<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.
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(Name of Registrant as Specified in its Charter)
---------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
LINDSAY MANUFACTURING CO.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 30, 2001
The Annual Meeting of Stockholders of Lindsay Manufacturing Co. (the
"Company") will be held at the Embassy Suites Hotel, 555 South 10th Street,
Omaha, Nebraska, on Tuesday, January 30, 2001, at 8:30 a.m., Central Standard
Time, for the following purposes:
(1) To elect a director for a term ending in 2004.
(2) To approve the Lindsay Manufacturing Co. 2001 Long-Term Incentive Plan.
(3) To ratify the appointment of PricewaterhouseCoopers LLP as independent
auditors for the Company for the fiscal year ending August 31, 2001.
(4) To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Enclosed herewith is a Proxy Statement setting forth information with
respect to the election of the director, approval of the 2001 Long-Term
Incentive Plan and the ratification of the appointment of independent auditors.
Only stockholders holding shares of Common Stock of record at the close of
business on December 15, 2000 are entitled to notice of, and to vote, at the
meeting.
Stockholders, whether or not they expect to be present at the Annual
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 Annual Meeting may withdraw their
proxies and vote in person.
By Order of the Board of Directors
/s/ Bruce C. Karsk
------------------
Bruce C. Karsk, Secretary
Omaha, Nebraska
December 28, 2000
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.
2707 North 108th Street, Suite 102
Omaha, Nebraska 68164
---------------
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 Tuesday, January 30, 2001 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
2707 North 108th Street, Suite 102, Omaha, Nebraska 68164. This Proxy Statement
and the proxy cards are first being mailed to stockholders on or about December
28, 2000.
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 5.8% of the total shares
outstanding as of December 15, 2000. Shares of Common Stock entitled to vote and
represented by properly executed, returned and unrevoked proxies will be
considered present at the meeting for purposes of determining a quorum,
including shares with respect to which votes are withheld, abstentions are cast
or there are broker nonvotes.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP
THEREOF BY PRINCIPAL STOCKHOLDERS,
DIRECTORS AND OFFICERS
Only holders of Common Stock of record at the close of business on December
15, 2000 are entitled to vote at the Annual Meeting. At the record date, there
were 11,695,619 shares of Common Stock which were issued and outstanding. Each
share of Common Stock is entitled to one vote upon each matter to be voted on at
the Annual Meeting. Stockholders do not have the right to cumulate votes in the
election of directors.
<PAGE> 4
The following table sets forth, as of November 30, 2000, the beneficial
ownership of the Company's Common Stock by directors and the nominee 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 PERCENT
NAME BENEFICIALLY OWNED(1) OF CLASS
------------------------------ --------------------- ---------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Howard G. Buffett, Director 36,566 (2) *
Michael N. Christodolou, Director 5,306 (2) *
John W. Croghan, Director and Chairman of the Board 152,993 (2) 1.3
Larry H. Cunningham, Director 0 *
Richard W. Parod, Director, President and Chief Executive Officer 2,800 *
Bruce C. Karsk, Executive Vice President, Secretary,
Treasurer and Director (3) 159,036 1.4
Eduardo R. Enriquez, Vice President--International
and President of Lindsay International Sales
Corporation 44,164 (2)
*
Clifford P. Loseke, Vice President--Operations 96,595 (2)
*
Robert S. Snoozy, Vice President--Domestic Sales 82,556 (2)
*
All executive officers, directors and director nominee as a group
(12 persons) 693,928 (2) 5.8
OTHER SHAREHOLDERS
Ontario Teachers' Pension Plan Board 1,735,830 (4)(7) 14.8
The Bass Management Trust and Other Related Parties 1,444,833 (5)(7) 12.4
Gary D. Parker 755,616 (6) 6.5
</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 35,430; 5,060; 55,670; 10,200; 48,000; 48,000 and 250,360 shares
which may be acquired currently or within 60 days of November 30, 2000
pursuant to the exercise of options by Messrs. Buffett, Christodolou,
Croghan, Enriquez, Loseke, and Snoozy and the executive officers and
directors as a group, respectively.
(3) Mr. Karsk will end his term as a director on January 30, 2001. Mr. Karsk
will remain as an executive officer of the Company.
(4) Ontario Teachers' Pension Plan Board, 5650 Yonge Street, 5th Floor,
Toronto, Canada M2M 4H5.
(5) 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, 820 Management Trust and
Sid R. Bass Management Trust.
(6) 6272 Country Club Drive, Columbus, Nebraska 68601. Mr. Parker is the former
Chairman and Chief Executive Officer of the Company. The total excludes
45,566 shares owned by Mr. Parker's spouse, of which Mr. Parker has
disclaimed beneficial ownership.
(7) Based on Schedules 13D, 13F or 13G filed with the Securities and Exchange
Commission with respect to the Company's Common Stock.
2
<PAGE> 5
ELECTION OF DIRECTOR
BOARD OF DIRECTORS AND COMMITTEES
The Board has nominated Howard G. Buffett to serve as director for an
additional three-year term and proxies submitted pursuant to this solicitation
will be voted, unless specified otherwise, for the election of Mr.. Buffett. Mr.
Buffett has expressed an intention to continue to serve, if elected, and the
Board of Directors knows of no reason why he might be unavailable to continue to
serve, if elected. If Mr. Buffett is unable to continue to serve, the shares
represented by all valid proxies will be voted for the election of such
substitute nominee as the Board of Directors may recommend. There are no
arrangements or understandings between Mr. Buffett and any other person pursuant
to which he was nominated to serve on the Board of Directors.
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 the director will have no impact on the election of the director.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
MR. BUFFETT.
Mr. Bruce C. Karsk will end his term as director as of the date of the
Annual Meeting. As a result, the entire Board of Directors will consist of five
members after January 30, 2001. The following table sets forth certain
information regarding the directors of the Company. All members of, and the
nominee 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
---- --- ---------- ----- ------
NOMINEE
<S> <C> <C> <C> <C>
Howard G. Buffett 46 Chairman of the Board, The GSI Group(1) 1995 2001
DIRECTORS CONTINUING IN OFFICE
John W. Croghan 70 President of Lincoln Partners, a 1989 2002
partnership of Lincoln Capital
Management Company(2)
Michael N. Christodolou 39 Founder and Managing Partner of Inwood 1999 2002
Capital Partners, L.P.(3)
Larry H. Cunningham 56 Senior Vice President, Corporate Affairs 2000 2003
for Archer Daniels Midland Company (4)
Richard W. Parod 47 President and Chief Executive Officer of 2000 2003
Lindsay Manufacturing Co. (5)
</TABLE>
-----------------
(1) Prior to joining The GSI Group in 1995, Mr. Buffett was Corporate Vice
President, Assistant to the Chairman and director of Archer Daniels Midland
Company from 1992 to 1995 and a County Commissioner of Douglas County, Nebraska
from 1989 to 1992. Mr. Buffett is also a director of The GSI Group, Berkshire
Hathaway, Inc., Coca-Cola Enterprises, Inc. and Trailmobile Canada Limited.
(2) Prior to 1997, Mr. Croghan was Chairman of Lincoln Capital Management
Company. Mr. Croghan is also a director of Republic Services, Inc.
(3) From 1993 to 1999, Mr. Christodolou was Director of Equity Investments of
Barbnet Investment Co. (formerly known as Thomas M. Taylor & Co.), an investment
consulting firm providing services to various entities associated with certain
members of the Bass Family of Fort Worth, Texas. Mr. Christodolou joined Thomas
M. Taylor & Co. in 1988 as an investment analyst. Mr. Christodolou is also a
director of XTRA Corporation.
(4) Prior to joining Archer Daniels Midland Company in 1993, Mr. Cunningham was
employed by A.E. Staley Manufacturing Company from 1965 to 1990. Mr. Cunningham
is currently on the Board of Trustees for Millikin University and the James
Millikin Trust.
(5) Prior to joining the Company, Mr. Parod was the Vice President and General
Manager of Toro Irrigation from 1997. From 1993 to 1997, he was an executive
officer of James Hardie Irrigation, serving as President 1994 to 1997.
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, 2000, the Board of
Directors held four meetings and eight teleconference meetings. All directors
attended 75% or more of the meetings of the Board of Directors and of the
committees of the Board of Directors on which they served during fiscal 2000.
The Board of Directors has established three standing 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 year-end financials and the Security and Exchange
Commission Form 10-K prior to its filing, reviewing quarterly financial results
prior to their release to the public, 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 was composed
of Directors Buffett, Christodolou and Croghan until January 2000 when Mr.
Cunningham replaced Mr. Buffett. Mr. Christodolou is the Chairman of the Audit
Committee. The Audit Committee met once and held six teleconference meetings
during fiscal 2000.
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
currently consists of Directors Buffett, Christodolou and Croghan. Mr. Buffett
is the Chairman of the Compensation Committee. The Compensation Committee held
two meetings and five teleconference meetings during fiscal 2000.
NOMINATING COMMITTEE. The Nominating Committee is responsible for
nominating persons to serve as directors of the Company. The Nominating
Committee will consider nominees recommended by security holders which are
submitted in the manner described under "Submission of Stockholder Proposals."
During fiscal 2000, the Nominating Committee consisted of Directors Buffett,
Christodolou and Croghan. In fiscal 2001, Mr. Cunningham replaced Mr. Buffett on
the Nominating Committee. Mr. Christodolou is the Chairman of the Nominating
Committee. The Nominating Committee held two meetings and one teleconference
meeting during fiscal 2000.
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. Non-employee directors
are also entitled to automatic awards of nonqualified options to purchase Common
Stock. Continuing non-employee directors received a fixed annual grant of
options to purchase 5,062 shares of Common Stock on September 3 of each year. A
new director will receive an initial grant of options to purchase 25,312 shares
of Common Stock on the first 3rd of September occurring after he or she becomes
a Director. No other grants of stock options can be made to non-employee
directors. In all cases, the exercise price for options granted to non-employee
directors is equal to the closing price of the Common Stock on the date of the
grant. Options granted to a non-employee director will vest 20% per year over a
five-year period and unexercised options are subject to forfeiture if a director
retires voluntarily or is terminated for cause. The grant of stock options to
non-employee directors under the Company's proposed 2001 Long-Term Incentive
Plan will be the same as under the Company's current 1991 Long-Term Incentive
Plan. See "Adoption of 2001 Long-Term Incentive Plan." During fiscal 2000, the
Company granted Mr. Christodolou options to purchase 25,312 shares and both
Messrs. Buffett and Croghan were granted options to purchase 5,062 shares of
Common Stock, all at an exercise price of $17.19 per share. No options were
exercised by any non-employee director during fiscal 2000.
4
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by, or paid by the Company and its
subsidiaries to, the Chief Executive Officer, its former Chief Executive Officer
and the other four highest paid executive officers of the Company for services
rendered during the three fiscal years ended August 31, 2000, August 31, 1999
and August 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ------------------------- -----------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION (1) AWARD (S)(2) SARS PAYOUTS (3) COMPENSATION (4)
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
-------------------- ------ -------- ------- ---------------- ------------ ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard W. Parod 2000 115,385 150,000 -- -- 350,000 -- 2,253
President and Chief 1999 -- -- -- -- -- -- --
Executive Officer 1998 -- -- -- -- -- -- --
Gary D. Parker(5) 2000 367,047 -- -- 863,789 -- -- 69,224
Former President and 1999 367,047 450,000 -- 1,252,969 -- -- 75,198
Chief Executive 1998 367,047 500,000 -- 1,627,594 -- -- 72,893
Officer
Bruce C. Karsk 2000 154,688 90,000 -- -- -- -- 19,538
Executive Vice 1999 147,457 90,000 -- 59,063 -- -- 20,140
President, Secretary 1998 140,436 90,000 -- 103,781 -- -- 18,896
and Treasurer
Eduardo R. Enriquez 2000 102,165 13,000 -- -- -- -- 6,819
Vice President-- 1999 99,300 13,000 -- -- 7,500 -- 7,177
International and 1998 96,408 16,750 -- -- 7,500 -- 6,987
President of Lindsay
International Sales
Corporation
Clifford P. Loseke 2000 111,240 53,000 -- -- -- -- 10,761
Vice President-- 1999 107,120 36,000 -- 22,313 7,500 -- 11,348
Manufacturing 1998 103,000 34,000 -- 29,250 7,500 -- 9,722
Robert S. Snoozy 2000 103,032 93,966 -- -- -- -- 10,717
Vice President-- 1999 99,216 81,679 -- 22,313 7,500 -- 11,448
Domestic Sales 1998 95,400 77,000 -- 29,250 7,500 -- 10,699
</TABLE>
-------------------
(1) No disclosure is required in this column pursuant to applicable
Securities and Exchange Commission Regulations, as the aggregate value of items
covered by this column does not exceed the lesser of $50,000 or 10% of the
annual salary and bonus shown for each respective executive officer named.
(2) Represents restricted stock awards of (i) 50,625, 60,750 and 60,750
to Mr. Parker in fiscal 2000, fiscal 1999 and fiscal 1998, respectively, (ii)
3,375 shares and 3,375 shares to Mr. Karsk, in fiscal 1999 and fiscal 1998,
respectively, and (iii) 1,050 shares to each of Messrs. Loseke and Snoozy in
fiscal 1999 (relating to fiscal 1998) and 1,125 shares to each of Messrs. Loseke
and Snoozy in fiscal 1998 (relating to fiscal 1997). The restricted stock awards
vest two years from the date of grant and participate in dividends on a
nonpreferential basis. All of the fiscal 1999 and fiscal 1998 restricted stock
awards to Messrs. Loseke and Snoozy were performance based. At August 31, 2000,
(i) the value of the award to Mr. Parker of 50,625 shares in fiscal 2000 was
$923,906 and the value of each award to Mr. Parker of 60,750 shares in fiscal
1999 and 1998 was $1,108,688; (ii) the value of each award to Mr. Karsk of 3,375
shares in fiscal 1999 and 1998 was $61,594 and (iii) the value of the fiscal
1999 awards to Messrs. Loseke and Snoozy of 1,050 shares each was $19,163 and
the value of the fiscal 1998 awards to Messrs. Loseke and Snoozy of 1,125 shares
each was $20,531.
5
<PAGE> 8
(3) The Company does not have a long-term incentive plan as defined in
Item 402 of Regulation S-K under the Securities Exchange Act of 1934, as
amended.
(4) These amounts for fiscal 2000 consist of defined contributions and
matching contributions to the Company's defined contribution profit-sharing and
401(k) plan of $0, $9,305, $4,577, $8,488 and $8,762 for Messrs. Parod, Karsk,
Enriquez, Loseke and Snoozy, respectively, and of premiums for supplemental life
and disability insurance (and, in the case of Messrs. Karsk and Parod, the value
of split-dollar supplemental term life insurance) of $2,253, $10,223, $2,242,
$2,273 and $1,955 for Messrs. Parod, Karsk, Enriquez, Loseke and Snoozy,
respectively.
(5) Mr. Parker retired as President and Chief Executive Officer on
April 4, 2000. On December 1, 1999, Mr. Parker entered into an agreement with
the Company under which he agreed to continue to be employed by the Company as a
consultant after a new President and Chief Executive Officer was appointed
through August 31, 2002. Under the agreement, Mr. Parker will receive a salary
of $367,047 per year. Thereafter, Mr. Parker is entitled to payments for
agreeing not to compete with the Company equal to $367,047 per year from
September 1, 2002 through August 31, 2004 and $115,000 per year from September
1, 2004 through August 31, 2006. Commencing January 1, 2001, Mr. Parker is also
entitled to an early retirement benefit under the Company's Supplemental
Retirement Plan of $16,990 per month for life. and his wife is entitled to a
survivor's benefit of $8,495 per month after Mr. Parker's death. Mr. Parker is
not eligible to receive bonuses or any awards of stock options or restricted
stock under his new agreement. However, during fiscal 2000, Mr. Parker was paid
a $200,000 bonus earned in fiscal 1999 and supplemental deferred compensation of
$200,000, plus interest, relating to fiscal 1998. On September 1, 2000, Mr.
Parker received supplemental deferred compensation of $200,000, plus interest,
relating to fiscal 1999. In addition, during fiscal 2000, a total of 50,625
shares of restricted stock relating to fiscal 1999 were awarded to Mr. Parker.
Stock options and shares of restricted stock previously awarded to Mr. Parker
will continue to vest under their original terms while he continues to serve as
a consultant. Mr. Parker will be entitled to reimbursed of up to $25,000 per
year for medical insurance coverage and physical examinations for him and his
wife. The Company will provide Mr. Parker with $250,000 of life insurance
coverage through August 31, 2006 and will continue to pay premiums on certain
split-dollar life insurance policies. Mr. Parker will not be eligible to receive
any other benefits.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information relating to options
granted during fiscal 2000 to executive officers of the Company whose
compensation is reported in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
OPTION TERM(2)
-----------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF %
SECURITIES OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
------ ------------ ------------ ----------- ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Parod 350,000 100% $14.00 March 8, 2010 3,081,584 7,809,338
Gary D. Parker -- -- -- -- -- --
Bruce C. Karsk -- -- -- -- -- --
Eduardo R. Enriquez -- -- -- -- -- --
Clifford P. Loseke -- -- -- -- -- --
Robert S. Snoozy -- -- -- -- -- --
</TABLE>
----------------
(1) The exercise price of all options granted during fiscal 2000 is equal to the
fair market value of the Company's Common Stock on the date of grant. Each
option expires ten years from the date of grant. Mr. Parod's options were
granted pursuant to the terms of his Employment Agreement on March 8, 2000.
Options for 300,000 shares granted to Mr. Parod will become exercisable 20% per
year beginning on April 5, 2001 through April 5, 2005. The remaining 50,000
options granted to Mr. Parod will become exercisable on (i) the first day
following completion of a 20 business day period during which the fair market
value of the Company's Common Stock exceeds $40 per share provided the period
occurs prior to April 5, 2005 or (b) April 5, 2009. Mr. Parod's options will
also vest immediately in the event of certain "change of control" events
described below under "Employment Agreements." No stock appreciation rights
(SARs) were granted during fiscal 2000.
(2) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of Common Stock price appreciation from the
respective dates of the grant to the respective expiration dates of the options
of 5% and 10%. These assumptions are not intended to forecast future price
appreciation of the Company's Common Stock. The Company's stock price may
increase or decrease in value over the time period set forth above.
6
<PAGE> 9
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table sets forth certain information concerning options
exercised during fiscal 2000, the number of unexercised options and the value of
unexercised options at the end of fiscal 2000 for the executive officers of the
Company whose compensation is reported in the Summary Compensation Table.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL YEAR
FISCAL YEAR END(#) END($)(1)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($)(1) UNEXERCISABLE UNEXERCISABLE
------ --------------- -------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Richard W. Parod -0- -0- -0-/350,000 -0-/1,487,500
Gary D. Parker 136,701 1,889,342 -0-/-0- -0-/-0-
Bruce C. Karsk 71,149 979,999 -0-/-0- -0-/-0-
Eduardo R. Enriquez 13,500 85,813 7,200/10,500 31,081/17,625
Clifford P. Loseke 20,250 258,125 45,000/10,500 373,531/17,625
Robert S. Snoozy -0- -0- 45,000/10,500 373,531/17,625
</TABLE>
---------------------
(1) Based on the difference between the closing sale price of the Common
Stock on August 31, 2000 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. 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 monthly benefits are $-0-,
$-0-, $585 and $-0- for Messrs. Enriquez, Karsk, Loseke and Snoozy,
respectively.
EMPLOYMENT AGREEMENT
Pursuant to Mr. Parod's appointment as President and Chief Executive
Officer, the Company has entered into an employment agreement with him,
effective April 5, 2000 (the "Agreement"). Under the Agreement, Mr. Parod will
receive a base salary of $300,000 per year, subject to annual review and
potential increase by the Board of Directors, as well as a $75,000 sign-on bonus
and other fringe benefits provided in the Company's employee benefit programs.
Mr. Parod will also be entitled to an annual incentive bonus with a target of
60% of his annual salary and an actual payout of 0% to 120% of his annual salary
based on individual and/or Company performance.
Under the terms of his employment agreement, Mr. Parod was granted a total
of 350,000 non-qualified stock options. The exercise price of these options is
equal to the fair market value of the Company's Common Stock
7
<PAGE> 10
on the date of grant. Options for 300,000 shares granted to Mr. Parod will
become exercisable 20% per year beginning on April 5, 2001 through April 5,
2005. The remaining 50,000 options will become exercisable on (i) the first day
following completion of a 20 business day period during which the fair market
value of the Company's Common Stock exceeds $40 per share provided the period
occurs prior to April 5, 2005 or (b) April 5, 2009. All of Mr. Parod's options
will vest immediately in the event of (a) a dissolution or liquidation of the
Company, (b) a sale of substantially all the assets of the Company, (c) a merger
or other combination involving the Company after which the owners of the Company
immediately prior to such merger or combination own less than 50% of the
outstanding shares of the Company, or (d) the acquisition of more than 50% of
the Company's Common Stock by any person through a tender offer or otherwise.
The options granted to Mr. Parod expire ten years from the date of grant.
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.
The Compensation Committee of the Board of Directors is comprised of Howard
G. Buffett, Michael N. Christodolou and John W. Croghan, each of whom is an
independent director of the Company. The Compensation Committee is responsible
for setting policies with respect to compensation of the Company's executive
officers.
EXECUTIVE OFFICER COMPENSATION. The Compensation Committee endeavors to
implement an executive compensation program that is effective in attracting,
retaining and motivating the executive officers upon whom the Company relies to
develop and implement its business strategy. The overall goal of the Company's
compensation program is to maximize shareholder value. Accordingly, an important
component of our compensation philosophy is to closely align the financial
interests of the Company's executive officers with those of the shareholders.
During fiscal 2000, the Company utilized a compensation package that
provided its executive officers with a base salary, benefits and opportunities
to receive performance bonuses as well as grants of stock options, stock
appreciation rights and/or restricted stock under our existing long-term
incentive plans. Base salaries were established based on the executive officers'
prior salary and our view of the base salary levels for executive officers with
comparable positions and responsibilities in similar companies. The remaining
portion of each executive officer's 2000 compensation was directly related to
the success of the Company. This is accomplished in two ways.
First, each executive officer was eligible to earn a cash bonus based
primarily upon the executive's individual performance considering qualitative
and/or quantitative factors, including the performance of the operating and
staff organization for which the executive officer is responsible. As an example
of quantitative factors having a role in determining an executive officer's
bonus, executive officers with sales responsibilities earn a bonus if specific
sales and margin goals are obtained. In cases where performance for the year was
below targeted levels, only nominal cash bonuses were earned. As specific
quantitative goals were met or exceeded, executive officers earned progressively
larger cash bonuses up to stated maximums. Qualitative factors, such as the
overall performance of the individual executive officer, were also considered in
arriving at the executive officers' cash bonuses for the year.
Second, believing that significant ownership of Company stock serves to
align management's interest with that of the Company's shareholders, executive
officers who, in our opinion, contributed to the growth, development and
financial success of the Company were awarded stock options and/or restricted
stock. In order to motivate our executives to increase shareholder value, the
exercise price of all stock options granted in 2000 was equal to market value of
our Common Stock on the respective grant dates. Accordingly, these options will
only have value if our shareholders also benefit from increasing share prices.
In order to motivate the Company's executives to make a long-term commitment to
the Company, stock options may not be exercised until they vest. All stock
options granted in 2000 vest ratably over a five-year period. Likewise, grants
of restricted stock do not vest until two years from the grant date. Until
vested, these shares are subject to forfeiture provisions if an executive
officers leaves the Company.
8
<PAGE> 11
In an effort to further improve the correlation between cash compensation
and the Company's financial performance, the Compensation Committee engaged
William M. Mercer, Inc., an international compensation consulting company, to
assist it in the development of a management incentive program for the Company.
For fiscal 2001, the Company has implemented a management incentive plan (the
"Incentive Plan") that directly correlates employee bonuses to the achievement
of both corporate and individual performance objectives. The Compensation
Committee is responsible for approving objectives and otherwise administering
the implementation of the Incentive Plan with respect to the Named Executive
Officers. Under the Incentive Plan, a target bonus of 60% of base salary is
established for the Chief Executive Officer and a target bonus of 35% of base
salary is established for the other Named Executive Officers. Achievement of
corporate objectives relating to revenue growth and operating margin will
account for 80% of the total potential bonus paid to Named Executive Officers.
Individual performance objectives, tailored to each officer's area of
responsibility, will account for the remaining 20% of the total bonus potential.
Measurable performance objectives have been established for each Named Executive
Officer. Minimum "threshold" objectives levels must be achieved under the
corporate and the individual component in order for any bonus to be earned under
that component. Conversely, up to 200% of the target bonus amount may be paid if
target objectives are significantly exceeded.
DISCUSSION OF 2000 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER. As
described above, the Compensation Committee is responsible for establishing
total compensation for all executives, including Richard Parod, the Company's
Chief Executive Officer. During fiscal 2000, the Company's former Chairman and
Chief Executive Officer retired and the Board undertook to locate and attract a
suitable replacement. The compensation package offered to attract Mr. Parod to
join the Company operates in the same manner to that of the Company's other
executive officers. Base salary was negotiated with Mr. Parod and reflects a
number of factors including his previous salary level, the salary level of the
Company's former Chief Executive officer and salary levels generally for chief
executives of public manufacturing companies. Mr. Parod's bonus and stock option
awards during fiscal 2000 were reflective of Mr. Parod's efforts in assuming the
leadership of the Company and the Company's financial performance and other
corporate accomplishments during the year.
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
2000, 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
John W. Croghan
Michael N. Christodolou
9
<PAGE> 12
REPORT OF THE AUDIT COMMITTEE
The following report of the audit committee of Lindsay Manufacturing Co.
(the "Company") shall not be deemed to be "soliciting material" or to be "filed"
with the Securities and Exchange Commission, nor shall this report be
incorporated by reference into any filing made by the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.
The Audit Committee is comprised of Michael N. Christodolou, John W.
Croghan and Larry H. Cunningham, each of which is an independent director of the
Company under the rules adopted by the New York Stock Exchange. The Audit
Committee operates under a written charter which is attached as an exhibit to
this Proxy Statement.
The Company's management is responsible for the preparation of the
Company's financial statements and for maintaining an adequate system of
internal controls and processes for that purpose. PricewaterhouseCoopers LLP
("PWC") acts as the Company's independent auditors and they are responsible for
conducting an independent audit of the Company's annual financial statements in
accordance with generally accepted auditing standards and issuing a report on
the results of their audit. The Audit Committee is responsible for providing
independent, objective oversight of both of these processes.
The Audit Committee has reviewed and discussed the audited financial
statements for the year ended August 31, 2000 with management of the Company and
with representatives of PWC. As a result of these discussions, the Audit
Committee believes that the Company maintains an effective system of accounting
controls that allow it to prepare financial statements that fairly present the
Company's financial position and results of its operations. Our discussions with
PWC also included the matters required by Statement on Auditing Standard No. 61
(Communications with Audit Committees).
In addition, the Audit Committee reviewed the independence of PWC. We
received written disclosures and a letter from PWC regarding its independence as
required by Independence Standards Board Standards No. 1 and discussed this
information was discussed with PWC.
Based on the foregoing, the Audit Committee has recommended to the full
board of directors that the audited financial statements of the Company for the
year ended August 31, 2000 be included in the Company's annual report on Form
10-K to be filed with the Securities and Exchange Commission.
Michael N. Christodolou, Chairman
John W. Croghan
Larry H. Cunningham
10
<PAGE> 13
STOCK PERFORMANCE GRAPH
This stock performance graph is 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 this stock performance graph 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.
The following stock performance graph is a comparison of the Cumulative
Total Return on the Company's Common Stock over the five-year period ending
August 31, 2000, with the Cumulative Total Return on the S&P Smallcap 600 Index
and the S&P Machinery (Diversified)-500.
[TOTAL RETURN INDEX GRAPHIC]
SOURCE: S&P COMPUSTAT BASE YEAR = 100: 8/31/95
<TABLE>
<CAPTION>
COMPANY NAME AUG-95 AUG-96 AUG-97 AUG-98 AUG-99 AUG-00
------------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
LINDSAY MANUFACTURING CO 100.00 169.20 256.50 199.51 171.23 183.93
S&P SMALLCAP 600 INDEX 100.00 113.28 151.90 124.13 154.16 197.60
MACHINERY (DIVERSIFIED)-500 100.00 111.57 170.82 121.55 164.69 136.56
</TABLE>
11
<PAGE> 14
ADOPTION OF
2001 LONG TERM INCENTIVE PLAN
The Board of Directors has adopted the Lindsay Manufacturing Co. 2001
Long-Term Incentive Plan (the "Plan") in order to advance the interests of the
Company and its shareholders by attracting, retaining and stimulating the
performance of officers and other key employees upon whose judgment, initiative
and effort the Company is largely dependent for the successful conduct of its
business. The Plan is also designed to promote the interests of the Company by
providing nonemployee directors with an incentive to remain in the service of
the Company. Adoption of the Plan is subject to the approval of the shareholders
of the Company. If the Plan is approved by the shareholders, it will become
effective as of December 1, 2000 and no further options or other awards will be
granted under the Company's 1988 Long-Term Incentive Plan and 1991 Long-Term
Incentive Plan (the "Prior Plans").
The full text of the 2001 Long-Term Incentive Plan is set forth in Exhibit
B to this Proxy Statement. Certain features of the 2001 Long-Term Incentive Plan
are summarized below, but such summary is qualified in its entirety by reference
to the full text of the 2001-Long Term Incentive Plan. All capitalized terms not
defined herein shall have the meanings set forth in the 2001 Long-Term Incentive
Plan.
The Plan will be administered by the Compensation Committee of the Board of
Directors, which has exclusive authority to determine the persons who will
receive awards under the Plan and the terms of any awards made under the Plan.
The Plan provides that each member of the Compensation Committee must be (i) a
"Non-Employee Director as defined in Rule 16(b)(3) under the Securities Exchange
Act of 1934 and (ii) an "outside director" as defined in the regulations under
Section 162(m) of the Internal Revenue Code of 1986 (the "Code").
The Plan provides for awards of stock options, restricted stock or stock
appreciation rights ("SARs") to employees of the Company and for awards of stock
options to nonemployee directors. Awards made to employees may be based on the
achievement of performance or other objectives established by the Compensation
Committee. A total of 900,000 shares of the Company's Common Stock may be issued
under the Plan, subject to adjustments to reflect stock splits and similar
events. If options or restricted stock awarded under the Plan (or under the
Prior Plans or under the option to acquire 350,000 shares of Common Stock
awarded to Mr. Parod independently of the Prior Plans) terminate without being
fully vested or exercised, the number of shares represented thereby will be
available again for grant under the Plan. No more than 180,000 shares of Common
Stock may be issued to employees other than through options having an exercise
price of not less than the fair market value of the underlying shares.
Stock Options. Stock options granted under the Plan may be either incentive
stock options that are qualified under Section 422 of the Code or non-qualified
stock options. Stock options may be granted to employees at any time as
determined by the Compensation Committee. Nonemployee directors joining the
Board of Directors will be awarded an initial option to acquire 25,312 shares of
Common Stock on the 3rd of September after they join the Board of Directors.
Thereafter, each nonemployee director will receive an automatic award of an
option to acquire 5,062 shares of Common Stock on an annual basis. The exercise
price for stock options granted to an employee will be determined by the
Compensation Committee and may be at, below or above the fair market value of
the Company's Common Stock on the date of the grant. However, the exercise price
for any incentive stock option must be no less than the fair market value of the
Company's Common Stock on the date of the grant (or 110% of fair market value if
the employee awarded the option holds 10% or more of the Company's outstanding
Common Stock (a "10% Owner")). The exercise price of any stock option granted to
a nonemployee director will be no less than the fair market value of the
Company's Common Stock on the date of the automatic grant. No stock option
granted under the Plan may have a term of more than 10 years (or five years for
an incentive stock option granted to an employee who is a 10% Owner).
Stock options granted under the Plan may not be exercised until they vest
and no option will vest in less than six months from the date of grant. The
Compensation Committee will determine the vesting schedule for all options and
may impose additional restrictions on the exercise of any stock option. The
exercise price of a stock option may be paid in cash, in shares of Common Stock
of the Company or in any combination of cash or Common Stock.
12
<PAGE> 15
Stock options issued may not be transferred other than upon the death of
the option holder. Prior to the exercise of a stock option, the option holder
will have no rights as a shareholder with respect to the shares subject to the
option.
Restricted Stock. Under the Plan, shares of Common Stock may be awarded to
employees without payment to the Company. These shares will be subject to such
restrictions on transferability as the Committee shall impose; provided that the
period of restriction may not exceed ten years from the date of an award of
restricted stock. During the restriction period, the holder of restricted stock
will be entitled to vote such shares and to receive all dividends, stock splits
and other distributions on such shares. However, during the period of
restriction, the restricted stock will be subject to forfeiture if the employee
leaves the company other than due to death, permanent disability or retirement
after age 65. The Compensation Committee may waive forfeiture of restricted
shares unless the employee is terminated due to serious misconduct.
SARs. SARs may only be granted to Company employees and may be granted
either in conjunction with the grant of stock options or separately. The holder
of SARs has the right to receive, without payment to the Company, a number of
shares of Common Stock, cash or a combination thereof. The number of shares of
Common Stock to be issued upon the exercise of a SAR will be equal to (a) the
number of shares of Common Stock to which the SAR is exercised times (b) the
amount of the appreciation in such shares divided by (c) the fair market value
of the Common Stock on the exercise date. For this purpose, appreciation is
equal to the amount by which the fair market value of the Common Stock on the
exercise date exceeds (i) in the case of a SAR related to an option, the
exercise price of the related stock option or (ii) in the case of a SAR granted
alone, an amount determined by the Compensation Committee at the time SAR is
granted. In lieu of issuing only shares of Common Stock upon the exercise of a
SAR, the Compensation Committee may elect to pay the holder of the SAR cash or
any combination of cash or Common Stock.
Grants of Restricted Stock, SARs, cash payments or stock awards made under
the Plan to employees may be made contingent on the achievement of performance
or other objectives during a specified period. The performance measures that may
be used by the Compensation Committee for such performance awards will be based
on any one or more of the following: (i) earnings per share and/or growth in
earnings per share in relation to target objectives (excluding the effect of
extraordinary or nonrecurring items); (ii) operating cash flow and/or growth in
operating cash flow in relation to target objectives; (iii) cash available in
relation to target objectives; (iv) net income and/or growth in net income in
relation to target objectives (excluding the effect of extraordinary or
nonrecurring items); (v) revenue and/or growth in revenue in relation to target
objectives; (vi) total shareholder return (measured as the total of the
appreciation of and dividends declared on the Common Stock) in relation to
target objectives; (vii) economic value added; (viii) stock price; (ix) return
on invested capital in relation to target objectives; (x) return on shareholder
equity in relation to target objectives; (xi) return on assets in relation to
target objectives; and (xii) return on common book equity in relation to target
objectives. The Compensation may modify the performance goals or the related
minimum acceptable level of achievement for any period if it determines that
such a change is necessary to reflect events or circumstances. The Compensation
Committee may designate whether any such "performance award" to an employee is
intended to be "performance-based compensation" as that term is used in Section
162(m) of the Code which generally limits compensation to an annual limit of
$1,000,000, but exempts such performance-based compensation from the limitation.
Any performance-based compensation awarded under the Plan must be conditioned on
the achievement of one or more specified performance measures to the extent
required by Section 162(m) of the Code.
No individual may receive an award under the Plan that results in the
individual receiving a stock option or restricted stock of more than 350,000
shares of Common Stock during any rolling 36-month period. In addition, no
participant in the Plan may receive any cash awards under the Plan in excess of
$5,000,000 in any rolling 36-month period.
Notwithstanding any other provision of the Plan, all unvested or
unexercisable awards made under the Plan will automatically vest and become
exercisable without further action by the Board of Directors or the Committee
upon a "Change in Control", unless otherwise provided in an award agreement. For
purposes of the Plan, a "Change in Control" means (a) a dissolution or
liquidation of the Company, (b) a sale of substantially all the assets of the
Company, (c) a merger or other combination involving the Company after which the
owners of the Company immediately prior to such merger or combination own less
than 50% of the outstanding shares of the Company, or
13
<PAGE> 16
(d) the acquisition of more than 50% of the Company's Common Stock by any person
through a tender offer or otherwise. The decision of the Committee as to whether
a Change in Control has occurred shall be conclusive and binding.
The Plan may be amended from time to time by the Board of Directors.
However, the Plan may not be amended to (a) increase the total number of shares
of Common Stock that may be issued under the Plan or (b) change the number of
shares of Common Stock that may be issued to employees with an exercise price
less than the fair market value of the underlying shares without the prior
consent of the shareholders of the Company. In addition, without the approval of
the Company's stockholders, the Committee will not (i) reduce the exercise price
of any option or (ii) cancel or settle for cash or other consideration an
outstanding option and grant a replacement option at a lower exercise price,
within 6 months before or after the cancellation.
The Board of Directors believes that it is in the best interest of the
Company and its shareholders to use awards of stock options, restricted stock
and SARs in order to attract and retain qualified personnel at all levels of the
organization and to align the interest of the Company's directors and employees
with those of its shareholders. The Board of Directors believes that adoption of
the Plan is necessary at this time to ensure that a sufficient number of
options, SARs and shares of restricted stock are available as they are needed in
the future. The approval of the Plan requires the affirmative vote of the
holders of a majority of the shares present in person or represented by proxy at
the meeting and entitled to vote. Abstentions and broker nonvotes will not be
considered shares entitled to vote with respect to approval of the adoption of
the Plan and will not be counted as votes for or against the approval of the
Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 2001 LONG-TERM
INCENTIVE PLAN.
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, 2001. 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, 2001.
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.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals submitted for presentation at the Annual Meeting must
be received by the Secretary of the Company at its home office no later than
January 5, 2001. Such proposals must set forth (i) a brief description of the
business desired to be brought before the annual meeting and the reason for
conducting such business at the annual meeting, (ii) the name and address of the
stockholder proposing such business, (iii) the class and number of shares of the
Company's Common Stock beneficially owned by such stockholder and (iv) any
material interest of such stockholder in such business. Nominations for
directors may be submitted by stockholders by delivery of such nominations in
writing to the Secretary of the Company by January 5, 2001. Only stockholders of
record as of December 15, 2000 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 22, 2001 to the Secretary of the Company at its home
14
<PAGE> 17
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 January 5,
2001.
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
/s/ Bruce C. Karsk
------------------
Bruce C. Karsk, Secretary
Omaha, Nebraska
December 28, 2000
15
<PAGE> 18
EXHIBIT A
LINDSAY MANUFACTURING CO.
AUDIT COMMITTEE CHARTER
The Audit Committee of Lindsay Manufacturing Co. shall be appointed by the
Board of Directors annually and shall consist solely of three or more
independent Directors, one of whom shall be appointed by the Board as the
Chairman of the Committee. A Director shall be considered independent if they
have no relationship to the Company that may interfere with the exercise of
their independence from management and the Company. All members of the Committee
shall have a working familiarity with basic finance and accounting practices,
and at least one member of the Committee shall have accounting or related
financial management expertise. To effectively perform his role, each Committee
member will obtain an understanding of the detailed responsibilities of
Committee membership as well as the Company's business operations and risks.
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Company to any
governmental body or the public; the Company's systems of internal controls
regarding finance, accounting, legal compliance and ethics that management and
the Board have established; and the Company's auditing, accounting and financial
processes generally. The Audit Committee shall have access to all records of the
Company, shall perform the following functions, and shall have and may exercise
such powers as are appropriate for the performance thereof:
A. Financial Practices:
1. a. Review and discuss with management the Company's Annual Report
and the related Form 10-K including the financial statements
therein, prior to their release to the public or filing with the
SEC.
b. Review and discuss with management the Company's quarterly
financial results and financial statements prior to their release
to the public.
2. The Committee Chairman will review press releases submitted by
management in connection with the release of quarterly, annual, or
special financial statements. In respect thereto to the Committee
Chairman will recommend to the Chairman of the Board and Vice
President of Finance any changes which appear necessary to conform
releases to appropriate disclosure practice.
3. Study the format and timeliness of financial reports presented to the
public or used internally and, when appropriate, recommend changes
after consideration by the outside auditor and management.
<PAGE> 19
4. Periodically, at least annually, request that management or the
Company's counsel provide a review of legal and environmental matters
that may have a significant impact on the Company or its financial
reports.
5. Meet with the Company's Vice President of Finance to review safety,
insurance, permissible investments, and other risk management issues
that may have a significant impact on the Company or its financial
reports.
6. Examine whether management has been diligent and prudent in
establishing accounting provisions for probable losses or doubtful
values and in making appropriate disclosures of significant financial
conditions or events.
B. Outside Auditor:
The outside auditor is ultimately accountable to the Company's Board of
Directors and Audit Committee who, as representatives of the shareholders,
have the ultimate authority and responsibility to select, evaluate, and,
where appropriate , replace the outside auditor.
1. Review the management's recommendation on the outside auditor to be
selected each year and make final proposal to the Board of Directors
in respect to such appointment.
2. In conjunction with the Vice President of Finance and the Corporate
Controller, review the general scope of the annual audit, approve the
extent and nature of such activity, and agree upon the general level
of the related fees.
3. Obtain from the outside auditor each year a formal written statement
detailing all relationships between the auditor and the Company, and
addressing whether the auditor is "independent" within applicable
rules, as required by Independence Standards Board Standard No. 1, and
discuss with the auditors their independence.
4. Discuss with the outside auditor the matters required to be discussed
by Statement on Auditing Standards No. 61.
5. Consider any significant non-audit assignments given to the to outside
auditor and judge their impact upon the general independence of the
audit firm as it performs the annual audit.
6. Maintain an independent contact with the senior personnel of the
outside auditor and communicate freely and openly with them in respect
to the financial developments. Meet periodically, at least annually,
with the outside auditor without any company officers or employees
present.
C. Internal Audit Function:
1. While the Company does not have a separately staffed Internal Audit
Department, certain activities performed by the financial executives
within the Company are
2
<PAGE> 20
deemed to be similar to internal audit functions. Review periodically with
the outside auditor and the Vice President of Finance and the Corporate
Controller the scope and implications of the Company's internal audit-like
activities and consider their adequacy.
2. Maintain direct access to the Vice President of Finance and the
individuals who report to him. If deemed useful, require that special
studies be initiated on subjects of special interest to the Audit
Committee.
3. Support the direct interface of the Vice President of Finance and the
Corporate Controller with members of the Audit Committee.
D. Internal Control:
1. Understand the system of internal control used by the Company. By
means of special reports from financial management, make periodic
reviews of significant aspects of the system.
2. Review the comments on internal control submitted by the outside
auditor and insure that appropriate suggestions for improvement are
promptly addressed and incorporated into operating practices.
3. Review the principal accounting practices as described in the
footnotes to the Company's financial statements, as well as the
financial and operating policies as contained in the Company's "Policy
Manual." Obtain assurances from financial management and the Vice
President of Finance that such practices and policies are being
followed.
4. At least annually, examine a detailed report of the expenses and
perquisites of the officers of the Company and of the Board members
and report to the Board of Directors on their appropriateness.
E. Financial Reporting Processes:
1. In consultation with the outside auditor and the Vice President of
Finance review the integrity of the organization's financial reporting
processes, both internal and external.
2. Consider the outside auditor's judgements about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
3. Consider and approve, if appropriate, major changes to the Company's
auditing and accounting principles and practices as suggested by the
outside auditor, management or the Vice President of Finance.
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F. Financial Staff:
1. Review the professionalism and competence of the principal financial
executives and consider their present and future abilities to
represent the Company's interests.
2. Consider the general adequacy of the financial staffing and its
compensation and when needed discuss such matters with the Chief
Executive Officer.
G. Special Duties:
1. Upon request, assist management by appearing before investment,
professional, or regulatory bodies in matters dealing with financial
statements, internal control, tax treatments, or the accounting
policies employed in relation thereto.
2 Upon request from the Chairman of the Board, Vice President of Finance
or Corporate Controller, make special studies of matters related to
the financial operations of the Company or to allegations of
managerial misconduct by its executives.
3. In conjunction with the Company's Counsel, review the compliance of
executives with the Company's "Business Conduct Policy".
4. Work with the Board and management, as requested, on considerations
related to the Board's dividend policy.
5. Review and update its Audit Committee Charter periodically, as
conditions dictate.
6. As per SEC Item 306 of Regulation S-K and S-B and Item 7(e)(3) of
Schedule 14A, provide a report for inclusion in the Company's proxy
statement that informs stockholders of the Audit Committee's oversight
with respect to financial reporting and underscores the importance of
the Audit Committee's role.
7. As per SEC Item 7(e)(3) of Schedule 14A, provide disclosure in the
Company's proxy statement that the Audit Committee has a written
Charter and include a copy of the Charter as an appendix to the proxy
statement at least once every three years.
Meetings of the Audit Committee will be held quarterly prior to the
release of corporate earnings reports and at such other times as shall be
required by the Chairman of the Board or the Chairman of the Committee. Two
or more committee members shall constitute a quorum.
At the invitation of the Chairman of the Committee, the meetings shall
be attended by the Chief Executive Officer, the Chief Financial Officer,
the Corporate Controller, the representatives of the outside auditor, and
such other persons as are appropriate to the matters under consideration.
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At least annually, or upon request of the Chairman of the Committee,
the Audit Committee will meet in "executive session" with the outside
auditor and with the Vice President of Finance or Corporate Controller to
consider all circumstances related to the audit and financial process. At
least annually, the Audit Committee shall also meet with the outside
auditor without any company officers or employees present.
Written minutes pertaining to each meeting shall be filed with the
Chairman of the Board by the Chairman of the Committee and an oral report
shall be presented by the Chairman of the Committee at each Board meeting.
January 1, 2000
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EXHIBIT B
LINDSAY MANUFACTURING CO.
2001 LONG-TERM INCENTIVE PLAN
The Lindsay Manufacturing Co. 2001 Long-Term Incentive Plan (the "Plan"),
is hereby adopted by the Board of Directors of Lindsay Manufacturing Co. as of
the 18th day of December, 2000.
ARTICLE I
PURPOSE
SECTION 1.01. OFFICERS AND KEY EMPLOYEES. The Plan is intended to advance
the interests of Lindsay Manufacturing Co., its shareholders and its
subsidiaries by attracting, retaining and stimulating the performance of
officers and other key employees upon whose judgment, initiative and effort
Lindsay Manufacturing Co. is largely dependent for the successful conduct of its
business, and to encourage and enable such officers and other key employees
("Employee Participants") to acquire and retain a proprietary interest in
Lindsay Manufacturing Co. by ownership of its stock. Options granted may, if so
intended by the Committee, be Incentive Stock Options designed to meet the
requirements of Section 422 of the Internal Revenue Code of 1986.
SECTION 1.02. NONEMPLOYEE DIRECTORS. The Plan is also intended to promote
the interests of Lindsay Manufacturing Co. by offering nonemployee members of
the Board of Directors ("Director Participants") of the Company the opportunity
to receive Nonqualified Stock Options to provide them with significant
incentives to remain in the service of the Company. Only Nonqualified Stock
Options will be granted to Director Participants under this Plan.
ARTICLE II
DEFINITIONS
"Automatic Grant Date" shall be September 3 of each year, beginning with
September 3, 2001, provided, that in the event the Common Stock is not sold in
the regular way on the New York Stock Exchange or other national securities
exchange or on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") on September 3 of a particular year, the Automatic
Grant Date shall be the first preceding day on which there were such sales.
Automatic Grant as used in the Plan shall mean the automatic grant which occurs
on the Automatic Grant Date.
"Award" means a grant of an Incentive Stock Option, Nonqualified Stock
Option, Restricted Stock, SAR or Performance Award under this Plan.
"Board" means the Board of Directors of the Company.
<PAGE> 24
"Change in Control" shall mean any one of the following events: (a) a
dissolution or liquidation of the Company, (b) a sale of substantially all of
the assets of the Company, (c) a merger or combination involving the Company
after which the owners of Common Stock of the Company immediately prior to the
merger or combination own less than 50% of the outstanding shares of common
stock of the surviving corporation, or (d) the acquisition of more than 50% of
the outstanding shares of Common Stock of the Company, whether by tender offer
or otherwise, by any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934) other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company. The decision
of the Committee as to whether a Change in Control has occurred shall be
conclusive and binding.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Compensation Committee of the Board; provided that
the Committee is intended to consist solely of persons who, at the time of their
appointment, each qualified as a "Non-Employee Director" under Rule
16b-3(b)(3)(i) promulgated under the Securities Exchange Act of 1934 and, to the
extent that relief from the limitation of Section 162(m) of the Code is sought,
as an "Outside Director" under Section 1.162-27(e)(3)(i) of the Treasury
Regulations issued under Section 162 of the Code.
"Common Stock" means the Company's $1.00 par value common stock.
"Company" means Lindsay Manufacturing Co., a Delaware corporation.
"Date of Grant" means the date on which an Award is granted under the Plan
to an Employee Participant or Director Participant.
"Director Participant" means a Director who is not an employee of the
Company or any of its Subsidiaries to whom a Nonqualified Stock Option, which
has not expired, has been granted under the Plan.
"Employee Participant" means an officer or key employee (or any person who
agrees to become an officer or key employee) of the Company or its Subsidiaries
to whom an Award, which has not expired, has been granted under the Plan.
"Fair Market Value" means the last price per share at which the Common
Stock is sold in the regular way on the New York Stock Exchange or other
national securities exchange or NASDAQ on the Date of Grant or, in the absence
of any reported sales on such day, the first preceding day on which there were
such sales.
"Incentive Stock Option" means a stock option granted to an Employee
Participant under the Plan which is intended to meet the requirements of Section
422 of the Internal Revenue Code of 1986.
"Long-Term Incentive Plan Agreement" means an agreement between the Company
and an Employee Participant or Director Participant under which the Participant
may receive an Award under this Plan.
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"Nonqualified Stock Option" means a stock option granted to either an
Employee Participant or Director Participant that is not intended to meet the
requirements of Section 422 of the Internal Revenue Code of 1986.
"Option" means a Nonqualified Stock Option or an Incentive Stock Option
granted under the Plan. "Options" when granted to Director Participants under
the Plan shall be limited to a Nonqualified Stock Options received on an
Automatic Grant Date.
"Performance Award" means a grant of Restricted Stock, SARs, cash payments
or stock awards which are contingent on the achievement of performance or other
objectives during a specified period.
"Period of Restriction" means the period starting from the Date of Grant,
during which the transfer of shares of Restricted Stock is restricted pursuant
to Article VIII of this Plan, or other such period that may be assigned to any
Options granted under the Plan.
"Plan" means the Lindsay Manufacturing Co. 2001 Long-Term Incentive Plan.
"Restricted Stock" means Common Stock granted to an Employee Participant
pursuant to Article VIII of this Plan.
"Serious Misconduct" means embezzlement or misappropriation of corporate
funds, other acts of dishonesty, significant activities harmful to the
reputation of the Company or its Subsidiaries, a significant violation of
Company or Subsidiary policy, willful refusal to perform or substantial
disregard of the duties properly assigned to the Employee or Director
Participant, or a significant violation of any contractual, statutory or common
law duty of loyalty to the Company or its Subsidiaries.
"Stock Appreciation Right" or "SAR" is the right of an Employee Participant
to receive, without payment to the Company, a number of shares of Common Stock,
cash or any combination thereof, the amount of which is determined pursuant to
the formula set forth in Article VII.
"Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 424 of the Internal Revenue
Code of 1986.
ARTICLE III
PARTICIPANTS
SECTION 3.01. EMPLOYEE PARTICIPANTS. The Committee may grant Restricted
Stock, Options, or SARs to Employee Participants as it shall determine in its
sole discretion from time to time in accordance with the terms and conditions of
the Plan.
SECTION 3.02. DIRECTOR PARTICIPANTS. Automatic grants of Nonqualified Stock
Options will be granted to each person who, on or after September 3, 2001, is or
becomes a Director Participant as provided in Section 6.02 hereof.
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ARTICLE IV
ADMINISTRATION
SECTION 4.01. COMMITTEE. The Plan shall be administered by the Committee.
Subject to the express provisions of the Plan, the Committee shall have sole
discretion and authority to determine, from among eligible officers and other
key employees (or persons who agree to become officers or key employees) those
to whom and the time or times at which Awards may be granted to any Employee
Participants and the number of shares of Restricted Stock that may be awarded or
the number of shares of Common Stock to be subject to each Option or SAR.
Subject to the express provisions of the Plan, the Committee shall also have
complete authority to interpret the Plan, to prescribe, amend, and rescind rules
and regulations relating to it, to determine the details and provisions of each
Long-Term Incentive Plan Agreement, and to make all the determinations necessary
or advisable in the administration of the Plan as it relates to Employee and
Director Participants. All such actions and determinations by the Committee
shall be conclusively binding for all purposes and upon all persons.
SECTION 4.02. MAJORITY RULE. A majority of the members of the Committee
shall constitute a quorum, and any action taken by a majority present at a
meeting at which a quorum is present or any action taken without a meeting
evidenced by a writing executed by a majority of the whole Committee shall
constitute the action of the Committee.
SECTION 4.03. COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Committee on all matters relating to eligible employees,
their employment, death, retirement, disability or other termination of
employment, and such other pertinent facts as the Committee may require. The
Company shall furnish the Committee with such clerical and other assistance as
is necessary in the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
SECTION 5.01. LIMITATIONS; AGGREGATE. Subject to adjustment pursuant to the
provisions of Section 5.04 hereof, the number of shares of Common Stock which
may be issued to Employee and Director Participants hereunder shall be 900,000
shares of Common Stock. All such shares may be issued pursuant to Incentive
Stock Options. No more than 180,000 shares of Common Stock may be issued to
Employee Participants other than as Options having an exercise price of not less
than the Fair Market Value of the underlying shares. Such shares may be either
authorized but unissued shares, shares issued and reacquired by the Company or
shares bought on the market for the purposes of the Plan. Automatic awards of
Nonqualified Stock Options to Director Participants shall be counted for
purposes of the limitations in this Section 5.01. The number of shares of Common
Stock which may be issued to Employee Participants and Director Participants
hereunder shall not be increased (except as provided for in Section 5.04 hereto)
without the approval of the Company's stockholders. Notwithstanding the
foregoing limitations, shares of Common Stock which are again available for
grant pursuant to Section 5.03 of this Plan shall not be counted for purposes of
the limitations in this Section 5.01.
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SECTION 5.02. LIMITATIONS; INDIVIDUAL. No Employee Participant or Director
Participant may receive an Award under this Plan if such Award results in the
Employee Participant or Director Participant receiving an Option or Restricted
Stock of more than 350,000 shares of Common Stock during any rolling 36-month
period. No Employee Participant or Director Participant may receive any cash
awards under this Plan in excess of $5,000,000 in any rolling 36-month period.
SECTION 5.03. RESTRICTED STOCK AND OPTIONS GRANTED UNDER PLAN. Shares of
Common Stock with respect to which Restricted Stock shall have vested or Options
granted to Employee Participants or Nonqualified Stock Options granted to
Director Participants hereunder that have been exercised shall not again be
available for grant hereunder; provided, however, that shares of Common Stock
exercised and immediately surrendered to the Company as payment of the exercise
price or applicable taxes may again be available for grant hereunder. If
Restricted Stock or an Option granted to Employee Participants or Nonqualified
Stock Options granted to Director Participants hereunder (or such awards which
are outstanding as of December 1, 2000 under the Company's Amended and Restated
1988 and 1991 Long-Term Incentive Plans or the stock options for 350,000 shares
of Common Stock granted to Richard W. Parod on March 8, 2000) shall terminate
for any reason without being wholly vested or exercised, the number of shares to
which such Restricted Stock or Option termination relates shall again be
available for grant hereunder.
SECTION 5.04. ANTIDILUTION. In the event that the outstanding shares of
Common Stock hereafter are changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up, or stock dividend, or
in the event that there should be any other stock splits, stock dividends or
other relevant changes in capitalization occurring after the effective date of
this Plan:
(a) The aggregate number and kind of Restricted Stock and shares
subject to Options or other Awards which may be granted hereunder shall be
adjusted appropriately; and
(b) Rights under outstanding Restricted Stock and Options or other
Awards granted to Employee Participants or Nonqualified Stock Options
granted to Director Participants hereunder, both as to the number of
subject shares and the Option price, shall be adjusted appropriately.
Where dissolution or liquidation of the Company or any merger or
combination in which the Company is not a surviving corporation is involved,
each outstanding Restricted Stock award and Option granted hereunder shall
terminate, but the Employee Participant and Director Participant shall have the
right, immediately prior to such dissolution, liquidation, merger, or
combination, to receive the Common Stock or to exercise any Option in whole or
in part, to the extent that it shall not have been exercised, without regard to
any vesting restriction or installment exercise provisions.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined solely by the Committee, and any such adjustment
may provide for the elimination of fractional share interests.
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ARTICLE VI
OPTIONS
SECTION 6.01. OPTION GRANT AND AGREEMENT, EMPLOYEE PARTICIPANTS. Each
Option granted hereunder to an Employee Participant shall be evidenced by
minutes of a meeting or the written consent of the Committee and by a written
Long-Term Incentive Plan Agreement dated as of the Date of Grant and executed by
the Company and the Employee Participant. The Long-Term Incentive Plan Agreement
shall set forth such terms and conditions as may be determined by the Committee
to be consistent with the Plan, but may include additional provisions and
restrictions, provided that they are not inconsistent with the Plan.
SECTION 6.02. AUTOMATIC OPTION GRANT AND AGREEMENT, DIRECTOR PARTICIPANTS.
(a) A Director Participant who was not a Director on September 3, 2000
will be granted a Nonqualified Stock Option to purchase 25,312 shares of
Common Stock as of the Automatic Grant Date first occurring after he or she
is first appointed or elected to the Board of Directors. All such
Nonqualified Stock Options shall have an exercise price equal to the Fair
Market Value per share as of the applicable Automatic Grant Date.
(b) Director Participants as of each Automatic Grant Date after the
first Automatic Grant Date on which a Director Participant receives a grant
pursuant to Section 6.02(a) or under the Lindsay Manufacturing Co. Amended
and Restated 1991 Long-Term Incentive Plan will be granted a Nonqualified
Stock Option to purchase 5,062 shares of Common Stock. All such
Nonqualified Stock Options shall have an exercise price equal to the Fair
Market Value per share as of the applicable Automatic Grant Date.
(c) Nonqualified Stock Options granted hereunder shall be evidenced by
minutes of a meeting or the written consent of the Committee and by a
written Long-Term Incentive Plan Agreement dated as of the Automatic Grant
and executed by the Company and the Director Participant. The Long-Term
Incentive Plan Agreement shall set forth such terms and conditions as
consistent with the Plan, but may include additional provisions and
restrictions, provided that they are not inconsistent with the Plan.
SECTION 6.03. EXERCISE PRICE.
(a) The exercise price per share for all Options issued under the Plan
shall be determined by the Committee in its discretion, and may be at,
below or above the Fair Market Value except that:
(i) the exercise price of any Incentive Stock Option shall equal
or exceed the Fair Market Value of the Common Stock as of the Date of
Grant;
(ii) the exercise price for any Incentive Stock Option granted to
a "10% owner" (as defined in Article IX) shall be determined as
provided in Article IX(a) hereof; and
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(iii) the exercise price of any Nonqualified Stock Option granted
to a Director Participant shall be the Fair Market Value as of the
applicable Automatic Grant Date.
(b) The Committee shall not without the approval of the Company's
stockholders:
(i) reduce the exercise price of an Option; or
(ii) cancel or settle for cash or other consideration an
outstanding Option and grant a replacement Option at a lower exercise
price, with six months before or after the cancellation.
SECTION 6.04. OPTION PERIOD; EMPLOYEE PARTICIPANT. Options may be granted
to Employee Participants at any time after the effective date of the Plan and
prior to the termination of the Plan, provided that the period during which each
Option may be exercised shall be not later than 10 years from the date such
Option is granted; and provided further that Incentive Stock Options granted to
a "10% owner" (as defined in Article IX) must be exercised within five years
from the Date of Grant thereof. The period for the exercise of each Option shall
be determined by the Committee.
SECTION 6.05. OPTION PERIOD; DIRECTOR PARTICIPANTS. Nonqualified Stock
Options will be granted to Director Participants as provided in Section 6.02 on
each Automatic Grant Date occurring prior to termination of the Plan.
Nonqualified Stock Options may be exercised as provided for in 6.06(c). The
period during which each Nonqualified Stock Option may be exercised shall not be
later than 10 years from the Date of Grant thereof.
SECTION 6.06. OPTION EXERCISE BY DIRECTOR PARTICIPANT OR EMPLOYEE
PARTICIPANT.
(a) Options granted hereunder may not be exercised unless and until
the Employee Participant shall have been or remained in the employ of the
Company or its Subsidiaries, or Director Participant shall have been or
remained a Director of the Company, for six months (or such longer time as
may be established by the Committee) from and after the Date of Grant,
except as otherwise provided in the Plan.
(b) Options may be exercised in whole or part (but only with respect
to whole shares of Common Stock and only for a minimum of 100 shares of
Common Stock) at any time within the period permitted for the exercise
thereof, and shall be exercised by written notice of intent to exercise the
Option delivered to the Secretary of the Company at its principal executive
offices.
(c) Unless otherwise determined by the Committee, Options granted to a
Director Participant pursuant to Section 6.02 will become exercisable by
him at the rate of 20% per year beginning on the first anniversary of the
applicable Automatic Grant Date and continuing at the rate of 20% per year
thereafter, subject to other provisions as provided in the Plan.
(d) The Committee may impose such restrictions or conditions on the
exercise of any Option or on any shares of Common Stock acquired pursuant
to the exercise of an Option under this Plan as it may deem advisable,
including, without limitation,
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restrictions imposed by applicable federal or state securities laws or the
requirements of any stock exchange on which such shares of Common Stock are
then listed. In that regard, the Committee may require as a condition to
the exercise of any Option that the exercising Employee Participant or
Director Participant (or his heirs, legatees, or legal representative, as
the case may be) deliver to the Company a written representation of present
intention to purchase the Common Stock for investment purposes only and not
with a view for distribution. In the event such representation is required
to be delivered, an appropriate legend may be placed upon each certificate
evidencing the Common Stock issued upon the exercise of such Option.
SECTION 6.07. PAYMENT. The exercise price for shares of Common Stock
purchased upon exercise of Options by Employee Participants or Director
Participants shall be paid in cash, in shares of Common Stock of the Company
(not subject to limitations on transfer) valued at the then Fair Market Value of
such shares, in a combination of cash and Common Stock, or in any other manner
approved by the Committee. In addition to, and at the time of payment of, the
exercise price, Employee Participants and Director Participants shall pay to the
Company in cash or in Common Stock of the Company the full amount of all federal
and state withholding or other employment taxes applicable to the taxable income
resulting from such exercise. Notwithstanding the foregoing, no shares of Common
Stock of the Company may be used as payment of the exercise price of any Option
or for withholding and other employment taxes unless such shares have been owned
by the Employee Participant or Director Participant for at least 6 months prior
to exercise of the Options.
SECTION 6.08. NONTRANSFERABILITY OF OPTION. No Option shall be transferred
by an Employee Participant or Director Participant otherwise than by will or the
laws of descent and distribution or designation of a beneficiary in a form
acceptable to the Committee. During the lifetime of an Employee Participant or
Director Participant the Option shall be exercisable only by him, or, in the
case of an Employee Participant or Director Participant who is mentally
incapacitated, the Option shall be exercisable by his guardian or legal
representative. Notwithstanding the foregoing, the Committee may approve certain
transfers of Nonqualified Stock Options to a family member or trust benefiting a
family member of an Employee Participant or Director Participant.
SECTION 6.09. EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYEE PARTICIPANT.
(a) Except as otherwise provided in this Section 6.09, if, prior to a
date six months from the Date of Grant of an Option (or such longer time as
may be established by the Committee), an Employee Participant's employment
with the Company and its Subsidiaries shall be terminated by the Company or
Subsidiary for any reason, or by the act of the Employee Participant, the
Employee Participant's right to exercise such Option shall terminate and
all rights thereunder shall cease, unless otherwise determined by the
Committee.
(b) If, on or after six months from the Date of Grant of an Option (or
such longer time as may be established by the Committee), an Employee
Participant's employment with the Company or its Subsidiaries shall be
terminated for any reason other than death, retirement, permanent and total
disability or serious misconduct, the Employee Participant shall have the
right, during the period ending upon the shorter of 60 days after
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such termination or the remaining time available under the Option, to
exercise such Option to the extent that it was exercisable at the date of
such termination of employment and shall not have been exercised, unless
otherwise determined by the Committee.
(c) If an Employee Participant shall die while in the employ of the
Company or its Subsidiaries or within 60 days after termination of such
employment, the executor or administrator of the estate of the decedent or
the person or persons to whom an Option granted hereunder shall have been
validly transferred by the executor or the administrator pursuant to will
or the laws of descent and distribution or pursuant to a proper designation
of beneficiary by the Employee Participant shall have the right, during the
period ending upon the shorter of one year after the date of the Employee
Participant's death or the remaining time available under the Option, to
exercise the Employee Participant's Option to the extent that it was
exercisable at the date of death and shall not have been exercised, unless
otherwise determined by the Committee.
(d) If an Employee Participant shall retire after attaining age 65 or
become permanently and totally disabled while in the employ of the Company,
the Employee Participant (or in the case of an Employee Participant who is
mentally incapacitated, his guardian or legal representative) shall have
the right, during a period ending upon the shorter of one year after such
retirement or permanent and total disability or the remaining time
available under the Option, to exercise such Option to the extent that it
was exercisable at the date of termination of employment due to retirement
or permanent and total disability and shall not have been exercised, unless
otherwise determined by the Committee.
(e) If an Employee Participant's employment with the Company or its
Subsidiaries shall be terminated by the Company or a Subsidiary for Serious
Misconduct, the Employee Participant's right to exercise any Option shall
immediately terminate and all rights thereunder shall cease, unless
otherwise determined by the Committee.
(f) No transfer of an Option by an Employee Participant shall be
effective to bind the Company unless the Company shall have been furnished
with written notice thereof and such other evidence as the Committee may
reasonably deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of
such Option.
SECTION 6.10. EFFECT OF DEATH OR OTHER TERMINATION OF DIRECTOR PARTICIPANT.
(a) Except as otherwise provided in this Section 6.10 and Section
11.04, if, prior to a date six months from an Automatic Grant Date relating
to any Nonqualified Stock Option, a Director Participant ceases to be a
member of the Company's Board of Directors for any reason, the Director
Participant's right to exercise such Nonqualified Stock Option shall
terminate and all rights thereunder shall cease, unless otherwise
determined by the Committee.
(b) If, on or after six months from an Automatic Grant Date relating
to any Nonqualified Stock Option, a Director Participant ceases to be a
member of the Company's Board of Directors for any reason other than death,
retirement, permanent and total disability or serious misconduct, the
Director Participant shall have the right,
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during the period ending upon the shorter of 60 days after such termination
or the remaining time available under the Nonqualified Stock Option, to
exercise such Nonqualified Stock Option to the extent that it was
exercisable at the date of such cessation of membership and shall not have
been exercised, unless otherwise determined by the Committee.
(c) If a Director Participant shall die while a Director of the
Company or within 60 days after termination as a Director of the Company,
the executor or administrator of the estate of the decedent or the person
or persons to whom any Nonqualified Stock Option granted hereunder shall
have been validly transferred by the executor or the administrator pursuant
to will or the laws of descent and distribution or pursuant to a proper
designation of beneficiary by the Director Participant shall have the
right, during the period ending upon the shorter of one year after the date
of the Director Participant's death or the remaining time available under
the Nonqualified Stock Option, to exercise any Nonqualified Stock Option to
the extent that it was exercisable at the date of death and shall not have
been exercised, unless otherwise determined by the Committee.
(d) If a Director Participant shall retire after attaining age 70 or
become permanently and totally disabled while a Director of the Company,
the Director Participant (or in the case of a Director Participant who
becomes mentally incapacitated, his guardian or legal representative) shall
have the right, during the period ending upon the shorter of 60 days after
such retirement or permanent and total disability or the remaining time
available under the Nonqualified Stock Option, to exercise such Option to
the extent that it was exercisable at the date of termination as a Director
due to retirement or permanent and total disability and shall not have been
exercised, unless otherwise determined by the Committee.
(e) If a Director Participant's membership on the Board of Directors
shall be terminated by the Company for Serious Misconduct, the Director
Participant's right to exercise any Nonqualified Stock Option shall
immediately terminate and all rights thereunder shall cease, unless
otherwise determined by the Committee.
(f) No transfer of a Nonqualified Stock Option by a Director
Participant shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and such other evidence as
the Committee may deem necessary to establish the validity of the transfer
and the acceptance by the transferee or transferees of the terms and
conditions of a Nonqualified Stock Option.
SECTION 6.11. RIGHTS AS SHAREHOLDER; EMPLOYEE PARTICIPANT. An Employee
Participant or a transferee of an Option shall have no rights as a shareholder
with respect to any shares subject to such Option prior to the purchase of such
shares by exercise of such Option as provided herein.
SECTION 6.12. RIGHTS AS SHAREHOLDER; DIRECTOR PARTICIPANT. A Director
Participant or a transferee of a Nonqualified Stock Option shall have no rights
as a shareholder with respect to any shares subject to such Nonqualified Stock
Option prior to the purchase of such shares by exercise of such Nonqualified
Stock Option as provided herein. Nothing contained herein or in any Long-Term
Incentive Plan Agreement shall be construed or interpreted so as to affect
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adversely or otherwise impair the right to remove any Director Participant from
service on the Board of Directors of the Company at any time in accordance with
the provisions of applicable law.
ARTICLE VII
STOCK APPRECIATION RIGHTS
SECTION 7.01. SAR GRANTS. An SAR may be granted to Employee Participants
(a) with respect to any Option granted under this Plan, either concurrently with
the grant of such Option or at such later time as determined by the Committee
(as to all or any portion of the shares of Common Stock subject to the Option),
or (b) alone, without reference to any related Option. Each SAR granted by the
Committee under this Plan shall be subject to the terms and conditions contained
in this Article VIII.
SECTION 7.02. NUMBER. Each SAR granted to any Employee Participant shall
relate to such number of shares of Common Stock as shall be determined by the
Committee, subject to adjustment as provided in Section 5.04. In the case of an
SAR granted with respect to an Option, the number of shares of Common Stock to
which the SAR pertains shall be reduced in the same proportion that the Employee
Participant exercises the related Option.
SECTION 7.03. DURATION. Subject to earlier termination as provided in
Section 6.04 or 6.09(e), the term of each SAR shall be determined by the
Committee, but shall not exceed 10 years from the Date of Grant. Unless
otherwise provided by the Committee, each SAR shall become exercisable at such
time or times, to such extent and upon such conditions as the Option, if any, to
which it relates is exercisable. No SAR may be exercised during the first six
months of its term (or such longer period as may be established by the
Committee), unless otherwise determined by the Board. Except as provided in the
preceding sentence, the Committee may in its discretion accelerate the
exercisability of any SAR in the manner described in Section 6.04.
SECTION 7.04. EXERCISE. An SAR may be exercised, in whole or in part, by
giving written notice to the Company, specifying the number of SARs which the
Employee Participant wishes to exercise. Upon receipt of such written notice,
the Company shall, within 90 days thereafter, deliver to the exercising Employee
Participant certificates for the shares of Common Stock or cash or both, as
determined by the Committee, to which the holder is entitled pursuant to Section
7.05.
SECTION 7.05. PAYMENT. Subject to the right of the Committee to deliver
cash in lieu of shares of Common Stock (which, as it pertains to officers of the
Company, shall comply with all requirements of the Securities Exchange Act of
1934, as amended, and regulations adopted thereunder), the number of shares of
Common Stock which shall be issuable upon the exercise of an SAR shall be
determined by dividing:
(a) the number of shares of Common Stock as to which the SAR is
exercised multiplied by the amount of the appreciation in such shares (for
this purpose, the "appreciation" shall be the amount by which the Fair
Market Value of the shares of Common Stock subject to the SAR on the
exercise date exceeds (i) in the case of an SAR related to an option, the
purchase price of the shares of Common Stock under the Option or (ii) in
the case of an SAR granted alone, without reference to a related Option, an
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amount which shall be determined by the Committee at the time of grant,
subject to adjustment under Section 5.04); by
(b) the Fair Market Value of a share of Common Stock on the exercise
date.
In lieu of issuing only shares of Common Stock upon the exercise of a SAR,
the Committee may elect to pay the holder of the SAR cash or any
combination of cash or Common Stock equal to the Fair Market Value on the
exercise date of any or all of the shares which would otherwise be
issuable. No fractional shares of Common Stock shall be issued upon the
exercise of an SAR; instead, the holder of the SAR shall be entitled to
receive a cash adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the exercise date or to purchase the
portion necessary to make a whole share at its Fair Market Value on the
date of exercise.
SECTION 7.06. EMPLOYMENT TAXES. The Company shall retain the full
amount of all federal and state withholding or other employment taxes
applicable to the taxable income of the Employee Participant resulting from
the exercise of the SAR.
ARTICLE VIII
RESTRICTED STOCK
SECTION 8.01. GRANT OF RESTRICTED STOCK. The Committee, at any time and
from time to time, may grant shares of Restricted Stock under the Plan to such
Employee Participants and in such amounts as it shall determine. Each grant of
Restricted Stock shall be evidenced by minutes of a meeting or the written
consent of the Committee and by a written Long-Term Incentive Plan Agreement
dated as of the Date of Grant and executed by the Company and the Employee
Participant. The Long-Term Incentive Plan Agreement shall specify the Period(s)
of Restriction and the time or times at which such period(s) shall lapse with
respect to a specified number of shares of Restricted Stock and shall set forth
such other terms and conditions as may be determined by the Committee to be
consistent with the Plan, but may include additional provisions and
restrictions, provided that they are not inconsistent with the Plan. The Periods
of Restriction shall not exceed 10 years from the Date of Grant of the
Restricted Stock.
SECTION 8.02. NONTRANSFERABILITY. Except as provided in Section 8.08
hereof, the shares of Restricted Stock granted hereunder may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated for such
period of time as shall be specified in the Long-Term Incentive Plan Agreement,
or upon earlier satisfaction of other conditions as specified by the Committee
in its sole discretion and set forth in the Long-Term Incentive Plan Agreement.
SECTION 8.03. OTHER RESTRICTIONS. The provisions of Section 6.06(d) shall
be applicable to grants of Restricted Stock.
SECTION 8.04. VOTING RIGHTS. Employee Participants holding shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those shares during the Period of Restriction.
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SECTION 8.05. DIVIDENDS, STOCK SPLITS AND OTHER DISTRIBUTIONS. During the
Period of Restriction, Employee Participants holding shares of Restricted Stock
granted hereunder shall be entitled to receive all dividends, stock splits and
other distributions paid with respect to those shares while they are so held. If
any such dividends or distributions are paid in shares of Common Stock, those
shares shall be subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were paid.
SECTION 8.06. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event
that an Employee Participant terminates his employment on or after his
sixty-fifth birthday, the Periods of Restriction applicable to the Restricted
Stock pursuant to Section 8.02 hereof shall lapse automatically and, except as
otherwise provided in Section 8.03, the shares of Restricted Stock shall thereby
be free of restrictions and freely transferable. In the event that an Employee
Participant terminates his employment with the Company or its Subsidiaries by
retiring prior to his sixty-fifth birthday, all shares of Restricted Stock shall
be forfeited and returned to the Company; provided, however, that the Committee
in its sole discretion may waive the restrictions remaining on any or all shares
of Restricted Stock.
SECTION 8.07. TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the
event an Employee Participant's employment with the Company or its Subsidiaries
terminates because of his death or permanent and total disability during the
Periods of Restriction, the restrictions applicable to the shares of Restricted
Stock pursuant to Section 8.02 hereof shall lapse automatically and the shares
of Restricted Stock shall thereby be free of restrictions and freely
transferable.
SECTION 8.08. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH,
DISABILITY, OR RETIREMENT. In the event that an Employee Participant's
employment with the Company or its Subsidiaries is voluntarily terminated by the
Employee Participant for any reason other than those set forth in Section 8.06
and 8.07 during the Periods of Restriction, any shares of Restricted Stock still
subject to restrictions at the date of such termination automatically shall be
forfeited and returned to the Company. In the event of termination of the
employment of an Employee Participant by the Company other than a termination
for serious misconduct as defined in Section 6.09(e), the Committee in its sole
discretion may waive the automatic forfeiture of any or all Restricted Stock and
may waive any and all restrictions.
SECTION 8.09. EMPLOYMENT TAXES. The Company shall retain the full amount of
all federal and state withholding or other employment taxes applicable to the
taxable income of the Employee Participant resulting from such exercise.
ARTICLE IX
TEN-PERCENT OWNERS
Notwithstanding any other provisions of this Plan, the following terms and
conditions shall apply to Incentive Stock Options granted hereunder to a "10%
owner." For this purpose, a "10% owner" shall mean an Employee Participant who,
at the time the Incentive Stock Option is granted, owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of any Subsidiary. With respect to a 10% owner:
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(a) the price at which shares of stock may be purchased under an
Incentive Stock Option granted pursuant to this Plan shall be not less than
110% of the Fair Market Value thereof; and
(b) the period during which any such Incentive Stock Option may be
exercised, to be fixed by the Committee in the manner described in Section
6.04, above, shall expire not later than five years from the date the
Incentive Stock Option is granted.
ARTICLE X
ANNUAL LIMITS
Incentive Stock Options shall not be granted to any individual pursuant to
this Plan, the effect of which would be to permit such person to first exercise
Incentive Stock Options, in any calendar year, for the purchase of shares having
a Fair Market Value in excess of $100,000 (determined at the time of the grant
of the Incentive Stock Options). An Employee Participant hereunder may exercise
Incentive Stock Options for the purchase of shares valued in excess of $100,000
(determined at the time of grant of the Incentive Stock Options) in a calendar
year, but only if the right to exercise such Incentive Stock Options shall have
first become available in prior calendar years. Nothing in this Article X is
intended to prohibit an Employee Participant from exercising all of his
Incentive Stock Options which may be accelerated as a result of a Change in
Control.
ARTICLE XI
OTHER TERMS AND CONDITIONS
SECTION 11.01. INCENTIVE STOCK OPTIONS. Any Incentive Stock Option granted
hereunder shall contain such other and additional terms, not inconsistent with
the terms of this Plan, which are deemed necessary or desirable by the
Committee, which such terms, together with the terms of this Plan, shall
constitute such Incentive Stock Option as an "Incentive Stock Option" within the
meaning of Section 422 of the Code and lawful regulations thereunder.
SECTION 11.02. PERFORMANCE AWARDS. The Committee may designate whether any
Performance Award to any Employee Participant is intended to be
"performance-based compensation" as that term is used in Section 162(m) of the
Code. Any such Performance Awards designated as intended to be
"performance-based compensation" shall be conditioned on the achievement of one
or more performance measures, to the extent required by Section 162(m) of the
Code. The performance measures that may be used by the Committee for such
Performance Awards shall be based on any one or more of the following, as
selected by the Committee: earnings per share and/or growth in earnings per
share in relation to target objectives, excluding the effect of extraordinary or
nonrecurring items; operating cash flow and/or growth in operating cash flow in
relation to target objectives; cash available in relation to target objectives;
net income and/or growth in net income in relation to target objectives,
excluding the effect of extraordinary or nonrecurring items; revenue and/or
growth in revenue in relation to target objectives; total shareholder return
(measured as the total of the appreciation of and dividends declared on the
Common Stock) in relation to target objectives; economic value added; stock
price; return on invested capital in relation to target objectives; return on
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shareholder equity in relation to target objectives; return on assets in
relation to target objectives; and return on common book equity in relation to
target objectives.
If the Committee determines that, as a result of a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which the Company conducts its business, or any other events or
circumstances, the Performance Goals are no longer suitable, the Committee may
in its discretion modify such Performance Goals or the related minimum
acceptable level of achievement, in whole or in part, with respect to a period
as the Committee deems appropriate and equitable. For Performance Awards
intended to be "performance-based compensation" the grant of the Performance
Awards and the establishment of the performance measures shall be made during
the period required under Section 162(m) of the Code.
SECTION 11.03. DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award may provide an
Employee Participant or Director Participant with the right to receive dividend
payments or dividend equivalent payments with respect to Common Stock subject to
the Award (both before and after the Common Stock subject to the Award is
earned, vested or acquired), which payments may be either made currently or
credited to an account for such Employee Participant or Director Participant,
and may be settled in cash or shares of Common Stock, as determined by the
Committee. Any such settlements, and any such crediting of dividends or dividend
equivalents or reinvestment in shares of Common Stock, may be subject to such
conditions, restrictions and contingencies as the Committee shall establish,
including the reinvestment of such credited amounts in shares of Common Stock.
SECTION 11.04. CHANGE IN CONTROL. Notwithstanding any other provision of
this Plan to the contrary, all unvested or unexercisable Awards shall
automatically vest and become exercisable without further action by the Board or
Committee upon a Change in Control, except as may be otherwise provided in any
Long-Term Incentive Plan Agreement.
ARTICLE XII
STOCK CERTIFICATES
SECTION 12.01. CONDITIONS. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock received pursuant to a grant
of Restricted Stock or other Award purchased upon the exercise of any Option
granted to Employee Participants or Nonqualified Stock Options granted to
Director Participants hereunder or any portion thereof prior to fulfillment of
all of the following conditions:
(a) The completion of any registration or other qualification of such
shares under any federal or state law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body, which the Committee shall in its sole discretion deem
necessary or advisable;
(b) The obtaining of any approval or other clearance from any federal
or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable;
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(c) The lapse of such reasonable period of time following the Period
of Restriction or the exercise of the Option as the Committee from time to
time may establish for reasons of administrative convenience;
(d) Satisfaction by the Employee Participant or Director Participant
of all applicable withholding taxes or other withholding liabilities; and
(e) Specific requirements as provided for in Section 6.06(d).
SECTION 12.02. LEGENDS. The Company reserves the right to legend any
certificate for shares of Common Stock conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE XIII
TERMINATION, AMENDMENT, AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee, terminate,
and may at any time and from time to time and in any respect amend or modify,
the Plan; provided, however, that no such action shall impair the rights of any
holder of an Award theretofore granted; and further provided, that no such
action of the Board or Committee without approval of the shareholders of the
Company may: (a) increase the total number of shares of Common Stock subject to
the Plan, except as contemplated in Sections 5.03 and 5.04 hereof or (b) amend
Sections 5.01 or 6.03 of this Plan.
No termination, amendment, or modification of the Plan shall in any manner
adversely affect any Restricted Stock or Option theretofore granted under the
Plan without the consent of the Employee Participant or Director Participant
holding such Restricted Stock or Option.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. EMPLOYMENT OR BOARD MEMBERSHIP. Nothing in the Plan or in
any Award granted hereunder or in any Long-Term Incentive Plan Agreement
relating thereto shall confer upon any employee the right to continue in the
employ of the Company or any Subsidiary, or any Director the right to remain on
the Board of the Company.
SECTION 14.02. OTHER COMPENSATION PLANS. Except as provided in Section
14.08 hereof, the adoption of the Plan shall not affect any other stock option
or long-term incentive or other compensation plans in effect for the Company or
any Subsidiary, nor shall the Plan preclude the Company from establishing any
other forms of incentive or other compensation for employees of the Company or
any Subsidiary.
SECTION 14.03. PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon
the Company, its successors and assigns, and on each Employee Participant or
Director Participant, his executor, administrator and permitted transferees.
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SECTION 14.04. SINGULAR, PLURAL; GENDER. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
SECTION 14.05. HEADINGS NO PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.
SECTION 14.06. REPURCHASE OF SHARES. Nothing contained herein or in any
Long-Term Incentive Plan Agreement shall create an obligation on the part of the
Company to repurchase any shares of Common Stock issued hereunder.
SECTION 14.07. EFFECTIVE DATE. Subject to the approval of the Company's
stockholders prior to December 1, 2001, the Plan shall be effective as of
December 1, 2000; provided, however, that to the extent Awards are granted under
the Plan prior to its approval by the Company's stockholders, the Awards shall
be contingent on approval of the Plan by the Company's stockholders prior to
December 1, 2001.
SECTION 14.08. PRIOR PLANS. Upon shareholder approval of this Plan pursuant
to Section 14.07, no new awards will be granted under the Company's 1988 and
1991 Long-Term Incentive Plans, and any awards for shares of stock granted under
those Plans after December 1, 2000 will reduce the number of shares available
under this Plan.
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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 30, 2001 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 Embassy Suites Hotel, 555 South 10th Street, Omaha, Nebraska, on Tuesday,
January 30, 2001, at 8:30 a.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 DIRECTOR.
[ ] FOR the nominee listed below for term to expire in 2004
[ ] WITHHOLD AUTHORITY to vote for the nominee listed below
Howard G. Buffett
2. APPROVAL OF 2001 LONG-TERM INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. AUDITORS. Ratification of the appointment of PricewaterhouseCoopers
LLP as independent auditors for the fiscal year ending August 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote, in its discretion, upon any other business that may properly
come before the Annual Meeting or any adjournment thereof of which management
did not have written notice of on January 5, 2001.
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' NOMINEE FOR DIRECTOR, FOR THE
APPROVAL OF 2001 LONG-TERM INCENTIVE PLAN AND FOR THE RATIFICATION OF THE
APPOINTMENT OF AUDITORS.
(continued and to be signed on the reverse hereof)
<PAGE> 41
(continued from other side)
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 30, 2001 and the Proxy Statement for the Annual
Meeting prior to the signing of this proxy.
Dated: , .
------------------------ -------
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(Signature)
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(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.
