exhibit 5)
24 Power of Attorney (See Signature Page at page 8)
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* Incorporated by reference.
Item 9. Undertakings
The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the
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maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (i) and (ii) above do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Owosso Corporation on Form S-8 of our report dated December 11,
1997, appearing in the Annual Report on Form 10-K of Owosso Corporation for the
year ended October 26, 1997.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
June 2, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in King of Prussia, Pennsylvania, on May 20, 1998.
OWOSSO CORPORATION
By: /s/ George B. Lemmon, Jr.
------------------------------------
George B. Lemmon, Jr., Chief Executive
Officer, the principal executive officer
By: /s/ John H. Wert, Jr.
----------------------------------------
John H. Wert, Jr., Senior Vice President -
Finance and Chief Financial Officer, the
principal financial officer and the principal
accounting officer
POWER OF ATTORNEY
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KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints George B. Lemmon, Jr. and John H. Wert,
and each or any of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or his, her or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: May 20, 1998 /s/ George B. Lemmon, Jr.
-----------------------------------------
George B. Lemmon, Jr., President, Chief
Executive Officer, and Director
Date: May 20, 1998 /s/ John H. Wert, Jr.
-----------------------------------------
John H. Wert, Jr., Senior Vice President -
Finance and Chief Financial Officer
Date: May 20, 1998 /s/ John R. Reese
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John R. Reese, Chairman of the Board and
Director
Date: May 20, 1998 /s/ Ellen D. Harvey
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Ellen D. Harvey, Director
Date: May 20, 1998 /s/ Harry E. Hill
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Harry E. Hill, Director
Date: May 20, 1998 /s/ Lowell P. Huntsinger
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Lowell P. Huntsinger, Director
Date: May 20, 1998 /s/ Eugene P. Lynch
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Eugene P. Lynch, Director
Date: May 20, 1998 /s/ James A. Ounsworth
-----------------------------------------
James A. Ounsworth, Director
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EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
4.1 1998 Long-Term Incentive Plan
5 Opinion of Pepper Hamilton LLP
23.1 Consent of Deloitte & Touche, LLP (See "Independent Auditors'
Consent" at page 7)
23.2 Consent of Pepper Hamilton LLP
(Included in Exhibit 5)
24 Power of Attorney (See Signature Page at page 8)
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<PAGE>
OWOSSO CORPORATION
1998 LONG-TERM INCENTIVE PLAN
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SECTION 1. Purpose; Definitions. The purpose of the Owosso
Corporation 1998 Long-Term Incentive Plan (the "Plan") is to offer certain
employees and directors of the Owosso Corporation, a Pennsylvania corporation
(the "Corporation") and its subsidiaries, equity interests in the Corporation,
options to acquire equity interests in the Corporation, and other
performance-based incentive awards, thereby attracting, retaining and motivating
such persons, and strengthening the mutuality of interests between such persons
and the Corporation's shareholders.
For purposes of the Plan, the following initially capitalized
words and phrases shall be defined as set forth below, unless the context
clearly requires a different meaning:
a. "Affiliate" means, with respect to a person or
entity, a person that directly or indirectly controls, or is controlled by, or
is under common control with such person or entity.
b. "Associate" means, a consultant, contractor or
other provider of services to the Corporation.
c. "Board" means the Board of Directors of the
Corporation, as constituted from time to time.
d. "Cause" means a felony conviction of a Participant
or the failure of a Participant to contest prosecution for a felony, or a
Participant's willful misconduct or dishonesty.
e. "Change of Control" means (i) the acquisition in
one or more transactions by any "Person" (as the term person is used for
purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of "Beneficial Ownership" (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or
more of the combined voting power of the Corporation's then outstanding voting
securities (the "Voting Securities"), provided that for purposes of this clause
(i) the Voting Securities acquired directly from the Corporation by any Person
shall be excluded from the determination of such Person's Beneficial Ownership
of Voting Securities (but such Voting Securities shall be included in the
calculation of the total number of Voting Securities then outstanding); or (ii)
approval by shareholders of the Corporation of (A) a merger, reorganization or
consolidation involving the Corporation if the shareholders of the Corporation
immediately before such merger, reorganization or consolidation do not or will
not own directly or indirectly immediately following such merger, reorganization
or consolidation, more than fifty percent (50%) (or such other percentage
ranging from fifty percent (50%) to and including seventy-five percent (75%),
that the Committee may, in its discretion, specify from time to time in general
or with respect to any particular merger, reorganization or consolidation) of
the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such
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merger, reorganization or consolidation in substantially the same proportion as
their ownership of the Voting Securities outstanding immediately before such
merger, reorganization or consolidation) or (B) (1) a complete liquidation or
dissolution of the Corporation or (2) an agreement for the sale or other
disposition of all or substantially all of the assets of the Corporation; or (3)
acceptance by shareholders of the Corporation of shares in a share exchange if
the shareholders of the Corporation immediately before such share exchange do
not or will not own directly or indirectly immediately following such share
exchange more than fifty percent (50%) (or such other percentage ranging from
fifty percent (50%) to and including seventy-five percent (75%), that the
Committee may, in its discretion, specify from time to time in general or with
respect to any particular share exchange) of the combined voting power of the
outstanding voting securities of the corporation resulting from or surviving
such share exchange in substantially the same proportion as their ownership of
the Voting Securities outstanding immediately before such share exchange.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because twenty-five percent (25%) or more of the then outstanding Voting
Securities is acquired by (1) a corporation which immediately prior to such
acquisition is owned directly or indirectly by the shareholders of the
Corporation in the same proportion as their ownership of stock in the
Corporation immediately prior to such acquisition or (2) any or all of George B.
Lemmon, Sr., George B. Lemmon, Jr. and John R. Reese.
f. "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
g. "Committee" means the Committee referred to in
Section 2 hereof.
h. "Disability" means permanent and total disability,
as determined under the Corporation's long-term disability program, except that
Disability of an optionee with respect to an Incentive Stock Option shall occur
if the optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
i. "Non-Employee Director" shall have the meaning set
forth in Rule 16b-3 promulgated by the Securities and Exchange Commission under
the Exchange Act, or any successor definition adopted by the Securities and
Exchange Commission.
j. "Fair Market Value" means, as of any date: (1) the
closing price of the Stock as reported on the principal nationally recognized
stock exchange on which the Stock is traded on such date, or if no Stock prices
are reported on such date, the closing price of the Stock on the next preceding
date on which there were reported Stock prices; or (2) if the Stock is not
listed or admitted to unlisted trading privileges on a nationally recognized
stock exchange, the closing price of the Stock as reported by The Nasdaq Stock
Market on such date, or if no Stock prices are reported on such date, the
closing price of the Stock on the next preceding date on which there were
reported Stock prices; or (3) if the Stock is not listed or admitted to unlisted
trading privileges on a nationally recognized stock exchange or traded on The
Nasdaq Stock
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Market, then the "Market Price" shall be determined by the Board acting in its
discretion, in accordance with the standards set forth in Treasury Regulation
ss.1.421-4(d)(7).
k. "Incentive Stock Option" means any Stock Option
intended to be and designated as an "Incentive Stock Option" within the meaning
of Section 422 of the Code.
l. "Long-Term Performance Award" or "Long-Term Award"
means an award made pursuant to Section 8 hereof that is payable in cash and/or
Stock (including Restricted Stock, Performance Shares and Performance Units) in
accordance with the terms of the grant, based on Corporation, business unit
and/or individual performance over a period of at least two years, in each case
as determined by the Committee and as set forth in the grant letter.
m. "Non-Qualified Stock Option" means any Stock
Option that is not an Incentive Stock Option.
n. "Participant" means an employee, director or
Associate of the Corporation or a Subsidiary to whom an award is granted
pursuant to the Plan.
o. "Performance Share" means an award made pursuant
to Section 9 hereof of the right to receive Stock at the end of a specified
performance period.
p. "Performance Unit" means an award made pursuant to
Section 10 hereof of the right to receive cash at the end of a specified
performance period.
q. "Restricted Stock" means an award of shares of
Stock that is subject to restrictions pursuant to Section 7 hereof.
r. "Retirement" means termination of the employment
of a Participant with the Corporation, an Affiliate or a Subsidiary other than a
termination effected at the direction of the Corporation (whether or not the
Corporation effects such termination for Cause). With respect to a director who
is not also an employee of the Corporation, Retirement shall occur at such time
as the individual ceases to be a director.
s. "Securities Broker" means a registered securities
broker acceptable to the Corporation who agrees to effect the cashless exercise
of an Option pursuant to Section 5(m) hereof.
t. "Stock" means the common stock, $.01 par value per
share, of the Corporation, subject to substitution or adjustment as provided in
Section 3(d) hereof.
u. "Stock Appreciation Right" means the right,
pursuant to an award granted under Section 6 hereof, to cash and/or shares of
stock in an amount equal to the difference between (i) the Fair Market Value, as
of the date such right (or such portion thereof) is
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exercised, of the shares of Stock covered by such right (or such portion
thereof) and (ii) the base amount established by the Committee with respect to
such right (or such portion thereof).
v. "Stock Option" or "Option" means any option to
purchase shares of Stock (including Restricted Stock, if the Committee so
determines) granted pursuant to Section 5 hereof.
w. "Subsidiary" means, in respect of the Corporation,
a subsidiary corporation, whether now or hereafter existing, as defined in
Sections 424(f) and (g) of the Code.
SECTION 2. Administration. The Plan shall be administered
either by the entire Board or by a Committee of not less than two members of the
Board who are Non-Employee Directors and who shall be appointed by, and serve at
the pleasure of, the Board. The Board or the Committee may, in its sole
discretion, determine from time to time whether members of the Committee shall
be required to constitute "outside directors" within the meaning of the rules
and regulations under Section 162(m) of the Code. At any time that the Board
chooses to administer the Plan rather than have the Plan administered by the
Committee, all references in the Plan to the term "Committee" shall refer to the
Board (other than any such reference in this paragraph).
The Committee shall have full authority to grant to eligible
persons under Section 4: (i) Stock Options, (ii) Stock Appreciation Rights,
(iii) Restricted Stock, (iv) Long-Term Performance Awards, (v) Performance
Shares and/or (vi) Performance Units. In particular, the Committee shall have
the authority:
a. to select the persons to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Long-Term Performance Awards, Performance
Shares and Performance Units may from time to time be granted hereunder;
b. to determine whether and to what extent Incentive
Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock, Long-Term Performance Awards, Performance Shares and
Performance Units, or any combination thereof, are to be granted hereunder;
c. to determine the number of shares of Stock, if
any, to be covered by each such award granted hereunder;
d. to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder,
including, but not limited to, the share price and any restriction or
limitation, any vesting provisions, or any vesting acceleration or forfeiture
waiver regarding any Stock Option or other award and/or the shares of Stock
relating thereto, or the length of the period following termination of
employment of any Participant during which any Stock Option or Stock
Appreciation Right may be exercised, based on such factors as the Committee
shall determine, in its sole discretion;
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e. to determine whether and under what circumstances
a Stock Option may be settled in cash or stock, including Restricted Stock under
Section 5(l);
f. to determine whether and under what circumstances
a Stock Option may be exercised without a payment of cash under Section 5(m);
and
g. to determine whether, to what extent and under
what circumstances Stock and other amounts payable with respect to an award
under the Plan may be deferred either automatically or at the election of the
Participant.
The Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan as
it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any agreements
relating thereto); to amend the terms of any agreement relating to any award
issued under the Plan; and to otherwise supervise the administration of the
Plan. The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any award granted in the manner and to the
extent it shall deem necessary to carry out the intent of the Plan.
All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Corporation
and Participants. No member of the Committee shall be liable for any good faith
determination, act or failure to act in connection with the Plan or any award
made under the Plan.
SECTION 3. Stock Subject to the Plan.
a. Stock Subject to the Plan. The stock to be subject
or related to awards under the Plan shall be shares of Stock and may be either
authorized and unissued shares of Stock or shares of Stock held in the treasury
of the Corporation. The maximum number of shares of Stock that may be the
subject of awards under the Plan is five hundred thousand (500,000) and the
Corporation shall reserve for the purposes of the Plan, out of its authorized
and unissued shares of Stock or out of shares of Stock held in its treasury, or
partly out of each, such number of shares.
Notwithstanding the foregoing, no individual shall receive,
over the term of the Plan, awards for more than an aggregate of 200,000 of the
shares of Stock authorized for grant under the Plan.
b. Computation of Stock Available for the Plan. For
the purpose of computing the total number of shares of Stock available under the
Plan at any time during which the Plan is in effect, there shall be debited
against the total number of shares of Stock determined to be available pursuant
to paragraphs (a) and (c) of this Section 3 the maximum number of shares of
Stock subject to issuance upon exercise of Options or other stock based awards
made under the Plan.
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c. Effect of the Expiration or Termination of Awards.
If and to the extent that an award made under the Plan expires, terminates or is
canceled or forfeited for any reason without having been exercised in full, the
shares of Stock associated with the expired, terminated, canceled or forfeited
portion of the award shall again become available for award under the Plan. In
addition, during the period that any award remains outstanding under the Plan,
the Committee may make good faith adjustments with respect to the number of
shares of Stock attributable to such awards for purposes of calculating the
maximum number of shares available for the granting of future awards under the
Plan.
d. Other Adjustment. In the event of any merger,
reorganization, consolidation, recapitalization, Stock dividend, or other change
in corporate structure affecting the Stock, such substitution or adjustment
shall be made in the aggregate number, type and issuer of the securities
reserved for issuance under the Plan, in the number and option price of
securities subject to outstanding Options granted under the Plan and in the
number and price of securities to other awards made under the Plan, as may be
determined to be appropriate by the Committee in its sole discretion, provided
that the number of securities subject to any award shall always be a whole
number. Such adjusted option price shall also be used to determine the amount
payable by the Corporation upon the exercise of any Stock Appreciation Right.
SECTION 4. Eligibility. Employees, directors and Associates of
the Corporation or its Subsidiaries are eligible to be granted awards under the
Plan. Directors who are not employees of the Corporation or a Subsidiary are
eligible to be granted awards under the Plan, but are not eligible to be granted
Incentive Stock Options.
SECTION 5. Stock Options. Stock Options granted under the Plan
may be of two types: (i) Incentive Stock Options or (ii) Non-Qualified Stock
Options. Stock Options may be granted alone, in addition to or in tandem with
other awards granted under the Plan. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee
eligible under Section 4, Incentive Stock Options, Non-Qualified Stock Options,
or both types of Stock Options (in each case with or without Stock Appreciation
Rights). To the extent that any Stock Option designated as an Incentive Stock
Option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option governed by the terms hereof otherwise
applicable thereto.
Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of the optionee(s) affected, to disqualify any Incentive
Stock Option under such Section 422.
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Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem appropriate:
a. Option Price. The exercise price per share of
Stock purchasable under a Non-Qualified Stock Option shall be determined by the
Committee; provided, however, that if the Board or the Committee has determined
to comply with the rules and regulations under Section 162(m) of the Code, the
exercise price for any individual who is or (as of the time of grant) can be
reasonably anticipated to be subject to the provisions of Section 162(m) of the
Code shall not be less than the Fair Market Value at the time of grant. The
exercise price per share of Stock purchasable under an Incentive Stock Option
shall be 100% of the Fair Market Value of the Stock on the date of the grant.
However, any Incentive Stock Option granted to any optionee who, at the time the
Option is granted, owns more than 10% of the voting power of all classes of
stock of the Corporation or of a Subsidiary, shall have an exercise price per
share of not less than 110% of Fair Market Value per share on the date of the
grant.
b. Option Term. The term of each Stock Option shall
be fixed by the Committee, but no Stock Option shall be exercisable more than
ten years after the date the Option is granted. However, any Option granted to
any optionee who, at the time the Option is granted, owns more than 10% of the
voting power of all classes of stock of the Corporation or of a Subsidiary may
not have a term of more than five years. No Option may be exercised by any
person after expiration of the term of the Option.
c. Exercisability. Stock Options shall be exercisable
at such time or times and subject to such terms and conditions as shall be
determined by the Committee at grant. If the Committee provides, in its
discretion, that any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any time at or after
grant, in whole or in part, based on such factors as the Committee shall
determine, in its sole discretion.
d. Method of Exercise. Subject to the exercise
provisions under Section 5(c), Stock Options may be exercised in whole or in
part at any time and from time to time during the term of the Option, by giving
written notice of exercise to the Corporation specifying the number of shares to
be purchased. Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or such other instrument as
the Committee may accept. As determined by the Committee, in its sole
discretion, at or after grant, payment in full or in part of the exercise price
of a Stock Option may be made in the form of unrestricted Stock based on the
Fair Market Value of the Stock on the date the Option is exercised; provided,
however, that, in the case of an Incentive Stock Option, the right to make a
payment in the form of already owned shares of Stock may be authorized only at
the time the Option is granted.
The Committee, in its sole discretion, may at the time of
grant or such later time as it determines, permit payment of a Stock Option
exercise price of a Non-Qualified Stock Option
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to be made in whole or in part in the form of Restricted Stock based on the Fair
Market Value of the Stock on the date the Option is exercised (computed without
regard to the restrictions applicable to the Restricted Stock); provided,
however, that in the case of an Incentive Stock Option, the right to make a
payment in the form of Restricted Stock may be authorized only at the time the
Option is granted. If such payment is permitted, then Stock received upon the
exercise of the Option may be subject to the same forfeiture restrictions as the
Restricted Stock used to make the payment, unless otherwise determined by the
Committee, in its sole discretion, at or after grant.
No shares of Stock shall be issued upon exercise of an Option
until full payment therefor has been made. An optionee shall generally have the
right to dividends and other rights of a shareholder with respect to shares of
Stock subject to the Option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given the
representation described in Section 13(a) hereof.
e. Non-transferability of Options. Except as
otherwise determined by the Committee, no Stock Option shall be transferable by
the optionee otherwise than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order, as defined in the Code or
Title I of the Employee Retirement Income Security Act, and all Stock Options
shall be exercisable, during the optionee's lifetime, only by the optionee or,
in the event of his Disability, by his personal representative.
f. Termination by Reason of Death. Subject to Section
5(j), if an optionee's service with the Corporation or any Subsidiary terminates
by reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable or on such accelerated basis as the
Committee may determine at or after grant, by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee, for a
period of expiring (1) at such time as may be specified by the Committee at or
after the time of grant, or (2) if not specified by the Committee, then one year
from the date of death, or (3) if sooner than the applicable period specified
under (1) or (2) above, then upon the expiration of the stated term of such
Stock Option.
g. Termination by Reason of Disability. Subject to
Section 5(j), if an optionee's service with the Corporation or any Subsidiary
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee or his personal representative, to the
extent it was exercisable at the time of termination, or on such accelerated
basis as the Committee may determine at or after grant, for a period expiring
(1) at such time as may be specified by the Committee at or after the time of
grant, or (2) if not specified by the Committee, then six months from the date
of termination of service, or (3) if sooner than the applicable period specified
under (1) or (2) above, then upon the expiration of the stated term of such
Stock Option; provided, however, that if the optionee dies within such period,
any unexercised Stock Option held by such optionee shall, at the sole discretion
of the Committee, thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of one (1) year from the date of
such death (or such other period as may be specified by the
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Committee) or until the expiration of the stated term of such Stock Option,
whichever period is shorter.
h. Termination by Reason of Retirement. Subject to
Section 5(j), if an optionee's service with the Corporation or any Subsidiary
terminates by reason of Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of such Retirement or on such accelerated basis as the Committee may
determine at or after grant, for a period expiring (1) at such time as may be
specified by the Committee at or after the time of grant, or (2) if not
specified by the Committee, then thirty (30) days from the date of termination
of service, or (3) if sooner than the applicable period specified under (1) or
(2) above, then upon the expiration of the stated term of such Stock Option.
i. Other Termination. Unless otherwise determined by
the Committee at or after grant, if an optionee's service with the Corporation
or any Subsidiary terminates for any reason other than death, Disability or
Retirement, the Stock Option shall be exercisable by the optionee for a period
expiring (1) at such time as may be specified by the Committee at or after the
time of grant, or (2) if not specified by the Committee, then on the date of
termination of service in the event the termination occurred for Cause or 30
days from the date of termination of service if the termination occurred for any
reason other than death, Disability, Retirement or Cause, or (3) if sooner than
the applicable period specified under (1) or (2) above, then upon the expiration
of the stated term of such Stock Option.
j. Change of Control. In the event of a Change of
Control, the Committee may, in its sole discretion, cause all outstanding Stock
Options to immediately become fully exercisable.
k. Incentive Stock Option Limitations. To the extent
required for "incentive stock option" status under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the Stock
with respect to which Incentive Stock Options are exercisable for the first time
by the optionee during any calendar year under the Plan and/or any other plan of
the Corporation or any Subsidiary shall not exceed $100,000. For purposes of
applying the foregoing limitation, Incentive Stock Options shall be taken into
account in the order granted.
To the extent (if any) permitted under Section 422 of the Code
without causing an Incentive Stock Option to lose its status as such or to be
deemed to be a new Incentive Stock Option under the modification rules of
Section 424(h) of the Code, and subject to any restrictions imposed by the
Committee, if (i) a participant's service with the Corporation is terminated by
reason of death, Disability or Retirement and (ii) the portion of any Incentive
Stock Option that is otherwise exercisable during the post-termination period
specified under Section 5(f), (g) or (h), applied without regard to this Section
5(j), is greater than the portion of such Option that is exercisable as an
"incentive stock option" during such post-termination period under Section 422
after taking the $100,000 limitation into account, such post-termination period
of exercisability shall automatically be extended (but not beyond the original
Option term) to the extent necessary
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to permit the optionee to exercise such Incentive Stock Option without violating
the $100,000 limitation.
l. Cash-out of Option; Settlement of Restricted
Stock. On receipt of written notice to exercise, the Committee may, in its sole
discretion, elect to terminate all or part of the portion of the Option(s)
proposed to be exercised provided that the Corporation pays the optionee an
amount in cash equal to the excess of the Fair Market Value of the Stock
otherwise issuable over the Option price (the "Spread Value") on the effective
date of such cash-out.
In addition, if the option agreement so provides at grant or
is amended after grant and prior to exercise to so provide (with the optionee's
consent), the Committee may require that all or part of the shares to be issued
upon exercise of an Option take the form of Restricted Stock. For this purpose,
such Restricted Stock shall be valued on the date of exercise on the basis of
the Fair Market Value of such Restricted Stock determined without regard to the
forfeiture restrictions involved.
m. Cashless Exercise. With the consent of the
Committee, the Corporation agrees to cooperate in a "cashless exercise" of an
Option. The cashless exercise shall be effected by the Participant delivering to
the Securities Broker instructions to sell a sufficient number of shares of
Stock to cover the costs and expenses associated therewith.
SECTION 6. Stock Appreciation Rights.
a. Grant and Exercise. Stock Appreciation Rights may
be granted separate from or in conjunction with all or part of any Stock Option
granted under the Plan and shall be nontransferable except that, subject to
Section 5(e) hereof, a Stock Appreciation Right shall be transferable upon
transfer of the related Stock Option. In the case of a Non-Qualified Stock
Option, may be granted either at or after the time of the grant of such Stock
Option. In the case of an Incentive Stock Option, Stock Appreciation Rights may
be granted only at the time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option, except
that, unless otherwise determined by the Committee, in its sole discretion at
the time of grant, a Stock Appreciation Right granted with respect to less than
the full number of shares covered by a related Stock Option shall not be reduced
until the number of shares covered by an exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock Appreciation
Right. A Stock Appreciation Right not granted in connection with a Stock Option
shall terminate at the time specified in the grant.
A Stock Appreciation Right granted in connection with a Stock
Option may be exercised by an optionee, in accordance with Section 6(b) of the
Plan, by surrendering the applicable portion of the related Stock Option. Upon
such exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b) of the
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Plan. Stock Options which have been so surrendered, in whole or in part, shall
no longer be exercisable to the extent the related Stock Appreciation Rights
have been exercised. A Stock Appreciation Right not granted in connection with a
Stock Option may be exercised by the grantee's delivery to the Committee of a
notice of exercise, in the form prescribed by the Committee.
b. Terms and Conditions. Stock Appreciation Rights
shall be subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to time by the
Committee, in its sole discretion, including the following:
(1) Stock Appreciation Rights shall be
exercisable only at such time or times established by the Committee. Stock
Appreciation Rights granted in connection with Stock Options shall be
exercisable only at such time or times and to the extent that the Stock Options
to which they relate shall be exercisable in accordance with the provisions of
Section 5 and this Section 6 of the Plan.
(2) Upon the exercise of a Stock
Appreciation Right, an optionee shall be entitled to receive up to, but not more
than, an amount in cash and/or shares of Stock equal in value to the excess of
the Fair Market Value of one share of Stock over the base amount established by
the Committee, multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment. In the case of a Stock Appreciation
Right granted in connection with a Stock Option the base amount shall be the
exercise price of the related Stock Option.
(3) Upon the exercise of a Stock
Appreciation Right, the Stock Option or part thereof to which such Stock
Appreciation Right is related, if any, shall be deemed to have been exercised
for the purpose of the limitation set forth in Section 3 of the Plan on the
number of shares of Stock to be issued under the Plan, but only to the extent of
the number of shares issued under the Stock Appreciation Right at the time of
exercise based on the value of the Stock Appreciation Right at such time.
(4) A Stock Appreciation Right granted in
connection with a Stock Option may be exercised only if and when the market
price of the Stock subject to the Stock Option exceeds the exercise price of
such Stock Option.
SECTION 7. Restricted Stock.
a. Administration. Shares of Restricted Stock may be
issued either alone or in addition to other awards granted under the Plan. The
Committee shall determine the persons to whom, and the time or times at which,
grants of Restricted Stock will be made, the number of shares to be awarded, the
price (if any) to be paid by the recipient of Restricted Stock, the time or
times within which such awards may be subject to forfeiture, and all other
conditions of the awards.
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The Committee may condition the vesting of Restricted Stock
upon the attainment of specified performance goals or such other factors as the
Committee may determine, in its sole discretion, at the time of the award.
The provisions of Restricted Stock awards need not be the same
with respect to each recipient.
b. Awards and Certificates. The prospective recipient
of a Restricted Stock award shall not have any rights with respect to such
award, unless and until such recipient has executed an agreement evidencing the
award and has delivered a fully executed copy thereof to the Corporation, and
has otherwise complied with the applicable terms and conditions of such award.
The purchase price for shares of Restricted Stock may be zero.
Each Participant receiving a Restricted Stock award shall be
issued a stock certificate in respect of such shares of Restricted Stock. Such
certificate shall be registered in the name of such Participant, and shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Owosso Corporation
1998 Long-Term Incentive Plan and an Agreement entered into
between the registered owner and the Owosso Corporation.
Copies of such Plan and Agreement are on file in the principal
corporate offices of the Owosso Corporation"
The Committee shall require that the stock certificates
evidencing shares of Restricted Stock be held in custody by the Corporation
until the restrictions thereon shall have lapsed, and that, as a condition of
any Restricted Stock award, the Participant shall have delivered to the
Corporation a stock power, endorsed in blank, relating to the Stock covered by
such award.
c. Restrictions and Conditions. The shares of
Restricted Stock awarded pursuant to this Section 7 shall be subject to the
following restrictions and conditions:
(1) During a period set by the Committee
commencing with the date of such award (the "Restriction Period"), the
Participant shall not be permitted to sell, transfer, pledge, assign or
otherwise encumber shares of Restricted Stock awarded under the Plan. The
Committee, in its sole discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive such restrictions in
whole or in part, based on service, performance and/or such other factors or
criteria as the Committee may determine, in its sole discretion.
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(2) Except as provided in this paragraph
(ii) and Section 7(c)(i), the Participant shall have, with respect to the shares
of Restricted Stock, all of the rights of a shareholder of the Corporation,
including the right to vote the shares, and the right to receive any cash
dividends. The Committee, in its sole discretion, as determined at the time of
award, may permit or require the payment of cash dividends to be deferred and,
if the Committee so determines, reinvested in additional shares of Restricted
Stock to the extent shares are available under Section 3 of the Plan.
(3) Subject to the applicable provisions of
the award agreement and this Section 7, upon termination of a Participant's
service with the Corporation for reasons other than death or Disability during
the Restriction Period, all shares of Restricted Stock still subject to
restriction shall be forfeited by the Participant. Subject to the provisions of
the Plan, the Committee, in its sole discretion, may provide for the lapse of
such restrictions in installments and may waive such restrictions, in whole or
in part, at any time, based on such factors as the Committee shall deem
appropriate in its sole discretion. Upon the death or Disability of a
Participant during the Restriction Period, restrictions will lapse with respect
to a percentage of the Restricted Stock award granted to the Participant that is
equal to the percentage of the Restriction Period that has elapsed as of the
date of death or the date on which such Disability commenced (as determined by
the Committee in its sole discretion), and a stock certificate or stock
certificates representing such shares of Stock shall be issued and delivered to
the Participant or the Participant's estate, as the case may be.
(4) In the event of hardship or other
special circumstances of a Participant whose service with the Corporation is
involuntarily terminated (other than for Cause), the Committee may, in its sole
discretion, waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock, based on such factors
as the Committee may deem appropriate.
(5) If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, the certificates for such shares shall be promptly delivered
by the Corporation to the Participant.
(6) In the event of a Change of Control, the
Committee in its sole discretion, cause all Restricted Stock remaining subject
to forfeiture to immediately cease to be subject to forfeiture and a stock
certificate or stock certificates representing such shares of Stock to be issued
and delivered to the Participant.
SECTION 8. Long Term Performance Awards.
a. Awards and Administration. Long Term Performance
Awards may be awarded either alone or in addition to other awards granted under
the Plan. Prior to award of a Long Term Performance Award, the Committee shall
determine the nature, length and starting date of the performance period (the
"performance period") for each Long Term Performance Award, which shall be at
least two years (subject to Section 11 below). Performance periods may
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overlap and Participants may participate simultaneously with respect to Long
Term Performance Awards that are subject to different performance periods and/or
different performance factors and criteria. Prior to award of a Long Term
Performance Award, the Committee shall determine the performance objectives to
be used in valuing Long Term Performance Awards and determine the extent to
which such Long Term Performance Awards have been earned. Performance objectives
may vary from Participant to Participant and between groups of Participants and
shall be based upon such Corporation, business unit and/or individual
performance factors and criteria as the Committee may deem appropriate,
including, but not limited to, earnings per share or return on equity, as
approved by the Shareholders of the Corporation. If the Board or the Committee
has determined to comply with the rules and regulations under Section 162(m) of
the Code, the Committee shall determine, in its sole discretion, the extent to
which the performance objectives for any Long Term Performance Award should be
disclosed to and approved by the shareholders of the Corporation and otherwise
comply with such rules and regulations.
At the beginning of each performance period, the Committee
shall determine for each Long Term Performance Award subject to such performance
period the range of dollar values or number of shares of Stock to be awarded to
the Participant at the end of the performance period if and to the extent that
the relevant measure(s) of performance for such Long Term Performance Award is
(are) met; provided, however, that no Participant shall be awarded a Long Term
Performance Award with a dollar value in excess of One Million Dollars
($1,000,000) for the performance period to which the Long Term Performance Award
relates. Such dollar values or number of shares of Stock may be fixed or may
vary in accordance with such performance and/or other criteria as may be
specified by the Committee, in its sole discretion.
b. Adjustment of Awards. In the event of special or
unusual events or circumstances affecting the application of one or more
performance objectives to a Long Term Performance Award, the Committee may
revise the performance objectives and/or underlying factors and criteria
applicable to the Long Term Performance Awards affected, to the extent deemed
appropriate by the Committee, in its sole discretion, to avoid unintended
windfalls or hardship.
c. Termination of Service. Unless otherwise provided
in the applicable award agreement(s), if a Participant terminates service with
the Corporation during a performance period because of death, Disability or
Retirement, such Participant (or his estate) shall be entitled to a payment with
respect to each outstanding Long Term Performance Award at the end of the
applicable performance period:
(1) based, to the extent relevant under the
terms of the award, upon the Participant's performance for the portion of such
performance period ending on the date of termination and the performance of the
applicable business unit(s) for the entire performance period, and
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(2) pro-rated, where deemed appropriate by
the Committee, for the portion of the performance period during which the
Participant was employed by the Corporation, all as determined by the Committee,
in its sole discretion.
However, the Committee may provide for an earlier payment in
settlement of such award in such amount and under such terms and conditions as
the Committee deems appropriate, in its sole discretion.
Except as otherwise determined by the Committee, if a
Participant terminates service with the Corporation during a performance period
for any other reason, then such Participant shall not be entitled to any payment
with respect to the Long Term Performance Awards subject to such performance
period, unless the Committee shall otherwise determine, in its sole discretion.
In the event of a Change of Control, the Committee may, in its
sole discretion, cause all conditions applicable to a Long Term Performance
Award to immediately terminate and a stock certificate or stock certificates
representing shares of Stock subject to such award, or cash, as the case may be,
to be issued and/or delivered to the Participant.
d. Form of Payment. The earned portion of a Long Term
Performance Award may be paid currently or on a deferred basis, together with
such interest or earnings equivalent as may be determined by the Committee, in
its sole discretion. Payment shall be made in the form of cash or whole shares
of Stock, including Restricted Stock, either in a lump sum payment or in annual
installments commencing as soon as practicable after the end of the relevant
performance period, all as the Committee shall determine at or after grant. If
and to the extent a Long Term Performance Award is payable in Stock and the full
amount of such value is not paid in Stock, then the shares of Stock representing
the portion of the value of the Long Term Performance Award not paid in Stock
shall again become available for award under the Plan, subject to Section 3(c).
Prior to any payment, the Committee shall certify that all of the performance
goals or other material terms of the award have been met.
SECTION 9. Performance Shares.
a. Awards and Administration. The Committee shall
determine the persons to whom and the time or times at which Performance Shares
shall be awarded, the number of Performance Shares to be awarded to any such
person, the duration of the period (the "performance period") during which, and
the conditions under which, receipt of the shares of Stock will be deferred, and
the other terms and conditions of the award in addition to those set forth
below.
The Committee may condition the receipt of shares of Stock
pursuant to a Performance Share award upon the attainment of specified
performance goals or such other factors or criteria as the Committee shall
determine, in its sole discretion.
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The provisions of Performance Share awards need not be the
same with respect to each Participant, and such awards to individual
Participants need not be the same in subsequent years.
b. Terms and Conditions. Performance Shares awarded
pursuant to this Section 9 shall be subject to the following terms and
conditions and such other terms and conditions, not inconsistent with the terms
of this Plan, as the Committee shall deem desirable:
(1) Conditions. The Committee, in its sole
discretion, shall specify the performance period during which, and the
conditions under which, the receipt of shares of Stock covered by the
Performance Share award will be deferred.
(2) Stock Certificate. At the expiration of
the performance period, if the Committee, in its sole discretion, determines
that the conditions specified in the Performance Share agreement have been
satisfied, a stock certificate or stock certificates representing the number of
shares of Stock covered by the Performance Share award shall be issued and
delivered to the Participant. A Participant shall not be deemed to be the holder
of Stock, or to have the rights of a holder of Stock, with respect to the
Performance Shares unless and until a stock certificate or stock certificates
representing such shares of Stock are issued to such Participant.
(3) Death, Disability or Retirement. Subject
to the provisions of the Plan, if a Participant terminates service with the
Corporation during a performance period because of death, Disability or
Retirement, such Participant (or his estate) shall be entitled to receive, at
the expiration of the performance period, a percentage of Performance Shares
that is equal to the percentage of the performance period that had elapsed as of
the date of termination, provided that the Committee, in its sole discretion,
determines that the conditions specified in the Performance Share agreement have
been satisfied. In such event, a stock certificate or stock certificates
representing such shares of Stock shall be issued and delivered to the
Participant or the Participant's estate, as the case may be.
(4) Termination of Service. Unless otherwise
determined by the Committee at the time of grant, the Performance Shares will be
forfeited upon a termination of service during the performance period for any
reason other than death, Disability or Retirement.
(5) Change of Control. In the event of a
Change of Control, the Committee may, in its sole discretion, cause all
conditions applicable to the Performance Shares to immediately terminate and a
stock certificate or stock certificates representing shares of Stock subject to
the Stock award to be issued and delivered to the Participant.
SECTION 10. Performance Units.
a. Awards and Administration. The Committee shall
determine the persons to whom and the time or times at which Performance Units
shall be awarded, the number
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of Performance Units to be awarded to any such person, the duration of the
period (the "performance period") during which, and the conditions under which,
a Participant's right to Performance Units will be vested, the ability of
Participants to defer the receipt of payment of such Performance Units, and the
other terms and conditions of the award in addition to those set forth below.
A Performance Unit shall have a fixed dollar value.
The Committee may condition the vesting of Performance Units
upon the attainment of specified performance goals or such other factors or
criteria as the Committee shall determine, in its sole discretion.
The provisions of Performance Unit awards need not be the same
with respect to each Participant, and such awards to individual Participants
need not be the same in subsequent years.
b. Terms and Conditions. Performance Units awarded
pursuant to this Section 10 shall be subject to the following terms and
conditions and such other terms and conditions, not inconsistent with the terms
of this Plan, as the Committee shall deem desirable:
(1) Conditions. The Committee, in its sole
discretion, shall specify the performance period during which, and the
conditions under which, the Participant's right to Performance Units will be
vested.
(2) Vesting. At the expiration of the
performance period, the Committee, in its sole discretion, shall determine the
extent to which the performance goals have been achieved, and the percentage of
the Performance Units of each Participant that have vested.
(3) Death, Disability or Retirement. Subject
to the provisions of this Plan, if a Participant terminates service with the
Corporation during a performance period because of death, Disability or
Retirement, such Participant (or the Participant's estate) shall be entitled to
receive, at the expiration of the performance period, a percentage of
Performance Units that is equal to the percentage of the performance period that
had elapsed as of the date of termination, provided that the Committee, in its
sole discretion, determines that the conditions specified in the Performance
Unit agreement have been satisfied, and payment thereof shall be made to the
Participant or the Participant's estate, as the case may be.
(4) Termination of Service. Unless otherwise
determined by the Committee at the time of grant, the Performance Units will be
forfeited upon a termination of service during the performance period for any
reason other than death, Disability or Retirement.
(5) Change of Control. In the event of a
Change of Control, the Committee may, in its sole discretion, cause all
conditions applicable to Performance Units to
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immediately terminate and cash representing the full amount of such award to be
paid to the Participant.
SECTION 11. Amendments and Termination. The Board may amend,
alter or discontinue the Plan at any time and from time to time, but no
amendment, alteration or discontinuation shall be made which would impair the
rights of a Participant with respect to a Stock Option, Stock Appreciation
Right, Restricted Stock, Long Term Performance Award, Performance Share or
Performance Unit which has been granted under the Plan, without the
Participant's consent.
Subject to the above provisions, the Board shall have broad
authority to amend the Plan to take into account changes in applicable tax laws
and accounting rules, as well as other developments.
SECTION 12. Unfunded Status of Plan. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or optionee by the
Corporation, nothing contained herein shall give any such Participant or
optionee any rights that are greater than those of a general creditor of the
Corporation. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or payments in lieu of Stock or with respect to awards hereunder.
SECTION 13. General Provisions.
a. The Committee may require each person acquiring
Stock or a Stock based award under the Plan to represent to and agree with the
Corporation in writing that the Participant is acquiring the Stock or Stock
based award for investment purposes and without a view to distribution thereof
and as to such other matters as the Committee believes are appropriate to ensure
compliance with applicable Federal and state securities laws. The certificate
evidencing such award and any securities issued pursuant thereto may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer and compliance with securities laws.
All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities Act of 1933, as
amended, the Exchange Act, any stock exchange upon which the Stock is then
listed, and any other applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
b. Nothing contained in the Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
shareholder approval if such
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approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases.
c. The adoption of the Plan shall not confer upon any
employee of the Corporation or a Subsidiary any right to continued employment
with the Corporation or such Subsidiary, nor shall it interfere in any way with
the right of the Corporation or such Subsidiary to terminate the employment of
any of its employees at any time.
d. No later than the date as of which an amount first
becomes includible in the gross income of the Participant for Federal income tax
purposes with respect to any award under the Plan, the Participant shall pay to
the Corporation, or make arrangements satisfactory to the Committee regarding
the payment, of any Federal, state or local taxes of any kind required by law to
be withheld with respect to such amount. Unless otherwise determined by the
Committee, the minimum required withholding obligations may be settled with
Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Corporation under the Plan shall
be conditional on such payment or arrangements and the Corporation shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
e. At the time of grant of an award under the Plan,
the Committee may provide that the shares of Stock received as a result of such
grant shall be subject to a right of first refusal, pursuant to which the
Participant shall be required to offer to the Corporation any shares that the
Participant wishes to sell, with the price being the then Fair Market Value of
the Stock, subject to such other terms and conditions as the Committee may
specify at the time of grant.
f. The reinvestment of dividends in additional
Restricted Stock (or in other types of Plan awards) at the time of any dividend
payment shall only be permissible if sufficient shares of Stock are available
under Section 3 of the Plan for such reinvestment (taking into account then
outstanding Stock Options and other Plan awards).
g. The Committee shall establish such procedures as
it deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid.
h. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania governing contracts to be performed within the
Commonwealth and without regard to the conflicts of laws provisions thereof.
SECTION 14. Effective Date of Plan. The Plan shall be
effective on the date it is approved by the Board; provided, however, that if
the Plan is not approved by the affirmative vote of the holders of a majority of
the shares of Stock present, or represented, and entitled to vote on the Plan at
a meeting of shareholders at the next annual meeting of
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shareholders of the Owosso Corporation following Board approval of the Plan, the
Plan shall become null and void.
SECTION 15. Term of Plan. No Stock Option, Stock Appreciation
Right, Restricted Stock, Long Term Performance Award, Performance Share or
Performance Unit shall be granted pursuant to the Plan on or after the tenth
(10th) anniversary of the date of shareholder approval of the Plan, but awards
granted prior to such tenth (10th) anniversary may extend beyond that date.
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June 2, 1998
Owosso Corporation
The Triad Building
2200 Renaissance Boulevard, Suite 150
King of Prussia, Pennsylvania 19406
Re: Registration Statement on Form S-8
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Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8
(the "Registration Statement") of Owosso Corporation, a Pennsylvania corporation
(the "Company"), filed on or about the date hereof with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"). The Registration Statement relates to the offering and sale
by the Company of up to an aggregate of 1,000,000 shares of common stock, par
value $0.01 per share (the "Shares"), of the Company pursuant to the Company's
1994 Stock Option Plan and 1998 Long-Term Incentive Plan (the "Plans").
In this connection, we have examined the Registration
Statement, including the exhibits thereto, the originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation
and the By-Laws of the Company as amended to date, and such other documents and
corporate records relating to the Company as we have deemed appropriate for the
purpose of rendering the opinion expressed herein. The opinion expressed herein
is based exclusively on the applicable provisions of the Pennsylvania Business
Corporation Law and federal securities laws as in effect on the date hereof.
On the basis of the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the Plans, will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. By providing such consent, we do not admit that
we come within the categories of persons whose consent is required under Section
7 of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
PEPPER HAMILTON LLP
By: /s/ Robert A. Friedel
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A Partner
