exv10w1



 





EXHIBIT 10.1




LINDSAY MANUFACTURING CO.

MANAGEMENT INCENTIVE PLAN (MIP)

2007 PLAN YEAR




LINDSAY MANUFACTURING CO.




MANAGEMENT INCENTIVE PLAN (MIP)




2007




PLAN YEAR




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	1. PURPOSE
	 	 	1	 
	 
	 	 	 	 
	2. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	3. EFFECTIVE DATE
	 	 	2	 
	 
	 	 	 	 
	4. ELIGIBILITY FOR PARTICIPATION
	 	 	2	 
	 
	 	 	 	 
	5 ENROLLMENT IN THE PLAN
	 	 	2&3	 
	 
	 	 	 	 
	6. DETERMINATION OF TARGET PAYOUT LEVELS
	 	 	3&4	 
	 
	 	 	 	 
	7. BASIS OF AWARDS
	 	 	4,5,&6	 
	 
	 	 	 	 
	8. CHANGES IN EMPLOYMENT STATUS
	 	 	6&7	 
	 
	 	 	 	 
	9. ADMINISTRATION
	 	 	7	 
	 
	 	 	 	 
	10. Attachment
	 	 	8 9&10	 





November,
2006





 












 





PURPOSE




          The purpose of the Management Incentive Plan (the “Plan”) is to:





	 	•	 	Encourage performance consistent with the Company’s business strategy
	 
	 	•	 	Focus on near-term performance results as well as progress toward the
achievement of long-term objectives
	 
	 	•	 	Strengthen the link between performance and pay by delivering awards based
on measurable corporate and individual goals.





DEFINITIONS




          The terms used in this Plan have the meanings set forth below.




Section 1. “Company” shall mean Lindsay Manufacturing Co.



Section 2. “Compensation Committee” shall mean the Compensation Committee of the Company’s
Board of Directors.



Section 3. “Financial Performance Component” shall mean the portion of a Participant’s Plan
award that is based on the Company’s and specific Market financial performance as
defined in Section 7B.



Section 4. “Individual Performance Component” shall mean the portion of a Participant’s Plan
award that is based on a Participant’s performance relative to individual objectives
established in accordance with Section 7C.



Section 5. “Named Executive Officers” shall mean the executives of the Company listed in the
Executive Compensation section of the Company’s Proxy Statement.



Section 6. “Participant” shall mean a key employee eligible for awards under the terms
outlined in Section 4 of this Plan.



Section 7. “Plan” shall mean Lindsay Manufacturing Co. Management Incentive Plan.



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EFFECTIVE DATE





The Plan shall be effective as of September 1, 2006 and will be in effect for the 2007 bonus
year. The 2007 bonus year is defined as September 1, 2006 through August 31, 2007.



ELIGIBILITY FOR PARTICIPATION




Section 8. Participation in the Plan is limited to individuals in positions which have
significant responsibility for and impact on the Company’s corporate performance.



Section 9. Only the Chief Executive Officer and those employees in grades E through G are
eligible to be considered for participation in the Plan.



Section 10. Participation in the Plan does not guarantee or entitle any employee to
participate in any bonus plan enacted in the future. Participation in the Plan at any
target bonus level does not guarantee or entitle any employee to be eligible to
participate at any similar target bonus level in any bonus plan which may be enacted in
the future.



ENROLLMENT IN THE PLAN





	 	A.	 	Initial Enrollment






At the beginning of the Plan year, each Participant must be enrolled in the Plan subject to the
approvals and eligibility criteria set forth in Sections 4 and 6. The enrollment process is as
follows:




	 	(a)	 	Plan Participants will participate in the Plan at the standard
target percent per grade level as listed in Section 6.
	 
	 	(b)	 	The Company’s Chief Executive Officer will review the
participant list and projected bonus costs of enrolled employees with the
Compensation Committee. The Compensation Committee provides final approval on
the aggregate potential cost of the Plan.




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Section 11. Mid-year Enrollment




When hiring or promoting employees during the Plan year who may be eligible for
participation in the Plan, the following procedures must be followed:




	 	(a)	 	Prior to the commencement of the recruiting or promotion
process, the hiring manager consults with Human Resources to determine the
position’s eligibility for participation in the Plan and the recommended target
bonus amount.
	 
	 	(b)	 	Offer letters indicating bonus Plan participation and target
bonus award opportunities to new hires and/or promoted employees must be
reviewed by the CEO or, in the case of a Named Executive Officer, by the
Compensation Committee. Target bonus recommendations must be approved before
communication to a prospective Participant. Generally, employees hired or
promoted during the fourth quarter 2007 are not eligible to participate in the
2007 Plan.





DETERMINATION OF TARGET PAYOUT LEVELS





	 	A.	 	Incentive awards will be calculated as a percentage of the Participant’s actual
base salary received during the Plan year. While award amounts will vary based on the
range of award opportunity and an assessment of individual performance results, the
target award opportunities for each grade level are shown below:





	 	 	 	 	 
	Grade	 	Target % of Salary
	CEO
	 	 	60	%
	G
	 	 	35	%
	F	 	 	25	%
	E
	 	 	15	%







	 	(c)	 	Actual participation is subject to approval by the CEO, or in
the case of a Named Executive Officer, by the Compensation Committee. Actual
participation is based on an assessment of the individual’s position impact on
the organization.
	 
	 	(d)	 	Standard target percents per grade level should be followed for
all Plan Participants.





Section 12. If a Participant’s Plan target award opportunity (Target % of Salary as set
forth above) changes due to promotion into a grade level with a higher target bonus,
the Participant’s bonus will be calculated based on his or her



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actual salary during the
Plan year and a weighted average bonus percentage. The weighted average bonus
percentage will reflect the portion of the Plan year spent in each grade level (e.g.,
seven months at 15% and five months at 25%). In
evaluating the performance of Participants who change positions during the Plan year,
consideration will be given to the length of time and results in each position. Actual
award decisions will be made by the CEO or, in the case of a Named Executive Officer, by
the Compensation Committee. Generally, fourth quarter promotions will not result in an
increase in a Participant’s target award opportunity.



Section 13. Examples of various award calculations are included with this Plan document as
Attachment A.



Section 14. The CEO will review and approve award recommendations for all employees other
than Named Executive Officers prior to payout. Final approval authority for all
payments (except for award payments to the Named Executive Officers) rests with the
CEO. Individual award payments for all Participants (except the Named Executive
Officers) may be adjusted at any time and for any reason at the discretion of the CEO.



Section 15. The Compensation Committee will determine the award payments to the Named
Executive Officers.



Section 16. Award payments will be calculated on an annual basis and paid in accordance with
the Company’s normal payroll cycle. Payments will be made during the first quarter
following the Plan year. The payment date may be changed at any time and for any
reason at the discretion of the CEO, or in the case of a Named Executive Officer, with
approval of the Compensation Committee.



BASIS OF AWARDS




Section 17. Measurable performance objectives for each Plan Participant will be established
at the beginning of the Plan year (or at mid-year for mid-year hires or newly eligible
employees). In 2007, consideration will be given to:




	 	(a)	 	Financial Performance Component: Company and Market financial
performance vs. Plan performance objectives in accordance with Section 7B.
	 
	 	(b)	 	Individual Performance Component: Participant’s performance
relative to individual goals established in accordance with Section 7C.




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	 	(c)	 	Individual and Financial Performance Components will be added to reach a
Participant’s total bonus. The relative weighting will vary by grade in
accordance with the following schedule:





	 	 	 	 	 	 	 	 	 
	 	 	Financial	 	Individual
	Grade	 	Performance	 	Performance
	CEO
	 	 	80	%	 	 	20	%
	G
	 	 	80	%	 	 	20	%
	F
	 	 	65	%	 	 	35	%
	E
	 	 	50	%	 	 	50	%







Section 18.
 At the beginning of the Plan year, the objectives for the Financial Performance
Component are identified and approved by the Compensation Committee.




	 	(a)	 	Recommended award amounts may range from 0 — 200% of the
Financial Performance Component of the Participant’s target award, based on
performance.
	 
	 	(b)	 	Percentages between the threshold, intermediate, target, and
maximum award will be interpolated.
	 
	 	(c)	 	In the event of an acquisition, revenue and operating income
resulting from the acquisition will be excluded from award payout calculations,
unless






	 	(1)	 	the CEO or Compensation Committee suggests a
modification to the objectives under the Financial Performance
Component that would incorporate revenue and income generated as a
result of the acquisition, and
	 
	 	(2)	 	The Compensation Committee approves the
modification.





Section 19. The Individual Performance Component will be based on written objectives set
annually for Participants by their supervisors and approved by the CEO or, in the case
of a Named Executive Officer, by the Compensation Committee. Objectives will be based
on the Participant’s position and may be financial, operational or strategic.




	 	(a)	 	Objectives under the Individual Performance Component may be
linked to team-based goals, if appropriate




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	 	(b)	 	Examples of appropriate objectives under the Individual
Performance Component include:






	 	•	 	Safety
	 
	 	•	 	Customer Service
	 
	 	•	 	Market Share
	 
	 	•	 	On-time Delivery
	 
	 	•	 	Cost Reduction
	 
	 	•	 	Product Development






	 	(c)	 	Recommended award amounts may range from 0% — 200% of the
target amount under the Individual Performance Component. Recommended award
amounts will be based on an assessment of the individual’s performance relative
to objectives established under the Individual Performance Component, in
accordance with the following guidelines:





	 	 	 	 	 
	 	 	Payout
	Individual	 	(as % of Target Individual
	Performance	 	Performance Component)
	Does not meet objectives

	 	 	0	%
	Meets some objectives

	 	 	50	%
	Meets most objectives

	 	 	75	%
	Meets all objectives

	 	 	100	%
	Exceeds objectives

	 	 	150	%
	Significantly exceeds objectives

	 	 	200	%







	 	(d)	 	The “Payout (as % of Target Individual Performance Component)”
represents the payout relative to target award for the Individual Performance
Component of the Plan.





CHANGES IN EMPLOYMENT STATUS




Section 20. Under most circumstances, Participants who cease to be employees of the Company
during the Plan year or after the Plan year but prior to the date of actual payment
will receive no award. Only active employees on the date that the bonus is paid will
be eligible to receive an award. Any exceptions will require the approval of the CEO,
or in the case of a Named Executive Officer, the Compensation Committee.



Section 21. In the event that a Participant transfers out of an eligible position into an
ineligible position within the Company, the employee may be eligible for a prorated
bonus award based upon the approval of the CEO, or in the case of a



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Named Executive Officer, the Compensation Committee.



Section 22. In all cases awards will be calculated and paid according to the provisions in
Sections 6 and 7 of this Plan document.



ADMINISTRATION




Section 23. General authority for Plan administration and responsibility for ongoing Plan
administration will rest with the Compensation Committee of the Company’s Board of
Directors. The Compensation Committee has sole authority for decisions regarding
interpretation of the terms of this Plan.



Section 24. The Company reserves the right to amend or change the Plan in whole or in part
at any time during the Plan year. Amendments to the Plan require the approval of the
Compensation Committee.



Section 25. Participation in the Plan does not constitute a contract of employment nor a
contractual agreement of payment. It shall not affect the right of the Company to
discharge, transfer, or change the position of a Participant. The Plan shall not be
construed to limit or prevent the Company from adopting or changing, from time to time,
any rules, standards or procedures affecting the Participant’s employment with the
Company or any Company affiliate, including those which affect bonus payouts.



Section 26. If any provision of this Plan is found to be illegal, invalid or unenforceable
under present or future laws, that provision shall be severed from the Plan. If such a
provision is severed, this Plan shall be construed and enforced as if the severed
provision had never been part of it and the remaining provisions of this Plan shall
remain in full force and effect and shall not be affected by the severed provisions or
by its severance from this Plan. In place of any severed provision there shall be
added automatically as part of this Plan a provision as similar in terms to the severed
provision as may be possible and be legal, valid and enforceable.




	 	E.	 	This is not an ERISA plan. This is a bonus program.






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ATTACHMENT A

Award Calculation Guidelines



The following examples are to be used as guidelines in calculating bonus awards at the end of the
2007 Plan year. Managers should use their discretion in calculating actual bonus awards and may
consider exceptions to the calculations below when necessary. Any such exceptions must be fully
documented and are subject to review and approval by the Chief Executive Officer, or in the case of
a Named Executive Officer, the Compensation Committee.




	 	 	 	 	 
	 	 	 	 	Target Award
	Full Year Participation
	 	 	 	 
	•   September 1 — August 31
	 	 	 	 
	•   Target award opportunity:
	 	15%	 	 
	•   Actual base salary received:
	 	$75,000	 	 
	•   Plan target award calculation:
	 	$75,000 * 15% =	 	$11,250
	 
	 	 	 	 
	Partial Year Participation
	 	 	 	 
	•   February 15 — August 31
	 	 	 	 
	•   Target award opportunity:
	 	25%	 	 
	•   Actual base salary received (for partial
year employment):
	 	$61,250	 	 
	•   Plan target award calculation:
	 	$61,250 * 25% =	 	$15,312
	 
	 	 	 	 
	Mid-year Promotion
	 	 	 	 
	•   March 1 promotion
	 	 	 	 
	•   Actual base salary received:
	 	$94,000	 	 
	•   Target award opportunity at beginning of year:
	 	15%	 	 
	•   Target award opportunity upon promotion:
	 	25%	 	 
	•   Months from September 1 — March 1:
	 	6 months	 	 
	•   Months from March 1 — August 31:
	 	6 months	 	 
	•   Weighted average target award calculation:
	 	((15% * 6 months) +	 	 
	 
	 	(25% * 6 months)) /	 	 
	 
	 	12 months = 20.0%	 	 
	•   Plan target award calculation:
	 	$94,000 * 20.0%	 	$18,800






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“The Financial Performance Component Elements for Fiscal Year 2007
constitutes confidential information and has been omitted from this
filing. This appendix has been filed separately with the Securities
and Exchange Commission.”




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