<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended July 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission File No. 0-15240
LOWRANCE ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 44-0624411
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
12000 East Skelly Drive, Tulsa, Oklahoma 74128
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (918) 437-6881
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, par value $.10 per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's
<PAGE>
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K for any amendment to this Form 10-K. [X]
Aggregate Market Value of the Voting Stock Held By
Non-Affiliates as of November 1, 1999 - $7,521,817/1/
Number of Shares of Common Stock
Outstanding as of November 1, 1999 - 3,768,796/2/
DOCUMENTS INCORPORATED BY REFERENCE
None
EXPLANATORY NOTE
This Form 10-K/A constitutes Amendment No. 1 to the Registrant's Annual
Report of Form 10-K for the fiscal year ended July 31, 1999, and is being filed
solely for the purpose of filing the information required by Part III (Items 10,
11, 12 and 13) to the Form 10-K. The information contained herein was included
in the Company's proxy statement mailed to shareholders on November 19, 1999. A
copy of the proxy statement has been filed concurrently with the filing of this
Amendment No. 1.
LOWRANCE ELECTRONICS, INC.
FORM 10-K/A
AMENDMENT NO. 1 TO 1999 ANNUAL REPORT
TABLE OF CONTENTS
PART III
Item 10. Directors and Executive Officers of the Registrant................ 2
Item 11. Executive Compensation............................................ 4
Item 12. Security Ownership of Certain Beneficial Owners and Management.... 7
Item 13. Certain Relationships and Related Transactions.................... 10
SIGNATURES
______________________
/1/ Information provided herein is as of November 1, 1999, the date applicable
to the period for which this filing is made. As of September 7, 2000, the
Aggregate Market Value of the Voting Stock Held By Non-Affiliates is $4,695,093,
as reflected in the Company's 8-K filing of September 7, 2000.
/2/ As of September 7, 2000, the Number of Shares of Common Stock Outstanding
is 3,768,796, as reflected in the Company's 8-K filing of September 7, 2000.
2
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information regarding the Company's executive officers and
directors as of July 31, 1999.
<TABLE>
<CAPTION>
Name Age Position
------------------------ --- -------------------------------------------------------------------
<S> <C> <C>
Darrell J. Lowrance 61 Director, President and Chief Executive Officer
Ronald G. Weber 55 Director and Executive Vice President of Technology and Engineering
Steven L. Schneider(1) 40 Vice President of Sales and Marketing
Terry R. Nimmo(2) 51 Vice President of Manufacturing and Materials
Mark C. Wilmoth(3) 40 Vice President of Finance and Treasurer
Robert F. Biolchini(4) 60 Director and Secretary
Peter L. Foley, III(5) 63 Director
Alpo F. Crane(6) 58 Director
Willard P. Britton(7) 76 Director
</TABLE>
(1) Mr. Schneider's association with the Company ended on December 29, 1999.
(2) Mr. Nimmo resigned as an officer on February 11, 2000.
(3) Mr. Wilmoth resigned as an officer on February 9, 2000.
(4) Member of the Audit Committee and Compensation and Nominating Committee.
Mr. Biolchini resigned as a director effective December 8, 1999.
(5) Member of the Compensation and Nominating Committee.
(6) Member of the Audit Committee. Mr. Crane resigned as a director effective
February 1, 2000.
(7) Member of the Audit Committee and Compensation and Nominating Committee.
Darrell J. Lowrance. Mr. Lowrance, age 61, 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.
Ronald G. Weber. Mr. Weber, age 55, has served the Company as its
Executive Vice President of Technology and Engineering since December 1993 and
prior thereto served as
3
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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.
Steven L. Schneider. Mr. Schneider, age 40, has served as Vice President
of Sales and Marketing since March 1994. Prior to his current position, Mr.
Schneider served as the Vice President of Marketing and International Sales from
February 1993, and prior to that time he served as the Director of Marketing and
International Sales from September 1992.
Terry R. Nimmo. Mr. Nimmo, age 51, has served as Vice President of
Manufacturing and Materials since June 1995. Mr. Nimmo joined the Company in
April 1982 as its Manager of Information Systems and was promoted to Manager of
Materials/Management Information Systems in 1991, where he served until promoted
to his current position.
Mark C. Wilmoth. Mr. Wilmoth, age 40, has served as Vice President of
Finance and Treasurer of the Company since March 1994. Prior thereto, Mr.
Wilmoth was Corporate Controller and Assistant Secretary since 1988.
Robert F. Biolchini. Mr. Biolchini, age 60, 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.
Peter F. Foley, III. Mr. Foley, age 63, 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.
Alpo F. Crane. Mr. Crane, age 58, 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.
Willard P. Britton. Mr. Britton, age 76, 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.
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.
4
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ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Each director receives $12,000 per year compensation, provided the director
attends at least 75% of the aggregate number of meetings of the Board and
Committees upon which they sit. In addition, each director receives 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 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. No other compensation was paid or accrued for directors of the
Company with respect to their 1999 services as directors of the Company.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the aggregate cash compensation paid for
services rendered in all capacities to the Company to (i) the Company's Chief
Executive Officer and (ii) the four other highest paid executive officers
serving as such at the end of the fiscal year ended July 31, 1999, whose salary
and bonus for the fiscal year was in excess of $100,000. The individuals named
in the table will be hereinafter referred to as the "Named Officers". No other
executive officer who would otherwise have been included in such table on the
basis of fiscal year 1999 salary and bonus resigned or terminated employment
during the year.
<TABLE>
<CAPTION> (1) (2) (3)
Name of Individual/ Other Annual All
Principal Position Year Salary Bonus Compensation Other
($) ($) ($) ($)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Darrell J. Lowrance 1999 382,000 249,000 - 30,600
President and Chief 1998 382,000 - - 30,300
Executive Officer 1997 374,000 - - 26,255
Ronald G. Weber 1999 208,000 92,000 - 30,600
Executive Vice President 1998 208,000 - - 30,686
of Technology and Engineering 1997 204,000 - - 24,347
Steven L. Schneider 1999 163,000 47,000 - 9,600
Vice President of 1998 163,000 - - 9,313
Sales and Marketing 1997 160,000 - - 9,553
Mark C. Wilmoth 1999 145,000 64,000 - 9,010
Vice President of Finance and 1998 145,000 - - 8,596
Treasurer 1997 140,000 - - 8,898
Terry R. Nimmo 1999 145,000 64,000 - 9,001
Vice President of 1998 145,000 - - 7,505
Materials/M.I.S. 1997 140,000 - - 7,703
</TABLE>
5
<PAGE>
(1) The Company's Executive Bonus Plan for fiscal year 1999 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, four Vice Presidents, and
certain other key employees. In order to earn any performance bonus, it
was necessary for pretax, prebonus income to exceed $700,000, which the
Company did and accordingly a performance bonus pool of $489,000 was earned
and paid in October, 1999 to those officers and key employees who earned a
performance bonus. The Executive Bonus Plan for fiscal year 1999 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 $124,000 were recommended by the Compensation and Nominating
Committee and approved by the Board of Directors for payment in October of
1999. The Company paid an aggregate of $613,000 in bonuses in October 1999
pursuant to the Company's 1999 Executive Bonus Plan. The aggregate maximum
amount payable pursuant to the Company's 1999 Executive Bonus Plan, to
include performance bonuses and discretionary bonuses, was limited to
$1,000,000.
(2) The 1999 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 1999, 1998, and 1997, 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 director's fees of $21,000, $21,000 and $17,000 paid to
Mr. Lowrance and $21,000, $21,000 and $15,000 paid to Mr. Weber in 1999,
1998 and 1997, respectively.
OPTION EXERCISES AND HOLDINGS
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
(less than 13 persons are eligible to participate as of the date of this
filing). 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-
6
<PAGE>
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 1999, no options and no limited SAR's were granted. As
of November 1, 1999, the Company had no non-qualified options issued of the
400,000 authorized in the Plans. There were no options exercised during the
year by the Company's Chief Executive Officer and the other executive officers
named in the compensation table.
As of November 1, 1999, options on 80,000 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.
EMPLOYMENT CONTRACTS, TERMINATION AGREEMENTS AND CHANGE OF CONTROL AGREEMENTS
The Company is a party to employment and severance agreements with the
following three executive officers of the Company: Terry R. Nimmo, Steven L.
Schneider and Mark C. Wilmoth. Under these employment and severance agreements,
all of which are substantially identical, if the Company is sold, merged,
reorganized or otherwise acquired at a time when the executive is still employed
with the Company, and if employment of any executive is terminated other than
for "cause", as defined in the employment and severance agreement, then each
such executive would be entitled to payment of the Company's standard severance
and a lump sum payment in the amount of such executive's salary for one year.
The aggregate amount of such cash benefits payable to each executive would be
$197,981.00 for Mr. Nimmo, $222,557.00 for Mr. Schneider and $196,586.00 for Mr.
Wilmoth.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the 1999 fiscal year, Willard P. Britton, Peter F. Foley, III, and
Robert F. Biolchini served as members of the Compensation and Nominating
Committee of the Board of Directors. Each member of the Committee is a non-
employee director of the Company.
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation and Nominating Committee.
7
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Common Stock, as of November 1,
1999, by (i) all persons who are beneficial owners of five percent (5%) or more
of the Company's Common Stock, (ii) each director, (iii) the Named Officers in
the summary compensation table above, and (iv) all current directors and
executive officers as a group. The number of shares beneficially owned by each
director or executive officer is determined under rules of the SEC and
information is not necessarily indicative of beneficial ownership for any other
purpose. Shares of Common Stock subject to options, warrants or convertible
promissory notes currently exercisable or convertible, or exercisable or
convertible within 60 days of November 1, 1999 are deemed to be beneficially
owned by the person holding such option, warrant or convertible promissory notes
for computing the percentage ownership of such person, but are not treated as
outstanding for computing the percentage of any other person. Except as
otherwise indicated, the Company believes that the beneficial owners of the
Common Stock listed below, based upon such information furnished by such owners,
have sole investment power with respect to such shares, subject to community
property laws where applicable.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percentage
of Beneficial Owner (1) Beneficial Ownership of Class (2)
----------------------- --------------------- ------------
<S> <C> <C>
Darrell J. Lowrance (3) 1,907,423(4) 50.6%
12000 East Skelly Drive
Tulsa, OK 74128-2486
Willard P. Britton (3) 14,653 *
1571 Breakwater Terrace Direct
Hollywood, FL 33019
Ronald G. Weber (3) 71,745(5) 1.9%
12000 East Skelly Drive
Tulsa, OK 74128-2486
Robert F. Biolchini (6) 95,661 2.5%
3300 First Place Tower Direct
15 East 5th Street
Tulsa, OK 74103
Peter F. Foley, III (3) 54,183 1.4%
Boone Bait Company Direct
1501 Minnesota Avenue
Winter Park, FL 32790
Alpo F. Crane (6) 3,580 *
2633 Richardson Drive, Apt. 3-C Direct
Charlotte, NC 28211
Estate of James L. Knight 384,152 10.2%
c/o Northern Trust Bank of Direct
Florida, N.A.
</TABLE>
8
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<TABLE>
<S> <C> <C>
700 Brickell Avenue
Miami, FL 33131-2881
All directors and 2,169,095 (7) 57.6%
officers as a group
(including those listed
above, nine persons
total)
</TABLE>
* One-half of one percent or less
(1) This table is based upon information supplied to us by executive officers,
directors and stockholders owning greater than five percent, as set forth
in filings required by the Securities and Exchange Commission or as
otherwise provided. Although Loeb Arbitrage Fund, c/o Loeb Partners
Corporation, 61 Broadway, New York, NY 1006 filed a Schedule 13(D) with
the Securities and Exchange Commission on October 28, 1999, this table does
not identify it as a five percent owner since both its 13(D) filing and
actual stock ownership reflect that it beneficially owns less than five
percent of the Company's Common Stock.
(2) Percentage of beneficial ownership is calculated assuming 3,768,796 shares
of Common Stock were outstanding as of November 1, 1999. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of Common Stock subject to options, warrants
or convertible promissory notes currently exercisable or convertible or
exercisable or convertible within 60 days of November 1, 1999, are included
in the number of shares outstanding for computing the percentage of the
person holding such option, warrant or convertible promissory note but are
not included in the number of shares outstanding for computing the
percentage of any other person.
(3) Director.
(4) 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 and 3,725 owned
indirectly by an immediate family member.
(5) 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.
(6) Former director.
(7) 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 allowed them, after the initial public offering of the
Company's stock in 1986 to sell their Common Stock in the public market pursuant
to Rule 144 and permits 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.
9
<PAGE>
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 November 1, 1999, 806,936 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.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
None.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DATE: October 17 , 2000 BY: /s/ Darrell J. Lowrance
------------------------- -------------------------------------
Darrell J. Lowrance,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated and on the dates indicated:
/s/ Darrell J. Lowrance
-----------------------
Darrell J. Lowrance President and Chief Executive Officer October 17, 2000
(Principal Executive Officer)
/s/ Douglas J. Townsdin
-----------------------
Douglas J. Townsdin Vice President of Finance and October 17, 2000
Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)
/s/ Willard P. Britton
----------------------
Willard P. Britton Director October 17, 2000
/s/ Peter F. Foley, III
-----------------------
Peter F. Foley, III Director October 17, 2000
/s/ Ronald G. Weber
-----------------------
Ronald G. Weber Director and Executive Vice President October 17, 2000
of Engineering and Manufacturing
11
