<PAGE> 1
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 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 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)(1) 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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(4) Date Filed:
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<PAGE> 2
LINDSAY MANUFACTURING CO.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1998
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, January 23, 1998, at 1:00 p.m., Central Standard Time, for
the following purposes:
(1) To elect two directors.
(2) To approve the adoption of the Company's Executive Compensation
Plan.
(3) To ratify the appointment of Coopers & Lybrand L.L.P. as
independent auditors for the Company for the fiscal year ending August 31,
1998.
(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, the proposed Executive Compensation
Plan 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 18, 1997 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
December 19, 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 January 23, 1998 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 December 19, 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 10.6% of the total shares
outstanding as of December 8, 1997. 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
18, 1997 will be entitled to vote at the Annual Meeting. At the record date,
there were 9,343,856 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.
<PAGE> 4
The following table sets forth, as of December 8, 1997, 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 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., Director.............................. 2,260 *
Howard G. Buffett, Director................................. 7,685(2) *
John W. Croghan, Director................................... 91,385(2) 1.0%
Eduardo R. Enriquez, Vice President -- International and
President of Lindsay International Sales Corporation...... 32,640(2) *
Bruce C. Karsk, Vice President -- Finance, Secretary and
Treasurer................................................. 112,264(2) 1.2%
Clifford P. Loseke, Vice President -- Manufacturing......... 56,900(2) *
Gary D. Parker, Chairman of the Board, President, Chief
Executive Officer and Director............................ 590,051(2) 6.2%
George W. Plossl, Director.................................. 27,710(2) *
Robert S. Snoozy, Vice President -- Sales and Marketing..... 46,100(2) *
The Bass Management Trust and Other Related Parties......... 1,645,297(3)(6) 17.6%
Fidelity Management & Research Co........................... 474,850(4)(6) 5.1%
Palisade Capital Management, L.L.C.......................... 979,100(5)(6) 10.5%
All executive officers and directors as a group (10
persons).................................................. 1,032,470(2) 10.6%
</TABLE>
- -------------------------
* Represents less than 1% of the outstanding Common Stock of the Company.
(1) Each shareholder has sole voting and investment power over the shares he
beneficially owns, and all such shares are owned directly unless otherwise
indicated.
(2) Includes 7,425; 27,000; 21,600; 50,766; 35,600; 156,375; 25,380; 35,600; and
419,146 shares of restricted stock granted but not yet issued or shares
which may be acquired within 60 days of December 8, 1997, pursuant to the
exercise of options by Messrs. Buffett, Croghan, 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 R. 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) Fidelity Management & Research Co., 82 Devonshire Street, Boston,
Massachusetts 02109.
(5) Palisade Capital Management, L.L.C., Suite 695, One Bridge Plaza, Fort Lee,
New Jersey 07024.
(6) Based on information on Form 13D, 13F and 13G filed with the Securities and
Exchange Commission with respect to the Company's Common Stock.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has nominated Howard G. Buffett and George W. Plossl
to serve three-year terms as directors. Proxies submitted pursuant to this
solicitation will be voted, unless specified otherwise, for the election of
Messrs. Buffett and Plossl. The Board of Directors knows of no reason why Mr.
Buffett or Mr. Plossl might be unavailable to serve, if elected. Messrs. Buffett
and Plossl have each expressed an intention to serve, if elected. If either Mr.
Buffett or Mr. Plossl 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. Buffett or Mr. Plossl and any other
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<PAGE> 5
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 MESSRS.
BUFFETT AND PLOSSL.
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.
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR TERM TO
NAME AGE OCCUPATION SINCE EXPIRE
---- --- ---------- -------- -------
<S> <C> <C> <C> <C>
NOMINEES
Howard G. Buffett.................... 43 Chairman of the Board, The GSI Group(1) 1995 1998
George W. Plossl..................... 79 President of G.W. Plossl & Co., Inc. 1989 1998
DIRECTORS CONTINUING IN OFFICE
John W. Croghan...................... 67 President of Lincoln Partners, a 1989 1999
partnership of Lincoln Capital
Management Company(2)
Vaughn L. Beals, Jr.................. 69 Chairman-Emeritus, Harley-Davidson, 1997 2000
Inc.
Gary D. Parker....................... 52 Chairman, President and Chief Executive 1978 2000
Officer of the Company
</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) Prior to 1997, Mr. Croghan was Chairman of Lincoln Capital Management
Company. Mr. Croghan is also a director of St. Paul Bancorp, Inc. and of
thirteen Morgan Stanley public closed-end funds.
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, 1997, the Board of
Directors held four meetings. All directors attended 75% or more of the meetings
of the Board of Directors and of the committees of the Board of Directors on
which they served during fiscal 1997, except for Mr. Plossl, who attended 50% of
the meetings of the Board of Directors.
The Board of Directors has established three committees: Audit,
Compensation and Nominating.
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
Beals, Croghan and Plossl. The Audit Committee met one time during fiscal 1997.
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 Beals, Buffett and Croghan. The Compensation Committee met
two times during fiscal 1997.
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<PAGE> 6
NOMINATING COMMITTEE. The Nominating Committee, composed of Directors
Buffett, Parker and Plossl, is responsible for nominating persons to serve as
directors of the Company. The Nominating Committee met two times during fiscal
1997.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid $24,000 annually,
plus $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. 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
Compensation Committee. Continuing Directors receive an annual grant of options
to purchase 3,375 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 16,875 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 202,500 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 1997, the Company
granted Messrs. Buffett, Croghan and Plossl options to purchase 3,375, 3,375 and
3,375 shares of Common Stock, respectively, at an exercise price of $25.83 per
share. Mr. Beals (who became a director of the Company after the September 3,
1996 grant date for fiscal 1997) received his initial grant of options in fiscal
1998. No options were exercised by any outside director during fiscal 1997.
4
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by or paid by the Company and its
subsidiaries to the Chief Executive Officer and the other four highest paid
executive officers of the Company for services rendered during the three fiscal
years ended August 31, 1997, August 31, 1996 and August 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(A) (B) (C) (D) (E) (F) (G) (H) (I)
<CAPTION>
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION(1) AWARD(S)(2) SARS(3) PAYOUTS(4) COMPENSATION(5)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------- ---- ------- ------- -- --------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary D. Parker....... 1997 367,047 300,000 -- 1,114,875 -- -- 58,841
Chairman, 1996 339,859 300,000 -- 689,625 -- -- 49,512
President and Chief 1995 323,675 300,000 -- 525,000 -- -- 46,023
Executive Officer
Eduardo R.
Enriquez........... 1997 92,700 26,525 -- -- -- -- 8,731
Vice President -- 1996 90,000 22,000 -- -- -- -- 6,757
International and 1995 86,776 25,000 -- -- 9,000 -- 6,766
President of
Lindsay
International Sales
Corporation
Bruce C. Karsk....... 1997 131,249 90,000 -- 81,000 -- -- 17,770
Vice President -- 1996 121,527 85,000 -- 57,375 -- -- 15,304
Finance, Secretary 1995 115,740 77,000 -- 31,250 -- -- 15,142
and Treasurer
Clifford P. Loseke... 1997 98,000 34,000 -- 27,125 -- -- 10,320
Vice President -- 1996 93,185 35,000 -- -- -- -- 7,229
Manufacturing 1995 89,601 33,000 -- -- 9,000 -- 8,647
Robert S. Snoozy..... 1997 90,000 74,180 -- 27,125 -- -- 10,678
Vice President -- 1996 81,643 75,000 -- -- -- -- 8,083
Sales and 1995 77,756 57,000 -- -- 9,000 -- 8,644
Marketing
</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 40,500 shares and 2,250 shares for
Messrs. Parker and Karsk, respectively, in each of fiscal 1997, fiscal 1996
and fiscal 1995 and 1,050 shares to each of Messrs. Loseke and Snoozy in
fiscal 1997 (all shares adjusted for the March 10, 1997 three-for-two stock
split). The restricted stock awards vest two years from the date of grant
and participate in dividends on a nonpreferential basis. Of each year's
restricted stock award to Mr. Parker, 33,750 shares were performance-based
as were all of the fiscal 1997 restricted stock awards to Messrs. Loseke and
Snoozy. At August 31, 1997, the value of each award to Mr. Parker of 40,500
shares in fiscal 1997, 1996 and 1995 is $1,579,500. At August 31, 1997, the
value of each award to Mr. Karsk of 2,250 shares in fiscal 1997, 1996 and
1995 is $87,750. At August 31, 1997, the value of the fiscal 1997 awards to
Messrs. Loseke and Snoozy of 1,050 shares each is $40,950.
(3) Adjusted for the March 10, 1997 three-for-two stock split.
(4) 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.
(5) These amounts for fiscal 1997 consist of defined contributions and matching
contributions to the Company's defined contribution profit-sharing and
401(k) plan of $10,203, $8,038, $10,203, $9,240 and $10,203 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
$48,638, $693, $7,567, $1,080 and $475 for Messrs. Parker, Enriquez, Karsk,
Loseke and Snoozy, respectively.
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<PAGE> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options were granted to the executive officers listed in the Summary
Compensation Table during fiscal year 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table sets forth certain information concerning options
exercised during fiscal year 1997, the number of unexercised options and the
value of unexercised options at the end of fiscal 1997 for the executive
officers whose compensation is reported in the Summary Compensation Table.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR FISCAL YEAR
END(#)(1) END($)(2)
------------- -----------------
SHARES ACQUIRED
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#)(1) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------- ------- --------- ------------- -----------------
<S> <C> <C> <C> <C>
Gary D. Parker....................... 100,687 2,950,136 156,375/-0- 5,415,266/-0-
Eduardo R. Enriquez.................. 7,005 217,851 19,800/7,200 492,948/189,972
Bruce C. Karsk....................... 50,766 1,537,528 50,766/-0- 1,758,027/-0-
Clifford P. Loseke................... -0- -0- 33,300/7,200 943,443/189,972
Robert S. Snoozy..................... -0- -0- 33,300/7,200 943,443/189,972
</TABLE>
- -------------------------
(1) Shares adjusted for the three-for-two stock split of March 10, 1997.
(2) Based on the difference between the closing sale price of the Common Stock
on August 31, 1997 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
$295,716, $9,612, $-0-, $18,984 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 and SIRs as well as certain fringe benefits
6
<PAGE> 9
provided in the Company's employee benefit programs. Under the agreement, Mr.
Parker receives a performance bonus (up to a maximum $200,000 beginning in any
fiscal year after 1997) 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 deferred bonus
awarded in any fiscal year may not exceed $400,000. Additionally, Mr. Parker is
entitled to receive an annual performance-based award of 33,750 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, 2002 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.
The Company has also entered into employment agreements with Messrs.
Enriquez, Karsk, Loseke and Snoozy that provide for the payment of a base salary
and the opportunity for a performance bonus award. Each employment agreement
also provides that such officers will be eligible to receive options to purchase
Common Stock and certain fringe benefits provided in the Company's employee
benefit programs. The employment agreements with Messrs. Enriquez, Karsk, Loseke
and Snoozy each expire on August 31, 2000. If the Company terminates any such
officer's employment without cause, as defined in the employment agreements,
such officer will 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 his employment agreement or compensation equal to 250% of his
average gross compensation under each respective agreement. If there were a
change in control, as defined in the employment agreements, each such officer
will be entitled to receive a lump-sum payment equal to the balance of his
salary plus all bonuses and incentives through the end of the term of the
employment agreement 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
7
<PAGE> 10
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 1997 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 rates of compensation. In determining Mr. Parker's compensation for 1997,
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 1997 salary,
emphasis was placed on performance and competitive salaries in the marketplace.
The Company's 1997 internal plan was met or exceeded and the Company exceeded
the 1997 return on equity goal established for Mr. Parker. Accordingly, Mr.
Parker was awarded the maximum allowable bonus and restricted shares for 1997.
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.
Howard G. Buffett, Chairman
Vaughn L. Beals, Jr.
John W. Croghan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, 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.
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<PAGE> 11
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
MEASUREMENT PERIOD LINDSAY NASDAQ COMPOSITE S&P MACHINERY
(FISCAL YEAR COVERED) MANUFACTURING CO. TOTAL RETURN INDEX (DIVERSIFIED)
<S> <C> <C> <C>
1992 100 100 100
1993 98 132 156
1994 94 137 173
1995 113 185 199
1996 191 209 222
1997 289 291 340
</TABLE>
APPROVAL OF THE COMPANY'S EXECUTIVE COMPENSATION PLAN
The Compensation Committee of the Board of Directors has adopted, and
recommends that the shareholders approve, the Executive Compensation Plan (the
"Plan") in the belief that grants and awards of cash and stock thereunder
(collectively, "awards") will assist the Company to attract, retain and provide
appropriate incentives to key personnel. In addition, approval of the Plan by
shareholders will enable certain awards to qualify as "performance-based
compensation" not subject to the limitations on deductibility of executive
compensation provided for in Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). The Plan is similar to the Company's past
executive compensation arrangements.
The following is a summary of the major provisions of the Plan:
ADMINISTRATION AND ELIGIBILITY. The Plan will be administered by the
Compensation Committee of the Board of Directors, which consists solely of two
or more outside directors of the Board. The Compensation Committee will be
empowered, among other things, to interpret the Plan, to make all determinations
deemed necessary or advisable for its administration and to authorize awards
thereunder to key Company employees. Stock awards may include options,
restricted stock and other forms of awards measured in whole or in part by the
value of shares.
Key employees are eligible to participate in the Plan subject to selection
by the Compensation Committee based upon an employee's past or anticipated
contributions to the Company's growth and success.
ANNUAL MAXIMUM AWARDS. Options and other stock awards may not be granted to
any Plan participant in any fiscal year covering more than a total of 50,000
shares of the Company's Common Stock. The 50,000 share limitation is to be
automatically adjusted pro rata for any future stock splits or other changes in
capitalization. All options or other stock awards under the Plan will be made
under the Company's 1991 Long-Term Incentive Plan (the "1991 Plan") approved by
the shareholders on February 11, 1992 and are subject to the limit on the total
number of shares for which awards can be made under the 1991 Plan. Accordingly,
the adoption of the Plan will not increase the total number of shares of Common
Stock for which awards may be made under the 1991 Plan.
STOCK OPTIONS. All options to be granted under the Plan, which may include
incentive stock options satisfying certain Code requirements, must have an
exercise price of not less than the fair market value of
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<PAGE> 12
the Company's Common Stock on the date of grant. In addition, a participant will
be required to complete a specified period of employment following the grant
date before an option becomes exercisable. The exercise price of an option may
be paid in cash, through the surrender of shares of Company's Common Stock
having a fair market value equal to the exercise price or through a combination
of the foregoing.
RESTRICTED STOCK AND OTHER AWARDS. Awards of Common Stock may be made on
terms and conditions fixed by the Compensation Committee, including restrictions
as to vesting or transferability of the award. If the Committee intends a
restricted stock award to qualify as performance-based compensation under
Section 162(m) of the Code, such shares will vest only upon the attainment of
specific performance goals, as discussed below.
Awards, payable in cash or Common Stock, may be granted under the Plan.
Pursuant to Code Section 162(m), compensation in excess of the per year limit
paid to the Chief Executive Officer or any of the four other highest paid
executive officers is not deductible by the Company unless such compensation is
based on pre-established, objective performance criteria. Additionally,
shareholders must have approved the general performance criteria for such
compensation. Accordingly, the Plan authorizes performance-based awards to be
based on one or more of the following criteria: earnings per share, operating
income, profit margins, return on net assets, increased inventory and/or
receivable turns, cash flow, stock price, total shareholder return and any other
objective measure specified in a written agreement with the participant and
approved by the Compensation Committee.
Such awards will be based on the extent to which performance criteria have
been satisfied and will not become payable to participants (or vested, in the
case of restricted stock) until the Compensation Committee certifies that the
applicable performance targets have been met.
TERM, EXERCISE PERIOD AND TRANSFERABILITY OF STOCK AWARDS. Under the Plan,
stock awards may be granted for such terms as the Compensation Committee may
determine. Options will be exercisable only during the participant's employment
by the Company (or within 60 days after the participant's termination of
employment by the Company) and unearned portions of restricted stock and other
awards will be forfeited upon termination of the participant's employment prior
to the end of the restriction or performance period, subject to exceptions in
the case of death, termination without cause or termination following a change
in control of the Company. Stock awards are not transferable subject to
exceptions in the case of death of a participant.
AMENDMENT, TERMINATION AND ADJUSTMENT. The Plan may be amended or
terminated by the Board at any time, but no amendment shall be made without
shareholder approval to the extent such approval is required by law, agreement
or the rules of any exchange upon which the Company stock is listed. In
addition, no amendment shall impair the rights of holders of any agreement
theretofore in place or of any award theretofore granted without their consent.
The Plan provides that in the event of a reorganization, recapitalization,
spinoff, stock dividend or stock split, or a combination or other increase or
reduction in the number of issued shares of the Company's Common Stock, the
Board or the Compensation Committee may, in order to prevent dilution or
enlargement of rights under awards, make such adjustments in the number and type
of shares authorized by the Plan and covered by outstanding awards and the price
thereof as may be determined to be appropriate and equitable. The Board or the
Compensation Committee may provide in award agreements that in the event of a
change in control, merger, consolidation, reorganization, recapitalization, sale
or exchange of substantially all assets or dissolution of or spinoff or similar
transaction by the Company, the rights under such awards may be accelerated or
adjustments may be made in order to prevent the dilution or enlargement of
rights thereunder.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion is intended only
as a brief summary of the federal income tax rules relevant to stock option,
restricted stock and cash awards. The laws governing the tax aspects of awards
are complex and subject to change in the future.
Under present law, upon exercise of a stock option that is not an Incentive
Stock Option ("ISO"), the holder recognizes ordinary income, and the Company is
entitled to a deduction, equal to the amount by which the fair market value of
the shares acquired upon exercise exceeds the exercise price. However, an ISO
will
10
<PAGE> 13
not result in taxable income to the recipient or a tax deduction to the Company
at the time of exercise if (i) at all times during the period beginning on the
grant date and ending on the day three months before the exercise date, the
holder was an employee of the Company, (ii) the recipient does not dispose of
the shares acquired pursuant to the exercise of the ISO for at least one year
from the date of exercise and at least two years from the date the ISO was
granted (whichever is longer) and (iii) certain other requirements are
satisfied.
Stock awards are taxable as ordinary income to the holder and deductible by
the Company generally in the year paid in an amount equal to the fair market
value of the shares received. However, if the shares are subject to restrictions
involving both forfeitability and nontransferability, the recipient's taxable
income and the Company's deduction are deferred and measured by the fair market
value of the shares at the time that the first of the two restrictions lapses,
unless the recipient makes a timely election to recognize income at the time the
shares are received.
Cash awards are taxable to recipients as ordinary income and generally
deductible by the Company as of the date they are paid.
WITHHOLDING OF TAXES. The Company may withhold, or allow stock award
holders to remit to the Company, any applicable federal, state or local taxes
relating to awards under the Plan. To satisfy such tax liability, the holder may
elect to surrender previously acquired shares of Common Stock or to have the
Company withhold shares that would otherwise have been issued to the holder
under the Plan. Taxes are withheld by the Company from cash awards in accordance
with applicable law at the time they are paid.
The approval of the adoption of the Plan 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 approval. Broker nonvotes will not be considered shares
entitled to vote with respect to approval of the adoption of the Plan and will
not be counted as votes for or against the approval of the Plan. THE BOARD
RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE EXECUTIVE COMPENSATION PLAN.
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, 1998. 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, 1998.
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
December 29, 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
11
<PAGE> 14
December 29, 1997. Only stockholders of record as of December 18, 1997 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 August 22, 1998
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.
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
December 19, 1997
12
<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 JANUARY 23, 1998 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,
January 23, 1998, at 1:00 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>
<CAPTION>
<S> <C>
[ ] FOR all nominees listed below for terms to expire [ ] WITHHOLD AUTHORITY to vote for
in 2001 (except as marked to the contrary below) all nominees listed below
</TABLE>
Howard G. Buffett George W. Plossl
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
------------------------------------------------------------
2. EXECUTIVE COMPENSATION PLAN. Approval of the adoption of the Company's
Executive Compensation Plan.
[ ] 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, 1998.
[ ] 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
APPROVAL OF THE COMPANY'S EXECUTIVE COMPENSATION PLAN 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 January 23, 1998 and the Proxy Statement for the Annual
Meeting prior to the signing of this proxy.
Dated: _____________________ , 199 ___ .
------------------------------------
(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.
