<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: __________________________________
(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:
<PAGE> 2
LINDSAY MANUFACTURING CO.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 1999
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 Tuesday, January 26, 1999, at 1:00 p.m., Central Standard Time, for
the following purposes:
(1) To elect two directors.
(2) To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors for the Company for the fiscal year ending August 31,
1999.
(3) 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 and the ratification of the appointment
of independent auditors.
Only stockholders holding shares of Common Stock of record at the close of
business on November 28, 1998 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 17, 1998
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 26, 1999 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 17, 1998.
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 37.4% of the total shares
outstanding as of November 28, 1998. 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.
<PAGE> 4
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 November
28, 1998 will be entitled to vote at the Annual Meeting. At the record date,
there were 13,146,657 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 November 28, 1998, 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......................... 14,028(2) *
Howard G. Buffett, Director............................ 19,088(2) *
Michael N. Christodolou, Director Nominee.............. 3,492,395(3) 26.6
John W. Croghan, Director.............................. 142,603(2) 1.1
Eduardo R. Enriquez, Vice President -- International
and President of Lindsay International Sales
Corporation.......................................... 46,217(2) *
Bruce C. Karsk, Vice President -- Finance, Secretary,
Treasurer and Director............................... 169,781(2) 1.3
Clifford P. Loseke, Vice President -- Manufacturing.... 90,188(2) *
Gary D. Parker, Chairman of the Board, President, Chief
Executive Officer and Director....................... 906,089(2) 6.8
George W. Plossl, Director............................. 47,091(2) *
Robert S. Snoozy, Vice President -- Domestic Sales..... 71,543(2) *
The Bass Management Trust and Other Related Parties.... 3,492,395(4)(6) 26.6
PRIMECAP Management 659,900(5)(6) 5.0
All executive officers, directors and director nominees
as a group (11 persons).............................. 5,101,435(2) 37.4
</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 by the individual
or their spouse unless otherwise indicated.
(2) Includes 5,062; 18,222; 45,550; 23,100; 71,147; 56,850; 136,701; 43,120;
36,600; and 493,202 shares which may be acquired within 60 days of November
28, 1998 pursuant to the exercise of options by Messrs. Beals, Buffett,
Croghan, Enriquez, Karsk, Loseke, Parker, Plossl and Snoozy and the
executive officers and directors as a group, respectively.
(3) Consists of shares held by The Bass Management Trust and Other Related
Parties over which Mr. Christodolou exercises voting and investment
authority -- see footnote (4).
(4) All shares held by The Bass Management Trust and Other Related Parties c/o
W. Robert Catham, 201 Main Street, Suite 2600, Fort Worth, Texas 76102.
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.
(5) PRIMECAP Management, 225 South Lake Avenue, Pasadena, California 91101.
(6) Based on information on Form 13F filed with the Securities and Exchange
Commission with respect to the Company's Common Stock.
2
<PAGE> 5
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has increased the number of directors making up the
full Board from five to seven. The new directorships have been created in the
classes with terms expiring in 1999 and 2001. The Board has appointed Bruce C.
Karsk as a director for a term ending in 2001. The remaining directorship is
currently unfilled, but the Board has nominated Michael N. Christodolou to fill
this new position on the Board. In addition, the Board has nominated John W.
Croghan as a director. If elected, both Messrs. Croghan and Christodolou will
serve three-year terms. Proxies submitted pursuant to this solicitation will be
voted, unless specified otherwise, for the election of Messrs. Croghan and
Christodolou. Messrs. Croghan and Christodolou have each expressed an intention
to serve, if elected. The Board of Directors knows of no reason why Messrs.
Croghan and Christodolou might be unavailable to serve, if elected. If either
Mr. Croghan or Mr. Christodolou 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. Croghan or Mr. Christodolou and any other person
pursuant to which such nominees were 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. CROGHAN AND CHRISTODOLOU.
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
John W. Croghan............... 68 President of Lincoln Partners, a 1989 2002
partnership of Lincoln Capital Management
Company(1)
Michael N. Christodolou....... 37 Director of Equity Investments, Taylor & -- 2002
Company(2)
DIRECTORS CONTINUING IN OFFICE
Vaughn L. Beals, Jr........... 70 Chairman-Emeritus, Harley-Davidson, Inc.(3) 1997 2000
Gary D. Parker................ 53 Chairman, President and Chief Executive 1978 2000
Officer of the Company
Howard G. Buffett............. 44 Chairman of the Board, The GSI Group(4) 1995 2001
Bruce C. Karsk................ 46 Vice President-Finance Secretary and 1998 2001
Treasurer of the Company
George W. Plossl.............. 80 President of G.W. Plossl & Co., Inc. 1989 2001
</TABLE>
- ---------------
(1) Prior to 1997, Mr. Croghan was Chairman of Lincoln Capital Management
Company. Mr. Croghan is also a director of St. Paul Bancorp, Inc., Republic
Services, Inc. and of thirteen Morgan Stanley public closed-end funds.
(2) Taylor & Company is an investment consulting firm providing services to the
Trinity I Fund, L.P. and certain entities associated with certain members of
the Bass Family of Forth Worth, Texas. Mr. Christodolou is also a director
of XTRA Corp.
(3) Mr. Beals has served as Chairman-Emeritus of Harley-Davidson, Inc. He
retired as a director of Harley-Davidson, Inc. in 1998.
(4) 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.
3
<PAGE> 6
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, 1998, the Board of
Directors held four meetings and took action by written consent in lieu of a
meeting three times. 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 1998.
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 is chaired by Mr. Plossl and met
one time during fiscal 1998.
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
which is chaired by Mr. Buffett, met one time and took action by written consent
in lieu of meeting two times during fiscal 1998.
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 which is chaired by Mr.
Parker, met one time and took action by written consent in lieu of meeting one
time during fiscal 1998.
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 any separate 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 5,062 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 25,312 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
303,750 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 1998, the Company granted Messrs. Beals, Buffett, Croghan and Plossl
options to purchase 25,312, 5,062, 5,062, and 5,062 shares of Common Stock,
respectively, at an exercise price of $26.17 per share. No options were
exercised by any outside director during fiscal 1998.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by, or paid by the Company and its
subsidiaries to, the Chief Executive Officer and the other four highest paid
executive officers of the Company for services rendered during the three fiscal
years ended August 31, 1998, August 31, 1997 and August 31, 1996.
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------- ----------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
SALARY BONUS COMPENSATION AWARD(S) SARs PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (2)($) (3)($) (4)(#) (5)($) (6)($)
- --------------------------- ---- ------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary D. Parker............ 1998 367,047 500,000(1) -- 1,627,594 -- -- 72,893
Chairman, President and 1997 367,047 300,000 -- 1,114,875 -- -- 58,841
Chief Executive Officer 1996 339,859 300,000 -- 689,625 -- -- 49,512
Eduardo R. Enriquez....... 1998 96,408 16,750 -- -- 7,500 -- 6,987
Vice President -- 1997 92,700 26,525 -- -- -- -- 8,731
International and 1996 90,000 22,000 -- -- -- -- 6,757
President of Lindsay
International Sales
Corporation
Bruce C. Karsk............ 1998 140,436 90,000 -- 103,781 -- -- 18,896
Vice President -- 1997 131,249 90,000 -- 81,000 -- -- 17,770
Finance, Secretary and 1996 121,527 85,000 -- 57,375 -- -- 15,304
Treasurer
Clifford P. Loseke........ 1998 103,000 34,000 -- 29,250 7,500 -- 9,722
Vice President -- 1997 98,000 34,000 -- 27,125 -- -- 10,320
Manufacturing 1996 93,185 35,000 -- -- -- -- 7,229
Robert S. Snoozy.......... 1998 95,400 77,000 -- 29,250 7,500 -- 10,699
Vice President -- 1997 90,000 74,180 -- 27,125 -- -- 10,678
Domestic Sales 1996 81,643 75,000 -- -- -- -- 8,083
</TABLE>
- ---------------
(1) The amount reported as Mr. Parker's fiscal 1998 bonus includes a
discretionary bonus of $100,000 that was awarded and paid in fiscal 1998 but
which related to fiscal 1997. Because this bonus was awarded after the date
of the Company's prior year proxy statement, it had not been previously
reported.
(2) 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.
(3) Represents restricted stock awards of 60,750 shares and 3,375 shares for
Messrs. Parker and Karsk, respectively, in each of fiscal 1998, fiscal 1997
and fiscal 1996 and 1,125 shares to each of Messrs. Loseke and Snoozy in
fiscal 1998 and 1,575 shares to each of Messrs. Loseke and Snoozy in 1997,
as adjusted to reflect the June 15, 1998 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, 50,625 shares were performance based
as were all of the fiscal 1998 and fiscal 1997 restricted stock awards to
Messrs. Loseke and Snoozy. At August 31, 1998, the value of each award to
Mr. Parker of 60,750 shares in fiscal 1998, 1997 and 1996 was $1,222,594. At
August 31, 1998, the value of each award to Mr. Karsk of 3,375 shares in
fiscal 1998, 1997 and 1996 was $67,922. At August 31, 1998, the value of the
fiscal 1998 awards to Messrs. Loseke and Snoozy of 1,125 shares each was
$22,640 and the value of the fiscal 1997 awards to Messrs. Loseke and Snoozy
of 1,575 shares each was $31,697.
(4) Adjusted to reflect the June 15, 1998 three-for-two stock split.
(5) 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.
(6) These amounts for fiscal 1998 consist of defined contributions and matching
contributions to the Company's defined contribution profit-sharing and
401(k) plan of $9,390, $4,749, $9,357, $7,838 and $8,694 for Messrs. Parker,
Enriquez, Karsk, Loseke and Snoozy, respectively, and of premiums for
supplemental life and disability insurance (and, in the case of Messrs.
Karsk and Parker, the value of split-dollar supplemental term life
insurance) of $63,503, $2,238, $9,539, $1,884 and $2,005 for Messrs. Parker,
Enriquez, Karsk, Loseke and Snoozy, respectively.
5
<PAGE> 8
The following table sets forth certain information relating to options
granted during fiscal year 1998 to executive officers of the Company whose
compensation is reported in the Summary Compensation Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
OPTION TERM(3)
-------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF %
SECURITIES OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
---- ------------ ------------ ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Gary D. Parker................. -- -- -- -- -- --
Eduardo R. Enriquez............ 7,500 9% 28.17 11/06/07 132,870 336,718
Bruce C. Karsk................. -- -- -- -- -- --
Clifford P. Loseke............. 7,500 9% 28.17 11/06/07 132,870 336,718
Robert S. Snoozy............... 7,500 9% 28.17 11/06/07 132,870 336,718
</TABLE>
- ---------------
(1) All amounts relate to options granted to the named executive officers. No
stock appreciation rights (SARs) were granted during fiscal 1998. All
options were granted on November 6, 1997, become exercisable ratably
beginning one year from date of grant through five years from date of grant
and expire on November 6, 2007. All options were granted at fair market
value on the date of grant.
(2) Adjusted to reflect the June 15, 1998 three-for-two stock split.
(3) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of Common Stock price appreciation from
November 6, 1997 (the date of the grant) to March 6, 2007 (the date of
expiration of such options) of 5% and 10%. These assumptions are not
intended to forecast future price appreciation of the Company's Common Stock
price. The exercise price of all these options exceeded the closing sale
price of $20.125 for the Company's Common Stock as of the end of its fiscal
year ended August 31, 1998.
6
<PAGE> 9
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table sets forth certain information concerning options
exercised during fiscal year 1998, the number of unexercised options and the
value of unexercised options at the end of fiscal 1998 for the executive
officers of the Company whose compensation is reported in the Summary
Compensation Table.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL YEAR
FISCAL YEAR END(#)(1) END($)(2)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#)(1) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------------- -------------- --------------------- ---------------
<S> <C> <C> <C> <C>
Gary D. Parker................ 97,861 2,699,676 136,701/-0- 2,352,816/-0-
Eduardo R. Enriquez........... -0- -0- 35,100/12,900 381,588/63,475
Bruce C. Karsk................ -0- -0- 76,147/-0- 1,310,596/-0-
Clifford P. Loseke............ -0- -0- 55,350/12,900 713,119/63,475
Robert S. Snoozy.............. 20,250 553,433 35,100/12,900 381,588/63,475
</TABLE>
- ---------------
(1) Adjusted to reflect the three-for-two stock split of June 15, 1998.
(2) Based on the difference between the closing sale price of the Common Stock
on August 31, 1998 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
$330,504, $6,228, $-0-, $14,796 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 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 performance 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
performance bonus awarded in any fiscal year may not exceed $400,000.
Additionally, Mr. Parker is entitled to receive an annual performance-based
award of 50,625 shares of
7
<PAGE> 10
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 restricted Common
Stock, 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 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
shareholders. The Compensation Committee, as it deems appropriate, utilizes
independent 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 bonuses, 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 the 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 and 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
8
<PAGE> 11
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 1998 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 1998,
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 1998 salary,
emphasis was placed on performance and competitive salaries in the marketplace.
The Company's 1998 internal plan was met or exceeded, and the Company exceeded
the 1998 return on equity goal established for Mr. Parker. Accordingly, Mr.
Parker was awarded the maximum allowable bonus and restricted shares for 1998.
SEE "EMPLOYMENT AGREEMENTS."
Mr. Parker's salary has remained at the same level for fiscal years 1997
and 1998 and will remain unchanged in fiscal 1999. The Compensation Committee
believes Mr. Parker's salary is appropriate in relationship to other companies
which compare to Lindsay in size and scope.
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 total 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. During fiscal
1998 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.
Howard G. Buffett, Chairman
Vaughn L. Beals, Jr.
John W. Croghan
9
<PAGE> 12
PERFORMANCE CHARTS
These performance charts are not deemed to be "soliciting material" or
"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 these performance charts 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.
STOCK PERFORMANCE GRAPH
The following graph is a comparison of the Cumulative Total Return on the
Company's Common Stock over the five-year period ending August 31, 1998, with
the Cumulative Total Return on the S&P Smallcap 600 Index and the S&P Machinery
(Diversified)-500.
INDEXED TOTAL RETURN -- GRAPH 1
<TABLE>
<CAPTION>
MACHINERY (DIVERSIFIED) -
LINDSAY MANUFACTURING CO. 500 S&P SMALLCAP 600 INDEX
------------------------- ------------------------- ----------------------
<S> <C> <C> <C>
1993 100 100 100
1994 95.84 111.05 103.6
1995 115 127.61 126.84
1996 194.57 142.37 143.69
1997 294.97 217.98 192.68
1998 229.43 155.11 157.45
</TABLE>
10
<PAGE> 13
STOCK PERFORMANCE GRAPH
The following graph is a comparison of the Cumulative Total Return on the
Company's Common Stock over the five-year period ending August 31, 1998, with
the Cumulative Total Return on the Nasdaq Composite Total Return Index and S&P
Machinery (Diversified) 500. This chart is provided with the comparative indexes
used by the Company in last year's information statement. The Nasdaq Composite
Total Return Index will not be used in future years because the S&P Small Cap
600 Index, of which Lindsay is a member, on the preceding page is closer to the
Company's market capitalization and because the Company is no longer included in
the Nasdaq Composite Index.
INDEXED TOTAL RETURN -- GRAPH 2
<TABLE>
<CAPTION>
MACHINERY (DIVERSIFIED) -
LINDSAY MANUFACTURING CO. 500 NASDAQ COMPOSITE
------------------------- ------------------------- ----------------
<S> <C> <C> <C>
1993 100 100 100
1994 95.84 111.05 104.1
1995 115 127.61 140.21
1996 194.57 142.37 158.07
1997 294.97 217.98 220.54
1998 229.43 155.11 209.8
</TABLE>
RATIFICATION OF APPOINTMENT OF AUDITOR
PricewaterhouseCoopers LLP, 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, 1999. 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
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING
AUGUST 31, 1999.
Representatives of PricewaterhouseCoopers LLP 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.
11
<PAGE> 14
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 27, 1998. 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 December 27, 1998. Only stockholders
of record as of November 28, 1998 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 and form of proxy
relating to its next annual meeting, stockholder proposals must be submitted by
August 24, 1999 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. The enclosed proxy for the Annual
Meeting confers discretionary authority on the Board of Directors to vote on any
matter proposed by shareholders for consideration at the Annual Meeting if the
Company did not receive written notice of the matter on or before December 27,
1998.
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 17, 1998
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 26, 1999 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 Tuesday,
January 26, 1999, 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
[ ] FOR all nominees listed below, for terms to
expire in 2002 (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for
all nominees listed below
John W. Croghan Michael N. Christodolou
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below)
---------------------------------------------------------
2. AUDITORS. Ratification of the appointment of PricewaterhouseCoopers LLP
as independent auditors for the fiscal year ending August 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To vote, in its discretion, upon any other business that may properly
come before the Annual Meeting or any adjournment thereof of which management
did not have written notice of on December 27, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 AND FOR
THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
(continued and to be signed on the reverse hereof)
13
<PAGE> 16
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 26, 1999 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.
