<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1999 OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-17116
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Lindsay Manufacturing Co.
-------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 47-0554096
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
BOX 156, 214 EAST 2ND STREET, LINDSAY, NEBRASKA 68644
- ----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
402-428-2131
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Registrant's telephone number, including area code
COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE, INC.(SYMBOL LNN)
- ----------------------------- -----------------------------------------
Title of Class Name of each exchange on which registered
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No|_|
COMMON STOCK, $1.00 PAR VALUE 12,404,498
- ----------------------------- ---------------------------------
Title of Class Outstanding as of January 5, 2000
Exhibit index is located on page 2.
Total number of pages 34.
1
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LINDSAY MANUFACTURING CO. AND CONSOLIDATED SUBSIDIARIES
INDEX FORM 10-Q
<TABLE>
<CAPTION>
Page No.
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<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Balance Sheets, November 30, 1999 and 1998
and August 31, 1999 3
Consolidated Statements of Operations for the three
months ended November 30, 1999 and 1998 4
Consolidated Statements of Cash Flows for the three
months ended November 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6-8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION 9-11
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 12
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 12
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
EXHIBIT INDEX
10(a) - Employment Agreement between the Company and Gary D. Parker
effective December 1, 1999 14-33
27 - Financial Data Schedule 34
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
LINDSAY MANUFACTURING CO.
CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 1999 AND 1998 AND AUGUST 31, 1999
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITIED)
NOVEMBER NOVEMBER AUGUST
($ IN THOUSANDS, EXCEPT PAR VALUES) 1999 1998 1999
- ----------------------------------- ---- ---- ----
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ..................................... $ 9,515 $ 1,469 $ 14,232
Marketable securities ......................................... 22,700 16,054 18,236
Receivables ................................................... 15,982 14,925 12,909
Inventories ................................................... 8,731 10,257 7,659
Deferred income taxes ......................................... 3,655 3,563 3,803
Other current assets .......................................... 796 646 85
--------- --------- ---------
Total current assets ....................................... 61,379 46,914 56,924
Long-term marketable securities ............................... 24,473 39,773 27,229
Property, plant and equipment, net ............................ 15,673 13,994 15,416
Other noncurrent assets........................................ 837 1,017 820
--------- --------- ---------
Total assets ..................................................... $ 102,362 $ 101,698 $ 100,389
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade ....................................... $ 4,472 $ 4,663 $ 4,081
Other current liabilities ..................................... 13,182 11,008 12,580
Current portion of capital lease obligation ................... 55 156 95
--------- --------- ---------
Total current liabilities .................................. 17,709 15,827 16,756
Other noncurrent liabilities .................................. 1,025 887 935
Obligation under capital lease less current portion ........... 0 68 0
--------- --------- ---------
Total liabilities ................................................ 18,734 16,782 17,691
--------- --------- ---------
Contingencies
Shareholders' equity:
Preferred stock, ($1 par value, 2,000,000 shares
authorized no shares issued and outstanding
in November 1999 and 1998 and August 1999)
Common stock, ($1 par value, 25,000,000 shares authorized,
17,058,851, 17,031,345 and 17,074,491 shares
issued in November 1999 and 1998 and August 1999) .......... 17,059 17,031 17,074
Capital in excess of stated value ............................. 1,795 1,381 2,118
Retained earnings.............................................. 135,976 124,734 134,708
Less treasury stock, at cost, 4,650,237, 3,884,688 and 4,650,237
shares in November 1999 and 1998 and August 1999............ (71,202) (58,230) (71,202)
--------- --------- ---------
Total shareholders' equity..................................... 83,628 84,916 82,698
--------- --------- ---------
Total liabilities and shareholders' equity .................... $ 102,362 $ 101,698 $ 100,389
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
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LINDSAY MANUFACTURING CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
NOVEMBER NOVEMBER
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1999 1998
- ---------------------------------------- ---- ----
<S> <C> <C>
Operating revenues............................................ $24,503 $21,642
Cost of operating revenues.................................... 18,763 16,964
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Gross profit.................................................. 5,740 4,678
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Operating expenses:
Selling expense............................................ 1,361 1,261
General and administrative expense......................... 2,229 1,822
Engineering and research expense........................... 472 395
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Total operating expenses...................................... 4,062 3,478
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Operating income.............................................. 1,678 1,200
Interest income, net.......................................... 719 741
Other income, net............................................. 36 162
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Earnings before income taxes.................................. 2,433 2,103
Income tax provision.......................................... 730 673
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Net earnings.................................................. $ 1,703 $ 1,430
======= =======
Basic net earnings per share.................................. $ 0.14 $ .11
======= =======
Diluted net earnings per share................................ $ 0.13 $ .10
======= =======
Average shares outstanding.................................... 12,421 13,354
Diluted effect of stock options............................... 426 401
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Average shares outstanding assuming dilution.................. 12,847 13,755
======= =======
Cash dividends per share...................................... $ 0.035 $ 0.035
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
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LINDSAY MANUFACTURING CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998
(UNAUDITIED)
<TABLE>
<CAPTION>
NOVEMBER NOVEMBER
($ IN THOUSANDS) 1999 1998
- ---------------- ---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings................................................................ $ 1,703 $ 1,430
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization............................................ 713 637
Amortization of marketable securities premiums, net...................... 24 50
(Gain) on sale of fixed assets........................................... (47) (18)
Loss (gain) on maturities of marketable securities
held-to-maturity...................................................... 8 (5)
Provision for uncollectible accounts receivable.......................... (276) 0
Deferred income taxes.................................................... 148 298
Changes in assets and liabilities:
Receivables.............................................................. (2,797) (859)
Inventories.............................................................. (1,072) (59)
Other current assets..................................................... (711) (554)
Accounts payable......................................................... 391 (273)
Other current liabilities................................................ (72) (1,863)
Current taxes payable.................................................... 674 1,148
Other noncurrent assets and liabilities.................................. 73 (291)
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Net cash used in operating activities.................................... (1,241) (359)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment.................................. (970) (582)
Proceeds from sale of property, plant and equipment......................... 47 40
Purchases of marketable securities held-to-maturity......................... (5,480) 0
Proceeds from maturities of marketable securities held-to-maturity.......... 3,740 5,996
-------- -------
Net cash (used in) provided by investing activities......................... (2,663) 5,454
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under capital lease obligation........................... (40) (26)
(Repurchases and cancellations) proceeds from issuance of common
stock under stock option plan ........................................... (338) 563
Dividends paid.............................................................. (435) (460)
Purchases of treasury stock................................................. 0 (7,497)
-------- -------
Net cash used in financing activities....................................... (813) (7,420)
-------- -------
Net decrease in cash and cash equivalents................................... (4,717) (2,325)
Cash and cash equivalents, beginning of period.............................. 14,232 3,794
-------- -------
Cash and cash equivalents, end of period.................................... $ 9,515 $ 1,469
======== =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid........................................................... $ (23) $ (1)
Interest paid............................................................... $ 1 $ 2
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
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LINDSAY MANUFACTURING CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) GENERAL
The consolidated financial statements included herein are presented in
accordance with the requirements of Form 10-Q and consequently do not include
all of the disclosures normally required by generally accepted accounting
principles or those normally made in the registrant's annual Form 10-K filing.
These consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Lindsay Manufacturing
Co., (Lindsay) August 31, 1999 Annual Report to Shareholders.
In the opinion of management the unaudited consolidated financial
statements of Lindsay reflect all adjustments of a normal recurring nature
necessary to present a fair statement of the results of operations for the
respective interim periods. The results for interim periods are not necessarily
indicative of trends or results expected for a full year.
(2) CASH EQUIVALENTS, MARKETABLE SECURITIES AND LONG-TERM MARKETABLE SECURITIES
Cash equivalents are included at cost, which approximates market. At November
30, 1999, Lindsay's cash equivalents were held primarily by one financial
institution. Marketable securities and long-term marketable securities are
categorized as held-to-maturity. Investments in the held-to-maturity category
are carried at amortized cost. Lindsay considers all highly liquid investments
with original maturities of three months or less to be cash equivalents, while
those having maturities in excess of three months are classified as marketable
securities or as long-term marketable securities when maturities are in excess
of one year. Marketable securities and long-term marketable securities consist
of investment-grade municipal bonds.
The total amortized cost, gross unrealized holding gains, gross
unrealized holding losses, and aggregate fair value for held-to-maturity
securities are $47,173,000, $79,000, $90,000 and $47,162,000, respectively. In
the held-to-maturity category at November 30, 1999, $22,700,000 in marketable
securities mature within one year and $24,473,000 in long term marketable
securities have maturities ranging from 12 to 42 months. The Company is not
subject to material market risks with respect to its marketable securities.
(3) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined by the
last-in, first-out (LIFO) method for all inventories.
<TABLE>
<CAPTION>
NOVEMBER NOVEMBER AUGUST
$ IN THOUSANDS 1999 1998 1999
- --------------- ---- ---- ----
<S> <C> <C> <C>
First-in, first-out (FIFO) inventory .................................... $ 13,054 $14,565 $ 11,983
LIFO reserves ........................................................... (3,388) (3,373) (3,389)
Obsolescence reserve .................................................... (935) (935) (935)
-------- ------- --------
Total Inventories ....................................................... $ 8,731 $10,257 $ 7,659
======== ======= ========
</TABLE>
The estimated percentage distribution between major classes of inventory before
reserves is as follows:
<TABLE>
<CAPTION>
NOVEMBER NOVEMBER AUGUST
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Raw materials ........................................................... 12% 18% 12%
Work in process ......................................................... 5% 6% 5%
Purchased parts ......................................................... 38% 35% 38%
Finished goods .......................................................... 45% 41% 45%
</TABLE>
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(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant, equipment and capitalized lease assets are stated at cost.
<TABLE>
<CAPTION>
NOVEMBER NOVEMBER AUGUST
$ IN THOUSANDS 1999 1998 1999
- --------------- ---- ---- -----
<S> <C> <C> <C>
Plant and equipment:
Land ............................................................... $ 70 $ 70 $ 70
Buildings .......................................................... 5,866 5,043 5,781
Equipment .......................................................... 28,251 26,164 27,841
Other............................................................... 5,437 4,520 5,004
Capital lease:
Equipment .......................................................... 458 458 458
-------- ------- --------
Total plant, equipment and capital lease ................................ 40,082 36,255 39,154
Accumulated depreciation and amortization:
Plant and equipment ................................................ (24,165) (22,121) (23,520)
Capital lease ...................................................... (244) (140) (218)
-------- ------- --------
Property, plant and equipment, net ..................................... $ 15,673 $13,994 $ 15,416
======== ======= ========
</TABLE>
(5) CREDIT ARRANGEMENTS
Lindsay entered into an agreement with a commercial bank in December 1999 for a
$10.0 million unsecured revolving line of credit through December 31, 2000.
Proceeds from this line of credit, if any, are to be used for working capital
and general corporate purposes including stock repurchases. Borrowings will bear
interest at a rate equal to one percent per annum under the rate in effect from
time to time and designated by the commercial bank as its National Base Rate. No
covenants limit the ability of Lindsay to merge or consolidate, to encumber
assets, to sell significant portions of its assets, to pay dividends, or to
repurchase common stock.
(6) CONTINGENCIES
The Company and its subsidiaries are defendants in various legal actions arising
in the ordinary course of their business activities. In the opinion of
management, resolution of these legal actions will not result in a material
adverse effect on Lindsay's consolidated financial position, results of
operations or cash flows.
(7) NET EARNINGS PER SHARE
Basic net earnings per share is computed by dividing net earnings by the
weighted average number of shares outstanding. Diluted net earnings per share
includes the dilutive effect of stock options.
Options to purchase 140,250 shares of common stock at a weighted
average price of $26.41 per share were outstanding during the first quarter of
fiscal year 2000, but were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market price of
the common shares. These options expire between September 3, 2007 and September
3, 2008.
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(8) INDUSTRY SEGMENT INFORMATION
The Company adopted SFAS No. 131 "Disclosures About Segments of an Enterprise
and Related Information" in fiscal year 1999 which changes the way the Company
reports information about its operating segments.
The Company manages its business activities in two reportable segments:
Irrigation: This segment includes the manufacture and marketing of
center pivot and lateral move irrigation equipment.
Diversified Products: This segment includes providing outsource
manufacturing services and selling large diameter steel tubing.
The accounting policies of the two reportable segments are the same as
those described in the "Accounting Policies" in Note A. of the financial
statements included in the Form 10-K for the fiscal year ended August 31, 1999.
The Company evaluates the performance of its operating segments based on segment
sales, gross profit and operating income and does not include general or
administrative expenses (which include corporate expenses) or engineering and
research expenses, interest income net, non-operating income and expenses,
income taxes, and assets. Operating income does include selling and other
overhead charges directly attributable to the segment. There are no intersegment
sales.
Summarized financial information concerning the Company's reportable segments is
shown in the following table:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
NOVEMBER NOVEMBER
$ IN THOUSANDS 1999 1998
- -------------- ---- ----
<S> <C> <C>
Operating revenues:
Irrigation......................................................... $ 22,156 $ 17,711
Diversified products............................................... 2,347 3,931
--------- --------
Total operating revenues.............................................. $ 24,503 $ 21,642
========= ========
Operating income:
Irrigation......................................................... $ 3,958 $ 2,351
Diversified products............................................... 421 1,066
--------- --------
Segment operating income.............................................. 4,379 3,417
Unallocated general & administrative and
engineering & research expenses.................................... 2,701 2,217
Interest and other income, net........................................ 755 903
--------- --------
Earnings before income taxes.......................................... $ 2,433 $ 2,103
========= ========
Geographic area revenues:
Europe & Africa.................................................... $ 689 $ 1,188
Mexico & Latin America............................................. 1,667 1,917
Other export....................................................... 2,745 1,905
United States...................................................... 19,402 16,632
--------- --------
Total revenues..................................................... $ 24,503 $ 21,642
========= ========
</TABLE>
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
The following table provides highlights of the first quarter of fiscal year 2000
compared with the first quarter of fiscal year 1999 of Lindsay's consolidated
operating results displayed in the Consolidated Statements of Operations and
should be read together with the industry segment information in Note (8) to the
consolidated financial statements.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
-------------------------------------------------
PERCENT INCREASE
($ IN THOUSANDS) 11/30/99 11/30/98 (DECREASE)
- ---------------- -------- -------- ----------
<S> <C> <C> <C>
Consolidated
Operating Revenues....................................... $24,503 $ 21,642 13.2%
Cost of Operating Revenues............................... $18,763 $ 16,964 10.6
Gross Profit............................................. $ 5,740 $ 4,678 22.7
Gross Margin............................................. 23.4% 21.6%
Selling, Eng. & Research, and G&A Expense................ $ 4,062 $ 3,478 16.8
Operating Income......................................... $ 1,678 $ 1,200 39.8
Operating Margin......................................... 6.8% 5.5%
Interest Income, net..................................... $ 719 $ 741 (3.0)
Other Income, net........................................ $ 36 $ 162 (77.8)
Income Tax Provision..................................... $ 730 $ 673 8.5
Effective Income Tax Rate................................ 30.0% 32.0%
Net Earnings............................................. $ 1,703 $ 1,430 19.1
Irrigation Equipment Segment (See Note (8))
Operating Revenues....................................... $22,156 $ 17,711 25.1
Operating Income......................................... $ 3,958 $ 2,351 68.4
Operating Margin......................................... 17.9% 13.3%
Diversified Products Segment (See Note (8))
Operating Revenues....................................... $ 2,347 $ 3,931 (40.3)
Operating Income......................................... $ 421 $ 1,066 (60.5%)
Operating Margin......................................... 17.9% 27.1%
</TABLE>
As the above table displays, operating revenues for the three month
period ended November 30, 1999, were 13.2 percent ($2.9 million) higher than the
first quarter of fiscal year 1999. This increase was the net result of 38
percent ($4.5 million) increase in U.S. irrigation equipment revenues, a 2
percent ($0.1 million) increase in export irrigation equipment revenues, a 40
percent ($1.6 million) reduction in diversified products revenues and a 13
percent ($0.1 million) reduction in other revenues.
Lindsay believes that the long-term demand drivers for center pivot
irrigation equipment consisting of the need for farmers to conserve water,
energy and labor while at the same time improving crop yields and increasing
crop production remain in place in its U.S. market and in its markets outside
the U.S. Results for Lindsay's first quarter of fiscal year 2000 reflect a
favorable comparison with the first quarter of fiscal year 1999 when uncertainty
due to lower agricultural commodity prices caused many farmers to postpone
capital equipment purchases. The Company believes that the comparatively
stronger first quarter fiscal year 2000 performance reflects the U.S. farmers'
adjustment to lower agricultural commodity prices, as well as to their ability
to leverage government programs and crop marketing strategies. Although prices
for crops including corn, wheat and soybeans are forecasted to continue at
levels lower than their historical averages, the USDA projects 1999's net cash
farm income to total $57.9 billion, approximately $3 billion higher than 1998's
$54.9 billion.
Export irrigation equipment revenues during the first quarter of fiscal
year 2000 were slightly higher primarily due to increased whole unit sales to
our irrigation equipment dealers or their customers in Australia and New
Zealand. Revenues from sales to our Canadian dealers were only slightly greater
than that of the first quarter of the fiscal year 1999. Revenues from sales to
our Latin American and European and South and Central African markets were lower
during the quarter as compared to the first quarter of fiscal year 1999.
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<PAGE> 10
First quarter fiscal year 2000 diversified products revenues were lower
primarily due to reduced sales of agricultural related outsource manufacturing
products to Deere & Company and New Holland North America, Inc. Large diameter
tubing revenues during the first quarter of fiscal year 2000 were only slightly
lower than that of the prior year's first quarter.
Gross margin for the three months ended November 30 1999, was 23.4
percent as compared to 21.6 percent for the first quarter of last year. Fiscal
year 2000's gross margin was favorably impacted by overhead rate variances that
were less negative as the result of an increased level of manufacturing as
compared to the first quarter of fiscal year 1999. Raw material prices were
largely stable or only slightly higher (i.e., steel and zinc) during the
quarter.
First quarter fiscal year 2000's selling, engineering and research and
general and administrative (SG&A) expenses of $4.1 million (16.6% as a percent
of sales) were higher than the first quarter of fiscal year 1998's SG&A expenses
of $3.5 million (16.1% as a percent of sales). Increased SG&A salary and wage
costs (due primarily to higher bonus earnout accruals), depreciation,
professional and legal fees, and group insurance expenses were partially offset
by reduced product advertising costs.
The $0.1 million decline in other income during the first quarter of
fiscal year 2000 as compared to the prior year's comparative period was due to a
reduction of the State of Nebraska economic development sales tax credit.
The effective tax rate for the first quarter of fiscal year 2000 was
30.0 percent as compared to 32.0 percent rate for the comparative period of
fiscal year 1999. Due to the federal income tax exempt status of interest income
from its municipal bond investments and the foreign sales corporation federal
tax provisions as they relate to export sales, Lindsay benefits from an
effective tax rate which is lower than the combined federal and state statutory
rates, currently estimated at 36.4 percent.
FINANCIAL POSITION AND LIQUIDITY
The discussion of financial position and liquidity focuses on the balance sheet
and statement of cash flows. Lindsay requires cash for financing its
receivables, inventories, capital expenditures, stock repurchases and dividends.
Over the years, Lindsay has financed its growth through funds provided by
operations. Cash flows used in operations totaled $1.2 million for the first
three months of fiscal year 2000 compared to $0.4 million for the first three
months of fiscal year 1999. The use of cash flows in operating activities for
fiscal year 2000 were primarily due to increased receivables and increased
inventories. Fiscal year 1999 cash flows used in operating activities were
principally due to decreased other current liabilities partially offset by
increased current taxes payable.
Receivables of $16.0 million at November 30, 1999 increased $3.1
million from $12.9 million at August 31, 1999 and increased $1.1 million from
$14.9 million at November 30, 1998. The increases were principally due to the
higher level of U.S. irrigation equipment sales activity during November 1999 as
compared to August 1999 and November 1998. Inventories at November 30, 1999
totaled $8.7 million, higher than their $7.7 million balance at August 31, 1999
and lower than their $10.3 million balance at November 30, 1998. Inventory was
reduced from November 1998 by using improved inventory planning systems and
criteria.
Current liabilities of $17.7 million at November 30, 1999 are higher
than their $16.8 million balance at August 31, 1999 and their $15.8 million
balance at November 30, 1998. The increase from August 31, 1999 is principally
due to increased trade payables and a higher accrual for taxes payable. The
increase from November 30, 1998 is primarily due to higher accruals for payroll
and vacation, and taxes payable.
Cash flows used in investing activities of $2.7 million for the first
three months of fiscal year 2000 compared to cash flows provided by investing
activities of $5.5 million for the first three months of fiscal year 1999. The
cash flows used in investing activities in fiscal year 2000 were attributable to
capital expenditures and purchases of marketable securities partially offset by
proceeds from maturities of marketable securities. Fiscal year 1999 cash flows
provided by investing activities was primarily due to proceeds from maturities
of marketable securities, partially offset by capital expenditures.
Lindsay's cash and short-term marketable securities totaled $32.2
million at November 30, 1999, as compared to $32.5 million at August 31, 1999
and $17.5 million at November 30, 1998. At November 30, 1999, Lindsay had $24.5
million invested in long-term marketable securities which represent intermediate
term (12 to 42 months maturities) municipal debt, as compared to $27.2 million
at August 31, 1999 and from $39.8 million at November 30, 1998.
Cash flows used in financing activities of $0.8 million for the first
three months of fiscal year 2000 decreased from $7.4 million for the three
months of fiscal year 1999. The cash flows used in financing activities in
fiscal year 2000 was primarily attributable to cancellations to pay for the
exercise price or required taxes of common stock under Lindsay's employee stock
option plan. Fiscal year 1999 cash flows used in financing activities were
primarily attributable to
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<PAGE> 11
purchases of treasury stock and dividends paid partially offset by proceeds from
the issuance of common stock under Lindsay's employee stock option plan.
Lindsay's equity increased to $83.6 million at November 30, 1999 from
$82.7 million at August 31, 1999 due to its net earnings of $1.7 million, less
$0.4 million from the cancellations- (net) of common stock under Lindsay's
employee stock option plan, less dividends paid of $0.4 million. Lindsay's
equity at November 30, 1998 was $84.9 million.
Capital expenditures of $1.0 million during the first three months of
fiscal year 2000 increased from $0.6 million during the first three months of
fiscal year 1999. Fiscal year 2000 capital expenditures were used primarily for
upgrading manufacturing plant and equipment and to further automate Lindsay's
facility. Capital expenditures for fiscal year 2000 are expected to be
approximately $3.0 to $4.0 million and will be used to improve the company's
existing facilities, expand its manufacturing capabilities and increase
productivity.
Lindsay believes its capitalization (including cash and marketable
securities balances), operating cash flow and potential line of credit are
sufficient to cover expected working capital needs, planned capital
expenditures, dividends and continued repurchases of common stock.
SEASONALITY
Irrigation equipment sales are seasonal by nature. Farmers generally order
systems to be delivered and installed before the growing season. Shipments to
U.S. customers usually peak during Lindsay's second and third quarters for the
spring planting period. Lindsay's expansion into diversified products
complements its irrigation operations by using available capacity and reducing
seasonality.
OTHER FACTORS
Lindsay's domestic and international irrigation equipment sales are highly
dependent upon the need for irrigated agricultural production which, in turn,
depends upon many factors including total worldwide crop production, the
profitability of agricultural production, agricultural commodity prices,
aggregate net cash farm income, governmental policies regarding the agricultural
sector, water and energy conservation policies and the regularity of rainfall.
Approximately 21% and 23% of Lindsay's operating revenues for the first
quarter of fiscal year 2000 and 1999 respectively, were generated from export
sales. For the full year of 1999 approximately 19% of Lindsay's operating
revenues were generated from export sales. Lindsay does not believe it has
significant exposure to foreign currency translation risks because its export
sales are all in U.S. dollars and are generally all shipped against prepayments
or U.S. bank confirmed irrevocable letters of credit or other secured means.
YEAR 2000 ISSUES
As of January 10, 2000 Lindsay has had no problems associated with Year 2000
issues for its mission critical components of the Company's Information
Technology ("IT") software and non-IT systems, or the Company's critical
suppliers and third-party providers. Lindsay does not expect problems associated
with Year 2000 mission critical issues in the future.
Concerning Forward-Looking Statements - This Report on Form 10-Q,
including the Management's Discussion and Analysis, Year 2000 and other
sections, contains forward-looking statements that are subject to risks and
uncertainties and which reflect management's current beliefs and estimates of
future economic circumstances, industry conditions, Company performance and
financial results. Forward-looking statements include the information concerning
possible or assumed future results of operations of the Company and those
statements preceded by, followed by or including the words "future", "position",
"anticipate(s)", "expect", "believe(s)", "see", "plan", "further improve",
"outlook", "should", or similar expressions. For these statements, the Company
claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. You should
understand that the following important factors, in addition to those discussed
elsewhere in this document, could affect the future results of the Company and
could cause those results to differ materially from those expressed in these
forward-looking statements: availability of and price of raw materials, product
pricing, competitive environment and related domestic and international market
conditions, operating efficiencies and actions of domestic and foreign
governments. Any changes in such factors could result in significantly different
results.
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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not subject to material market risks with respect to its
marketable securities.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Lindsay is a party to a number of lawsuits in the ordinary course of its
business. Management does not believe that these lawsuits, either individually
or in the aggregate, are likely to have a material adverse effect on Lindsay's
consolidated financial condition, results of operations or cash flows.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -
4 - Specimen Form of Common Stock Certificate incorporated by
reference to Exhibit 4 to the Company's Report on Form 10-Q for
the fiscal quarter ended November 30, 1997
10(a) - Employment Agreement between the Company and Gary D. Parker,
effective December 1, 1999.
27 - Financial Data Schedule
(b) Reports on form 8-K -
No Form 8-K was filed during the quarter ended November 30, 1999.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on this 11th day of
January, 2000.
LINDSAY MANUFACTURING CO.
By: /s/ BRUCE C. KARSK
------------------------------------
Name: Bruce C. Karsk
Title: Director, Vice President-Finance, Treasurer
and Secretary;
Principal Financial and Accounting Officer
By: /s/ RALPH J. KROENKE
------------------------------------
Name: Ralph J. Kroenke
Title: Controller
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AGREEMENT
THIS AGREEMENT is effective as of the 1st day of December, 1999,
between Gary D. Parker ("PARKER") and Lindsay Manufacturing Co., a Delaware
corporation ("LINDSAY").
WHEREAS, PARKER, who currently serves as Chairman, President and Chief
Executive Officer of LINDSAY, has elected to retire early in order to pursue
other interests; and
WHEREAS, LINDSAY desires to obtain assurances that PARKER will remain
an employee of LINDSAY for a period of time on the terms set forth herein and
that he will not accept any position or engage in any activity which is directly
competitive in the irrigation business with the products, processes or business
of LINDSAY for a period of time thereafter; and
WHEREAS, PARKER is willing to accept such continued employment and to
agree not to enter into competition with LINDSAY for the compensation and upon
the terms set forth herein; and
WHEREAS, each party is willing to grant a release of claims which it
may have against the other party pursuant to the terms of the releases set forth
herein;
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT AND TERM. Upon the terms set out in this Agreement,
LINDSAY agrees to employ PARKER, and PARKER agrees to be so employed by LINDSAY,
in accordance with the following terms:
A. FULL-TIME EMPLOYMENT. PARKER will remain a full-time employee of
LINDSAY and will continue to serve as President and Chief Executive Officer
until the Annual Meeting of Stockholders on January 25, 2000 and thereafter
until his successor (including any interim successor) is selected by the Board
of Directors and assumes office or until August 31, 2000, whichever is sooner.
PARKER will not be nominated for re-election as a Director of LINDSAY and will
cease to serve as Chairman of the Board at the next Annual Meeting of
Stockholders of LINDSAY. Thereafter, PARKER shall report to the Chairman of the
Board and to the Board.
While he remains a full-time employee of LINDSAY and continues to
serve as President and Chief Executive Officer:
i. Parker agrees to devote his best efforts to such employment.
His duties shall be rendered at Lindsay, Nebraska, and at such
other place or places agreeable to PARKER within or without
the State of Nebraska, as
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LINDSAY shall in good faith require or as the interest, needs,
business or opportunities of LINDSAY shall require.
ii. PARKER shall devote his normal and regular business time,
attention, knowledge and skill to the business and interests
of LINDSAY, and LINDSAY shall be entitled to all of the
benefits, profits or other issues arising from or incident to
all work, services and advice of PARKER performed for LINDSAY.
iii. PARKER shall have the right to devote such amounts of his time
which are not required for the full and faithful performance
of his duties hereunder to any outside activities and
businesses which are not then being engaged in by LINDSAY and
which shall not otherwise interfere with the performance of
his duties hereunder.
iv. Absent prior approval from the Board of Directors, PARKER:
(a) shall not knowingly make investments in businesses which
do business with or which are competitive with LINDSAY, and
(b) shall not knowingly engage in any activity which
constitutes a conflict of interest with his employment at
LINDSAY.
Effective when he ceases to serve as President and Chief Executive
Officer, PARKER shall automatically without further action on his part be deemed
to resign from all other positions of responsibility and authority, whether as
an officer, director, manager, trustee, administrator or otherwise, at LINDSAY
or any of its subsidiaries and affiliates. To the extent necessary, PARKER
agrees upon LINDSAY's request to execute any and all documents as may be
necessary or desirable to confirm his resignation from such positions.
B. CONSULTING PERIOD. PARKER will remain an employee of LINDSAY
in a consulting capacity for a period (the "Consulting Period") commencing when
he ceases to serve as President and Chief Executive Officer under Paragraph 1A
above and ending on August 31, 2002. During this Consulting Period, PARKER
agrees to be available on a full-time basis during the first month after he
ceases to serve as President and Chief Executive Officer. Thereafter, PARKER
agrees to be available, upon reasonable notice and at reasonable times which
shall be mutually agreed upon by the parties, to consult with and assist LINDSAY
for (i) up to a maximum of 160 hours during the balance of the first year of the
Consulting Period and (ii) up to a maximum of 160 hours during the remainder of
the Consulting Period. For this purpose any service or travel for LINDSAY shall
be counted based on the actual hours expended; provided that any such service or
travel on a given day shall be deemed to be not less than one hour or more than
eight hours, regardless of the actual time spent by PARKER during such day.
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<PAGE> 3
During the Consulting Period, PARKER shall assist LINDSAY to
maintain good relationships with its dealers, customers, suppliers and employees
and shall provide such other consulting and assistance consistent with PARKER's
experience as may be requested by the Chief Executive Officer or the Chairman of
the Board. In addition, PARKER shall assist LINDSAY and cooperate in preparing
for any and all litigation, arbitration proceedings, investigations and other
legal proceedings (collectively, "Legal Proceedings") relating to matters which
occurred during his tenure with LINDSAY and as to which LINDSAY may reasonably
request his assistance. Without limiting the generality of the foregoing, PARKER
shall (i) make himself available at such times as may reasonably be requested
for depositions in connection with any Legal Proceedings, (ii) make himself
available to testify in any Legal Proceedings, and (iii) assist LINDSAY in
preparing responses to requests for written discovery in any Legal Proceedings.
PARKER shall have the right to accept other full-time employment or
engage in other activities beginning at any time after the first month of the
Consulting Period, provided that such other employment or activities shall not
excuse PARKER from his obligations to provide consulting services and assistance
to LINDSAY in accordance with the provisions of this Paragraph 1B and shall not
result in a breach of the non-competition provisions of Paragraph 4 below.
Absent prior approval from the Board of Directors, PARKER shall not knowingly
engage in any activity which constitutes a conflict of interest with his
services as a consultant to LINDSAY.
2. COMPENSATION THROUGH AUGUST 31, 2000. As compensation for the
services to be rendered by PARKER, LINDSAY agrees to provide PARKER with the
following through August 31, 2000:
A. SALARY. PARKER shall continue to receive salary at the annual
rate of $367,047.
B. OTHER BENEFITS. PARKER shall also be entitled to receive the
fringe benefits and to participate in the benefit programs of LINDSAY which are
listed below:
- Vacation
- Life Insurance
- Long Term Disability Insurance
- Club Dues
- Company Automobile
- Annual Physical and Medical Check Up
- Medical Insurance
- Financial and accounting assistance up to $5,000 annually
- Profit Sharing
- Directors and Officers Liability Insurance
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<PAGE> 4
Notwithstanding the foregoing, after PARKER ceases to serve as President and
Chief Executive Officer, he will no longer participate in LINDSAY's group
medical or dental insurance coverage, but LINDSAY will use reasonable efforts to
assist PARKER to obtain individual medical and dental insurance coverage for
PARKER and his spouse which is generally comparable to LINDSAY's group medical
and dental insurance coverage. At his option, PARKER may cease to participate in
LINDSAY's group medical and dental insurance coverage and obtain such individual
medical and dental insurance coverage while he continues to serve as President
and Chief Executive Officer. LINDSAY agrees to reimburse PARKER up to an
aggregate limit (which includes any gross-up payments to cover taxes) of $25,000
for each full calendar year (or a pro-rated amount for a partial year) for
premiums paid by PARKER for such individual medical and dental insurance
coverage for PARKER and his spouse and for the cost of an annual physical and
medical check-up for PARKER (grossed-up for any federal and state taxes which
are payable by PARKER on such reimbursements). Further, PARKER shall only be
eligible to make or receive contributions under LINDSAY's Profit Sharing Plan to
the extent permitted under the terms thereof.
PARKER shall no longer be eligible to participate in the Salaried
Severance program or to accrue additional benefits under the Supplemental
Retirement Plan, except as contemplated by Paragraph 5E below. He shall not be
eligible to earn any bonuses or supplemental compensation or to receive any new
awards or grants of stock options or restricted stock, but shall only be
entitled to receive the benefits which are listed above.
3. COMPENSATION FROM SEPTEMBER 1, 2000 THROUGH AUGUST 31, 2002. As
compensation for the consulting services and assistance to be rendered by PARKER
as an employee from September 1, 2000 through August 31, 2002, LINDSAY agrees to
pay PARKER a salary at the annual rate of $367,047. PARKER will be entitled to
receive his full salary irrespective of whether LINDSAY elects to utilize his
services for the maximum time permitted under Paragraph 1B. LINDSAY will use
reasonable efforts to assist PARKER to obtain or maintain individual medical and
dental insurance coverage for PARKER and his spouse which is generally
comparable to LINDSAY's group medical and dental insurance coverage. LINDSAY
agrees to reimburse PARKER during the Consulting Period up to an aggregate limit
(which includes any gross-up payments to cover taxes) of $25,000 for each full
calendar year (or a pro-rated amount for a partial year) for premiums paid by
PARKER for such individual medical and dental insurance coverage for PARKER and
his spouse and for the cost of an annual physical and medical check-up for
PARKER (grossed-up for any federal and state taxes which are payable by PARKER
on such reimbursements), provided that such reimbursements for medical and
dental insurance coverage and an annual physical and medical check-up will
terminate if he becomes eligible to obtain medical insurance coverage as a
result of other full-time employment. In addition, LINDSAY will continue to
provide $250,000 of life insurance coverage for PARKER, so long as such coverage
is provided for senior executives of LINDSAY, which will terminate if he becomes
eligible to obtain life insurance coverage as a result of other full-time
employment. PARKER will not be eligible for any other benefits, other than
eligibility to make or receive
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<PAGE> 5
contributions under LINDSAY's Profit Sharing Plan to the extent permitted under
the terms thereof.
4. NON-COMPETITION; COMPENSATION. During the Consulting Period and for
a period (the "Non-Competition Period") of four (4) years after the end of the
Consulting Period, PARKER will not engage in, work for (directly or indirectly)
or contribute his knowledge to any person or entity, company or work which is
directly competitive in the irrigation business with the products, processes or
business of LINDSAY.
During the four-year Non-Competition Period, PARKER shall be
entitled to receive non-competition payments at an annual rate of $367,047 from
September 1, 2002 through August 31, 2004 and $115,000 from September 1, 2004
through August 31, 2006, which shall be payable on a monthly basis at the end of
each month during the Non-Competition Period. LINDSAY will use reasonable
efforts to assist PARKER to maintain individual medical and dental insurance
coverage for PARKER and his spouse which is generally comparable to LINDSAY's
group medical and dental insurance coverage. LINDSAY agrees to reimburse PARKER
during the Non-Competition Period up to an aggregate limit (which includes any
gross-up payments to cover taxes) of $25,000 for each full calendar year (or a
pro-rated amount for a partial year) for premiums paid by PARKER for such
individual medical and dental insurance coverage for PARKER and his spouse and
for the cost of an annual physical and medical check-up for PARKER (grossed-up
for any federal and state taxes which are payable by PARKER on such
reimbursements), provided that such reimbursements for medical and dental
insurance coverage and an annual physical and medical check-up will terminate if
he becomes eligible to obtain medical insurance coverage as a result of other
full-time employment. In addition, LINDSAY will continue to provide $250,000 of
life insurance coverage for PARKER, so long as such coverage is provided for
senior executives of LINDSAY, which will terminate if he becomes eligible to
obtain life insurance coverage as a result of other full-time employment. PARKER
will not be eligible to receive any other benefits during the Non-Competition
Period.
Notwithstanding any other provision of this Agreement to the
contrary, if PARKER commits a breach of the non-competition provisions of this
Paragraph 4 at any time, PARKER shall not thereafter be entitled to receive any
further payments or benefits during the Consulting Period or the Non-Competition
Period under Paragraphs 3 or 4 of this Agreement.
5. OTHER FINANCIAL TERMS.
A. BONUS FOR FISCAL YEAR 1999. PARKER has earned the maximum
annual bonus for fiscal year 1999 of $200,000. This amount will be paid to
PARKER immediately following execution of this Agreement.
B. SUPPLEMENTAL COMPENSATION FOR FISCAL YEAR 1998. PARKER is
entitled to receive the deferred supplemental compensation earned for fiscal
year 1998 of
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<PAGE> 6
$200,000 (plus interest thereon at 6.50% per annum until paid). This amount will
be paid to PARKER immediately following execution of this Agreement.
C. SUPPLEMENTAL COMPENSATION FOR FISCAL YEAR 1999. PARKER has
earned supplemental compensation for fiscal year 1999 in the amount of $200,000.
This amount (plus interest thereon at 5.28% per annum computed in accordance
with the past practice of LINDSAY) will be vested and paid to PARKER on
September 1, 2000, if he continues to be employed by LINDSAY (including as a
consultant) at that time.
D. RESTRICTED STOCK. PARKER has earned 50,625 shares of
performance-based restricted stock for fiscal year 1999. All restricted stock
which has previously been awarded to PARKER will continue to vest while PARKER
continues to be employed with LINDSAY (including as a consultant). PARKER will
not be eligible to earn any new restricted stock awards. PARKER has a total of
121,500 shares of restricted stock (including the performance-based grant of
50,625 shares for fiscal year 1999) which are not yet vested, of which one-half
(60,750 shares) will vest in 2000 (10,125 shares in June and 50,625 shares in
September) and the other one-half (60,750 shares) will vest in 2001 (10,125
shares in June and 50,625 shares in September). All shares of restricted stock
held by PARKER will fully vest upon a "Change in Control," as such term is
defined in the Lindsay Manufacturing Co. Supplemental Retirement Plan.
E. SUPPLEMENTAL RETIREMENT PLAN. PARKER shall receive an early
retirement benefit under the Supplemental Retirement Plan in the amount of
$16,989.58 per month commencing on January 1, 2001, which shall be paid to
PARKER in monthly installments until his death. After PARKER's death, his
surviving spouse, if any, shall receive a survivor benefit of $8,494.79 per
month commencing on the later of the first day of the month following PARKER's
death or January 1, 2001, which shall be paid in monthly installments during the
lifetime of PARKER's surviving spouse, unless PARKER's surviving spouse is more
than ten years younger than PARKER, in which case his surviving spouse shall
receive monthly retirement benefits for a maximum of 15 years. If a "Change in
Control" (as defined in the Supplemental Retirement Plan) occurs, PARKER or his
surviving spouse may elect, within a 30-day period following the Change in
Control, to receive a lump sum benefit equal to the actuarial equivalent of the
remaining monthly benefits due, based upon mortality and interest rate
assumptions which are determined by the actuary for the Supplemental Retirement
Plan and apply to all participants in the Supplemental Retirement Plan. The
foregoing benefits shall be payable in lieu of any other benefits under the
Lindsay Manufacturing Co. Supplemental Retirement Plan and notwithstanding any
provisions contained therein to the contrary, including, without limitation, any
provisions for a greater supplemental retirement benefit or survivor benefit due
to inclusion of severance benefits or consulting or non-competition payments as
compensation or resulting from a Change of Control of LINDSAY. PARKER hereby
releases all claims to any other benefits under the Lindsay Manufacturing Co.
Supplemental Retirement Plan, except as set forth in this Paragraph 5E.
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F. SPLIT-DOLLAR LIFE INSURANCE POLICIES. PARKER and LINDSAY are
parties to split-dollar life insurance policies which are owned by PARKER and
collaterally assigned to LINDSAY which are identified on Exhibit A to this
Agreement. LINDSAY agrees to make additional premium payments on these policies
(approximately $100,000), as set forth on Exhibit A. LINDSAY shall be entitled
to recover the total premiums which it has paid on each insurance policy from
the death benefits which are payable under the policy upon PARKER's death or
from the cash surrender value upon any surrender of the policy. Neither LINDSAY,
PARKER nor any other owner of any of the insurance policies listed on Exhibit A
may make withdrawals or loans from the policies. PARKER will provide a
collateral assignment to LINDSAY from the owner of each insurance policy listed
on Exhibit A, substantially in the form of the collateral assignment for the
Security Life of Denver insurance policies or other form of collateral
assignment which is reasonably acceptable to LINDSAY. In addition, LINDSAY,
PARKER and the owner of each insurance policy listed on Exhibit A shall execute
a Memorandum of Understanding in the form attached as part of Exhibit A
confirming the death benefit which will be payable to LINDSAY under each such
insurance policy and the restriction on any withdrawals or loans under each such
insurance policy. If PARKER is unable to provide LINDSAY with such collateral
assignment executed by the owner and such a Memorandum of Understanding executed
by PARKER and the owner for any insurance policy listed on Exhibit A prior to
commencement of the Consulting Period, LINDSAY may withhold from payments
pursuant to Paragraphs 3 and 4 above amounts up to the total premiums which it
has paid on such insurance policy, whereupon LINDSAY shall release all rights to
any death benefit or other interest in such insurance policy and shall not be
obligated to make any further premium payments on such insurance policy. PARKER
will use reasonable efforts to obtain written confirmation acknowledging receipt
of a copy of the Memorandum of Understanding from the insurance company which
issued each insurance policy listed on Exhibit A and confirming that no
withdrawals or loans have been made under each insurance policy.
G. SUPPLEMENTAL DISABILITY INSURANCE POLICY. LINDSAY will cease
to pay premiums on PARKER's supplemental disability insurance policy after
PARKER ceases to be President and Chief Executive Officer, and PARKER will
retain ownership of this disability insurance policy.
H. AGREEMENT REGARDING HOME. The agreement relating to PARKER's
home dated February 7, 1997 is hereby terminated and shall have no further force
or effect. PARKER hereby releases all claims against LINDSAY under such
agreement.
I. STOCK OPTIONS. PARKER's existing stock options will remain
outstanding (subject to their original expiration dates) while he continues in
employment with LINDSAY (including as a consultant). PARKER will not be eligible
to receive any new stock option grants.
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<PAGE> 8
6. REMOVAL AS PRESIDENT AND CEO FOR CAUSE.
A. DEFINITION OF CAUSE. LINDSAY may remove PARKER as President
and Chief Executive Officer for cause if after the effective date of this
Agreement:
i. he commits a breach of his fiduciary duty of loyalty to
LINDSAY; or
ii. he commits acts or omissions regarding LINDSAY's business and
which are not in good faith or which involve intentional
misconduct, dishonesty, or a knowing violation of the law; or
iii. he engages in any transaction involving LINDSAY from which he
gains an improper personal benefit, which is not agreed to by
the Board of Directors of LINDSAY in advance of the
transaction; or
iv. he refuses to perform or neglects any of his material duties
under this Agreement; or
v. he breaches the provisions of this Agreement.
B. PROCEDURE. Prior to such removal for cause, LINDSAY shall
notify PARKER in writing of its intent to remove him as President and Chief
Executive Officer for cause, shall state the effective date of removal, shall
state the reason and give grounds therefor, and shall give PARKER five (5)
working days after receipt of such notice to explain his conduct to LINDSAY's
reasonable satisfaction, whereupon the removal for cause shall be final.
C. CONSEQUENCES OF REMOVAL FOR CAUSE. If PARKER is removed as
President and Chief Executive Officer for cause, he shall not be entitled to any
further compensation or benefits pursuant to Paragraph 2A, and the Consulting
Period shall commence immediately upon such removal.
7. TERMINATION OF EMPLOYMENT.
A. CONSULTING AND NON-COMPETITION PAYMENTS. PARKER (or his
beneficiary) will continue to be entitled to receive any remaining consulting
and non-competition payments when they otherwise would have been paid pursuant
to Paragraphs 2 and 3 of this Agreement following termination of his employment
(including as a consultant) initiated by LINDSAY for any reason (either with or
without cause) or due to PARKER's death or total and permanent disability, for
so long as PARKER complies (or prior to his death had complied) with the
non-competition restrictions of Paragraph 4 of this Agreement. PARKER will
forfeit any remaining consulting and non-competition payments under Paragraphs 2
and 3 if he voluntarily terminates employment or violates the non-competition
restrictions of Paragraph 4 of this Agreement.
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B. SUPPLEMENTAL COMPENSATION. Any supplemental compensation
described in Paragraph 5C which has not yet vested will become fully vested and
be immediately paid to PARKER if his employment (including as a consultant) is
terminated by LINDSAY without cause (as defined in Paragraph 6A) or due to
PARKER's death or total and permanent disability, but any supplemental
compensation which is not yet vested shall be forfeited if PARKER is removed as
President and Chief Executive Officer for cause pursuant to Paragraph 6 or
violates the non-competition restrictions of Paragraph 4.
C. RESTRICTED STOCK. Any restricted stock held by PARKER which
has not yet vested will become fully vested and shall be free of restrictions
and freely transferable if his employment (including as a consultant) is
terminated by LINDSAY without cause (as defined in Paragraph 6A) or due to
PARKER's death or total and permanent disability, but any restricted stock which
is not yet vested shall be forfeited if PARKER is removed as President and Chief
Executive Officer for cause pursuant to Paragraph 6 or violates the
non-competition restrictions of Paragraph 4.
8. BUSINESS OPPORTUNITIES. While he is employed by LINDSAY, PARKER
will make full and prompt written disclosure to LINDSAY of any business
opportunity of which he becomes aware and which relates to the business of
LINDSAY or any of its subsidiaries or affiliates.
9. INVENTIONS.
A. An "Invention" means any new or useful art, discovery,
contribution, finding, or improvement whether or not patentable, and all related
know-how.
B. "Copyright Works" are materials for which copyright protection
may be obtained, including but not limited to: literary works, computer
programs, artistic works, (including designs, graphs, drawings, blueprints and
other works), recordings, photographs, slides, motion pictures, and audio-visual
works.
C. Upon conception, all Inventions and Copyright Works described
herein shall become the property of LINDSAY whether or not patent or copyright
applications are filed on the subject matter of the conception. PARKER will
communicate to LINDSAY promptly and fully all Inventions, or suggestions
(whether or not patentable), and all Copyright Works made or conceived by PARKER
(whether made or conceived solely by PARKER or jointly with others) during the
period of PARKER's employment with LINDSAY or in the two years following
cessation of employment: (a) which correspond to the business, work or
investigations of LINDSAY at the time of conception, or (b) which result from or
are suggested by any work which PARKER has done or may do for or on behalf of
LINDSAY, or (c) which are developed, tested, improved or investigated either in
part or entirely on time for which PARKER was paid by LINDSAY or using any
resources of LINDSAY.
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D. PARKER will assign to LINDSAY his entire right, title and
interest in all Inventions and Copyright Works: (a) which relate in any way to
the actual or anticipated business of LINDSAY, or (b) which relate in any way to
the actual or anticipated research or development of LINDSAY, or (c) which is
suggested by or results from any task assigned to PARKER on behalf of LINDSAY.
PARKER also will execute at any time during or after his employment an
assignment for each such Invention or Copyright Work as LINDSAY may request and
on such documents as LINDSAY may provide. PARKER will promptly and fully assist
LINDSAY during and subsequent to PARKER's employment in every lawful way without
reimbursement other than his normal compensation as an employee of LINDSAY and
other than a reasonable payment for time involved in the event his employment
with LINDSAY has terminated, but at the expense of LINDSAY, to obtain for the
benefit of LINDSAY patents, copyrights, mask work protection or other
proprietary rights for Inventions or Copyright Works.
10. CONFIDENTIALITY.
A. PARKER will not at any time during or after his employment by
LINDSAY, directly or indirectly, divulge, disclose or communicate to any person,
firm or corporation in any manner whatsoever, other than in the normal course of
performing his duties for LINDSAY, any Confidential Information. While engaged
by LINDSAY, PARKER may only use Confidential Information for a purpose which is
necessary to the carrying out of PARKER's duties as an employee or director of
LINDSAY, and PARKER may not make use of any Confidential Information of LINDSAY
after he is no longer an employee or director of LINDSAY.
B. PARKER agrees that the following shall be considered
Confidential Information: all non-public and internal information, whether
written or otherwise, regarding LINDSAY's business (or business of any
subsidiary or affiliate of LINDSAY), including but not limited to information
regarding customers, customer lists, employees, employee salaries, costs,
prices, earnings, and any financial or cost accounting reports, products,
services, formulae, compositions, machines, equipment, apparatus, systems,
manufacturing procedures, operations, potential acquisitions, new location
plans, prospective and executed contracts and other business arrangements, and
sources of supply.
C. PARKER agrees that all such information is a trade secret
owned exclusively by LINDSAY which shall at all times be kept confidential.
D. PARKER further agrees that he will, upon termination of his
employment with LINDSAY, return to LINDSAY all books, records, lists and other
written, typed or printed materials, whether furnished by LINDSAY or prepared by
PARKER, which contain any Confidential Information, and PARKER agrees that he
will neither make nor retain any copies of such materials after termination of
employment.
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11. SOLICITATION OF EMPLOYEES. While he is employed by LINDSAY
(including as a consultant) and during the Non-Competition Period, PARKER will
not, directly or indirectly, either as an individual, proprietor, stockholder,
partner, officer, director, employee or otherwise, solicit any officer,
director, employee or other individual:
A. to leave his or her employment or position with LINDSAY,
B. to compete with the business of LINDSAY, or
C. to violate the terms of any employment, non-competition or
similar agreement with LINDSAY.
12. REMEDIES; SURVIVAL OF PARKER'S COVENANTS.
A. Without limiting the rights of LINDSAY to pursue all other
legal and equitable rights available to it for any violation of the covenants of
PARKER contained herein, it is agreed that: (a) the services to be rendered by
PARKER under this Agreement are of a special, unique, unusual and extraordinary
character which gives them a peculiar value, and the loss of such services can
not be reasonably and adequately compensated in damages in an action at law, and
(b) remedies other than injunctive relief can not fully compensate LINDSAY for
violations of Paragraphs 1, 4, 8, 9, 10 and 11 of this Agreement; accordingly,
LINDSAY shall be entitled to injunctive relief to prevent violations of such
paragraphs or continuing violations thereof.
B. All of PARKER's covenants in and obligations under Paragraphs
4, 9, 10 and 11 of this Agreement shall continue in effect notwithstanding any
termination of PARKER's employment, whether by LINDSAY or by PARKER, upon
expiration or otherwise, and whether or not pursuant to the terms of this
Agreement.
13. PARKER EXPENSES. LINDSAY shall pay PARKER's reasonable airline
fare, hotel bills, and other necessary and proper expenses when traveling on or
otherwise performing LINDSAY's business, provided that PARKER furnishes LINDSAY
with appropriate supporting documentation of such expenses in accordance with
LINDSAY's applicable procedures. During the Consulting Period, PARKER will only
be reimbursed for reasonable business expenses incurred in connection with
LINDSAY's business which are authorized in advance and approved by LINDSAY's
Chief Executive Officer.
14. RELEASE BY PARKER. As a material inducement to LINDSAY to enter
into this Agreement, PARKER hereby irrevocably and unconditionally releases,
acquits and forever discharges LINDSAY and each of LINDSAY's past, present and
future owners, stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, divisions,
subsidiaries and affiliates (and all past, present and future owners,
stockholders, predecessors, successors, assigns, agents, directors, officers,
employees, representatives and attorneys of such divisions, subsidiaries and
affiliates), and all persons acting
11
<PAGE> 12
by, through, under or in concert with any of them (collectively, the "Company
Releases"), from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies and expenses (including
attorneys' fees and costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, including, but not limited to, any charges,
complaints, claims, liabilities, obligations, controversies and expenses arising
out of alleged violations of any contracts, express or implied, any covenant of
good faith and fair dealing, express or implied, any obligation for
compensation, lost wages, lost benefits or any other expectation of remuneration
or benefit on the part of PARKER, including but not limited to intentional or
negligent infliction of emotional distress, or any other tort, or any legal
restrictions on LINDSAY's right to terminate employees, or any federal, state or
other governmental statute, regulation or ordinance (including, without
limitation: (i) Title VII of the Civil Rights Act of 1964 (race, color,
religion, sex and national origin discrimination); (ii) 42 U.S.C. Section 1981
(discrimination); (iii) 29 U.S.C. Section 206(d)(1) (equal pay); (iv) Executive
Order 11246 (race, color, religion, sex and national origin discrimination); (v)
Executive Order 11141 (age discrimination); (vi) Section 503 and Section 504 of
the Rehabilitation Act of 1973 (disability discrimination); (vii) the Employee
Retirement Income Security Act (employee benefits); (viii) the Fair Labor
Standards Act; (ix) the Americans with Disabilities Act (discrimination against
individuals with a disability); (x) the Age Discrimination in Employment Act
(age discrimination); (xi) the Civil Rights Act of 1991; and (xii) any Nebraska
or other state fair employment, discrimination, labor or workers compensation
laws), which PARKER now has, owns or holds, or claims to have, own or hold, or
which PARKER, at any time heretofore had, owned, or held, or claimed to have,
own or hold, against LINDSAY or any Company Releasee; provided, however, that
the foregoing shall not release LINDSAY or any other Company Releasee from any
(1) obligations under this Agreement (including the obligation to make the
payments provided for herein and to reimburse PARKER for business expenses as
provided herein), (2) rights to vested benefits under LINDSAY's Profit Sharing
Plan, or (3) claims arising after the effective date of this Agreement.
15. RELEASE BY LINDSAY. As a material inducement to PARKER to enter
into this Agreement, LINDSAY, on its own behalf and on behalf of the
subsidiaries and affiliated entities which it controls, hereby irrevocably and
unconditionally releases, acquits and forever discharges PARKER, his personal
and legal representatives, executors, administrators, heirs, distributees,
devisees and legatees (collectively, the "PARKER Releasees") from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies and expenses (including attorneys' fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected,
including, but not limited to, any charges, complaints, claims, liabilities,
obligations, controversies and expenses arising out of alleged violations of any
contracts, express or implied, or any covenant of good faith and fair dealing,
express or implied, which LINDSAY or any of such subsidiaries or affiliated
entities now has, owns or holds, or claims to have, own or hold, or which
LINDSAY or any of such subsidiaries or affiliated entities at any time
heretofore had, owned, or held, or claimed to have, own or hold, against PARKER
or any other PARKER Releasee relating to the performance of PARKER's duties as
an officer, director or employee of LINDSAY or any of its divisions,
subsidiaries or affiliates; provided, however, that the foregoing shall not
release PARKER or any PARKER Releasee from any
12
<PAGE> 13
(1) obligations under this Agreement, (2) claims arising after the effective
date of this Agreement, or (3) unknown claims based on acts of PARKER which
occurred prior to the effective date of this Agreement which would constitute a
felony under federal or state laws.
16. TERMINATION OF EMPLOYMENT AGREEMENT. LINDSAY and PARKER acknowledge
and agree that, effective as of the effective date of this Agreement, all of
their respective rights and obligations under that certain Employment Agreement
between LINDSAY and PARKER dated September 1, 1998 (the "Employment Agreement")
shall be deemed to have terminated and to be of no further force or effect.
17. NO CLAIMS; COVENANT NOT TO SUE. PARKER represents and covenants
that (i) he has not filed any complaints, charges or lawsuits, nor commenced any
arbitration or similar proceedings, against LINDSAY or any other Company
Releasee in connection with any claim or potential claim released hereunder,
including any claims under the Employment Agreement, and (ii) he will not do so
at any time hereafter; provided, however, that this Paragraph 17 shall not limit
PARKER from commencing appropriate proceedings for the purpose of enforcing any
claims not released hereunder. LINDSAY represents and covenants that (i) neither
it nor any subsidiary or other affiliated entity which it controls has filed any
complaints, charges or lawsuits, nor commenced any arbitration or similar
proceedings against PARKER or any other PARKER Releasee in connection with any
claim or potential claim released hereunder, including any claims under the
Employment Agreement, and (ii) neither it nor any such subsidiary or affiliated
entity will do so at any time hereafter; provided, however, that this Paragraph
17 shall not limit the Company from commencing appropriate proceedings for the
purpose of enforcing any claims not released hereunder.
18. NON-ADMISSION OF LIABILITY. This Agreement shall not in any way be
construed as an admission by LINDSAY that it or any subsidiary or affiliated
entity has acted wrongfully with respect to PARKER or that PARKER has any rights
whatsoever against LINDSAY or any other Company Releasee, and LINDSAY
specifically disclaims any liability to or wrongful acts against PARKER. This
Agreement shall not in any way be construed as an admission by PARKER that he
has acted wrongfully with respect to LINDSAY, or that LINDSAY or any subsidiary
or affiliated entity has any rights whatsoever against Parker or any other
PARKER Releasee, and PARKER specifically disclaims any liability to or wrongful
acts against LINDSAY.
19. NO CONFIDENTIALITY. PARKER acknowledges that LINDSAY intends to
file a copy of this Agreement as an exhibit to a future filing with the
Securities and Exchange Commission. Consequently, PARKER acknowledges and agrees
that the contents of this Agreement will be made publicly available and confirms
that he has no expectation of confidentiality with respect to the terms hereof.
20. ARBITRATION OF DISPUTES. All controversies, claims, disputes and
matters in question arising out of or relating to this Agreement or the breach
hereof or to PARKER's
13
<PAGE> 14
employment or termination of employment with LINDSAY shall be decided by binding
arbitration conducted in Omaha, Nebraska under the Commercial Arbitration Rules
of the American Arbitration Association (the "AAA") or its successor in effect
at the time a demand for arbitration is made. The arbitration will be conducted
by a single arbitrator chosen pursuant to the Commercial Arbitration Rules of
the AAA then in effect. The decision of the arbitrator shall be conclusive,
final, and binding on the parties hereto and on their respective heirs, legal
representatives, successors, and assigns. The arbitrator shall have no power to
award punitive, exemplary or similar damages to any party. Each party shall pay
for its own attorney's fees and other expenses incurred in connection with any
such dispute or proceeding, and each party shall pay one-half of the
arbitrator's fees and expenses.
21. NOTICES. Notices contemplated by this Agreement shall be in writing
and shall be deemed given when delivered in person or mailed by registered or
certified first class mail, postage prepaid, return receipt requested, to
LINDSAY at East Highway 91, Lindsay, Nebraska, 68644, Attention: Chairman of the
Compensation Committee, and to PARKER at 6272 Country Club Drive, Columbus, NE,
68601, or to such other address as the party so notifies to the other.
22. INTEGRATION, AMENDMENT AND MODIFICATION.
A. This Agreement contains the entire Agreement between the
parties hereto with respect to the employment contemplated herein, and
supersedes all prior negotiations and employment agreements, both oral and
written, between the parties relating to PARKER's employment with LINDSAY.
B. This Agreement can be amended, supplemented or modified by the
parties only by an instrument in writing signed by both parties.
C. If, in any action before any court or arbitrator legally
empowered to enforce such covenants, any term, restriction, covenant or promise
contained herein is found to be unreasonable, unlawful or otherwise invalid and
for that reason unenforceable, then such term, restriction, covenant or promise
shall be deemed modified to the extent necessary to make it enforceable by such
court or arbitrator.
23. HEADINGS. The headings in this Agreement are inserted for
convenience or reference only and shall not affect the meaning or interpretation
of this Agreement.
24. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced according to the laws of the State of Nebraska.
25. COUNTERPARTS. This Agreement may be executed in counterparts which
may be delivered by facsimile, each of which will be deemed an original, and
both of which together shall constitute one and the same Agreement.
14
<PAGE> 15
26. INTERPRETIVE MATTERS. This Agreement and any exhibits hereto shall
be construed without regard to the identity of the person who drafted the
various provisions of the same. Each and every provision of this Agreement and
any exhibits hereto shall be construed as though the parties participated
equally in the drafting of the same. Consequently, the parties acknowledge and
agree that any rule of construction that a document is to be construed against
the drafting party shall not be applicable either to this Agreement or any
exhibits hereto.
27. WITHHOLDING. LINDSAY shall withhold from payments made hereunder
federal, state or local taxes to the extent required to comply with applicable
laws.
28. BINDING ON SUCCESSORS. LINDSAY shall have any successor to all or
substantially all of its business and/or its assets expressly assume and agree
to perform this Agreement in the same manner and to the same extent that LINDSAY
would be required to perform if no such succession had taken place. In addition,
LINDSAY shall have the ultimate parent entity of any such successor guaranty
such performance of this Agreement.
29. PUBLIC RELATIONS. LINDSAY agrees to cooperate reasonably with
PARKER regarding internal and external media communications concerning PARKER's
early retirement and continuing employment under this Agreement, it being
understood that LINDSAY shall have sole and complete discretion regarding the
timing, content and other aspects of its internal and external media
communications. The initial press release will be substantially in the form of
Exhibit B hereto.
30. NEGOTIATION. PARKER acknowledges that (i) he has had an opportunity
to negotiate the terms of this Agreement and to receive advice of counsel with
regard thereto, (ii) he has carefully read and considered this Agreement, (iii)
he fully understands the extent and impact of the provisions of this Agreement,
and (iv) he has executed this Agreement voluntarily and without coercion, undue
influence, threats, or intimidation of any kind or type whatsoever.
31. TIME PERIODS. PARKER understands that he has the right to be given
twenty-one (21) days to consider whether or not to execute this Agreement
insofar as any claims released hereby arise under the federal Age Discrimination
in Employment Act and that, if he chooses to execute this Agreement before that
time period expires, he will be deemed to have voluntarily waived and forfeited
such right. PARKER also understands that he has up to seven (7) days after
executing this Agreement to rescind this Agreement by notifying LINDSAY of such
recission in writing.
15
<PAGE> 16
IN WITNESS WHEREOF, this Agreement is entered into effective as of the
date set forth above.
GARY D. PARKER LINDSAY MANUFACTURING CO.
/s/ Gary D. Parker By: /s/ Howard G. Buffett
- ----------------------------- ---------------------------------
Gary D. Parker Howard G. Buffett
Chairman, Compensation Committee
16
<PAGE> 17
EXHIBIT A
SPLIT-DOLLAR LIFE INSURANCE POLICIES
Employer: Lindsay Manufacturing Co.
1. Insurance Company: Equitable Variable Life Assurance Co.
Box B.W.
Des Moines, IA 50306
Attn: Kully Webster
Agent: Mr. Charles E. Halbur
Duhaine Agency
10040 Regency Circle, Suite 150
Omaha, NE 68114
Phone: (402) 397-2112
Fax: (402) 397-9573
Insured: Gary D. Parker
(Face Amount: $1,000,000)
Policy No. 40-244-648
Premiums Paid to Date by Employer and Portion
of Death Benefit or Cash Surrender Value Payable to Employer: $200,000
Remaining Premiums to Be Paid by Employer: None
-----------
Total Death Benefit or Cash Surrender Value Payable to Employer: $200,000
2. Insurance Company: Security Life of Denver
1290 Broadway
Denver, CO 80203-5699
Agent: Tom Von Riesen
Silverstone Group
11516 Miracle Hills Drive, Suite 102
Omaha, NE 68154
Phone: (402) 964-5441
Fax: (402) 964-5454
A-1
<PAGE> 18
Insured: Gary D. Parker
(Face Amount: $2,000,000)
Policy Nos.: 00-1019465
00-1551958
Premiums Paid to Date by Employer and Portion
of Death Benefit or Cash Surrender Value Payable to Employer: $509,924.26
Remaining Premiums to Be Paid by Employer
(4 annual premiums of $16,647): 66,588
-----------
Total Death Benefit or Cash Surrender Value Payable to Employer: $576,512.26
3. Insurance Company: Northwest Mutual Life Insurance Company
Attn: Mr. Timothy J. Engel
2304 13th Street
P. O. Box 7
Columbus, NE 68601
Phone: (402) 564-8616
Fax: (402) 563-1879
Insured: Gary D. Parker
(Face Amount: $250,000)
Policy No.: 7374536
Premiums Paid to Date by Employer and Portion of
Death Benefit or Cash Surrender Value Payable to Employer: $60,904
Remaining Premiums to Be Paid by Employer (10 annual
premiums of $2,648 and 1 premium of $2,548): 29,078
-----------
Total Death Benefit or Cash Surrender Value Payable to Employer: $89,982
* * * *
It is hereby agreed that this Exhibit A shall be attached as the schedule
to the Split-Dollar Insurance Agreement entered into between LINDSAY and PARKER
dated September 1, 1990, and shall be deemed to be incorporated as a part
thereof.
A-2
<PAGE> 19
MEMORANDUM OF UNDERSTANDING
REGARDING SPLIT-DOLLAR INSURANCE POLICIES
The purpose of this Memorandum of Understanding which is entered into as
of December 1, 1999, is to confirm the rights of Lindsay Manufacturing Co.
("Employer") and the owner in the split-dollar life insurance policy(ies)
identified on Schedule I hereto. This will confirm the following:
1. Employer is entitled to recover the amount shown on Exhibit A as "Total
Death Benefit or Cash Surrender Value Payable to Employer," which represents the
total premiums to be paid by Employer, less any payments which have not yet been
paid by Employer.
2. Neither Employer, the owner of the policy(ies) or the insured may make
any withdrawals or loans from the policy(ies).
3. The owner may surrender the policy(ies) at any time, provided Employer
receives an amount equal to the amount shown on Exhibit A as "Total Death
Benefit or Cash Surrender Value Payable to Employer" upon any surrender of the
policy(ies), less any payments which have not yet been paid by Employer.
This Memorandum of Understanding shall be attached to the Split-Dollar
Insurance Agreement entered into between Lindsay Manufacturing Co. (Employer)
and Gary D. Parker (Employee and Insured) dated September 1, 1990, and shall be
deemed to be incorporated as a part thereof. This Memorandum of Understanding
may be executed in counterparts, each of which will be deemed an original, and
all of which together shall constitute one and the same instrument.
EMPLOYER: Lindsay Manufacturing Co.
By: /s/ Bruce C. Karsk
--------------------------------------
Bruce C. Karsk, Vice President and Secretary
EMPLOYEE/INSURED: /s/ Gary D. Parker
--------------------------------------
Gary D. Parker
OWNER: By:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
(Type or Print Name and Address of Owner)
A-3
<PAGE> 20
EXHIBIT B
PRESS RELEASE
For Immediate Release
Lindsay Manufacturing Chairman, President and CEO Gary Parker
Announces Retirement; Director John Croghan to Serve as
Chairman; Parker to Continue as President and CEO Pending Search
December 1, 1999. Lindsay, NE
Lindsay Manufacturing, a leading manufacturer of center pivot and lateral move
irrigation systems, today announced its Chairman, President and CEO, Gary D.
Parker will be retiring from the company by the conclusion of the fiscal year.
Mr. Parker will serve as Chairman of the Board and a Director until his term
expires at the Company's annual meeting on January 25, 2000. Following the
annual meeting, he will continue serving as President and CEO, and will retire
from those positions at the earlier of the end of Lindsay's current fiscal year
(ending August 31, 2000) or upon the naming of a successor. He will also serve
as a consultant to the Company for two years following his retirement.
At the annual meeting in January, Mr. John W. Croghan, a director of the Company
since 1989, will assume the role of Chairman. As Chairman, he will manage the
Board process while Mr. Parker, pending his retirement, will continue to manage
the Company. Mr. Parker will report to Mr. Croghan and the Board, which will
oversee the search for a successor to Mr. Parker.
"On behalf of the shareholders, the Board and the employees, I wish to thank
Gary for his years of fine service to Lindsay. The company has grown
dramatically and Gary has made many contributions in product innovation, factory
automation and expanded distribution. Since going public in 1988, under Gary's
leadership as President and CEO, Lindsay's stock has appreciated approximately
tenfold. We are grateful that Gary has agreed to serve as a consultant to the
company following his retirement and we wish him well in all of his future
endeavors," stated Mr. Croghan.
Mr. Parker commented, "It has been rewarding to be associated with the growth
and success of Lindsay during the last 28 years. Today Lindsay is a global
leader with systems operating in over 85 countries. I have truly enjoyed my
association with employees, dealers, and fellow shareholders, but have decided
at this point in my life I want to spend more time with my family and travel for
pleasure."
B-1
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