-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, eLq4vzEtpLvJoYOlrJVrbSEWZds1fiwHRemCa0SiDQ717Aqprwj8VzUsTQNNIDWb A3NVTD9n0Xt20yqH2N/i/w== 0000950131-94-001913.txt : 19941216 0000950131-94-001913.hdr.sgml : 19941216 ACCESSION NUMBER: 0000950131-94-001913 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950119 FILED AS OF DATE: 19941215 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OUTBOARD MARINE CORP CENTRAL INDEX KEY: 0000075149 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 361589715 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-02883 FILM NUMBER: 94564995 BUSINESS ADDRESS: STREET 1: 100 SEA HORSE DR CITY: WAUKEGAN STATE: IL ZIP: 60085 BUSINESS PHONE: 7086896200 MAIL ADDRESS: STREET 1: 100 SEA HORSE DRIVE CITY: WAUKEGAN STATE: IL ZIP: 60085 DEF 14A 1 NOTICE & PROXY SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12 OUTBOARD MARINE CORPORATION (Name of Registrant as Specified In Its Charter) OUTBOARD MARINE CORPORATION (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). [_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a- 6(i)(3). [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:* (4) Proposed maximum aggregate value of transaction: - -------- *Set forth the amount on which the filing is calculated and state how it was determined. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount previously paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: Notes: LOGO - -------------------------------------------------------------------------------- OUTBOARD MARINE CORPORATION December 16, 1994 Dear Shareholder: You are cordially invited to the Annual Meeting of Shareholders of Outboard Marine Corporation to be held on Thursday, January 19, 1995, commencing at 9:00 a.m., local time, at the Grove Park Inn, 290 Macon Avenue, Asheville, North Carolina. The Board of Directors and Management look forward to greeting those shareholders able to attend the meeting. At the Annual Meeting you will be asked to consider and vote upon the election of three directors for a three year term and the ratification of appointment of independent auditors of the Company. Your Board of Directors unanimously recommends a vote FOR the election of directors and the ratification of auditors. Regardless of the number of shares you own and whether or not you plan to attend, it is important that your shares are represented and voted at the meeting. Accordingly, you are requested to sign, date and mail the enclosed proxy at your earliest convenience. On behalf of the Board of Directors, thank you for your cooperation and support. Sincerely, LOGO James C. Chapman Chairman of the Board, President and Chief Executive Officer OUTBOARD MARINE CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS ------------ TO BE HELD JANUARY 19, 1995 The 1995 Annual Meeting of Shareholders of Outboard Marine Corporation will be held at the Grove Park Inn, 290 Macon Avenue, Asheville, North Carolina, on Thursday, January 19, 1995, at 9:00 a.m., local time, for the following purposes: 1.To elect three directors for a three year term; 2.To ratify the appointment of Arthur Andersen LLP as the Company's independent accountants; and 3. To consider and act upon such other matters as may properly come before the meeting or any adjournment thereof. Only shareholders of record at the close of business on November 22, 1994 are entitled to notice of and to vote at the meeting. A list of such shareholders shall be open to examination by every shareholder at the meeting and for a period of ten days prior to the meeting during the Company's normal business hours, for any purpose germane to the meeting. Holders of a majority of the Company's outstanding voting shares must be present in person or by proxy for the meeting to be properly held. Please sign, date and return the enclosed proxy promptly in the envelope provided. You may revoke any proxy previously voted by attending the meeting and voting your shares personally at any time before the voting is closed. If you plan on attending the Annual Meeting, please make sure to check the appropriate box on the proxy card. By order of the Board of Directors LOGO Howard Malovany Secretary Waukegan, Illinois December 16, 1994 PROXY STATEMENT ------------ PROXY SOLICITATION BY BOARD OF DIRECTORS This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the "Board") of Outboard Marine Corporation, a Delaware corporation and its subsidiaries (the "Company"), of proxies to be used at the Annual Meeting of Shareholders of the Company to be held on January 19, 1995, commencing at 9:00 a.m., local time, at the Grove Park Inn, 290 Macon Avenue, Asheville, North Carolina, or any adjournment thereof. The principal executive offices of the Company are at 100 Sea Horse Drive, Waukegan, Illinois 60085. This Proxy Statement and the proxy, accompanied by the Company's 1994 Annual Report to Shareholders, are being mailed to shareholders on or about December 16, 1994. The Company will bear the cost of soliciting proxies. In addition to mail solicitation, there may be incidental personal solicitation made by Officers and employees of the Company. The Company has engaged, at its expense, the services of D. F. King & Co., Inc., 77 Water Street, New York, New York 10005, to assist in the solicitation of proxies at an estimated fee of $6,000 plus out-of-pocket expenses. A proxy may be revoked, in writing, at any time prior to its exercise. VOTING SECURITIES AND PRINCIPAL HOLDERS The only issued class of capital stock of the Company is $.15 par value common stock (the "Common Stock"). On November 22, 1994 (the "Record Date"), there were 19,920,563 shares of Common Stock outstanding. Each share of Common Stock is entitled to one vote. Only shareholders of record at the close of business on the Record Date will be entitled to notice of and to vote at the Annual Meeting. A majority of the issued and outstanding shares of Common Stock if present in person or by proxy will constitute a quorum for the transaction of business at the Annual Meeting of Shareholders. The inspectors of election appointed at the meeting will determine the existence of a quorum and tabulate the votes cast at the meeting. Shareholders may withhold authority to vote for one or more of the nominees for director and may abstain on one or more of the other questions that may come before the meeting. Shares for which authority is withheld or abstentions are indicated will be counted as present for general quorum purposes. Directors are elected by a majority of those shares present in person or by proxy and entitled to vote at the meeting; votes withheld will be excluded entirely from the vote and will have no effect. The other questions expected to come before the meeting require the approval of a majority of the shares represented in person or by proxy and entitled to vote at the meeting, and, therefore, abstentions will have the effect of a negative vote. If a broker indicates on a proxy that it does not have discretionary authority to vote on a particular question, under applicable Delaware law, those shares will be counted as present for general quorum purposes, but will not be counted as votes cast on the question and will have no effect on the outcome of the vote on such question. The First Chicago Trust Co. of New York (the "Bank") is the record holder of shares of Common Stock for participants in the Outboard Marine Corporation Automatic Dividend Reinvestment and Cash Stock Purchase Plan. The Bank has advised the Company that it intends to tender its proxy only as directed by each participant. NBD Bank, N.A. ("NBD") is the record holder of shares of Common Stock for participants in the OMC Employee Stock Purchase Plan, the OMC Employees Stock Ownership and Tax Deferred Savings Plan and the OMC Boat Group 401(k) Plan. NBD has advised that it intends to tender its proxy only as directed by each participant. 1 The following tables set forth information with respect to (i) persons or groups who are known to the Company to be beneficial owners, as of November 22, 1994, of more than 5% of the outstanding Common Stock (the "Investor Table") and (ii) beneficial ownership of Common Stock held, as of November 22, 1994, by each of the Company's Directors, Named Executives and all the Company's Directors and the Company's elected Officers (the "Executive Officers") as a group (the "Director and Executive Officer Table"). Beneficial ownership is defined as the sole or shared power to vote, or direct the disposition of a security. Except as otherwise indicated, beneficial ownership in the following tables includes sole voting and dispositive power. INVESTOR TABLE
SHARES PERCENT BENEFICIALLY OF NAME AND ADDRESS OWNED (1) CLASS ---------------- ------------ ------- Loomis, Sayles & Company, Inc. One Financial Center Boston, Massachusetts 02111-2660..................... 1,906,093 9.58% Sanford C. Bernstein Co., Inc. 767 Fifth Avenue New York, New York 10153............................. 1,814,543 9.12% Fidelity Management & Research 82 Devonshire Street Boston, Massachusetts 02109-3614..................... 1,677,208 8.43% NM Capital Management, Inc. 5917 Lookout Mountain Drive Austin, Texas 78731.................................. 997,530 5.02%
- -------- (1) Owned by the named company or its affiliates which are registered investment advisers and held for the benefit of one or more persons. DIRECTOR AND EXECUTIVE OFFICER TABLE
SHARES OPTION SHARES BENEFICIALLY BENEFICIALLY OWNED (1) OWNED (2) ------------ ------------- DIRECTORS --------- James C. Chapman............................... 47,065 130,550 Frank Borman................................... 2,100 -- William C. France.............................. 835 -- Urban T. Kuechle............................... 3,338(3) -- Richard T. Lindgren............................ 24,738 -- J. W. Marriott, Jr............................. 5,838 -- Richard J. Stegemeier.......................... 1,738 -- Charles D. Strang.............................. 21,478 -- Richard F. Teerlink............................ 1,735 -- NAMED EXECUTIVES AND EXECUTIVE OFFICERS (4) ------------------------------------------- L. Earl Bentz.................................. 8,500 5,415 Ronald J. Jensen .............................. 9,362 10,825 D. Jeffrey Baddeley ........................... 8,300 9,750 William T. Ek.................................. 6,725 10,725 Robert D. Randolph (5)......................... 3,437 64,600 Directors and Executive Officers as a group (20 persons).................................. 185,169 212,535
- -------- (1) Except as otherwise noted, the named individuals and members of the group have sole voting and investment power as to the shares they own beneficially except for restricted shares, which are included, over which they currently have voting power only. All Directors and Executive Officers as a group own 2 approximately 1% of the Company's outstanding Common Stock. No Director or Executive Officer owns beneficially more than 1% of such stock. (2) Shares that could be acquired within 60 days following November 22, 1994 through the exercise of stock options prior to any cancellation thereof, as described herein. (3) This does not include 200 shares beneficially owned by Mr. Kuechle's wife as to which Mr. Kuechle disclaims beneficial ownership. (4) Mr. Chapman, as Chief Executive Officer, is a Named Executive and information with respect to his beneficial holdings of Common Stock is set forth above under the heading "Directors". (5) Mr. Randolph resigned his positions effective August 1, 1994. 1. ELECTION OF DIRECTORS The Board presently consists of nine members, one of whom is an Executive Officer of the Company. The Directors are divided into three classes. At each Annual Meeting of Shareholders, Directors of a given class are elected for a three year term. The current term of office of the Class III Directors is to expire on the date of the 1995 Annual Meeting of Shareholders. It is intended that votes will be cast, pursuant to the accompanying proxy, FOR the election of Richard T. Lindgren, Richard J. Stegemeier and Richard F. Teerlink as Class III Directors ("Nominees"). In the event any of the Nominees should become unavailable, it is intended that votes will be cast, unless otherwise instructed pursuant to the enclosed proxy, for such substitute nominee or nominees as may be nominated by the Board. The Board is unaware of any need for substitution of Nominees. NOMINEES AND DIRECTORS Names of and information concerning the Nominees, and the other Directors whose terms will continue after the 1995 Annual Meeting of Shareholders, together with certain additional information, are set forth below. All persons listed are now serving as Directors and have been previously elected by the shareholders. To the knowledge of the Company, there are no family relationships between any Director or Executive Officer and any other Director or Executive Officer. An affirmative vote of a majority of those shares represented and entitled to vote at the meeting where a quorum is present is required to elect Directors. NOMINEES Class III Directors Richard T. Lindgren President, The Lorr Corporation (Detroit, MI), a private investment company. Mr. Lindgren has been President since 1989. Mr. Lindgren was President, Chief Executive Officer and a Director of Cross and Trecker Corporation (Bloomfield Hills, MI) from 1982 until 1988. Mr. Lindgren is also Chairman of the Board of Robert Sinto Corporation (Lansing, MI), a foundry engineering and equipment manufacturer, a Director of Sinto America, Inc. parent of Robert Sinto Corporation and a Trustee of Suomi College (Hancock, MI). A Director since 1980. Mr. Lindgren is a member of the Compensation and Nominating Committees. Age 67. Richard J. Stegemeier Chairman of the Board of Unocal Corporation (Los Angeles, CA), an integrated petroleum company. Mr. Stegemeier has been Chairman since April 1989 and was Chief Executive Officer from 1988 through 1994. From December 1985 to June 1992 he was President, and from December 1985 to July 1988 he was 3 Chief Operating Officer. Mr. Stegemeier is also a director of First Interstate Bancorp (Los Angeles, CA), Northrop Corporation (Los Angeles, CA), Halliburton Company (Dallas, TX) and Foundation Health Corporation (Rancho Cordova, CA). A Director since 1990. Mr. Stegemeier is Chairman of the Compensation Committee and a member of the Audit, Nominating and Search Committees. Age 66. Richard F. Teerlink President and Chief Executive Officer of Harley-Davidson, Inc. (Milwaukee, WI), a manufacturer of specialty motor vehicles. Mr. Teerlink was Chief Financial Officer from 1981 until 1987; President and Chief Operating Officer from 1988 until 1989 and President and Chief Executive Officer since 1989. From 1987 until 1988 Mr. Teerlink was President and Chief Operating Officer of Harley-Davidson, Inc.'s Motorcycle Division. A Director since 1990. Mr. Teerlink is Chairman of the Nominating and Search Committees and a member of the Compensation Committee. Age 58. YOUR BOARD RECOMMENDS YOU VOTE "FOR" ALL NOMINEES. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE IN THEIR PROXIES. OTHER DIRECTORS Frank Borman Chairman of the Board and Chief Executive Officer of Patlex Corporation (Las Cruces, NM), a laser technology patent royalty company. Mr. Borman has been Chairman and Chief Executive Officer since 1988. Mr. Borman was Chairman of the Board and Chief Executive Officer of Eastern Airlines, Inc. from 1976 until he retired in 1986. He is also a Director of AutoFinance Group, Inc. (Westmont, IL), American Superconductor Corp. (Watertown, MA), Home Depot Companies (Atlanta, GA) and Thermo Instrument Systems, Inc. (Boston, MA) and is a member of the Board of Trustees of the National Geographic Society. A Director since 1985 (present term expires in 1997). Mr. Borman is a member of the Audit, Compensation and Search Committees. Age 66. James C. Chapman Chairman of the Board, President and Chief Executive Officer of the Company. Mr. Chapman has been President since 1985, Chief Executive Officer since 1990 and Chairman of the Board of Directors since 1993. Mr. Chapman was Vice President, Manufacturing of the Company from 1978 until 1985. Mr. Chapman is also a Director of Clark Equipment Company (South Bend, IN) and University of Detroit Mercy (Detroit, MI). A Director since 1985 (present term expires in 1997). Age 63. William C. France Chairman of the Board, President and Chief Executive Officer of International Speedway Company (Daytona Beach, FL), an owner and operator of three automobile racing facilities. Mr. France has been President and Chief Executive Officer since 1981 and Chairman since 1987. Mr. France is also President of the National Association of Stock Car Automobile Racing (Daytona Beach, FL). 4 A Director since 1985 (present term expires in 1996). Mr. France is a member of the Audit and Nominating Committees. Age 61. Urban T. Kuechle Consultant. Mr. Kuechle has been a consultant since 1980. Mr. Kuechle was previously Senior Vice President, The Laub Group, Inc. (Milwaukee, WI), an insurance brokerage firm and prior to that, President and then Vice Chairman of A.O. Smith Company (Milwaukee, WI). A Director since 1968 (present term expires in 1996). Mr. Kuechle is Chairman of the Audit Committee and a member of the Compensation and Nominating Committees. Age 84. J. W. Marriott, Jr. Chairman of the Board, President and Chief Executive Officer of Marriott International, Inc. (Washington, DC), a diversified lodging and services management company. Mr. Marriott became Chief Executive Officer of Marriott Corporation in 1972 and was named Chairman of the Board in 1985. Mr. Marriott is also a Director of Host Marriott Corporation (formerly Marriott Corporation; Washington, D.C.) and General Motors Corporation (Detroit, MI), a Trustee of the Mayo Foundation and the National Geographic Society and a member of The Conference Board, The Business Council and The Business Roundtable. A Director since 1986 (present term expires in 1997). Mr. Marriott is a member of the Compensation and Nominating Committees. Age 62. Charles D. Strang Consultant. Mr. Strang has been a consultant since 1990. Mr. Strang was Chairman of the Board of Directors from 1982 to 1993, Chief Executive Officer from 1980 to 1990 and President of the Company from 1974 until 1985. A Director since 1970 (present term expires in 1996). Mr. Strang is a member of the Audit and Search Committees. Age 73. BOARD OF DIRECTORS AND COMMITTEES The Board of Directors met seven times during the 1994 fiscal year. Board Committees included Audit, Compensation, Finance, Management Review and Nominating which during the year met two, four, two, one and one times, respectively. At the Board meeting held September 7, 1994 the Finance Committee and the Management Review committee were discontinued and their responsibilities have been absorbed by the Board. In addition, the Board established a Search Committee for the sole purpose of searching for a candidate to become the Company's next President and Chief Operating Officer. The members of the Search Committee are Richard F. Teerlink, Chairman, Frank Borman, Richard J. Stegemeier and Charles D. Strang. The Audit Committee consists of five non-employee Directors. This Committee oversees the Company's financial reporting process and internal controls, reviews any significant issues concerning litigation and contingencies, meets with independent public accountants and internal auditors to discuss the results of their examinations, reviews the insurance programs of the Company, and monitors compliance with the Company's Code of Conduct and other policies on ethical business practices. This Committee also consults with management, the internal auditors and the independent public accountants on matters related to the annual audit plan, audit procedures applied, audit and non-audit fees, status of federal tax returns and related reserves, the published financial statements, the accounting principles applied and any material changes thereto. 5 The Compensation Committee consists of six non-employee Directors. This Committee reviews and approves management's recommendations with respect to a competitive, fair and equitable compensation and benefits policy designed to retain personnel, stimulate their useful and profitable efforts on behalf of the Company and attract necessary and qualified additions to staff; reviews, approves and administers the Company's executive compensation plans and, after taking into consideration the recommendations of management, determines the salaries and incentive compensation of the Executive Officers of the Company and its foreign and domestic subsidiaries, including but not limited to annual bonuses and grants of stock options, restricted stock and performance units or shares; carries out the administrative responsibilities for the Company's compensation programs applicable to executives; reviews annually the performance of the Company's Chief Executive Officer vis-a-vis the Company's performance and based upon such review, recommends to the Board appropriate compensation adjustments and bonus awards, if any; and acts on, reports to and makes recommendations with respect to specific matters within delegated authority. The Nominating Committee consists of seven non-employee Directors. This Committee develops and recommends the criteria for the selection of candidates to serve on the Board which include whether the potential candidate's principal employment, occupation or association involves an active leadership role, whether the potential candidate has expertise or experience relevant to the Company's business that would not be otherwise readily available to the Board, whether the potential candidate brings diversity to the Board, and with respect to incumbent directors, how the potential candidate performed and contributed during his or her most recent term; develops and recommends the procedure for the selection of candidates to serve on the Board; reviews and recommends the number of members of the Board; recommends the slate of nominees to be proposed for election by the shareholders of the Company at the Company's annual meeting; recommends nominees to fill vacancies on the Board; considers and recommends the number, size and composition of committees of the Board; reviews and recommends the compensation and retirement programs for members of the Board; reviews the performance of the members of the Board; reviews the performance of the Chief Executive and Chief Operating Officers; reviews, develops and recommends plans and proposals for management succession with respect to the Chief Executive and Chief Operating Officers; and acts on, reports to and makes recommendations with respect to specific matters within a delegated authority. The Committee will consider nominees recommended by shareholders for existing vacancies. For a shareholder to properly bring a nomination for a Director before the Annual Meeting of Shareholders, such shareholder must give the Company written notice, received by the Secretary of the Company, at least sixty (60) days prior to the date one year from the date of the immediately preceding annual meeting of shareholders. Such notice must contain, for each person such shareholder intends to nominate, the name, age, business address and residence address of the person, the principal occupation or employment of the person, the class and number of shares of stock of the Company which are beneficially owned by the person and any other information relating to the person that is required to be disclosed in solicitations for proxies for election of Directors pursuant to Rule 14a under the Securities Exchange Act of 1934. The shareholder must provide such shareholder's name and address and the class and number of shares such shareholder beneficially owns as of the record date for the shareholder's meeting. In fiscal year 1994, no Director attended fewer than 75 percent of the aggregate number of meetings of the Board and the Board Committees on which such Director served except for Richard F. Teerlink. Directors who are not employees of the Company receive an annual retainer of $25,000 and a fee of $1,000 for each Board and Board Committee meeting attended, provided no Director will be paid for more than two meetings held in any one day. Directors who are employees of the Company receive no remuneration or fees, as such, for serving as Directors. Beginning April 14, 1993, Mr. Strang agreed not to compete with the Company for up to ten years, for which the Company is paying Mr. Strang $100,000 per year. Each Director is a participant in the Retirement Plan for Non-Employee Directors (the "Director's Retirement Plan"). The Director's Retirement Plan provides an annual retirement benefit equal to ten percent (10%) of the Director's retainer, as of the date of retirement, times the years of service as a Director, up to a 6 maximum of 100% of the retainer. The benefit begins to vest after six (6) years of service (10% per year) and is payable for the life of the Director. Under the Stock Purchase Plan for Non-Employee Directors, non-employee Directors of the Company are entitled to have all or a portion of their retainer used to purchase Common Stock at a price not less than eighty-five percent (85%) of the fair market value of the Common Stock on the date of purchase. Receipt of the Common Stock may be deferred for any period of time chosen by the Director. The Director must make the election to receive or defer receipt of stock, or change any such election, no less than six (6) months prior to the date the retainer would ordinarily have been received. As long as the stock is held or deferred, the Director will receive dividends, as and if declared, and will have the right to vote the stock. Payment of deferred amounts may be altered by the Committee in the case of financial hardship or change of control. EXECUTIVE COMPENSATION COMPENSATION OF EXECUTIVE OFFICERS SUMMARY COMPENSATION TABLE The following table sets forth information concerning the annual and long- term compensation paid or to be paid to those persons who were, at September 30, 1994, (i) the chief executive officer, (ii) the other four most highly compensated Executive Officers of the Company and (iii) individuals who would have been one of the four most highly paid Executive Officers but for the fact that they were not serving as an Executive Officer on September 30, 1994 (the "Named Executives") for services rendered in all capacities to the Company for the 1994, 1993 and 1992 fiscal years.
ANNUAL COMPENSATION LONG-TERM COMPENSATION ----------------------- ------------------------------- OTHER ANNUAL RESTRICTED SECURITIES NAME AND COMPEN- STOCK UNDERLYING LTIP ALL OTHER PRINCIPAL SALARY BONUS SATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION POSITION YEAR ($) ($) ($)(1) ($)(2) # ($) ($)(3) --------- ---- ------ ----- ------- ---------- ------------ ------- ------------ J. C. Chapman, 1994 467,000 424,833 55,915 0 30,600 126,419 48,496 Chairman, President and 1993 459,388 0 40,027 456,950 67,100 69,970 52,129 Chief Execu- tive Officer 1992 400,000 600,000 39,285 0 21,100 310,923 7,934 L. E. Bentz, 1994 201,500 104,022 (1) 0 6,400 0 5,589 Vice President and 1993 201,500 0 11,670 157,200 17,100 0 826 President, OMC Fishing 1992 188,300 160,288 3,000 0 3,800 0 0 Boat Group, Inc. R. J. Jensen, 1994 193,333 112,980 (1) 0 7,900 21,007 4,028 Vice President and 1993 169,202 0 14,272 170,200 14,300 11,226 3,787 President, In- ternational 1992 133,000 111,383 8,139 0 3,500 36,078 339 Group D. J. Baddeley, 1994 175,000 92,273 (1) 0 6,100 21,382 20,871 Vice President and 1993 155,208 0 24,977 153,550 12,300 11,380 20,656 General Coun- sel 1992 135,000 113,063 22,000 0 3,600 0 636 W. J. Ek, 1994 158,600 101,084 (1) 0 6,400 0 6,634 Vice President and 1993 161,308 0 5,287 123,950 13,500 0 0 President, OMC 1992 147,500 182,410 2,827 0 3,800 0 0 Aluminum Boat Group, Inc. R. D. Ran- dolph, 1994 187,500 188,313 (1) 0 0 64,127 26,879 Former Execu- tive Vice 1993 250,000 0 26,272 244,200 31,700 37,523 26,668 President and Chief 1992 215,000 241,875 30,425 0 11,300 90,118 2,985 Operating Of- ficer (4)
7 NOTES TO SUMMARY COMPENSATION TABLE (1) With the exception of Mr. Chapman, no other Named Executive's Other Annual Compensation reached the level required for disclosure. The amount listed for Mr. Chapman includes amounts paid by the Company for financial and estate planning and tax preparation advice of $30,488 and amounts paid by the Company representing the allocable expense for a leased automobile of $20,249. (2) In September 1993, for fiscal 1994, most Executive Officers were granted Restricted Stock at a value of $18.50 per share on the date of grant in lieu of a salary increase. The number of shares granted were 131,000, having an aggregate value on the date of grant of $2,425,350. Based on the value of a share of Common Stock as of September 30, 1994 the aggregate value of all outstanding shares of Restricted Stock granted to Executive Officers was $2,127,125. The Restricted Stock will not vest for five years from the date of grant. During the restricted period, the Executive Officers will receive dividends and will have the right to vote the stock. If the Executive Officer (including a Named Executive) does not remain in the employ of the Company for the entire five year period other than for retirement, death, disability or a change of control, such Executive Officer's restricted stock will be forfeited. (3) Includes matching contributions to the OMC Employee Stock Ownership and Taxed Deferred Savings Plan in the amount of $1,320, $1,414, $0, $1,312, $1,083 and $1,320 and the dollar value of insurance premiums paid by the Company of $47,176, $4,175, $4,028, $19,559, $5,551 and $25,559 for the benefit of Messrs. Chapman, Bentz, Jensen, Baddeley, Ek and Randolph, respectively. Mr. Randolph received compensation from the Company as a result of an agreement with the Company as further described below under the heading "Severance Agreements". (4) Mr. Randolph resigned his positions effective August 1, 1994. OPTION EXERCISES IN THE 1994 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES The following table shows information on the exercise in the 1994 fiscal year of options to purchase Common Stock by the Named Executives, all current Executive Officers as a group and all other employees as a group. Also shown are the unexercised options to purchase Common Stock as of September 30, 1994 and the value of in-the-money options as of such date.
VALUE OF IN-THE-MONEY NUMBER OF OPTIONS UNEXERCISED OPTIONS SHARES UNEXERCISED AT YEAR END AT YEAR END (1) ACQUIRED OR VALUE ------------------------- ------------------------- EXERCISED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE NAME (#) ($) (#) (#) ($) ($) ---- ----------- --------- ----------- ------------- ----------- ------------- J. C. Chapman........... 0 0 116,345 56,655 1,480,937 1,086,988 L. E. Bentz............. 4,760 20,860 2,175 13,965 40,238 267,143 R. J. Jensen............ 2,000 29,750 8,325 11,775 142,775 224,663 D. J. Baddeley.......... 2,800 42,000 7,495 10,305 130,781 196,832 W. J. Ek................ 0 0 7,935 11,265 139,739 216,011 R. D. Randolph ......... 0 0 57,335 27,165 734,079 522,471 All current Executive Officers as a group............. 9,560 92,610 170,155 136,260 2,515,646 2,611,836 All other employees as a group.................. 181,855 2,040,730 327,020 219,450 5,365,872 4,221,356
- -------- (1) Value of in-the-money options determined by multiplying the number of exercisable or unexercisable options by $22.75, the closing price of the Company's Common Stock on September 30, 1994, and subtracting the option price. 8 LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL YEAR 1994 The following table describes the performance shares granted to the Named Executive Officers during the Company's 1994 fiscal year under the 1994 OMC Long-Term Incentive Plan (the "LTIP"). With respect to the LTIP, the grants cover the three year award cycle October 1, 1994 through September 30, 1997. No distribution of performance shares, whether in cash or stock, will be made until after the end of the three year award cycle and the Compensation Committee has determined the extent to which the Company has achieved the performance goals set at the beginning of each award cycle. The initial value of each performance share granted under the LTIP was $24.208. The initial value was the average of the closing price for a share of Common Stock on the New York Stock Exchange for the month of September 1994. The performance goals set for these performance shares are (1) the average of the absolute return on investment for the three year award cycle, (2) return on investment improvement for the three year award cycle over the prior three year award cycle and (3) total shareholder return on the Common Stock as compared to the return on the S&P 400 measured over the three year award cycle. For a complete description of these performance goals, see the Report of the Compensation Committee under the heading "Long-Term Incentive Compensation" beginning on page 14 of this Proxy Statement. The performance shares will be paid in stock or cash at the discretion of the Compensation Committee.
ESTIMATED FUTURE PAYOUTS NUMBER OF PERFORMANCE (1) (POTENTIAL SHARES) PERFORMANCE PERIOD ------------------------ SHARES UNTIL THRESHOLD TARGET MAXIMUM NAME GRANTED (2) PAYOUT (#) (#) (#) - ---- ----------- ----------- --------- ------ ------- J. C. Chapman.................. 15,600 3 Years 15.6 15,600 23,400 L. E. Bentz.................... 3,100 3 Years 3.1 3,100 4,650 R. J. Jensen................... 4,000 3 Years 4.0 4,000 6,000 D. J. Baddeley................. 3,100 3 Years 3.1 3,100 4,650 W. J. Ek....................... 3,100 3 Years 3.1 3,100 4,650 R. D. Randolph................. 0 -- 0 0 0
- -------- (1) The number of shares to be paid upon the completion of an award cycle will depend entirely on the extent to which the Company achieves the performance goals set at the beginning of the award cycle. The payout at the Threshold level will be 0.1%, the payout at the Target level will be 100% and the payout at the Maximum level will be 150% of the number of performance shares originally granted. If the payment is in cash, as determined by the Compensation Committee, the amount of the payout will be the number of performance shares earned, as set forth above, times the closing price of a share of Common Stock on September 30, 1997. (2) Performance shares granted at $24.208 in September 1994 for the three year award cycle October 1, 1994 through September 30, 1997. OPTION GRANTS IN THE 1994 FISCAL YEAR The following table provides information on the grants of options to purchase Common Stock given to the Named Executives on September 7, 1994.
% OF TOTAL NUMBER OF OPTIONS SECURITIES GRANTED EXERCISE POTENTIAL UNDERLYING TO ALL PRICE REALIZABLE VALUE($) OPTIONS/SARS EMPLOYEES PER (4) GRANT GRANTED (#) IN 1994 SHARE($) EXPIRATION --------------------- NAME DATE (1) (2) (3) DATE 0% 5% 10% - ---- ------ ------------ --------- -------- ---------- -- ------- --------- J. C. Chapman........... 9/7/94 30,600 15% 24.625 9/8/2005 0 535,255 1,396,370 L. E. Bentz............. 9/7/94 6,400 3% 24.625 9/8/2005 0 111,949 292,051 R. J. Jensen............ 9/7/94 7,900 4% 24.625 9/8/2005 0 138,187 360,500 D. J. Baddeley.......... 9/7/94 6,100 3% 24.625 9/8/2005 0 106,701 278,361 W. J. Ek................ 9/7/94 6,400 3% 24.625 9/8/2005 0 111,949 292,051
9 - -------- (1) All options vest over a four-year period; 25% of the option grant being exercisable at the end of the first year after the grant date, and an additional 25% each year thereafter. (2) In the 1994 fiscal year 130 employees received stock options. (3) Exercise Price is the closing price of a share of the Common Stock on the grant date. (4) The amounts set forth reflect the potential realizable value of the options granted at assumed annual rates of stock price appreciation of 5% and 10% through the expiration date of the options (eleven years). The use of 5% and 10% is pursuant to Securities and Exchange Commission requirements and is not intended by the Company to forecast possible future appreciation. BENEFIT PLANS RETIREMENT PLANS OUTBOARD MARINE CORPORATION The Outboard Marine Corporation Employees Retirement Plan (the "Retirement Plan") provides a fixed benefit determined on the basis of years of service and final average base earnings. In addition to the benefits from the Retirement Plan, participants in the Company's annual incentive compensation plan(s) are eligible for retirement benefits from a supplemental non-qualified retirement plan. The retirement benefits under the non-qualified plan are based upon amounts paid under the annual bonus plan as well as salary, and the total retirement benefits payable under the plans may exceed the maximum benefits payable under the Employee Retirement Income Security Act of 1974, as amended. Upon a change of control of the Company and certain other actions by an acquirer, all participants of the Retirement Plan would become vested in any excess of plan assets over total accumulated benefit obligations. Participants in the plans who are not Executive Officers receive an aggregate benefit equal to 1.7% for each year of credited service times the average of the five highest consecutive annual earnings (base annual salary rate plus incentive compensation earned in the same year under an annual incentive compensation plan) during such participant's last ten years of employment. An Executive Officer who participates in the plans will receive a benefit equal to 1.7% for each year of credited service as a non-Executive Officer and 2.55% for each year of credited service as an Executive Officer times the average of the three highest annual earnings during the last ten years of such participant's tenure with the Company. The total annual benefit payable from these two plans is shown in the table below for selected average base earnings levels and years of service based upon certain assumptions including all years of credited service as an Executive Officer, retirement at age 65 and election of a single life annuity for the benefit payment. The approximate annual benefits shown in the table below are for the Named Executive participants and are not subject to social security offset but are subject to offset for any benefits payable from retirement programs of the Company's foreign subsidiaries. ANNUAL BENEFIT FOR NAMED EXECUTIVE PARTICIPANTS FOR SELECTED YEARS OF SERVICE
AVERAGE ANNUAL 10 15 20 OR BASE EARNINGS 5 YEARS YEARS YEARS MORE YEARS -------------- ------- ----- ----- ---------- $ 150,000 19,000 38,500 57,500 76,500 250,000 32,000 64,000 95,500 127,500 300,000 38,000 76,500 115,000 153,000 500,000 64,000 127,500 191,000 255,000 900,000 115,000 229,500 344,500 459,000 1,300,000 166,000 331,500 497,000 663,000
As of December 31, 1994, Messrs. Chapman, Bentz, Jensen, Baddeley, Ek and Randolph will have 16.92, 2.0, 20.33, 4.92, 8.17 and 10.17 respectively, credited years of service under the Company's retirement plans of which 16.25, 2.0, 3.9, 4.92, 1.9 and 8.25, respectively, credited years of service will be as an Executive 10 Officer of the Company. The total estimated annual benefit payable from these two plans for Messrs. Chapman, Bentz, Jensen, Baddeley, Ek and Randolph based upon certain assumptions including actual years of credited service as a non- Executive Officer and Executive Officer, as the case may be, current age and base earning levels, and election of a single life annuity for the benefit payment is $292,114, $10,196, $83,555, $25,498, $21,914 and $80,342 respectively, which payments are not subject to social security offset but are subject to offset for any benefits payable from retirement programs of the Company's foreign subsidiaries. SEVERANCE AGREEMENTS The Company has entered into a severance agreement with Mr. Chapman, which has a one year term and is automatically extended from year to year. This severance agreement, which applies only upon a change of control of the Company, provides that if Mr. Chapman (i) elects to resign, or (ii) is terminated by the Company other than for cause, the Company will pay Mr. Chapman an amount, in cash, equal to (1) a fraction, the numerator of which is equal to the lesser of thirty-six or the number of full and partial months existing between the date Mr. Chapman terminates employment and his 65th birthday and the denominator of which is twelve, multiplied by (2) his then current base salary plus the highest amount of incentive compensation received by him in the five years preceding the change of control. In addition, the Company will pay Mr. Chapman, in cash, amounts accelerated, earned, allocated or deferred under the Company's pension, retirement, compensation or Annual and Long-Term Incentive Plans, plus an amount, if applicable, required to be paid by Mr. Chapman pursuant to the application of Section 4999 of the Code. The Company has also entered into severance agreements with its other current Executive Officers, including the Named Executives. Each of these agreements has a one year term which is automatically extended from year to year. These severance agreements, which apply only upon a change of control of the Company, provide that if such Executive Officer (i) elects to resign his employment for certain specified reasons, or (ii) is terminated by the Company other than for cause, the Company will pay such Executive Officer an amount, in cash, equal to (1) a fraction, the numerator of which is equal to the lesser of twenty-four and the number of full and partial months existing between the date such Executive Officer terminates employment and his 65th birthday and the denominator of which is twelve, multiplied by (2) such Executive Officer's then current base salary plus the highest amount of incentive compensation received by such Executive Officer in the five years preceding the change in control. In addition, the Company will pay such Executive Officer, in cash, amounts accelerated, earned, allocated or deferred under the Company's pension, retirement, compensation or Annual and Long-Term Incentive Plans. No amounts are expensed by the Company for financial reporting purposes with respect to any severance agreement. For purposes of the severance agreements referred to above, a change of control of the Company shall generally be deemed to have occurred if (1) any person, other than the Company or fiduciaries holding securities under an employee benefit plan of the Company, is or becomes the beneficial owner of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities; (2) during any period of two consecutive years, individuals, who, at the beginning of such period, constitute the Board and certain new Directors (other than certain Directors designated by a person who has entered into certain change of control transactions), whose election by the Board or nomination for election by the Company's shareholders is approved by a vote of at least two-thirds of the Directors then still in office, cease for any reason to constitute a majority thereof; (3) the shareholders of the Company approve a merger or consolidation of the Company with any other company, other than certain transactions in which the voting securities of the Company continue to represent at least 80% of the combined voting power of the Company or such surviving entity following such transaction or certain recapitalizations in which no person acquires more than 15% of the combined voting power of the Company's then outstanding securities; (4) the shareholders of the Company approve a plan of complete liquidation of the Company; or (5) the Company enters into an agreement for the disposition of all or substantially all the Company's assets or the Company otherwise disposes of such assets. 11 On August 1, 1994 (the "Termination Date") Robert D. Randolph resigned as Executive Vice President, Chief Operating Officer and Director of the Company. Mr. Randolph and the Company entered into an agreement pursuant to which the Company would provide certain benefits to Mr. Randolph. Pursuant to the agreement, the Company would (1) through July 31, 1997 continue to pay Mr. Randolph's salary in effect on the Termination Date, (2) through July 31, 1997 provide the medical, health and life insurance coverage in existence as of the Termination Date, (3) for the 1994 fiscal year, to the extent the Company otherwise pays an annual bonus under its Executive Bonus Plan, pay an amount to Mr. Randolph equal to the amount to which he would have been entitled as if he were an employee of the Company through the end of such fiscal year, (4) pro rate the amount of performance units and shares earned for the 1994, 1995 and 1996 fiscal years based on the Termination Date, (5) continue to accrue benefits under its retirement and supplemental retirement plans through July 31, 1997 and (6) pay certain life insurance premiums for a period ending October 1, 2001. In consideration of these benefits, Mr. Randolph agreed (1) the Severance Agreement he previously held would terminate as of August 1, 1994, (2) all shares and benefits of Restricted Stock granted to him in September 1993 would be forfeited and (3) he would not compete with the Company for a period of time ending January 31, 1999. REPORT OF THE COMPENSATION COMMITTEE GOALS OF THE COMPENSATION COMMITTEE The Compensation Committee (the "Committee") is made up of six non-employee Directors. Its charter is to: 1. Review and approve a competitive, fair and equitable compensation and benefits policy designed to retain personnel, to stimulate their useful and profitable efforts on behalf of the Company and to attract necessary additions to the staff with appropriate qualifications; 2. Review, approve and administer the Company's executive compensation plans and determine the salaries and incentive compensation of the Executive Officers of the Company and its foreign and domestic subsidiaries; and 3. Review annually the performance of the Company's Chief Executive Officer vis-a-vis the Company's performance and, based upon such review, recommend to the Board appropriate compensation adjustments and bonus awards, if any. To carry out this charter, the Committee's current objectives are to use incentives to support the Company's strategies and provide executives ownership opportunities for their successful execution. The Committee will, if necessary to satisfy Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), certify the attainment of these incentives. Section 162(m) of the Code denies a tax deduction to any publicly held corporation such as the Company for compensation in excess of $1 million paid to any Named Executive. Certain performance-based compensation, however, is specifically exempt from the deduction limit. The determination of whether compensation is performance-based depends on several factors including: whether the compensation is payable solely on account of the attainment of one or more nondiscretionary objective performance goals established by an independent compensation committee of the board of directors; whether there has been disclosure to and approval by the shareholders of performance standards to be used in determining awards under the plan; whether the company's compensation committee is composed solely of "outside" directors; and whether prior to the payment of such compensation, the compensation committee has certified that applicable performance standards have been satisfied. Section 162(m) became effective January 1, 1994 and is applicable to the Company's fiscal year that commenced October 1, 1994. The Committee met four times in the 1994 fiscal year. 12 In addition to reports and recommendations from senior management, the Committee has relied on the services of Frederick W. Cook & Co., Inc. and Hewitt Associates as well as other nationally known compensation consulting firms, for information regarding appropriate compensation levels and programs. The Committee's compensation philosophy is based on several criteria, including, but not limited to, the financial and operational goals recommended by the Company's senior management and approved by the Board for the Company, as a whole, as well as significant business units; performance by the executives in achieving these goals; and the need to attract, retain and motivate executives to execute and exceed the Company's plans and programs. For the Company's 1994 fiscal year, the primary criteria used in evaluating Company performance were (i) return on investment, both in absolute terms and as compared to prior years, (ii) the total shareholder return of the Company's stock compared to the total return of the S&P 400 Index and (iii) business unit profitability for evaluating business unit performance. The Company's performance for the fiscal year just ended met or exceeded the goals set at the beginning of the year. BASE SALARY For three of the last four years, the Company's financial performance failed to meet its goals. For two of those years, 1991 and 1993, the Company reported substantial losses with a small profit being reported for fiscal 1992. For fiscal 1991 and 1992 the Company gave no salary increases to exempt employees, including the Named Executives. For fiscal 1993, salary increases for all exempt employees, including the Named Executives, averaged approximately 7%. In fiscal 1994 most Executive Officers received a grant of restricted stock in lieu of a salary increase in order to encourage them to remain with the Company and to increase their stock ownership. The amount of the restricted stock grants attempted to take into account the cumulative effect of the loss of the single year salary increase. The restricted stock will not vest for five years and during that period, dividends will be paid to the Executive Officer and the Executive Officer will be able to vote the shares. For fiscal 1995, salary increases for all exempt employees, including the Named Executives, averaged approximately 4.2%. It is the Committee's practice to target base annual salary at the 50th percentile of executives at other manufacturing companies and competitors with comparable levels of responsibility and individual performance. Individual performance is evaluated each year by the Committee and recommendations for salary adjustments, for all Executive Officers, are made by the Committee to the Board each September. The Committee has the authority, without Board approval, to set the salary ranges and adjustments for all other employees. ANNUAL INCENTIVE COMPENSATION The Executive Bonus Plan is designed to add incentive for executives to execute and exceed the Company's plans and receive annual rewards for that execution. Under the Executive Bonus Plan 50% of the reward is based on absolute return on investment for the fiscal year and 50% on the improvement in return on investment over the average of the prior three fiscal years. The target amount of annual incentive compensation is determined by the executive's salary grade. The Named Executives' target bonus amounts range from 35% to 60% of base annual salary. The Chief Executive Officer's target bonus amount equals 60% of salary. The target award, when added to base annual salary, is intended to result in total annual compensation at approximately the 50th percentile of competitive annual compensation, as discussed under the heading "Base Salary" above. Each executive can earn up to 175% of that target amount depending on the extent to which the Company achieves its annual performance targets and the individual performs vis-a-vis pre-determined annual goals. There will be no corporate bonus paid unless absolute return on investment ("AROI") exceeds 3% and a maximum award if AROI exceeds 15%. There will be no corporate award for the annual return on investment improvement goals ("ROII") unless ROII is greater than 0% and there will be a maximum award if ROII exceeds 4%. 13 No annual incentive compensation was earned in the 1993 fiscal year by any employee, including the Named Executives. For fiscal 1994 incentive compensation was earned at 150.6% of target as a result of an AROI of 10.8% and an ROII of 10.8%. LONG-TERM INCENTIVE COMPENSATION The 1994 Long-Term Incentive Plan ("the LTIP") provides for the grant of stock options, restricted stock, performance units and performance shares. The purpose of the plan is to create an opportunity for executives to share in the enhancement of shareholder value through equity based awards. The overall goal is to create a link between the Company's management and its shareholders through stock ownership and incentive compensation based on the achievement of specific financial measures. Each Executive Officer has a target amount of performance shares, ranging between 25% and 70% of annual salary, with a maximum amount that can be earned equal to 150% of the target amount depending on the extent to which performance targets are achieved over a three year award cycle. The Chief Executive Officer's target award equals 70% of salary. In addition, stock options are granted to Executive Officers in amounts ranging between 50% and 140% of salary, depending solely on such Executive Officer's salary grade. The Chief Executive Officer's option grant equals 140% of salary. The stock option and performance share grants, when added to base annual salary (when the performance share grant is paid at the target level), are intended to result in total long-term incentive compensation at approximately the 50th percentile of executives at other manufacturing companies and competitors with comparable levels of responsibility and individual performance. It is intended that payment for the achievement of the performance goals set with respect to performance shares be paid in shares of Common Stock. The performance goals for the outstanding award cycles are: (1) three year average of AROI, (2) three year average of ROII and (3) the monthly average of total shareholder return on the Common Stock versus the total return of the S&P 400 Index for the three year award cycle ("TSR"). Under the LTIP 50% of the award will be based upon the TSR goal, 25% on the AROI goal and 25% on the ROII goals. The AROI and ROII thresholds for payment and the maximum award are the same as those for Annual Incentive Compensation above, determined, however, on a cumulative basis for the three year award cycle. Under the TSR goals, there will be no award until the total shareholder return of the Common Stock is greater than 80% of the S&P 400 Index's total return and there will be a maximum award if the Company's TSR exceeds 120% of the S&P 400's total return. EXECUTIVE OFFICER BENEFITS In addition to base salary and annual and long-term incentive compensation, the Company also provides Executive Officers with a broad range of benefits available to all employees as well as specific, supplemental benefits, designed to be comparable to those offered to executives with similar levels of responsibility and individual performance. These supplemental benefits include a Company-leased automobile, financial and estate planning and tax preparation and advice and supplemental life insurance coverage. CHIEF EXECUTIVE OFFICER'S COMPENSATION The salary, annual and long-term incentive compensation and executive benefits for the Chief Executive Officer ("CEO") are determined by the Committee substantially in conformance with the policies described above for all other senior executives of the Company. In addition, the Committee evaluates the CEO's contribution to the Company's achievement of its long-term financial and non-financial objectives on an on-going basis. The Committee also evaluates the CEO's performance at least annually based upon a variety of factors including the extent to which strategic and business plan goals are met and targets for earnings per share, return on investment, growth in sales and earnings, market share and total return to shareholders are achieved. 14 Mr. Chapman received no salary increases for the 1991 or 1992 fiscal years. For the 1993 fiscal year, Mr. Chapman's salary increased 17.5% which reflected the Company's improvement in the 1992 fiscal year and his promotion to Chairman of the Board. For the 1994 fiscal year, the Committee granted to Mr. Chapman restricted stock in lieu of a salary increase. This restricted stock grant reflects the Committee's belief that Mr. Chapman's strategic vision will position the Company for solid financial performance in the future, to encourage Mr. Chapman to remain with the Company to execute the plans resulting from his strategic vision and to increase his stock ownership in the Company. For the 1995 fiscal year, Mr. Chapman received a salary increase of 7.45%. Submitted by the Compensation Committee of the Company's Board of Directors: Richard J. Stegemeier, Chairman Frank Borman Urban T. Kuechle Richard T. Lindgren J. Willard Marriott, Jr. Richard F. Teerlink PERFORMANCE GRAPH The following graph compares the cumulative total return on the Common Stock with the cumulative returns of the Standard & Poor's 500 Stock Index and Standard & Poor's Leisure Time Index weighted by the year-end market value of each company. "Cumulative total return" is defined as stock price appreciation plus dividends paid, assuming reinvestment of all such dividends. [GRAPH APPEARS HERE] COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG OUTBOARD MARINE, S&P INDUSTRIES AND S&P LEISURE TIME
Measurement Period OUTBOARD S&P S&P (Fiscal Year Covered) MARINE INDUSTRIES LEISURE TIME - ------------------- ---------- ---------- ------------ Measurement Pt- 9/89 $100 $100 $100 FYE 9/90 $ 39 $ 93 $ 41 FYE 9/91 $ 58 $122 $ 66 FYE 9/92 $ 56 $134 $ 64 FYE 9/93 $ 67 $145 $ 77 FYE 9/94 $ 84 $158 $ 95
15 2. RATIFICATION OF APPOINTMENT OF AUDITORS Arthur Andersen LLP, P. O. Box 1215, Milwaukee, Wisconsin 53201, served as independent auditors and accountants of the Company for the 1994 fiscal year. The Audit Committee has recommended to the Board, and the Board in turn, having approved such appointment at its November 2, 1994 meeting, recommends to the shareholders, that Arthur Andersen LLP's appointment as the Company's independent auditors and accountants for the 1995 fiscal year be confirmed. A representative of Arthur Andersen LLP is expected to be present at the Annual Meeting of Shareholders, with the opportunity to make a statement if he desires to do so, and is expected to be available to respond to appropriate questions. If the shareholders disapprove, the Company may or may not reconsider the appointment. YOUR BOARD RECOMMENDS YOU VOTE "FOR" THIS PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE IN THEIR PROXIES. SHAREHOLDER PROPOSAL PROCEDURE Any shareholder who intends to present a proposal at the Company's 1996 Annual Meeting of Shareholders and who wishes to have such proposal included in the Company's proxy soliciting material for that meeting must submit the proposal(s) in writing to the Secretary of the Company on or before August 10, 1995. OTHER MATTERS The Board knows of no matters, other than those specified above, to be brought before the meeting. However, if any other matters properly come before the meeting, or any adjournments thereof, it is the intention of the persons named in the enclosed proxy form to vote the same in accordance with their judgment on such matters. For shareholders who require information regarding the registration of their shares, the payment of dividends, details regarding the transfer of their shares or other similar information, they should call the Company's Transfer Agent, First Chicago Trust Co. of New York, P.O. Box 2500, Jersey City, New Jersey 07303-2500, Shareholder Services Division, 1-800-446-2617. THE COMPANY WILL PROVIDE WITHOUT CHARGE, UPON WRITTEN REQUEST, TO ANY PERSON WHO WAS A BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK ON THE RECORD DATE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 1994, WITHOUT EXHIBITS, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE SENT TO THE COMPANY TO: CORPORATE SECRETARY, 100 SEA HORSE DRIVE, WAUKEGAN, ILLINOIS 60085. 16 OUTBOARD MARINE CORPORATION ANNUAL MEETING -- JANUARY 19, 1995 P R PROXY SOLICITED BY BOARD OF DIRECTORS O X JAMES C. CHAPMAN, D. JEFFREY BADDELEY and HOWARD MALOVANY and Y each of them, are appointed Proxies, with power of substitution, to vote all stock of the undersigned at the Annual Meeting of Shareholders to be held January 19, 1995 at 9:00 a.m., (local time) at Grove Park Inn, Asheville, North Carolina, and at any adjournment thereof, upon the matters mentioned hereafter and, in their discretion, upon such other matters as may come before said meeting. UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2. ------------- CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE ------------- X Please mark your vote as in this example FOR WITHHELD Election of three Class III Directors for a three year term. 1. Election of [_] [_] Directors. Nominees: Richard T. Lindgren, Richard J. Stagemeier, Richard F. Teerlink For, except vote withheld from the following nominee(s): - ------------------------------------------------------- FOR AGAINST ABSTAIN 2. Ratify the appointment of [_] [_] [_] Auditors. MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [_] YES NO I will attend the annual meeting [_] [_] Please date and sign exactly as your name appears. If acting as attorney, executor, trustee, or in a representative capacity, also indicate title. - -------------------------------------------------- - -------------------------------------------------- SIGNATURE(S) DATE -----END PRIVACY-ENHANCED MESSAGE-----