<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LOWRANCE ELECTRONICS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LOWRANCE ELECTRONICS, INC.
12000 East Skelly Drive
Tulsa, Oklahoma 74128-2486
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 12, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Lowrance
Electronics, Inc., a Delaware corporation (the "Company"), will be held in the
Director's Row Room IV on the Main Lobby Floor of the Adam's Mark Hotel, 100
East Second Street, Tulsa, Oklahoma, on Tuesday, December 12, 2000, at 10:00
a.m., local time, to consider and vote upon the following matters described in
the accompanying Proxy Statement:
(1) To ratify the selection of Arthur Andersen LLP as independent public
accountants for the Company for its fiscal year 2001; and
(2) 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, 2000,
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
H. Wayne Cooper
Secretary
Tulsa, Oklahoma
November 10, 2000
IF YOU CANNOT BE PRESENT IN PERSON, PLEASE MARK, DATE,
AND SIGN THE ENCLOSED PROXY AND MAIL IT AT
YOUR EARLIEST CONVENIENCE
<PAGE>
LOWRANCE ELECTRONICS, INC.
12000 East Skelly Drive
Tulsa, Oklahoma 74128-2486
PROXY STATEMENT
Annual Meeting of Stockholders
December 12, 2000
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 Director's Row Room IV on the Main Lobby Floor of
the Adam's Mark Hotel, 100 East Second Street, Tulsa, Oklahoma, on Tuesday,
December 12, 2000, at 10:00 a.m., local time.
This Proxy Statement and the Proxy are mailed to Stockholders on or about
November 10, 2000, 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 H. Wayne Cooper, 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, 2000,
will be entitled to vote at the Annual Meeting. On October 31, 2000, there were
outstanding 3,768,796 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 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.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 31, 2000, 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 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) 1,907,423 (2) 50.6%
12000 East Skelly Drive
Tulsa, OK 74128-2486
Willard P. Britton (1) 14,653 *
1571 Breakwater Terrace Direct
Hollywood, FL 33019
Ronald G. Weber (1) 71,745 (3) 1.9%
12000 East Skelly Drive
Tulsa, OK 74128-2486
Peter F. Foley, III (1) 54,183 1.4%
Boone Bait Company Direct
1501 Minnesota Avenue
Winter Park, FL 32790
Estate of James L. Knight 336,754 8.9%
c/o Northern Trust Bank of Direct
Florida, N.A.
700 Brickell Avenue
Miami, FL 33131-2881
Don C. Whitaker 296,900 (4) 7.9%
23 Beechwood
Irvine, CA 72604
All directors and 2,048,104 (5) 54.3%
officers as a group
(including those listed
above, five persons
total)
* One-half of one percent or less
(1) 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
and 3,725 owned indirectly by an immediate family member.
(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.
<PAGE>
(4) Of the 296,900 shares identified as being beneficially owned by Don C.
Whitaker, 25,000 shares are owned by Don C. Whitaker, Inc. and 15,800
shares are owned by Don C. Whitaker, Jr.
(5) All voting securities owned by officers and directors are owned
directly except for 361,133 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. 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, 2000, 840,460 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.
The Compensation and Nominating Committee has not nominated any candidates
to replace Robert F. Biolchini, who resigned December 8, 1999, and Alpo F.
Crane, who resigned February 1, 2000, for election as Class II Directors.
Willard P. Britton and Ronald G. Weber, the Class I directors, and Darrell J.
Lowrance and Peter F. Foley, III, the Class III directors, will continue to
serve as directors pursuant to their prior elections.
Continuing in Office
Class I Directors
(Term Expires December 2002)
Willard P. Britton. Mr. Britton, age 77, 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 56, has served the Company as its
Executive Vice President of Engineering and Manufacturing since July 2000 and
prior thereto as its Senior Vice President of Engineering since 1980 and as its
Executive Vice President of Technology and Engineering since December 1993. 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.
<PAGE>
Class III Directors
(Term expires December 2001)
Darrell J. Lowrance. Mr. Lowrance, age 62, 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.
Peter F. Foley, III. Mr. Foley, age 64, 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 six times during the fiscal year ended
July 31, 2000. The Board of Directors has an Audit Committee and a Compensation
and Nominating Committee.
The Audit Committee is composed of Willard P. Britton, (Chairman) and Peter
F. Foley, III. The Audit Committee held two meetings during the Company's 2000
fiscal year. All members attended the 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
and Peter F. Foley, III (Chairman). The Compensation and Nominating Committee
held four meetings during the Company's 2000 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 2001, 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 10, 2001.
There was no incumbent 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.
<PAGE>
EXECUTIVE OFFICERS AND COMPENSATION
Executive Officers
The executive officers of the Company are as follows:
Name Age Position
---- --- --------
Darrell J. Lowrance 62 President and Chief Executive Officer since 1964.
Ronald G. Weber 56 Executive Vice President of Engineering and
Manufacturing since July 2000. Prior thereto Mr.
Weber was the Senior Vice President of Engineering
since 1980 and was subsequently promoted to
Executive Vice President of Technology and
Engineering in December 1993.
Mark C. McQuown 49 Vice President of Sales since February 2000.
Prior thereto, Mr. McQuown was Director of Sales
since August 1997. Mr. McQuown joined the Company
in June 1984 as a Zone Sales Manager and was
subsequently promoted to Regional Sales Manager in
June 1988, Director of International Sales in
February 1995 and Director of International,
Government and Industrial Sales in June 1996.
Bob G. Callaway 57 Vice President of Marketing since March 2000.
Mr. Callaway joined Lowrance in August 1987 as
Manager of Video Communications and was promoted
to Director of Video Communications in October
1993. He subsequently joined Addvantage Media as
Vice President-Field Service Group in March 1997.
He worked as a freelance marketing consultant from
October 1998 and in July 1999 joined T.D.
Williamson as Manager of Marketing Relations
before returning to Lowrance in March 2000.
Jane M. Kaiser 40 Vice President of Customer Operations since
February 2000. Prior thereto, Ms. Kaiser was
Director of Customer/Sales Service since August
1997. Ms. Kaiser joined the Company in May 1995
as a Cost Productivity Analyst and was
subsequently promoted to Director of Cost
Productivity in December 1995 and to Manager of
Customer Service in June 1997.
Douglas J. Townsdin 37 Vice President of Finance and Chief Financial
Officer since March 2000. Prior thereto, Mr.
Townsdin was a Senior Manager with Arthur
Andersen, LLP.
H. Wayne Cooper 55 Mr. Cooper has been a partner with Doerner,
Saunders, Daniel & Anderson, LLP since 1982.
All officers of the Company are elected annually and serve at the pleasure of
the Board of Directors.
<PAGE>
Compensation
The following table sets forth the aggregate cash compensation earned
by the executive officers listed for services rendered in all capacities to the
Company for the fiscal year ended July 31, 2000:
(1) (2) (3)
Name of Individual/ Other Annual All
Principal Position Year Salary Bonus Compensation Other
($) ($) ($) ($)
------------------------------------------------------------------------------
Darrell J. Lowrance 2000 399,200 108,000 - 31,200
President and Chief 1999 382,000 249,000 - 30,600
Executive Officer 1998 382,000 - - 30,300
Ronald G. Weber 2000 217,000 59,200 - 25,300
Executive Vice President 1999 208,000 92,000 - 30,600
of Engineering and Manufacturing 1998 208,000 - - 30,686
Douglas J. Townsdin (4) 2000 150,000 16,800 - -
Vice President of Finance and 1999 - - - -
Chief Financial Officer 1998 - - - -
Mark C. McQuown 2000 139,700 34,100 - 9,600
Vice President of Sales 1999 126,600 37,300 - 3,522
1998 100,100 - - 2,482
Bob G. Callaway (5) 2000 150,000 15,100 - -
Vice President of Marketing 1999 - - - -
1998 - - - -
Mark C. Wilmoth (6) 2000 107,600 - - 38,691
Former Vice President of 1999 145,000 64,000 - 9,010
Finance and Treasurer 1998 145,000 - - 8,596
Steven L. Schneider (7) 2000 119,600 - - 114,391
Former Vice President of 1999 163,000 47,000 - 9,600
Sales and Marketing 1998 163,000 - - 9,313
(1) The Company's Executive Bonus Plan for fiscal year 2000 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 $1,067,000, which the
Company did and accordingly a performance bonus pool of $185,000 was earned
and paid in October, 2000 to those officers and key employees who earned a
performance bonus. The Executive Bonus Plan for fiscal year 2000 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
2000. The Company paid an aggregate of $309,000 in bonuses in October 2000
pursuant to the Company's 2000 Executive Bonus Plan. The aggregate maximum
amount payable pursuant to the Company's 2000 Executive Bonus Plan,
exclusive of discretionary bonuses, was limited to $1,000,000.
(2) The 2000 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
<PAGE>
connection with the conduct of the Company's business. During 2000, 1999
and 1998, 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 $19,000, $21,000, and $21,000 paid to
Mr. Lowrance and $19,000, $21,000 and $21,000 paid to Mr. Weber in 2000,
1999 and 1998, respectively. Also included with respect to Mr. Wilmoth and
Mr. Schneider are payments in accordance with the terms of their respective
employment and severance agreements as described in Notes (6) and (7)
below.
(4) Mr. Townsdin's salary is presented on an annualized basis. His actual
salary earned since joining the Company on March 6, 2000 was $60,600. All
other compensation is presented on an as-earned basis.
(5) Mr. Callaway's salary is presented on an annualized basis. His actual
salary earned since rejoining the Company on March 27, 2000 was $51,900.
All other compensation is presented on an as-earned basis.
(6) Mr. Wilmoth resigned as an officer on February 9, 2000. All other
compensation includes $33,500 paid in accordance with the terms of Mr.
Wilmoth's employment and severance agreement.
(7) Mr. Schneider's association with the Company ended on December 29, 1999.
All other compensation includes $110,200 paid in accordance with the terms
of Mr. Schneider's employment and severance agreement. $58,300 will be
paid in accordance with the terms of Mr. Schneider's employment and
severance agreement during fiscal 2001.
Employment and Severance Arrangements. The Company entered into employment
agreements with the following four executive officers of the Company in April
2000: Bob G. Callaway, Mark C. McQuown, Douglas J. Townsdin and Jane M. Kaiser.
The initial term of these employment agreements, all of which are substantially
identical, runs for a period of 24 months. Each agreement has a renewal term of
an additional 24 months unless proper notice (as defined in the employment
agreement) is given prior to the expiration of the initial term by either party.
Under the terms of the employment agreements, if the employment of any executive
is terminated other than for "cause" (as defined in the employment agreement),
then each such executive would be entitled to payment of their salary in
accordance with the Company's standard payroll practices for the remainder of
the initial term of the agreement or a period of twelve months, whichever is
longer. If the employment of the executive is terminated upon a change of
control of the Company (as defined in the employment agreement), then each such
executive would be entitled to a lump sum payment equal to 24 months of their
salary. In accordance with the salary recommendations of the Compensation
Committee, as of November 13, 2000 the maximum aggregate amount of cash benefits
payable to each executive would be $318,000 for Mark C. McQuown, $312,458 for
Douglas J. Townsdin, $311,376 for Bob G. Callaway and $254,400 for Jane M.
Kaiser.
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 (10 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 2000, no options and no limited SAR's were granted. As
of October 31, 2000, the Company had no non-qualified options issued of the
400,000 authorized in the Plans. There were no options exercised during the
year either by the Company's chief executive officer or by the other executive
officers named in the compensation table.
<PAGE>
As of October 31, 2000, 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.
Series "A" Preferred Stock and Indebtedness of Management. In accordance
with the Company's May 13, 1996 private placement of 70,000 shares of Series "A"
Redeemable Preferred Stock with key officers of the Company, five such persons
became indebted to the Company for the purchase price of $6.875 per share for
each share purchased. The Series "A" Preferred Stock, issued for a term of ten
years, is a nonvoting stock paying a cumulative dividend of 2 1/2 cents. Each
share 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 thirty percent of his Common
Stock of the Company, or (ii) the Company sells substantially all of its assets
and operations to a third party. Each purchaser executed a Promissory Note in
favor of the Company bearing interest at Chase prime and a Security Agreement
whereby the Series "A" Preferred Stock is pledged to the Company to secure the
payment of such Promissory Note. In the event (i) the Series "A" Preferred
Stock is not converted within its ten-year term, or (ii) the purchaser
terminates his employment with the Company for any reason except death, the
Series "A" Preferred Stock is surrendered to the Company for cancellation in
exchange for cancellation of the principal amount of indebtedness owing under
his respective Promissory Note provided that all accrued interest is paid to the
date of termination. As of October 31, 2000, there are 40,000 shares of Series
"A" Preferred Stock outstanding and the following persons remain indebted to the
Company in conjunction with their respective purchase of Series "A" Preferred
Stock:
Relationship Number of Shares Indebtedness as of
Name to the Company Purchased October 31, 2000
---- -------------- --------- ----------------
Darrell J. Lowrance President and 20,000 $137,500.00
Chief Executive Officer
Ronald G. Weber Executive Vice President 20,000 $137,500.00
of Engineering and
Manufacturing
Board Compensation Committee Report. The members of the Compensation and
Nominating Committee are Mr. Willard Britton and Mr. Peter Foley, III. Each
member of the Committee is a non-employee director.
In determining the compensation payable to the Company's executive
officers, it is the basic philosophy of the Committee that the total annual
compensation for these individuals should be at a level which is competitive
with the marketplace (which requires compensation to be middle to high) in
companies of similar size for positions of similar scope and responsibility. In
determining the appropriateness of compensation levels, the Committee annually
reviews the Company's compensation policies and nationally recognized
compensation surveys, principally William Mercer Executive Compensation Survey,
which is a comparison of fixed and variable compensation based upon a
corporation's industry and size.
The key elements of the total annual compensation for executive officers
consists of a base salary and variable compensation in the form of annual bonus'
and stock options. The base salaries are generally set at or near the middle to
high range for the competitive marketplace as indicated in the above referenced
survey for companies within the same industry classification and relative size.
Annual bonus' consists of two components, a performance bonus based entirely on
the basis of the Company's pretax, prebonus earnings and a discretionary bonus
for
<PAGE>
executive officers, except the President, which is recommended by the President
on the basis of individual performance.
In fiscal 2000, the Company's performance exceeded target levels, therefore
performance bonus' of $185,000 were earned and discretionary bonus' in the
amount of $124,000 were granted. The aggregate payout in October 2000 was
$309,000.
The base salary for the Chief Executive Officer approximates the 75th
percentile for the comparable companies in the above referenced survey. The
committee has set the base pay for the Chief Executive above the market average
due to his tenure with the Company and his irreplaceable knowledge of and
personal contacts and relationships in the industries in which the Company
operates. All of the Chief Executive's incentive pay is based on achieving
targeted pretax, prebonus earnings levels with no discretionary bonus component.
As the Company's performance was above target levels in fiscal year 2000 an
incentive bonus of $108,000 was earned and paid in October 2000.
Compensation and Nominating Committee:
Peter F. Foley, III, Chairman
Willard P. Britton
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
LOWRANCE ELECTRONICS, INC.
PROXY DATA
<TABLE>
<CAPTION>
7/31/95 7/31/96 7/31/97 7/31/98 7/31/99 7/31/00
<S> <C> <C> <C> <C> <C> <C>
NASDAQ U.S. 327.085 356.391 525.911 619.099 885.447 1,260.855
NASDAQ ELECTRONIC COMPONENTS 809.696 751.546 1,599.465 1,367.366 2,472.901 5,478.400
LEIX 6.250 5.750 5.500 4.063 6.188 3.625
ADJUST TO BASE:
1995 1996 1997 1998 1999 2000
NASDAQ U.S. 100 109 161 189 271 385
NASDAQ ELECTRONIC COMPONENTS 100 93 198 169 305 677
LEIX 100 92 88 65 99 58
</TABLE>
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 2001, 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
2001 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 10, 2001.
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.
<PAGE>
PROXY
LOWRANCE ELECTRONICS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON DECEMBER 12, 2000
The undersigned hereby (a) acknowledges receipt of the Notice of Annual Meeting
of Stockholders to be held in the Director's Row Room IV on the Main Lobby Floor
of the Adams's Mark Hotel, 100 East Second Street, Tulsa, Oklahoma, on
December 12, 2000, at 10:00 a.m., local time, and the Proxy Statement relating
thereto and (b) appoints Darrell J. Lowrance and H. Wayne Cooper, or either or
them, as proxies and attorneys with several powers of substitution, hereby
revoking any prior Proxy, and hereby authorizes them or either of them to
represent the undersigned and to vote as designated on the reverse side, all the
shares of Common Stock of Lowrance Electronics, Inc. held of record by the
undersigned on October 31, 2000, at the Annual Meeting of Stockholders and at
any adjournment or adjournments thereof.
(Continued on reverse side)
<PAGE>
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
proposal ratifying the selection of Arthur Andersen LLP.
1. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR
ITS FISCAL YEAR 2001. The undersigned directs that is Proxy be voted:
FOR AGAINST ABSTAIN
[_] [_] [_]
2. OTHER MATTERS. The undersigned directs that this Proxy be voted in such
manner as the proxies named herein, or either of them, may direct, in their
discretion, on any other matter that may properly come before the Annual
Meeting or any adjournment thereof.
Dated:____________________, 2000
________________________________
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 sign full corporate name by a duly authorized officer.
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA PROCESSING EQUIPMENT WILL RECORD
YOUR VOTES"
