LOWRANCE ELECTRONICS, INC.
12000 East Skelly Drive
Tulsa, Oklahoma 74128-2486
PROXY STATEMENT
Annual Meeting of Stockholders
December 10, 1996
The enclosed form of Proxy is solicited by the Board of Directors
of Lowrance Electronics, Inc., (the "Company") for use at the Annual
Meeting of Stockholders to be held in the Diplomat Room on the Main
Lobby Floor of the Adam's Mark Hotel, 100 East Second Street, Tulsa,
Oklahoma, on Tuesday, December 10, 1996, at 10:00 a.m., local time.
This Proxy Statement and the Proxy are mailed to Stockholders
on or about November 8, 1996, and are furnished in connection with
the solicitation of Proxies by the Board of Directors of the Company.
This Proxy solicitation is by mail and at the expense of the Company.
It may be that further solicitation of Proxies will be made by
telephone or oral communication. All such further solicitation
will be at the expense of the Company and may be conducted by
employees of the Company who will not receive additional compensation
for such solicitation.
VOTING
Shares represented by Proxies received by the Board of Directors
will be voted at the Annual Meeting in accordance with the
specifications made thereon by the Stockholders, unless authority to
do so is withheld. If no specification is made, the Proxy will be
voted in favor of the proposals referred to therein and herein.
Any Stockholder giving a Proxy has the power to revoke it at any
time before it is voted, and revocation may be by letter, notice in
writing, or telegram addressed to Robert F. Biolchini, Secretary of
Lowrance Electronics, Inc., 12000 East Skelly Drive, Tulsa, Oklahoma,
74128-2486. Each Proxy, unless previously revoked, will be voted at
the meeting.
Only Stockholders of record at the close of business on October
31, 1996, will be entitled to vote at the Annual Meeting. On October
31, 1996, there were outstanding 3,352,458 shares of Common Stock, par
value $0.10 per share, all of which will be entitled to vote at the
Annual Meeting. Each Share of Common Stock is entitled to one vote,
with no right of cumulative voting. The Company has no other voting
securities outstanding.
The presence, in person or by proxy, of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual
Meeting shall constitute a quorum for the transaction of business. A
quorum being present, all proposals to be voted on at the Annual
Meeting will be decided by a majority vote of the shares present, in
person or by proxy, certified to by inspectors of election, unless the
proposal relates to matters on which more than a majority vote is
required under the Company's Certificate of Incorporation, its Bylaws,
or the laws of the State of Delaware, under whose laws the Company is
Incorporated.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 31, 1996, the
number and percentages of outstanding shares of the Common Stock
beneficially owned by all persons known by the Company to own more
than 5% of the Company's Common Stock, by each director and nominee
for director of the Company, and by all officers and directors of the
Company as a group:
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership of Shares
Darrell J. Lowrance (1) 1,734,507 (2) 50.6%
12000 East Skelly Drive
Tulsa, OK 74128-2486
Willard P. Britton (1) 200 *
385 N.E. 91st Street Direct
Miami Shores, FL 33138
Ronald G. Weber (1) 68,100 (3) 2.0%
12000 East Skelly Drive
Tulsa, OK 74128-2486
Robert F. Biolchini (1) 5,000 *
3300 First Place Tower Direct
15 East 5th Street
Tulsa, OK 74103
Peter F. Foley, III (1) 2,100 *
Boone Bait Company Direct
440 Plumosa Avenue
Casselbury, FL 32707
Estate of James L. Knight 652,344 19.0%
c/o Northern Trust Bank of Direct
Florida, N.A.
700 Brickell Avenue
Miami, FL 33131-2881
All directors and 1,831,757 (4)(5) 53.4%
officers as a group
(including those listed
above, nine persons
total)
* One-half of one percent or less
(1) Director or nominee for director
(2) Includes 180,500 shares held indirectly in an individual
retirement account with Mr. Lowrance having the sole voting
and investment power, 143,908 shares held of record by the
Trustees of the Lowrance Savings Plan and Trust for Mr.
Lowrance, who is entitled to vote such shares, 3,725 owned
indirectly by an immediate family member, and 22,500 shares
that may be purchased by Mr. Lowrance pursuant to options
granted under the Company's 1986 Stock Option Plan. See
"Executive Officers and Compensation - Stock Option Plans."
(3) Includes 33,000 shares held of record by the Trustees
of the Lowrance Savings Plan and Trust for Mr. Weber, who is
entitled to vote such shares, and 22,500 shares that may be
purchased by Mr. Weber pursuant to options granted
under the Company's 1986 Stock Option Plan. See
"Executive Officers and Compensation - Stock Option Plans".
(4) Includes 62,500 shares that may be purchased by officers of
the Company, including the 22,500 shares that may be
purchased by both Mr. Lowrance and Mr. Weber, pursuant to
options granted under the Company's 1986 Stock Option Plan.
(5) All voting securities owned by officers and directors are
owned directly except for 365,033 shares.
Darrell J. Lowrance and James L. Knight (deceased) entered into a
Shareholders' Agreement dated December 22, 1978, which provides that,
except for sales in a public offering, neither party may sell his
Common Stock without offering the Company the right of first refusal
at the same price offered by a third party, payable in eight equal
annual payments, including annual interest at 8%. If the Company
does not exercise the right of first refusal and purchase the Common
Stock, then the other individual party has the right to purchase such
stock at the same price and under the same payment terms. On October
8, 1986, a First Amendment to the Shareholders' Agreement was entered
into between Messrs. Knight and Lowrance which permits them, after the
initial public offering of the Company's stock, to sell their Common
Stock in the public market pursuant to Rule 144 and allows them to
make charitable donations of their Common Stock within certain limits
as to the total number of shares which may be donated to one
charitable institution without first offering such stock to the
Company or the other party. The right of first refusal terminates
only when either (a) Mr. Lowrance's stock ownership in the Company is
less than 15% of the Company's outstanding stock, or (b) Mr. Knight's
stock ownership in the Company is less than 10% of the Company's
outstanding stock, exclusive of any stock donated by either of them
to a charitable institution. Additionally, Messrs. Lowrance and
Knight entered into an Agreement on October 8, 1986, with the Company
whereby they agreed not to sell any of their shares of Common Stock
privately, except as permitted under the First Amendment to
Shareholders' Agreement.
As of October 31, 1996, 538,744 shares of Common Stock were sold
in the public market by the Estate of James L. Knight pursuant to
Rule 144 since May of 1992 when the Estate first elected to sell stock
owned by the Estate as permitted by the Agreement and First Amendment
to Shareholders' Agreement and as allowed under Rule 144.
Additionally, in May 1993, 68,966 shares of common Stock were sold by
the Estate of James L. Knight to the Company and retired and 34,483
shares were sold by the Estate of James L. Knight directly to Mr.
Lowrance. Except for the sales made by the Estate of James L. Knight
pursuant to Rule 144 and the sales made by the Estate of James L.
Knight to the Company and Mr. Lowrance, neither Mr. Knight nor Mr.
Lowrance has sold nor made a gift of any stock in the Company
pursuant to the aforementioned Agreement and First Amendment to
Shareholders' Agreement.
ELECTION OF DIRECTORS
The directors of the Company are divided into three classes,
designated as Class I, Class II, and Class III. Each class consists
of one-third of the directors constituting the whole Board. The
directors, upon being elected, all serve three-year terms, and the
term of each member of the same class expires at the same time. At
each Annual Meeting of Stockholders, directors to replace those whose
terms expire at such Annual Meeting are elected for a three-year term.
In accordance with the recommendation of the Compensation and
Nominating Committee, two individuals, Willard P. Britton and Ronald
G. Weber, who are currently directors of the Company, have been
nominated by the Board of Directors for re-election as Class I
directors at the Annual Meeting for a three-year term expiring in
December 1999. Darrell J. Lowrance and Peter F. Foley III, the Class
III directors, and Robert F. Biolchini and Alpo F. Crane, the Class II
directors, will continue to serve as directors pursuant to their prior
elections.
The persons designated by the Board of Directors as proxies in
the accompanying Proxy intend to vote, unless otherwise instructed in
such Proxy, for the election of Messrs. Britton and Weber. Should
either Mr. Britton or Mr. Weber become unable for any reason to stand
for election as a director of the Company, it is the intention of the
persons named in the Proxy to vote for the election of such other
person as the Compensation and Nominating Committee may recommend and
the Board of Directors may nominate to replace Mr. Britton or Mr.
Weber, or, if none, the Compensation and Nominating Committee will
recommend that the size of the Board of Directors be reduced. The
Company knows of no reason why Messrs. Britton and Weber will be
unavailable or unable to serve.
Standing for Election
Class I Directors
(Term Expires December 1999)
Willard P. Britton. Mr. Britton, age 73, has been a director of
the Company since December 1985. Mr. Britton is a retired Vice
President and Controller of Knight-Ridder, Inc., a corporation engaged
primarily in communications.
Ronald G. Weber. Mr. Weber, age 52, has served the Company as
its Executive Vice President of Technology and Engineering since
December 1993 and prior thereto served as Senior Vice President of
Engineering since 1980. Mr. Weber has also been a director since
October 1992. Mr. Weber joined the Company in 1976, and prior to
serving in his current position, he held several technical positions
with the Company.
Directors Continuing in Office
Class II Directors
(Term Expires December 1997)
Robert F. Biolchini. Mr. Biolchini, age 57, has served as a
Director of the Company and its Secretary since December 1985. Mr.
Biolchini is a director and Chairman of the Board of Valley National
Bank and his principal occupation since 1968 has been the practice of
law as a partner in the law firm of Stuart, Biolchini, Turner &
Givray, counsel for the Company.
Alpo F. Crane. Mr. Crane, age 55, has been a Director of the
Company since December 1985 and presently is involved in private
investments. Mr. Crane retired as the Director of International
Sales for the In-Sink-Erator Division of Emerson Electric Company, a
corporation engaged in the manufacture of a broad range of
electrical-electronic products and systems, in 1993, a position he
held since September 1989. Prior thereto, Mr. Crane was the
President and Treasurer of Almar International, Ltd., a corporation
engaged in international trade consulting.
Class III Director Nominees
(Term expires December 1998)
Darrell J. Lowrance. Mr. Lowrance, age 58, a founder of the
Company, has been with the Company since its formation in 1957. He
currently serves as President and Chief Executive Officer and a
Director of the Company, positions he has held since 1964. During
1983 and 1984, Mr. Lowrance served as President of the American
Fishing Tackle Manufacturer's Association (AFTMA). In July 1988, Mr.
Lowrance returned to the Board of Directors of AFTMA, a position he
previously held from 1978 through 1986. Additionally, in April 1989,
Mr. Lowrance was elected as a director of the National Association of
Marine Products and Services. Mr. Lowrance also serves on other
industry boards whose purpose is to restore and enhance fisheries.
Peter F. Foley, III. Mr. Foley, age 60, has served as a director
since October 1991 and has been President of Boone Bait Company, a
Company engaged in the manufacture of saltwater fishing lures, since
1978. For more than 10 years, Mr. Foley has served on numerous boards
related to the marine industry, including the American Fishing Tackle
Manufacturer's Association (AFTMA). Further, he has been awarded
government grants, as an industry expert in international marketing of
fishing tackle products, to study and report on key opportunities for
the industry.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Company's Board of Directors met seven times during the
fiscal year ended July 31, 1996. The Board of Directors has an Audit
Committee and a Compensation and Nominating Committee.
The Audit Committee is composed of Willard P. Britton, Alpo F.
Crane, and Robert F. Biolchini (Chairman). The Audit Committee held
two meetings during the Company's 1996 fiscal year. One member
missed one of the two meetings. The Audit Committee meets on a
scheduled basis with the Company's independent public accountants
and is available to meet at the request of the Company's independent
public accountants. The Audit committee reviews the Company's
accounting policies, internal controls, and other accounting and
auditing matters; considers the qualifications of the Company's
independent public accountants; makes a recommendation to the Board
as to the engagement of an independent public accountant; and reviews
the letter of engagement and statement of fees relating to the scope
of the annual audit and special audit work which may be recommended or
required by the independent public accountants.
The Compensation and Nominating Committee is composed of Willard
P. Britton, Peter F. Foley, III, and Robert F. Biolchini (Chairman).
The Compensation and Nominating Committee held three meetings during
the Company's 1996 fiscal year at which all members attended. The
Committee reviews the nature and amount of compensation of the
officers of the Company and recommends changes with respect thereto,
including the Company's Executive Bonus Plan, 1986 Stock Option Plan,
and 1989 Stock Option Plan, and recommends the nominees for directors.
The Committee will consider qualified director candidates submitted
to it by other directors, employees, or Stockholders. As a
prerequisite to consideration, each recommendation must be
accompanied by biographical material of the proposed candidate, fully
disclosing the candidate's qualifications and demonstrated sound
business judgment, as well as an indication that the proposed
candidate would be willing to serve as a director, if elected. In
order for a candidate recommended by a Stockholder to be considered
as a nominee at the Annual Meeting to be held in 1997, the name of
such candidate, together with the written description of the
candidate's qualifications, must be received by the Secretary of the
Company prior to August 15, 1997.
There was no incumbent or nominee for director who failed to
attend at least 75% of the aggregate number of meetings of the Board
and Committees upon which they sit. Each director receives $12,000
per year compensation and an additional fee of $1,000 for each
meeting of the Board of Directors and $750 for each Committee meeting
attended. All directors are reimbursed for certain reasonable
out-of-pocket expenses incurred in attending meetings of the Board of
Directors or Committee meetings.
There are no family relationships between any director or
executive officer of the Company. Alpo F. Crane is the son-in-law of
the late James L. Knight, whose Estate is a principal Stockholder of
the Company. Mr. Crane and Willard P. Britton initially served as
directors of the Company at the request of Mr. Knight and now serve
at the request of the Board of Directors.
EXECUTIVE OFFICERS AND COMPENSATION
Executive Officers
The executive officers of the Company are as follows:
Name Age Position
Darrell J. Lowrance 58 President and Chief Executive
Officer since 1964.
Ronald G. Weber 52 Executive Vice President of
Technology and Engineering since
December 1993. Prior thereto Mr.
Weber was the Senior Vice
President of Engineering since
1980.
Steven L. Schneider 37 Senior Vice President of Sales and
Marketing since March 1994.
Prior thereto, Mr. Schneider was
Director of Marketing and Inter-
national Sales since September
1992 and was subsequently
promoted to Vice President of
Marketing and International Sales
in February 1993.
Terry R. Nimmo 48 Vice President of Manufacturing
and Materials since June 1995.
Prior thereto Mr. Nimmo was
Vice-President of Materials/
M.I.S. since 1991. Mr. Nimmo
joined the Company in April 1982
as its Manager of Information
Systems and subsequently was
promoted to Manager of
Materials/Management
Information Systems.
Mark C. Wilmoth 37 Vice President of Finance and
Treasurer since March 1994.
Prior thereto, Mr. Wilmoth was
Corporate Controller and Assistant
Secretary since 1988.
Sue E. Chase 45 Vice President of Human
Resources since December 1993.
Prior thereto, Ms. Chase was
director of Human Resources
since June 1993. Before joining
the Company, Ms. Chase served
as Vice President of Human
Resources at Seiscor
Technologies, Inc., since 1985.
All officers of the Company are elected annually and serve at the
pleasure of the Board of Directors.
Compensation
The following table sets forth the aggregate cash compensation
paid to the executive officers listed for services rendered in all
capacities to the Company for the fiscal year ended July 31, 1996:
Name of
Individual/ (1) (2) (3)
Principal Position Year Salary Bonus Other Annual All Other
($) ($) Compensation ($)
Darrell J. Lowrance
President and Chief
Executive Officer 1996 349,000 81,511 - 24,886
1995 325,000 92,073 - 22,389
1994 306,000 - - 21,630
Ronald G. Weber
Executive Vice
President of
Technology and
Engineering 1996 193,000 48,884 - 25,681
1995 185,000 51,042 - 23,721
1994 176,000 21,400 - 25,382
Steven L. Schneider
Senior Vice
President of Sales
and Marketing 1996 151,000 38,316 - 8,990
1995 145,000 40,005 - 8,720
1994 129,000 14,300 - 8,506
Mark C. Wilmoth
Vice President of
Finance and
Treasurer 1996 125,000 31,635 - 8,649
1995 115,000 31,729 - 6,651
1994 96,000 11,000 - 5,493
Terry R. Nimmo
Vice President of
Materials/M.I.S.1996 123,000 31,244 - 6,682
1995 110,000 30,350 - 6,004
1994 106,000 13,800 - 7,645
(1) The Company's Executive Bonus Plan for fiscal year 1996 provided
for a performance bonus pool measured entirely on the basis of the
Company's pretax, prebonus earnings compared to budgeted pretax,
prebonus earnings. This bonus pool was to be divided, based on
certain predetermined percentages, between the Company's President,
five Vice Presidents, and certain other key employees. In order to
earn any performance bonus, it was necessary for pretax, prebonus
income to exceed $1,200,000, which the Company did and accordingly a
performance bonus pool of $166,997 was earned and paid in October,
1996 to those officers and key employees who earned a performance
bonus. The Executive Bonus Plan for fiscal year 1996 also provided
for discretionary bonuses for executive officers, except the
President, and certain other key employees, granted at the
recommendation of the President on the basis of individual
performance not to exceed 15% of their respective salaries. The
President exercised his right to recommend discretionary bonuses for
executive officers and certain key employees of the Company to the
Compensation and Nominating Committee of the Board of Directors.
Accordingly, certain discretionary bonuses aggregating $133,082 were
recommended by the Compensation and Nominating Committee and approved
by the Board of Directors for payment in November of 1996. The
Company paid an aggregate of $300,079 in bonuses in October and
November, 1996 pursuant to the Company's 1996 Executive Bonus Plan.
The aggregate maximum amount payable pursuant to the Company's 1996
Executive Bonus Plan, to include performance bonuses and discretionary
bonuses, was limited to $1,000,000.
(2) The 1996 remuneration described in other annual compensation
includes the cost to the Company of benefits furnished to the
executive officers, including premiums for life and health insurance,
personal use of Company automobiles, and other personal benefits
provided to such individuals that are extended in connection with the
conduct of the Company's business. During 1996, 1995, and 1994, no
executive officers received other compensation in excess of 10% of
such officer's cash compensation.
(3) Other long-term compensation resulted from contributions to the
Lowrance Savings Plan and Trust Number 1 on behalf of the listed
executive officers. Also included are directors fees of $16,500,
$15,500 and $13,500 paid to each of Mr. Lowrance and Mr. Weber,
respectively, in 1996, 1995 and 1994.
Stock Option Plans. The Company's 1986 and 1989 Stock Option
Plans (the "Plans") adopted by the Board of Directors and approved
by the Stockholders, reserve 400,000 shares of Common Stock (subject
to certain adjustments) for issuance upon the exercise of incentive
stock options (as defined in Section 422A of the Internal Revenue
Code), non-qualified stock options, and limited stock appreciation
rights ("limited SAR's") which may be granted to directors, officers,
and key employees (13 persons are eligible to participate as of the
date of this Proxy Statement). The Plans are designed to serve as an
incentive for attracting and retaining qualified and competent
employees and directors.
The Compensation and Nominating Committee of the Board of
Directors administers and interprets the Plans and has authority to
grant options on such terms and at such prices as it may determine,
but the exercise price of incentive stock options will not be less
than the fair market value of the Common Stock on the date of grant
and no option will be exercisable after the expiration of ten years
from the date of grant. The committee may also grant limited SAR's
in tandem with options. A limited SAR is exercisable only to the
extent that the related option is exercisable and the exercise of any
portion of either the related option or tandem limited SAR will
cause a corresponding reduction in the number of shares remaining
subject to the option or the tandem limited SAR. The Board of
Directors has resolved that the exercise price of non-statutory stock
options will be not less than 85% of the fair market value of the
Common Stock on the date of grant.
During fiscal year 1996, no options and no limited SAR's were
granted and none were exercised. As of October 31, 1996, the Company
had 75,000 non-qualified options issued of the 400,000 authorized in
the Plans. Total non-qualified options granted to executive officers
and presently outstanding were as follows:
Non-Qualified Average Option
Executive Officer Options Granted Price Per Share
Darrell J. Lowrance 22,500 shares $2.93
Ronald G. Weber 22,500 shares $2.93
Terry R. Nimmo 12,500 shares $2.97
Mark C. Wilmoth 5,000 shares $2.89
As of October 31, 1996, options on 5,000 shares under these
plans have been exercised to date and no limited SAR's have been
granted.
Retirement Plan. The Lowrance Savings Plan and Trust (the
"Retirement Plan") requires the Company to contribute to the
Retirement Plan up to 6% of each participant's salary annually.
Participants include all employees of the Company, including
executive officers, who have completed one year of employment with
at least 1,000 hours of service. The Company makes a fixed
contribution of 3% of each participant's salary. In addition, if an
employee makes voluntary contributions, the Company will make
additional contributions equal to 100% of the first $10 per pay
period of the employee's contribution and 50% thereafter, not to
exceed 3% of the employee's salary. Each participant's interest in
the Company's contributions vests fully over a period of seven years.
Generally, a participant's interest in the Company's contributions
may be withdrawn only upon termination or in certain hardship
situations. The Trustees and Administrative Committee of the
Retirement Plan are appointed by the Board of Directors.
Board Compensation Committee Report. The members of the
Compensation and Nominating Committee are Mr. Robert Biolchini, Mr.
Willard Britton, and Mr. Peter Foley, III. Each member of the
Committee is a non-employee director.
The Committee's executive compensation policies are designed to
provide competitive levels of compensation that integrate pay with
the Company's performance, recognize individual initiative and
achievements, and assist the Company in retaining qualified
executives. Annual bonuses to executives include two components, a
performance pool measured entirely on the basis of the Company's
pretax, prebonus earnings, and a discretionary bonus for executive
officers, except the President, which is recommended by the President
on the basis of individual performance.
The Committee believes that the three programs described above
provide compensation that is competitive with the levels paid by other
electronics corporations and helps link executive and shareholder
interests especially through the Company's Executive Bonus Plan and
Stock Options which create meaningful rewards for both short and
long-term performance that assists the Company to attain its revenue
growth and profitability for the benefit of the Company and its
Stockholders.
Compensation and Nominating Committee:
Robert F. Biolchini, Chairman
Willard P. Britton
Peter F. Foley, III
Performance Graph. The following performance graph reflects
yearly percentage change in the Company's cumulative total Stockholder
return on Common Stock as compared with the cumulative total return of
the NASDAQ (US) and the NASDAQ Electronic Components Index. All
cumulative returns assume reinvestment of dividends and are calculated
on a fiscal year basis on July 31 of each year.
Comparison of 5-Year Cumulative Total Return
91 92 93 94 95 96
NASDAQ (US) 100 117 143 147 204 225
NASDAQ ELEC. COMP 100 122 198 221 503 466
LOWRANCE ELEC. 100 300 214 314 357 329
PROPOSAL TO APPROVE 70,000 SHARES OF SERIES "A"
PREFERRED STOCK
Upon the recommendations of the Compensation Committee, the Board
of Directors of the Company, on February 28, 1996, unanimously
approved the issuance of 70,000 shares of Series "A" Preferred Stock
("Preferred Stock") to the five key officers of the Company. The
Board of Directors believes that the Preferred Stock is (i) an
effective means of insuring that the Company retain the services of
the five key officers that the Compensation Committee and Board of
Directors believe are critical to the Company's future; and (ii) the
Preferred Stock provided long-term incentive for the five key officers
and promotes loyalty and dedication to the Company through their
acquisition of the Preferred Stock of a significant proprietary
interest in the Company's ongoing growth and future. The Certificate
of the Designation of Preferences, Rights and Limitations of the
Company's Series "A" Preferred Stock is set forth in full on Appendix
A attached hereto.
The 70,000 shares of Preferred Stock were issued on May 13, 1996
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; Steve 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 1/2 cents per share. Each
share of Preferred Stock is convertible into five shares of the
company's Common Stock, but only if (i) the Chief Executive Officer of
the Company (Darrell J. Lowrance) 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 was issued for a term of ten years for a purchase
price of $6.88 per share, pursuant to a fairness opinion letter,
dated February 27, 1996, from Principal Financial Securities, Inc.
The Company financed the total purchase price of $481,250 for the
private placement of the 70,000 shares of Preferred Stock for the
five key officers of the Company, pursuant to five individual
Promissory Notes from each of the five key officers of the Company,
bearing interest at Chase prime, payable annually on May 13, which
Promissory Notes are secured by a pledge of each key officer's
Preferred Stock. In the event the Preferred Stock is not converted
within ten years, 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 remaining on each of the five
Promissory Notes to the Company. 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 pledged to secure each Promissory Note and the
Preferred Stock is immediately surrendered to the Company for
cancellation in exchange for the Company's canceling the principal
amount owing to the Company on the Promissory Note, provided all
accrued interest on the Promissory Note is paid to the date of such
key employee's termination.
If issuance of the Series "A" Preferred Stock is not approved by
a majority of the Stockholders of the Company at the Annual Meeting of
Stockholders, the five key officers of the Company to whom such 70,000
shares of Series "A" Preferred Stock has been issued have agreed that
such Series "A" Preferred Stock will revert back to the Company and
will be canceled with no further liability to any of the five key
officers pursuant to their individual Promissory Notes and Pledge and
Security Agreements held by the Company.
SELECTION OF AUDITORS
The Board of Directors, upon recommendation of the Audit
Committee, has selected Arthur Andersen LLP as the independent public
accountants for the Company for its fiscal year 1997, subject to
ratification by the Stockholders at the Annual Meeting.
Arthur Andersen LLP served as independent public accountants for
the Company for its last fiscal year. A representative of Arthur
Andersen LLP will attend the Annual Meeting and have the opportunity
to make a statement if the representative desires to do so and will be
available to answer appropriate questions.
STOCKHOLDER PROPOSALS
The date by which proposals of Stockholders intended to be
presented at the 1997 Annual Meeting of Stockholders must be received
by the Company for inclusion in the Company's Proxy Statement and form
of Proxy relating to that meeting is August 15, 1997.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors does not intend to bring any other matters
before the Annual Meeting nor does it know of any matters which other
persons intend to bring before the Annual Meeting. However, if any
other matters properly come before the Annual Meeting, the persons
named as proxies in the accompanying Proxy will vote thereon in
accordance with their best judgment.
It is important that Proxies be returned promptly. Therefore,
Stockholders who do not expect to attend the Annual Meeting in person
are urged to sign the enclosed Proxy and mail it at their earliest
convenience in the enclosed return envelope for which no postage is
needed if mailed in the United States.
LOWRANCE ELECTRONICS, INC.
12000 East Skelly Drive
Tulsa, Oklahoma 74128-2486
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 10, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Lowrance Electronics, Inc., a Delaware corporation (the "Company"),
will be held in the Diplomat Room on the Main Lobby Floor of the
Adam's Mark Hotel, 100 East Second Street, Tulsa, Oklahoma, on
Tuesday, December 10, 1996, at 10:00 a.m., local time, to consider
and vote upon the following matters described in the accompanying
Proxy Statement:
(1) To elect two Class I Directors for a three-year term
expiring in December 1999 and until their successors
have been duly elected and qualified;
(2) To consider and vote upon a proposal to approve the
issuance of 70,000 shares of Series "A" Preferred Stock;
(3) To ratify the selection of Arthur Andersen LLP as
independent public accountants for the Company for its
fiscal year 1997; and
(4) To transact such other and further business as may be
brought before the Annual Meeting or any adjournment or
adjournments thereof.
Only Stockholders of record at the close of business on October
31, 1996, are entitled to vote at the meeting or any adjournment or
adjournments thereof. Stockholders who do not expect to attend the
meeting in person are urged to mark, date, sign, and mail the enclosed
Proxy in the enclosed return envelope for which no postage is needed
if mailed in the United States.
By Order of the Board of Directors
Robert F. Biolchini
Secretary
Tulsa, Oklahoma
November 13, 1996
IF YOU CANNOT BE PRESENT IN PERSON, PLEASE
MARK, DATE, AND SIGN THE ENCLOSED PROXY
AND MAIL IT AT YOUR EARLIEST CONVENIENCE
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned. If no direction is made, this Proxy will
be voted FOR the persons nominated as Class I Directors, FOR the
proposal to approve the issuance of 70,000 shares of Series "A"
Preferred Stock and FOR the proposal ratifying the selection of Arthur
Andersen LLP.
1. ELECTION OF DIRECTORS. The undersigned directs that this Proxy be
voted:
FOR the nominees listed to the right.
WITHHOLD AUTHORITY To vote for the nominees listed to the right
Class I Directors (three-year terms)
Willard P. Britton
Ronald G. Weber
FOR, except
to vote for ________________________
2. Proposal to approve the issuance of 70,000 shares of Series "A"
Preferred Stock:
FOR AGAINST ABSTAIN
O O O
3. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN
LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY
FOR ITS FISCAL YEAR 1997. The undersigned directs that is Proxy be
voted:
FOR AGAINST ABSTAIN
O O O
4. OTHER MATTERS. The undersigned directs that this Proxy be voted
in such manner as proxies named herein, or either of them, may direct,
in their discretion, on any other matter that may properly come before
the Meeting or any adjournment thereof.
Dated:____________________, 1996
_______________________________
Signature of Shareholder
_______________________________
Signature of Shareholder
NOTE: in the case of joint ownership, each such owner should sign.
Executor, administrators, guardian, trustees, etc. should add their
title as such and where more than one executor, etc. is named, a
majority must sign. If the signer is a corporation please sing full
corporate name
by a duly authorized officer.
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
