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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 13, 1996
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Lowrance Electronics, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-15240 440624411
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
12000 East Skelly Drive
Tulsa, Oklahoma 74128
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 437-6881
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LOWRANCE ELECTRONICS, INC.
F O R M 8 - K
CURRENT REPORT
For the Event Occurring on May 13, 1996
Item 1. Changes in Control of Registrant.
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Not applicable.
Item 2. Acquisition or Disposition of Assets.
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Not applicable.
Item 3. Bankruptcy or Receivership.
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Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
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Not applicable.
Item 5. Other Events - Legal Proceeding.
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On May 13, 1996, the Company issued 70,000 shares of Series "A"
Preferred Stock in a private placement to the five key officers
(Darrell J. Lowrance, President and Chief Executive Officer, 20,000
shares; Ronald G. Weber, Executive Vice President of Technology and
Engineering, 20,000 shares; Steven L. Schneider, Senior Vice President
of Sales and Marketing, 10,000 shares; Terry R. Nimmo, Vice President
of Manufacturing and Materials, 10,000 shares; and Mark C. Wilmoth,
Vice President of Finance and Treasurer, 10,000 shares) of the
Company. The Series "A" Preferred Stock is a nonvoting stock paying a
noncumulative dividend of 2 1/2c per share. Each share of Series "A"
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Preferred Stock is convertible into five shares of the Company's
Common Stock at a cash purchase price of $5.00 per share of Common
Stock, but only if (i) the Chief Executive Officer of the Company
sells in excess of 30 percent of his Common Stock of the Company or
(ii) the Company sells substantially all of its assets and operations
to a third party. The Series "A" Preferred Stock has been issued for a
term of ten years for a purchase price of $6.88 per share. The Company
financed the total purchase price of $481,250 for the five key
officers of the Company pursuant to Promissory Notes bearing interest
at Chase prime and Security Agreements where all of such Series "A"
Preferred Stock is pledged to the Company to secure the Promissory
Notes. In the event the Series "A" Preferred Stock is not converted
within the ten year term, the holder is required to surrender the
Series "A" Preferred Stock for cancellation by the Company in exchange
for the Company forgiving the principal amount of the Promissory Note.
If any of the key employees terminate their employment with the
Company for any reason, except death, they immediately forfeit
ownership rights to the Series "A" Preferred Stock which is
immediately surrendered to the Company for cancellation in exchange
for cancellation of the principal amount owing on the Promissory Note,
provided all accrued interest on the Promissory Note is paid to the
date of the key employee's termination.
Item 6. Resignations of Registrant's Directors.
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Not applicable.
Item 7. Financial Statements and Exhibits.
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A copy of the Certificate of Designation of Preferences, Rights and
Limitations of the Lowrance Electronics, Inc. Series "A" Preferred
Stock is attached hereto as Exhibit "A."
Item 8. Change in Fiscal Year.
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Not applicable.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LOWRANCE ELECTRONICS, INC.
By: /s/ Darrell J. Lowrance
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Date: May 20, 1996 President and Chief
Executive Officer
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EXHIBIT A
CERTIFICATE OF THE DESIGNATION OF
PREFERENCES, RIGHTS AND LIMITATIONS
OF THE LOWRANCE ELECTRONICS, INC.
SERIES "A" PREFERRED STOCK
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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We, Darrell J. Lowrance, President, and Robert F. Biolchini, Secretary, of
Lowrance Electronics, Inc. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 151 thereof, do hereby certify:
That pursuant to authority conferred upon the Board of Directors of the
corporation by the Certificate of Incorporation of the Corporation, as amended
(the "Certificate of Incorporation"), said Board of Directors, at a meeting duly
held and convened on February 28, 1996, at which a quorum was present and acting
throughout, duly authorized and adopted the following resolution providing for
the issuance of 70,000 shares of a series of the Corporation's Preferred Stock
of the par value of $.50 per share, to be designated "Series "A" Preferred
Stock":
"RESOLVED, that the officers of the Company be and they hereby are
authorized to file a Certificate of Designation Preferences, Rights and
Limitations for the Lowrance Electronics, Inc., Series A Preferred Stock
pursuant to Section 151 of the general corporate laws of the State of Delaware
with the Secretary of State of Delaware, and
"RESOLVED, that pursuant to Article IV of the Certificate of Incorporation
of the Company, that the Board of Directors hereby expressly authorizes the
issuance of 70,000 shares of Series "A" Preferred Stock ("Preferred Stock")
issued for a term of ten (10) years, having the following rights, limitations,
preferences, powers and designations: The Series "A" Preferred Stock
("Preferred Stock") upon issuance shall be (i) nonvoting stock, no par value;
and (ii) allow the declaration of a noncumulative dividend payable at 2 1/2c per
share annually on such Preferred Stock, if and when declared by the Board of
Directors of the Company; and (iii) nontransferable and nonpledgable Preferred
Stock (except (a) if pledged to the Company by the holder to secure the purchase
price for such Preferred Stock; and (b) except upon the death of the holder when
Preferred Stock may be transferred to the holder's estate pursuant to the
holder's will); and (iv) with such Preferred Stock to be surrendered to the
Company by the holder for the price paid by the
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holder if the holder elects to leave the employment of the Company); and (v)
with each share of Preferred Stock convertible into five shares of Common Stock
of the Company at the purchase price of Five Dollars ($5.00) per share of Common
Stock (payable by the holder to the Company at conversion) which conversion is
permitted only upon the occurrence of either one of the following events: (a)
ninety (90) days after the sale by the Chief Executive Officer of the Company of
in excess of 30% of the Common Stock of the Company currently (February 28,
1996) directly owned by the Chief Executive Officer (exclusive of any stock
options or Series "A" Preferred Stock) by sale in a private placement or public
offering or through Rule 144 sales; or (b) upon the sale by the Company of all
or substantially all of the Company's assets and operations to a third party.
All rights under the Series "A" Preferred Stock shall terminate ten (10) years
after the date first issued and the holder shall surrender such Series "A"
Preferred Stock to the Company for zero consideration for cancellation at the
end of ten years and thereafter such Series "A" Preferred Stock shall be null
and void and of no value."
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Darrell J. Lowrance, President and Chief Executive Officer, and its
corporate seal to be hereunto affixed and attested by Robert F. Biolchini, as
Secretary, this 30th day of April, 1996, and each of said persons by his
signature hereto affirms that this Certificate is his act and deed and the act
and deed of said Corporation, and that the facts stated therein are true.
LOWRANCE ELECTRONICS, INC.
By _____________________________________
DARRELL J. LOWRANCE
President and Chief Executive Officer
[SEAL]
Attest:
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Robert F. Biolchini
(Secretary)
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