<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LINDSAY MANUFACTURING CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
LINDSAY MANUFACTURING CO.
Notice of Annual Meeting of Stockholders
FEBRUARY 7, 1997
The Annual Meeting of Stockholders of Lindsay Manufacturing Co. (the
"Company") will be held at The Cornhusker Hotel, 333 South 13th Street, Lincoln,
Nebraska, on Friday, February 7, 1997, at 1:30 p.m., Central Standard Time, for
the following purposes:
(1) To elect two directors.
(2) To amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 10,000,000 to
25,000,000.
(3) To ratify the appointment of Coopers & Lybrand L.L.P. as
independent auditors for the Company for the fiscal year ending August 31,
1997.
(4) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Enclosed herewith is a Proxy Statement setting forth information with
respect to the election of two directors, amendment of the Company's Restated
Certificate of Incorporation and the ratification of the appointment of
independent auditors.
Only stockholders holding shares of Common Stock of record at the close of
business on December 16, 1996 will be entitled to notice of and to vote at the
meeting.
Stockholders, whether or not they expect to be present at the meeting, are
requested to sign and date the enclosed proxy which is solicited on behalf of
the Board of Directors and return it promptly in the envelope enclosed for that
purpose. Any person giving a proxy has the power to revoke it at any time, and
stockholders who are present at the meeting may withdraw their proxies and vote
in person.
By Order of the Board of Directors
--------------------------------------
Bruce C. Karsk, Secretary
Lindsay, Nebraska
January 6, 1997
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER SOLICITATION FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING.
<PAGE> 3
LINDSAY MANUFACTURING CO.
East Highway 91
Lindsay, Nebraska 68644
------------------
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
of
COMMON STOCK
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of Lindsay Manufacturing
Co. (the "Company") to be held on February 7, 1997 at the time and place and for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The principal executive offices of the Company are at East Highway
91, Lindsay, Nebraska 68644. This Proxy Statement and the proxy cards are first
being mailed to stockholders on or about January 6, 1997.
The accompanying proxy is solicited on behalf of the Board of Directors of
the Company and is revocable at any time before it is exercised by written
notice of termination given to the Secretary of the Company or by filing with
him a later-dated proxy. Furthermore, stockholders who are present at the Annual
Meeting may withdraw their proxies and vote in person. All shares of the
Company's Common Stock represented by properly executed and unrevoked proxies
will be voted by the Board of Directors of the Company in accordance with the
directions given therein. Where no instructions are indicated, proxies will be
voted "FOR" each of the proposals set forth in this Proxy Statement for
consideration at the Annual Meeting. In addition, the directors believe shares
held by executive officers and directors of the Company will be voted "FOR" each
such proposal. Such shares represent approximately 10.1% of the total shares
outstanding as of December 16, 1996. Shares of Common Stock entitled to vote and
represented by properly executed, returned and unrevoked proxies will be
considered present at the meeting for purposes of determining a quorum,
including shares with respect to which votes are withheld, abstentions are cast
or there are broker nonvotes.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP THEREOF BY PRINCIPAL STOCKHOLDERS,
DIRECTORS AND OFFICERS
Only holders of Common Stock of record at the close of business on December
16, 1996 will be entitled to vote at the Annual Meeting. At the record date,
there were 6,332,916 shares of Common Stock which were issued and outstanding.
Each share of Common Stock is entitled to one vote upon each matter to be voted
on at the Annual Meeting. Stockholders do not have the right to cumulate votes
in the election of directors.
The following table sets forth, as of December 16, 1996, the beneficial
ownership of the Company's Common Stock by directors and the nominees for
director, by each of the executive officers named in the
1
<PAGE> 4
Summary Compensation Table, by each person believed by the Company to
beneficially own more than 5% of the Company's Common Stock and by all present
executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT
NAME OWNED(1) OF CLASS
- ---------------------------------------------------------------- ---------------- --------
<S> <C> <C>
Vaughn L. Beals, Jr., Nominee for Director...................... 0 *
Howard G. Buffett, Director..................................... 2,250(2) *
John W. Croghan, Director....................................... 58,500(2) *
J. David Dunn, Director......................................... 16,387(2) *
Eduardo R. Enriquez, Vice President -- International and
President of Lindsay International Sales Corporation.......... 18,953(2) *
Bruce C. Karsk, Vice President -- Finance, Secretary and
Treasurer..................................................... 78,300(2) 1.2%
Clifford P. Loseke, Vice President -- Manufacturing............. 34,000(2) *
Gary D. Parker, Chairman of the Board, President and Chief
Executive Officer............................................. 389,011(2) 6.0%
George W. Plossl, Director...................................... 16,050(2) *
Robert S. Snoozy, Vice President -- Sales and Marketing......... 26,800(2) *
The Bass Management Trust and Other Related Parties............. 935,299(3)(4) 14.8%
Palisade Capital Management, L.L.C.............................. 508,400(4)(5) 8.0%
All executive officers and directors as a group (10 persons).... 680,301(2) 10.1%
</TABLE>
- ---------------
* Represents less than 1% of the outstanding Common Stock of the Company.
(1) Each director and executive officer has sole voting and investment power
over the shares he beneficially owns, and all such shares are owned directly
unless otherwise indicated.
(2) Includes 2,250; 15,750; 15,750; 15,470; 67,688; 20,500; 171,375; 14,670;
20,500; and 379,953 shares of restricted stock granted but not yet issued or
shares which may be acquired within 60 days of December 16, 1996, pursuant
to the exercise of options by Messrs. Buffett, Croghan, Dunn, Enriquez,
Karsk, Loseke, Parker, Plossl and Snoozy and the executive officers and
directors as a group, respectively.
(3) The Bass Management Trust and Other Related Parties c/o W. Robert Catham,
201 Main Street, Suite 2600, Fort Worth, Texas 76102. These securities are
held by The Bass Management Trust, Perry R. Bass, Nancy L. Bass, Lee M.
Bass, Thomas M. Taylor, Sid Bass Management Trust, Sid R. Bass, Trinity I
Fund, L.P., TF Investors, L.P., Trinity Capital Management, Inc., Portfolio
Partners, L.P. and Portfolio Associates, Inc.
(4) Based on information on Form 13D, 13F and 13G filed with the Securities and
Exchange Commission with respect to the Company's Common Stock.
(5) Palisade Capital Management, L.L.C., Suite 695, One Bridge Plaza, Fort Lee,
New Jersey 07024.
2
<PAGE> 5
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has nominated Vaughn L. Beals, Jr. and Gary D.
Parker to serve three-year terms as directors. Proxies submitted pursuant to
this solicitation will be voted, unless specified otherwise, for the election of
Mr. Beals and Mr. Parker. The Board of Directors knows of no reason why Mr.
Beals or Mr. Parker might be unavailable to serve, if elected. Mr. Beals and Mr.
Parker have each expressed an intention to serve, if elected. If either Mr.
Beals or Mr. Parker is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute nominee as the Board
of Directors may recommend. There are no arrangements or understandings between
Mr. Beals or Mr. Parker and any other person pursuant to which either of such
nominees was selected. The election of a director requires the affirmative vote
of a plurality of the shares present in person or represented by proxy at the
meeting and entitled to vote. Consequently, votes withheld and broker nonvotes
with respect to the election of directors will have no impact on the election of
directors. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF MR. BEALS AND MR. PARKER.
The table below sets forth certain information regarding the directors of
the Company. All members of, and the nominees to, the Board of Directors have
held the positions with the companies (or their predecessors) set forth under
"Principal Occupation" for at least five years, unless otherwise indicated. J.
David Dunn has decided not to stand for re-election to the Board of Directors.
His term as Director expires on February 7, 1997.
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR TERM TO
NAME AGE OCCUPATION SINCE EXPIRE
- ------------------------------ --- ---------------------------------- -------- -------
<S> <C> <C> <C> <C>
NOMINEES
Vaughn L. Beals, Jr........... 68 Chairman-Emeritus, n/a n/a
Harley-Davidson, Inc.
Gary D. Parker................ 51 Chairman (since 1989), 1978 1997
President and Chief Executive
Officer of the Company
DIRECTORS CONTINUING IN OFFICE
Howard G. Buffett............. 42 Chairman of the Board, 1995 1998
The GSI Group(1)
John W. Croghan............... 66 Chairman of Lincoln Capital 1989 1999
Management Corporation(2)
George W. Plossl.............. 78 President of G.W. Plossl & Co., 1989 1998
Inc.
</TABLE>
- ---------------
(1) Prior to joining The GSI Group in 1995, Mr. Buffett was Corporate Vice
President, Assistant to the Chairman and director of Archer Daniels Midland
Company from 1992 to 1995 and a County Commissioner of Douglas County,
Nebraska from 1989 to 1992. Mr. Buffett is also a director of The GSI Group,
Berkshire Hathaway, Inc. and Coca-Cola Enterprises, Inc.
(2) Mr. Croghan is also a director of St. Paul Federal Bancorp for Savings Inc.
Information regarding executive officers of the Company is found in the
Company's Annual Report which has been supplied with this Proxy Statement.
The Board of Directors conducts its business through meetings of the Board
and actions taken by written consent in lieu of meetings and by the actions of
its committees. During the fiscal year ended August 31, 1996, the Board of
Directors held four meetings and took action by written consent four times. All
directors attended at least 75% of the meetings of the Board of Directors and of
the Committees of the Board of Directors on which they served during fiscal
1996.
The Board of Directors has established three committees: Audit,
Compensation and Nominating.
3
<PAGE> 6
AUDIT COMMITTEE. The functions performed by the Audit Committee include
reviewing periodically with independent auditors the performance of the services
for which they are engaged, including reviewing the scope of the annual audit
and its results, reviewing the scope and results of the Company's internal
auditing function, reviewing the adequacy of the Company's internal accounting
controls with management and auditors and reviewing fees charged by the
Company's independent auditors. The Audit Committee is composed of Directors
Croghan, Dunn and Plossl. The Audit Committee met three times during fiscal
1996.
COMPENSATION COMMITTEE. The Compensation Committee reviews and approves
compensation policy, changes in salary levels and bonus payment and awards
pursuant to the Company's management incentive plans. The Compensation Committee
consists of Directors Croghan, Dunn and Plossl. The Compensation Committee met
one time and took action by written consent in lieu of meeting one time during
fiscal 1996.
NOMINATING COMMITTEE. The Nominating Committee, composed of Directors Dunn,
Parker and Plossl, is responsible for nominating persons to serve as directors
of the Company. The Nominating Committee met one time during fiscal 1996.
COMPENSATION OF DIRECTORS
During fiscal year 1996, the Compensation Committee increased the annual
fee paid to non-employee Directors, commencing in fiscal year 1997, from $15,000
to $24,000. Fees of $1,200 per day for attending meetings of the Board of
Directors and $600 per day for attending meetings of committees of the Board of
Directors or other meetings at the request of the Company remain unchanged.
Directors are also reimbursed for expenses they incur in attending meetings.
Directors who are not employees of the Company are also eligible to receive
grants of nonqualified options to purchase Common Stock in amounts determined by
disinterested members of the Committee. Continuing Directors receive an annual
grant of options to purchase 2,250 shares of Common Stock on September 3 of each
fiscal year at an exercise price equal to the closing price of the Company's
Common Stock on the date of the grant. New Directors receive an initial grant of
options to purchase 11,250 shares of Common Stock on the 3rd of September after
becoming a Director at an exercise price equal to the closing price of the
Company's Common Stock on the date of the grant. The maximum number of shares
that can be issued to such directors pursuant to such options is the greater of
135,000 or 2% of the total shares outstanding. Options granted to a director
vest ratably over a five-year period and unexercised options are subject to
forfeiture if a director retires voluntarily or is terminated for cause. During
fiscal 1996, the Company granted Messrs. Buffett, Croghan, Dunn and Plossl
options to purchase 11,250 (first-year grant), 2,250, 2,250 and 2,250 shares of
Common Stock, respectively, at an exercise price of $23.00 per share. Director
Plossl exercised options for 1,080 shares of Common Stock at an exercise price
of $13.90 during fiscal 1996.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by or paid by the Company and its
subsidiaries to the Chief Executive Officer and the other four highest paid
executive officers of the Company for services rendered during the three fiscal
years ended August 31, 1996, August 31, 1995 and August 31, 1994.
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- ------------------------- ----------
(f) (g)
(e) RESTRICTED SECURITIES (h) (i)
(a) (c) (d) OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL (b) SALARY BONUS COMPENSATION(1) AWARD(S)(2) OPTIONS/SARS PAYOUTS(3) COMPENSATION(4)
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------- ---- ------- ------- --------------- ----------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary D. Parker....... 1996 339,859 300,000 -- 689,625 -- -- 49,512
Chairman, President 1995 323,675 300,000 -- 525,000 -- -- 46,023
and Chief Executive 1994 302,500 300,000 -- 546,750 -- -- 47,701
Officer
Eduardo R.
Enriquez........... 1996 90,000 22,000 -- -- -- -- 6,757
Vice President -- 1995 86,776 25,000 -- -- 4,000 -- 6,766
International and 1994 83,842 15,000 -- -- -- -- 7,263
President of
Lindsay
International Sales
Corporation
Bruce C. Karsk....... 1996 121,527 85,000 -- 57,375 -- -- 15,304
Vice President -- 1995 115,740 77,000 -- 31,250 -- -- 15,142
Finance, Secretary 1994 110,227 75,000 -- 33,250 -- -- 15,408
and Treasurer
Clifford P. Loseke... 1996 93,185 35,000 -- -- -- -- 7,229
Vice President -- 1995 89,601 33,000 -- -- 4,000 -- 8,647
Manufacturing 1994 85,335 45,000 -- -- -- -- 7,738
Robert S. Snoozy..... 1996 81,643 75,000 -- -- -- -- 8,083
Vice President -- 1995 77,756 57,000 -- -- 4,000 -- 8,644
Sales and Marketing 1994 74,054 65,000 -- -- -- -- 8,142
</TABLE>
- ---------------
(1) No disclosure is required in this column pursuant to applicable Securities
and Exchange Commission Regulations, as the aggregate value of items covered
by this column does not exceed the lesser of $50,000 or 10% of the annual
salary and bonus shown for each respective executive officer named.
(2) Represents restricted stock awards of 27,000 shares and 1,500 shares
(adjusted for the February 22, 1996 three-for-two stock split) for Messrs.
Parker and Karsk, respectively, in each of fiscal 1996, fiscal 1995 and
fiscal 1994. The restricted stock awards vest two years from the date of
grant and participate in dividends on a nonpreferential basis. 22,500 shares
of each year's restricted stock award to Mr. Parker were performance based.
At August 31, 1996, the value of each award to Mr. Parker of 27,000 shares
in fiscal 1996, 1995 and 1994 is $1,046,250. At August 31, 1996, the value
of each award to Mr. Karsk of 1,500 shares in fiscal 1996, 1995 and 1994 is
$58,125.
(3) The Company does not have a long-term incentive plan as defined in Item 402
of Regulation S-K under the Securities Exchange Act of 1934, as amended.
(4) These amounts for fiscal 1996 consist of contributions to the Company's
defined contribution profit-sharing plan of $8,491, $6,064, $8,491, $6,149
and $7,608 for Messrs. Parker, Enriquez, Karsk, Loseke and Snoozy,
respectively, and of premiums for supplemental life insurance (and, in the
case of Messrs. Karsk and Parker, the value of split-dollar supplemental
term life insurance) of $41,021, $693, $6,813, $1,080 and $475 for Messrs.
Parker, Enriquez, Karsk, Loseke and Snoozy, respectively.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options were granted to the executive officers listed in the Summary
Compensation Table during fiscal year 1996.
5
<PAGE> 8
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table sets forth certain information concerning options
exercised during fiscal year 1996, the number of unexercised options and the
value of unexercised options at the end of fiscal 1996 for the executive
officers whose compensation is reported in the Summary Compensation Table.
<TABLE>
<CAPTION>
(d)(1)
NUMBER OF (e)
SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL YEAR END
(b)(1) (c) FISCAL YEAR END (#) ($)(2)
(a) SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------- --------------- -------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Gary D. Parker.................. 19,500 358,931 171,375/-0- 5,516,145/-0-
Eduardo R. Enriquez............. -0- -0- 14,270/8,400 302,890/160,704
Bruce C. Karsk.................. -0- -0- 67,688/-0- 2,178,534/-0-
Clifford P. Loseke.............. -0- -0- 18,600/8,400 439,521/160,704
Robert S. Snoozy................ -0- -0- 18,600/8,400 439,521/160,704
</TABLE>
- ---------------
(1) Shares adjusted for the three-for-two stock split of February 22, 1996.
(2) Based on the difference between the August 31, 1996 Common Stock market
closing price and the related option exercise price.
RETIREMENT PLAN
The Company has a nonqualified Supplemental Retirement Plan (a defined
benefit retirement plan) that provides participants with certain retirement
benefits after the employee reaches his normal retirement age (age 62 for
Messrs. Parker, Karsk, Loseke and Snoozy and age 65 for Mr. Enriquez) which
would otherwise be denied them due to benefit limitations for Internal Revenue
Code qualified plans. The retirement benefits payable to participants pursuant
to this plan are determined by a calculation which is based on average annual
earnings (base salary plus cash bonuses) for the three highest earning years
during the ten year period immediately prior to the participant's retirement
reduced by the participant's retirement benefits from the Company's Profit
Sharing Plan, Social Security benefits payable, and benefits from any retirement
or pension plan the participant may be entitled to from any prior employers.
The Supplemental Retirement Plan provides reduced benefits for a
participant who elects early retirement at age 55 (age 60 in the case of Mr.
Enriquez) or later but before age 62 (age 65 in the case of Mr. Enriquez). While
the benefits are paid from the general assets of the Company, the Company has
secured life insurance on the participants to provide the Company with the funds
necessary to provide the above described supplemental retirement benefits. Upon
attainment of the normal retirement age the projected annual benefits are
$291,492, $8,772, $0, $18,120 and $0 for Messrs. Parker, Enriquez, Karsk, Loseke
and Snoozy, respectively.
EMPLOYMENT AGREEMENTS
The Company's employment agreement with Mr. Parker provides for the payment
of a base salary, a performance bonus and a deferred bonus. It also provides
that Mr. Parker will be eligible to receive restricted Common Stock, options to
purchase Common Stock, SARs (none to date) and SIRs as well as certain fringe
benefits provided in the Company's employee benefit programs. Under the
agreement, Mr. Parker receives a performance bonus (up to a maximum $150,000 in
any fiscal year) equal to 2% of the Company's pretax earnings if the Company's
pretax earnings are greater than 15% of its average equity during the year. A
deferred bonus, the payment of which is deferred 12 months and is unvested, may
also be earned by Mr. Parker in an amount equal to the current year's bonus. The
aggregate of the performance bonus and the
6
<PAGE> 9
deferred bonus awarded in any fiscal year may not exceed $300,000. Additionally,
Mr. Parker is entitled to receive an annual award of 22,500 shares of restricted
Common Stock if the Company achieves a pretax return on beginning equity of at
least 20%. He may not sell, transfer, pledge or assign the restricted Common
Stock for at least two years from the date of grant and this stock does not vest
until the end of the two-year period. Mr. Parker's employment agreement expires
August 31, 2001 and may be extended for up to two additional years. If the
Company were to terminate Mr. Parker's employment without cause, as defined
therein, or if there were a change in control, as defined therein, Mr. Parker
would be entitled to receive a lump sum payment equal to the greater of the
balance of his salary plus all bonuses and incentives through the end of the
term of the employment agreement or any earned bonus plus incentive and any
deferred bonus for the year in which the termination occurs plus additional
compensation equal to 250% of his average gross compensation.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The report is not deemed to be "soliciting material" or to be "filed" with
the Securities and Exchange Commission (the "SEC") or subject to the SEC's proxy
rules or to the liabilities of Section 18 of the Securities Exchange Act of 1934
(the "1934 Act"), and the report shall not be deemed to be incorporated by
reference into any prior or subsequent filing by the Company under the
Securities Act of 1933 or the 1934 Act.
EXECUTIVE OFFICER COMPENSATION The Compensation Committee of the Board of
Directors, which is composed of three independent outside directors, is
responsible for setting policies with respect to compensation of the Company's
executive officers.
COMPENSATION PHILOSOPHY AND OVERALL OBJECTIVES OF THE EXECUTIVE
COMPENSATION PROGRAM. At the direction of the Board of Directors, the
Compensation Committee endeavors to ensure the Company's Executive Compensation
Program is effective in retaining and motivating executives needed to achieve
performance objectives and maximize shareholder value. The Company's objective
is to closely align the executives' financial interests with those of the
shareholders. The Compensation Committee, as it deems appropriate, utilizes
outside consulting services and compensation surveys and reviews executive
compensation for a group of comparative companies to determine competitive
levels of compensation.
The Company subscribes to a total compensation theory in which base salary,
performance bonus, benefits and grants of restricted stock and/or options to
purchase common stock are considered individually and in total. Base salary is a
function of the executive officers' prior salary and the Compensation
Committee's view of base salary levels for executive officers with comparable
positions and responsibilities in other companies. The remaining portion of each
executive officer's compensation is directly related to the success of the
Company. This is accomplished in two ways. First, each executive officer is
eligible to earn a bonus based primarily upon the executive's individual
performance, considering both qualitative and quantitative factors, and the
performance of the operating or staff organization for which the executive
officer is responsible. For example, executive officers with sales
responsibilities earn a bonus if specific sales and margin goals are obtained.
If performance for the year is below targeted levels, there would be only a
nominal bonus payment or, in some cases, no bonus payment. As specific goals are
met or exceeded, the executive officer is entitled to receive a progressively
larger bonus up to a stated maximum. Total bonus is based secondarily on the
overall performance of the Company.
Second, believing that significant ownership of Company stock serves to
align key management's interest with that of shareholders, executive officers
who, in the opinion of the Compensation Committee, contribute to the growth,
development and financial success of the Company are awarded restricted Common
Stock and/or options to purchase Common Stock. Grants of restricted Common Stock
do not vest until two years from the grant date. All grants of options to
purchase Common Stock have been made with an exercise price equal to the closing
price of the Common Stock on the date of grant, and stock options granted since
Fiscal 1991 vest ratably over a five-year period. Therefore, the compensation
value of these stock options is directly related to the long-term performance of
the Company as measured by its future return to stockholders.
DISCUSSION OF 1996 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER. As
described above, the Compensation Committee is responsible for establishing
total compensation for all executives, including Gary Parker, considering both a
pay-for-performance philosophy with a cap on the maximum bonus opportunity and
market
7
<PAGE> 10
rates of compensation. In determining Mr. Parker's compensation for 1996, the
Compensation Committee considered the Company's financial performance and
corporate accomplishments, individual performance and leadership, and
competitive levels of compensation. The Compensation Committee also considered
more subjective factors, such as implementation of the Company's plan to enhance
shareholder value. With respect to establishing Mr. Parker's 1996 salary,
emphasis was placed on performance and competitive salaries in the marketplace.
With respect to Mr. Parker's 1996 bonus, the Company's 1996 internal plan was
met or exceeded, and the maximum allowable bonus was awarded. In support of the
Compensation Committee's focus on executive stock ownership, the Company
exceeded the return on equity goal established for Mr. Parker, and restricted
shares were granted for Fiscal 1996. See "EMPLOYMENT AGREEMENTS."
The Compensation Committee believes that the Company's accomplishments
under Mr. Parker's demonstrated leadership contributed to the overall
performance of the Company and that this is reflected in the compensation
package.
COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE. The current
tax law imposes an annual, individual limit of $1 million on the deductibility
of the Company's compensation payments to the chief executive officer and to the
four most highly compensated executive officers other than the chief executive
officer. Specified compensation is excluded for this purpose, including
performance-based compensation, provided that certain conditions are satisfied.
The Committee has determined to preserve, to the maximum extent practicable, the
deductibility of all compensation payments to the Company's executive officers.
John W. Croghan
J. David Dunn
George W. Plossl
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, there were no compensation committee interlocks and no
insider participation in compensation decisions that were required to be
reported under the rules and regulations of the Securities Exchange Act of 1934.
8
<PAGE> 11
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lindsay Manufacturing Co. 100 145 142 136 163 276
Nasdaq Composite Total Return Index 100 108 143 149 201 226
S&P Machinery (Diversified) 100 92 144 160 184 205
</TABLE>
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has unanimously approved, subject to approval by the
stockholders of the Company, a proposal to amend the Restated Certificate of
Incorporation to increase the number of shares of Common Stock authorized from
10,000,000 to 25,000,000.
Management believes that this amendment would benefit the Company by
providing greater flexibility to the Board of Directors to issue additional
equity securities, for example, to effect stock splits of the outstanding Common
Stock, to raise additional capital, to facilitate possible future acquisitions
and to provide stock-related employee benefits. If the increase is approved at
the Annual Meeting, generally, no stockholder approval would be necessary for
the issuance of all or any portion of the additional shares of Common Stock
unless required by law or any rules or regulations to which the Company is
subject. However, as long as the Common Stock is listed for trading on the
Nasdaq National Market, the flexibility that this amendment would provide the
Board of Directors will be limited by rules which, as presently in effect, would
generally require stockholder approval for the issuance of shares when: (i) a
stock option or purchase plan is to be established or other arrangements made
pursuant to which stock may be acquired by officers or directors except for
warrants or rights issued generally to securityholders of the Company or
broadly-based plans or arrangements including other employees; (ii) the issuance
would result in a change in control of the Company; (iii) stock or assets of
another company are to be acquired, if a director, officer or substantial
shareholder of the Company has a 5% or greater interest (10% or greater,
collectively), directly or indirectly, in the company or assets to be acquired
or the consideration to be paid and the present or potential issuance of Common
Stock could result in a 5% or greater increase in outstanding shares of Common
Stock; (iv) Common Stock, or securities convertible into or exercisable for
Common Stock, are to be issued in any transaction or series of related
transactions, other than a public offering for cash, if (a) the Common Stock to
be issued has, or will have upon issuance, voting power equal to or in excess of
20% of the voting power outstanding before the issuance of such Common Stock or
securities convertible into or exercisable for Common Stock, or (b) the number
of shares of Common Stock to be issued is, or will be, equal to or in excess of
20% of the number of shares of Common Stock outstanding before the issuance of
the Common Stock; (v) the Company sells or issues shares of Common Stock, or
securities convertible into or exercisable for Common Stock, in a nonpublic
offering for less than the greater of book or market value, which with sales by
officers, directors or substantial shareholders of the Company, equal
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<PAGE> 12
to 20% or more of the number of shares of Common Stock or 20% or more of the
voting power outstanding before the issuance; or (vi) the Company sells or
issues shares of Common Stock, or securities convertible into or exercisable for
Common Stock, in a nonpublic offering for less than the greater of book or
market value equal to 20% or more of the number of shares of Common Stock or 20%
or more of the voting power outstanding before the issuance.
Although the Company considers from time to time acquisitions and other
transactions that may involve the issuance of additional shares of Common Stock
(any one or more of which may be under consideration or acted upon at any time),
the Company is not a party to any agreements with respect to any such
transactions, nor does it have any agreements, commitments or understandings
with respect to such transactions or that would involve the issuance of
additional shares of Common Stock in amounts that would exceed the number of
currently authorized and unissued shares.
Depending upon the consideration per share received by the Company for any
subsequent issuance of Common Stock, such issuance could have a dilutive effect
on those stockholders who paid a higher consideration per share for their stock.
Also, future issuances will increase the number of outstanding shares of Common
Stock, thereby decreasing the percentage ownership in the Company (for voting,
distributions and all other purposes) represented by existing shares of Common
Stock. The availability for issuance of the additional shares of Common Stock
and any issuance thereof, or both, may be viewed as having the effect of
discouraging an unsolicited attempt by another person or entity to acquire
control of the Company. Although the Board of Directors has no present intention
of doing so, the Company's authorized but unissued Common Stock could be issued
in one or more transactions that would make a takeover of the Company more
difficult or costly, and therefore less likely. The Company is not aware of any
person or entity who is seeking to acquire control of the Company. Holders of
Common Stock do not have any preemptive rights to acquire any additional
securities issued by the Company.
As of December 16, 1996, 7,341,236 shares of Common Stock were issued (of
which 1,008,320 shares have been repurchased by the Company and were held as
treasury stock and 6,332,916 shares were outstanding) and 800,050 shares of
Common Stock were reserved for issuance pursuant to the Company's employee and
director Long-Term Incentive Plans. Accordingly, only an additional 1,858,714
unreserved shares of Common Stock are available for issuance under the Restated
Certificate of Incorporation. If the proposed amendment to the Restated
Certificate of Incorporation is not adopted, it would be necessary to convene a
special meeting of stockholders before the Company could effect a stock split or
consummate any transaction in which the number of shares of Common Stock that
would be issued, together with all other new issuances of Common Stock after
December 16, 1996, would exceed 2,658,764 shares. This could potentially add to
the costs of a proposed transaction and the added time necessary to prepare for
and hold a stockholders meeting could serve as a disincentive for third parties
otherwise interested in making an investment in, or entering into other
transactions with, the Company. It is for these and similar reasons that
companies have authorized and unissued shares available for issuance.
Adoption of the proposal to increase the number of authorized shares of
Common Stock requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote thereon. Abstentions and
broker nonvotes will have the same effect as a vote against the amendment. If
approved by the stockholders, such increase in the number of authorized shares
will become effective upon the filing with the Secretary of State of the State
of Delaware of an amendment to the Restated Certificate of Incorporation setting
forth such increase.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE INCREASE
IN THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY'S COMMON STOCK TO 25,000,000.
10
<PAGE> 13
RATIFICATION OF APPOINTMENT OF AUDITOR
Coopers & Lybrand L.L.P., who has been auditor for the Company since 1974,
has been appointed by the Board of Directors as auditors for the Company and its
subsidiaries for the fiscal year ending August 31, 1997. This appointment is
being presented to the stockholders for ratification. The ratification of the
appointment of auditor requires the affirmative vote of the holders of a
majority of the shares present in person or represented by proxy at the meeting
and entitled to vote. Abstentions will have the same effect as a vote against
ratification. Broker nonvotes will not be considered shares entitled to vote
with respect to ratification of the appointment and will not be counted as votes
for or against the ratification. THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND
L.L.P. AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING AUGUST 31, 1997.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting and will be provided an opportunity to make a statement and
to respond to appropriate inquiries from stockholders.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals submitted for presentation at the Annual Meeting must
be received by the Secretary of the Company at its home office no later than
January 18, 1997. Such proposals must set forth (i) a brief description of the
business desired to be brought before the annual meeting and the reason for
conducting such business at the annual meeting, (ii) the name and address of the
stockholder proposing such business, (iii) the class and number of shares of the
Company's Common Stock beneficially owned by such stockholder and (iv) any
material interest of such stockholder in such business. Nominations for
directors may be submitted by stockholders by delivery of such nominations in
writing to the Secretary of the Company by January 18, 1997. Only stockholders
of record as of December 16, 1996 are entitled to bring business before the
Annual Meeting or make nominations for directors.
In order to be included in the Company's proxy statement relating to its
next annual meeting, stockholder proposals must be submitted by September 9,
1997 to the Secretary of the Company at its home office. The inclusion of any
such proposal in such proxy material shall be subject to the requirements of the
proxy rules adopted under the Securities Exchange Act of 1934, as amended.
OTHER MATTERS
Management does not now intend to bring before the Annual Meeting any
matters other than those disclosed in the Notice of Annual Meeting of
Stockholders, and it does not know of any business which persons, other than the
management, intend to present at the meeting. Should any other matters requiring
a vote of the stockholders arise, the proxies in the enclosed form confer upon
the person or persons entitled to vote the shares represented by such proxies
discretionary authority to vote the same in respect of any such other matter in
accordance with their best judgment.
The Company will bear the cost of soliciting proxies. To the extent
necessary, proxies may be solicited by directors, officers and employees of the
Company in person, by telephone or through other forms of communication, but
such persons will not receive any additional compensation for such solicitation.
The Company will reimburse brokerage firms, banks and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of the Company's shares. In addition to
solicitation by mail, the Company will supply banks, brokers, dealers and other
custodian nominees and fiduciaries with proxy materials to enable them to send a
copy of such materials by mail to each beneficial owner of shares of the
Company's Common Stock which they hold of record and will, upon request,
reimburse them for their reasonable expenses in so doing.
11
<PAGE> 14
The Company's Annual Report, including financial statements, is being
mailed, together with this Proxy Statement, to all stockholders entitled to vote
at the Annual Meeting. The Company has incorporated portions of its Annual
Report into this Proxy Statement as indicated herein. However, such Annual
Report is not to be considered part of this proxy solicitation material. IN
ADDITION, ANY STOCKHOLDER WHO WISHES TO RECEIVE A COPY OF THE FORM 10-K FILED BY
THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION MAY OBTAIN A COPY
WITHOUT CHARGE BY WRITING TO THE COMPANY. REQUESTS SHOULD BE DIRECTED TO MR.
BRUCE C. KARSK AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
By Order of the Board of Directors
--------------------------------------
Bruce C. Karsk, Secretary
Lindsay, Nebraska
January 6, 1997
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<PAGE> 15
REVOCABLE PROXY
LINDSAY MANUFACTURING CO.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
LINDSAY MANUFACTURING CO. FOR USE ONLY AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON FEBRUARY 7, 1997 AND AT ANY ADJOURNMENT
THEREOF.
The undersigned hereby authorizes the Board of Directors of Lindsay
Manufacturing Co. (the "Company"), or any successors in their
respective positions, as proxy, with full powers of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of the
Company to be held at The Cornhusker Hotel, 333 South 13th Street,
Lincoln, Nebraska, on Friday, February 7, 1997, at 1:30 p.m., Central
Standard Time, and at any adjournment of said meeting, and thereat to
act with respect to all votes that the undersigned would be entitled
to cast, if then personally present, in accordance with the
instructions below and on the reverse hereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR all nominees listed below for terms to [ ] WITHHOLD AUTHORITY to vote for
expire in 2000 (except as marked to the contrary below) all nominees listed below
Vaughn L. Beals, Jr. Gary D. Parker
</TABLE>
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
----------------------------------------------------------------
2. AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION. Amend the
Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 10,000,000 to 25,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. AUDITORS. Ratification of the appointment of Coopers & Lybrand
L.L.P. as independent auditors for the fiscal year ending August 31,
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote, in its discretion, upon any other business that may
properly come before the Annual Meeting or any adjournment thereof.
Management is not aware of any other matters which should come before
the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF THE BOARD OF DIRECTORS'
NOMINEES FOR DIRECTORS, FOR THE AMENDMENT TO THE RESTATED CERTIFICATE
OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
(continued and to be signed on the reverse hereof)
This proxy is revocable and the undersigned may revoke it at any
time prior to the Annual Meeting by giving written notice of such
revocation to the Secretary of the Company. Should the undersigned be
present and want to vote in person at the Annual Meeting, or at any
adjournment thereof, the undersigned may revoke this proxy by giving
written notice of such revocation to the Secretary of the Company on a
form provided at the meeting. The undersigned hereby acknowledges
receipt of a Notice of Annual Meeting of Stockholders of the Company
called for February 7, 1997 and the Proxy Statement for the Annual
Meeting prior to the signing of this proxy.
Dated: , 1997.
-----------------------------
(Signature)
-----------------------------
(Signature if held jointly)
Please sign exactly as name
appears on this proxy. When
shares are held by joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title. If a
corporation, please sign in
full corporate name by
authorized officer. If a
partnership, please sign in
partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
