<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
OWOSSO CORPORATION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
[OWOSSO LOGO]
The Triad Building
2200 Renaissance Boulevard
Suite 150
King of Prussia, Pennsylvania 19406
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 24, 1999
------------------
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 24,
1999, at the Company's headquarters at The Triad Building, 2200 Renaissance
Boulevard, Suite 150, King of Prussia, 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 31, 1999; and
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 19, 1999, 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 & Chief Executive Officer
February 23, 1999
<PAGE>
[OWOSSO LOGO]
The Triad Building
2200 Renaissance Boulevard
Suite 150
King of Prussia, Pennsylvania 19406
------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MARCH 24, 1999
------------------
This Proxy Statement, which is first being mailed to shareholders on or
about February 23, 1999, 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 24, 1999, at the Company's
headquarters at The Triad Building, 2200 Renaissance Boulevard, Suite 150, King
of Prussia, 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 (i) for the
election of the nominees for director named below, (ii) for the ratification of
the appointment of Deloitte & Touche LLP as independent auditors, and (iii) 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 19, 1999, will be entitled to vote at the Annual
Meeting or any adjournments or postponements thereof. As of that date, there
were 5,815,842 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 six 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.
1
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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 matter. Broker non-votes, which occur when a
broker or other nominee holding shares for a beneficial owner does not require
voting instructions from the beneficial owner, 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 and Class A Convertible
Preferred 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 2000. 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., 37, became President of the Company in May 1996,
and 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.
John R. Reese, 55, was elected Chairman of the Board of Directors in March
1997. He has served as a director of the Company since March 1994, and served
as a director of Brynavon Group from 1982 until October 1994. Mr. Reese served
as the Vice Chairman of the Board of the Company from June 1996 to March 1997
and then became Chairman. Mr. Reese is also a Limited Managing Director at
Lazard Freres & Co., LLC, a position he has held since 1998, where he is in 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, 37, 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
2
<PAGE>
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 AVTEAM,
Inc., Travel Centers of America, Corp. and several private companies.
Ellen D. Harvey, 45, has served as a director of the Company since the
Reorganization. Since September 1996, she has been a principal of Morgan
Stanley Dean Witter Investment Management (formerly known as Morgan Stanley &
Co.). From 1984 to January 1996, Ms. Harvey served as a portfolio manager for
Miller, Anderson & Sherrerd, a money management firm in West Conshohocken,
Pennsylvania, and was a partner of that firm from 1989 to September 1996, at
which time it was acquired by Morgan Stanley. 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, 50, 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, which manufactures portable, cabinet and
automated pneumatic blasting equipment. Since 1984, Mr. Hill has been Managing
Partner of H.E. Hill and Company, which offers consulting services to
manufacturing and other companies. Since 1987, he has also been the President
and Chief Executive Officer of Delaware Car Company, which is engaged in the
railroad repair and equipment manufacturing business.
James A. Ounsworth, 56, 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 LLP, 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, 66, 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, one of whom remains 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 Proposal 1 to Elect All
Nominees.
Committees and Meetings of the Board of Directors
During the Company's 1998 fiscal year, which ended on October 25, 1998,
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 1998, the Audit Committee, which consisted of Mr. Hill, Mr.
Lynch and Mr. Ounsworth, 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 1998, the Compensation Committee, which consisted of Ms.
Harvey and Mr. Ounsworth, met four times. The Compensation Committee is
responsible for establishing the salaries of the executive
3
<PAGE>
officers of the Company, incentives and other forms of compensation and benefit
plans, and also administers the Company's 1994 Stock Option Plan and 1998
Long-Term Incentive Plan.
The Company does not have a standing Nominating Committee.
Compensation of Directors
The Company pays each director who is not also an employee of the Company
an annual fee of $8,000 payable in Company Common Stock, plus $1,500 for each
Board meeting and $400 for each Committee meeting attended by such director in
person. The Company will also reimburse the directors for expenses incurred in
connection with their activities as directors.
The Company's 1994 Stock Option Plan 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 initial 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 of
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.
EXECUTIVE COMPENSATION
Cash and Non-Cash Compensation Paid To Certain Executive Officers
The following table sets forth, with respect to services rendered during
fiscal 1998, 1997 and 1996, the total compensation paid by the Company to the
Company's Chief Executive Officer and each other executive officer whose total
annual salary and bonus exceeded $100,000 during fiscal 1998 (the "named
executive officers"). The Company has no written employment agreements with any
of the named executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------
Annual Compensation Restricted Securities All Other
------------------------ Stock Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) Awards($)(1) Options(#) ($)(2)
- --------------------------- ---- --------- --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
George B. Lemmon, Jr. 1998 $ 198,327 $ 50,000 -- 50,000 $ 5,014
President and Chief Executive 1997 $ 165,000 $ 55,463 $6,100 15,000 $ 3,520
Officer 1996 $ 165,000 $ 2,459 -- 20,000 $ 3,480
Harry Holiday III 1998 $ 204,385 $ 30,000 -- 50,000 $ 3,777
Executive Vice President and 1997 $ 192,308 $ 63,450 $7,050 -- $ 4,031
Chief Operating Officer 1996(3) -- -- -- 50,000 --
John H. Wert, Jr. 1998 $ 124,952 $ 32,188 -- 50,000 $ 6,627
Senior Vice President -- 1997 $ 118,666 $ 23,457 $2,606 -- $ 6,838
Finance, Chief Financial Officer, 1996 $ 113,416 $ 25,000 -- 5,000 $ 5,369
Secretary and Treasurer
Brian Tidwell 1998 $ 110,029 $ 28,650 -- 50,000 $ 3,668
Vice President of Operations 1997 $ 101,481 $ 21,245 $2,361 2,000 $ 3,681
1996(4) $ 87,308 $ 16,000 -- 5,000 $ 2,713
</TABLE>
- ------------
(1) At October 25, 1998, the value of the restricted stock awards granted to
the named executive officers in fiscal 1997 was: Mr. Lemmon, $3,778 for
his 775 shares; Mr. Holiday, $4,363 for his 895 shares; Mr. Wert, $1,614
for his 331 shares; and Mr. Tidwell, $1,463 for his 300 shares. Dividends
were paid on these shares. The restricted stock awards vested on January
4, 1999.
(2) Amounts indicated include insurance premiums paid with respect to term life
insurance in the following amounts: Mr. Lemmon, $966; Mr. Holiday, $102;
Mr. Wert, $66; and Mr. Tidwell, $66.
(3) Mr. Holiday was elected as an executive officer of the Company in November
1996.
(4) Mr. Tidwell was elected as an executive officer of the Company in June
1996.
4
<PAGE>
Stock Options Granted to Certain Executive Officers During Last Fiscal Year
Under the 1994 Stock Option Plan and the 1998 Long-Term Incentive Plan,
options to purchase Common Stock are available for grant to directors, officers
and other key employees of the Company. The following table sets forth certain
information regarding options for the purchase of Common Stock that were
awarded to the named executive officers during fiscal 1998.
OPTION GRANTS IN FISCAL YEAR ENDED OCTOBER 25, 1998
<TABLE>
<CAPTION>
Potential Realizable
Gain at Assumed Annual
Percent of Rates of Stock
Number of Total Options Appreciation for
Securities Granted to Option Terms
Underlying Employees in Exercise or Compounded Annually
Options Last Base Price Expiration -------------------------
Name Granted (#) Fiscal Year ($/Sh) Date (1) 5% 10%
- ------------------------------- ------------- --------------- ------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
George B. Lemmon, Jr. ......... 50,000 16.9% $ 7.875 03/18/08 $189,384 $457,975
Harry Holiday III ............. 50,000 16.9% $ 7.875 03/18/08 $189,384 $457,975
John H. Wert, Jr. ............. 50,000 16.9% $ 7.875 03/18/08 $189,384 $457,975
Brian Tidwell ................. 50,000 16.9% $ 7.875 03/18/08 $189,384 $457,975
</TABLE>
- ------------
(1) The stock options issued to Messrs. Lemmon, Holiday, Wert and Tidwell were
granted under the Company's 1998 Long Term Incentive Plan. The options
vest equally over five years beginning with the first anniversary of the
grant date, and the options expire, with respect to each vested portion of
the options, five years after the vesting date of such portion, or, if
sooner, the tenth anniversary of the grant date.
Stock Options Exercised by Certain Executive Officers During Fiscal 1997 Fiscal
Year and Held by Certain Executive Officers at October 25, 1998
No options granted by the Company were exercised by the named executive
officers during fiscal 1998. The following table sets forth certain information
regarding options for the purchase of Common Stock that were held by the named
executive officers.
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares Number of Securities
Acquired on Value Unexercised Options at Value of Unexercised In-the-
Name Exercise (#) Realized ($) FY-End (#) Money Options at FY-End ($)
- --------------------------- -------------- -------------- ------------------------------ -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
George B. Lemmon, Jr. ..... -- -- 51,000 84,000 0 0
Harry Holiday III ......... -- -- 20,000 80,000 0 0
John H. Wert, Jr. ......... -- -- 10,000 55,000 0 0
Brian Tidwell ............. -- -- 2,400 54,600 0 0
</TABLE>
5
<PAGE>
Board Compensation Committee Report on Executive Compensation
The Compensation Committee of the Company, consisting of two non-employee
directors, establishes the compensation of the Chief Executive Officer of the
Company, incentives and other forms of compensation and benefit plans, reviews
the compensation of senior management and administers the Company's 1994 Stock
Option Plan and 1998 Long-Term Incentive 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 and
other stock-based compensation granted at market value in order to provide
long-term incentives, thereby encouraging long-term strategic management and
enhancement of shareholder value.
The Compensation Committee believes that the following current base
salaries for the Company's executive officers for calendar year 1999 are
appropriate in light of the executive officers' contribution to the Company's
operations and performance: George B. Lemmon, Jr., $198,000, Harry Holiday III,
$198,000, John H. Wert, Jr., $126,000, Brian Tidwell, $130,000 and Steve
Shubert, the Company's Chief Information Officer, $110,000. 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.
The Committee believes that executive officers' compensation should
correlate with the Company's annual performance. Consequently, the officers
have the ability to receive a relatively large proportion of their compensation
pursuant to bonus arrangements, which the Compensation Committee intends to
continue. In fiscal 1998, the bonus arrangement for the Company's executive
officers was tied to matrices incorporating Company performance compared to
budget in the following categories: sales, operating profit margin, and
achievement of specific individual goals. In addition, the Committee determined
that 10% of the bonus payable to certain subsidiary management may be paid in
the form of restricted Common Stock, subject to a one-year vesting requirement.
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 1998, options were granted under the
1998 Long Term Incentive Plan to George B. Lemmon, Jr. (options on 50,000
shares) Harry Holiday III (options on 50,000 shares), John H. Wert, Jr.
(options on 50,000 shares) and Brian Tidwell (options on 50,000 shares). The
Compensation Committee based the grants on a variety of factors, including
expected future contribution to the Company's performance. The Compensation
Committee may also grant stock options in the future based on this and other
factors.
Ellen D. Harvey
James A. Ounsworth
6
<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 25, 1998 (the date the Company's 1998 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.
[GRAPHIC OMITTED]
ANNUAL RETURN PERCENTAGE
Years Ending
29Oct 95 27Oct96 26Oct97 25Oct98
Owosso -5.57 -45.31 37.79 -33.29
MFG 500 25.91 37.16 33.56 -0.32
S&P 500 25.59 23.03 36.71 15.36
INDEXED RETURNS
Years Ending
Base
Period
30 Oct95 29Oct 95 27Oct96 26Oct97 25Oct98
Owosso 100 94.43 51.64 71.16 47.47
MFG 500 100 125.91 172.70 230.66 229.92
S&P 500 100 125.59 154.51 211.24 243.68
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of February 1, 1999, 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, Jr. ............... 321,313 (3) 5.5% -- -- 4.7%
Harry Holiday III ................... 48,395 (4) * -- -- *
John H. Wert, Jr. ................... 32,031 (5) * -- -- *
Brian Tidwell ....................... 14,570 (6) * -- -- *
Ellen D. Harvey ..................... 18,500 (7) * -- -- *
Harry E. Hill ....................... 18,500 (8) * -- -- *
Lowell P. Huntsinger ................ 9,000 (9) * 518,433 48.4% 7.7%
Eugene P. Lynch ..................... 12,000 (7) * -- -- *
James A. Ounsworth .................. 4,000 (10) * -- -- *
John R. Reese ....................... 2,118,701 (11) 36.4% -- -- 30.8%
Morris R. Felt ...................... 900 (12) * 259,216 24.2% 3.8%
Randall V. James .................... 5,615 (13) * 293,779 27.4% 4.3%
George B. Lemmon, Sr. ............... 510,927 8.8% -- -- 7.4%
John F. Northway, Sr. ............... 675,949 (14) 11.6% -- -- 9.8%
Dimensional Fund Advisors, Inc. ..... 383,100 (15) 6.6% -- -- 5.6%
All directors and executive officers
as a group (10 persons) ............ 2,597,010 (16) 44.7% 518,433 48.4% 45.2%
</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 68,000 shares of Common Stock purchasable upon the exercise of
stock options. 217,538 shares are held by Mr. Lemmon, Jr. jointly with his
wife.
(4) Includes 30,000 shares of Common Stock purchasable upon the exercise of
stock options of these shares. 6,000 shares are held by Mr. Holiday's
wife.
(5) Includes 21,000 shares of Common Stock purchasable upon the exercise of
stock options. 1,000 shares are held by Mr. Wert as custodian for his
children, and 2,700 shares are held by Mr. Wert's wife.
(6) Includes 13,400 shares of Common Stock purchasable upon the exercise of
stock options. 370 shares are held by Mr. Tidwell jointly with his wife,
and 500 shares are held solely by Mr. Tidwell's wife.
(7) Includes 11,000 shares of Common Stock purchasable upon the exercise of
stock options.
(8) Includes 9,000 shares of Common Stock purchasable upon the exercise of
stock options. 1,000 shares are held by Mr. Hill as custodian for his
children.
(9) Includes 9,000 shares of Common Stock purchasable upon the exercise of
stock options.
8
<PAGE>
(10) Includes 4,000 shares of Common Stock purchasable upon the exercise of
stock options.
(11) Includes 14,000 shares of Common Stock purchasable upon the exercise of
stock options. 91,241 shares are held by Mr. Reese as trustee under a
trust under which the descendants of Mr. Lemmon, Sr. are beneficiaries,
and 9,000 shares are held by Mr. Reese as trustee under a trust under
which his family members 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.
(12) Includes 400 shares of Common Stock purchasable upon the exercise of stock
options.
(13) Includes 4,300 shares of Common Stock purchasable upon the exercise of
stock options.
(14) All of these shares are owned by a family limited partnership.
(15) Information with respect to beneficial ownership is based upon information
furnished by the shareholder pursuant to filings with the Securities and
Exchange Commission.
(16) Includes 179,400 shares of Common Stock purchasable upon the exercise of
stock options.
9
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
For his services as Chairman of the Board of Directors of the Company,
John R. Reese is paid a $60,000 annual consulting fee and has use of a car
leased by the Company.
In October 1995, in connection with the Company's acquisition of Stature
from the shareholders of Stature, which included Lowell P. Huntsinger, Mr.
Huntsinger agreed not to compete with the Company in the business of the
manufacture and sale of electric motors and parts through October 2000. In
addition, a promissory note was issued payable to Mr. Huntsinger. On October
25, 1998, the outstanding balance under the note was $1,814,516, and interest
paid was $145,161 in fiscal 1998. The note is payable on demand upon 30 days'
notice but will not be prepaid without the approval of a majority of the
Company's disinterested directors. Mr. Huntsinger was elected as a director of
the Company in connection with the acquisition.
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 25, 1998, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than ten-percent beneficial owners were complied with.
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 31, 1999, 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 its 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 31, 1999.
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 25, 1998 accompanies this Proxy Statement.
10
<PAGE>
SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for the 2000
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
26, 1999, 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. In addition, the execution of a
proxy solicited by the Company in connection with the 2000 Annual Meeting of
Shareholders shall confer on the designated proxyholder discretionary voting
authority to vote on any shareholder proposal which is not included in the
Company's proxy materials for such meeting and for which the Company has not
received notice at least 45 days prior to the date of such meeting.
----------------
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 25, 1998. 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 & Chief Executive Officer
Date: February 23, 1999
King of Prussia, Pennsylvania
11
<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 24, 1999, 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
2000: Ellen D. Harvey, Harry E. Hill, George B. Lemmon, Jr., Eugene
P. Lynch, James A. Ounsworth, and John R. Reese.
(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 31, 1999:
/ / 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 31, 1999. 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: , 1999
-----------------------------------
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 24, 1999, 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
2000: Ellen D. Harvey, Harry E. Hill, Lowell P. Huntsinger, George B.
Lemmon, Jr., Eugene P. Lynch, James A. Ounsworth, and John R. Reese.
(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 31, 1999:
/ / 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 31, 1999. 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: , 1999
----------------------------------
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.
