10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-13419

Lindsay Manufacturing Co.

(Exact name of registrant as specified in its charter)

Delaware	47-0554096
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2707 North 108th Street, Suite 102, Omaha, Nebraska	68164
(Address of principal executive offices)	(Zip Code)
402-428-2131 Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer o      Accelerated filer þ      Non-accelerated filer o     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of April 6, 2006, 11,528,083 shares of the registrant’s common stock were outstanding.

1

Lindsay Manufacturing Co. and Subsidiaries
INDEX FORM 10-Q

	Page No.
Part I — FINANCIAL INFORMATION
ITEM 1 — Consolidated Financial Statements
Consolidated Balance Sheets, February 28, 2006 and 2005 and August 31, 2005	3
Consolidated Statements of Operations for the three-months ended and six-months ended February 28, 2006 and 2005	4
Consolidated Statements of Cash Flows for the six-months ended February 28, 2006 and 2005	5
Notes to Consolidated Financial Statements	6-17
ITEM 2 — Management’s Discussion and Analysis of Results of Operations and Financial Condition	18-24
ITEM 3 — Quantitative and Qualitative Disclosures about Market Risk	24-25
ITEM 4 — Controls and Procedures	25
Part II — OTHER INFORMATION
ITEM 1 — Legal Proceedings	25
ITEM 1A — Risk Factors	25
ITEM 2 — Unregistered Sales of Equity Securities and Use of Proceeds	25-26
ITEM 3 — Defaults Upon Senior Securities	26
ITEM 4 — Submission of Matters to a Vote of Security Holders	26
ITEM 5 — Other Information	26
ITEM 6 — Exhibits	26-27
SIGNATURE	28
Long-Term Incentive Plan
Certification of CEO
Certification of CFO
Certification of CEO and CFO

2

Part I — FINANCIAL INFORMATION

ITEM 1 — Consolidated Financial Statements

Lindsay Manufacturing Co. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
February 28, 2006 and 2005 and August 31, 2005

	(Unaudited)			(Unaudited)
	February			February			August
($ in thousands, except par values)	2006			2005			2005
ASSETS
Current assets:
Cash and cash equivalents	$	26,907		$	7,571		$	25,564
Marketable securities		13,104			11,720			14,101
Receivables, net (net of allowance, $574, $1,472 and $702, respectively)		35,999			35,680			28,919
Inventories, net		26,292			29,858			19,311
Deferred income taxes		3,948			1,288			3,276
Other current assets		4,539			3,343			3,042
Total current assets		110,789			86,460			94,213
Long-term marketable securities		10,925			24,517			15,157
Property, plant and equipment, net		17,551			16,724			17,268
Other noncurrent assets		6,933			9,158			8,201
Total assets	$	146,198		$	139,859		$	134,839
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	14,215		$	11,010		$	6,704
Other current liabilities		14,743			13,849			13,434
Total current liabilities		28,958			24,859			20,138
Pension benefits liabilities		5,217			4,664			5,142
Other noncurrent liabilities		169			161			229
Total liabilities		34,344			29,684			25,509
Shareholders’ equity:
Preferred stock, ($1 par value, 2,000,000 shares authorized, no shares issued and outstanding)		—			—			—
Common stock, ($1 par value, 25,000,000 shares authorized, 17,573,531, 17,521,272 and 17,568,084 shares issued in February 2006 and 2005 and August 2005, respectively)		17,573			17,521			17,568
Capital in excess of stated value		4,500			3,092			3,690
Retained earnings		184,290			180,700			183,444
Less treasury stock (at cost, 6,048,448, 5,862,569 and 6,048,448 shares, respectively		(96,547	)		(93,073	)		(96,547	)
Accumulated other comprehensive income, net		2,038			1,935			1,175
Total shareholders’ equity		111,854			110,175			109,330
Total liabilities and shareholders’ equity	$	146,198		$	139,859		$	134,839

The accompanying notes are an integral part of the consolidated financial statements.

3

Lindsay Manufacturing Co. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS
For the three-months and six-months ended February 28, 2006 and 2005
(Unaudited)

	Three Months Ended					Six Months Ended
	February			February		February			February
(in thousands, except per share amounts)	2006			2005		2006			2005
Operating revenues	$	54,912		$	41,487	$	94,416		$	81,254
Cost of operating revenues		45,048			33,721		77,125			66,915
Gross profit		9,864			7,766		17,291			14,339
Operating expenses:
Selling expense		2,884			2,999		5,732			5,746
General and administrative expense		4,285			3,397		7,854			6,994
Engineering and research expense		607			660		1,254			1,356
Total operating expenses		7,776			7,056		14,840			14,096
Operating income		2,088			710		2,451			243
Interest income, net		436			295		863			556
Other (loss) income, net		(20	)		68		(18	)		452
Earnings before income taxes		2,504			1,073		3,296			1,251
Income tax provision		787			473		1,068			476
Net earnings	$	1,717		$	600	$	2,228		$	775
Basic net earnings per share	$	0.15		$	0.05	$	0.19		$	0.07
Diluted net earnings per share	$	0.15		$	0.05	$	0.19		$	0.06
Average shares outstanding		11,522			11,710		11,521			11,741
Diluted effect of stock options		174			168		163			188
Average shares outstanding assuming dilution		11,696			11,878		11,684			11,929
Cash dividends per share	$	0.060		$	0.055	$	0.120		$	0.110

The accompanying notes are an integral part of the consolidated financial statements.

4

Lindsay Manufacturing Co. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six-months ended February 28, 2006 and 2005
(Unaudited)

	February			February
($ in thousands)	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	2,228		$	775
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		1,661			1,783
Amortization of marketable securities, net		126			110
Loss on sale of property, plant and equipment		30			—
Provision for uncollectible accounts receivable		36			53
Equity in net earnings of equity method investments		(4	)		(230	)
Deferred income taxes		(239	)		(332	)
Stock-based compensation expense		741			—
Other, net		(61	)		(50	)
Changes in assets and liabilities:
Receivables, net		(6,448	)		(427	)
Inventories, net		(6,824	)		(8,914	)
Other current assets		(1,392	)		(521	)
Accounts payable, trade		7,503			1,425
Other current liabilities		1,223			(2,616	)
Current taxes payable		(251	)		351
Other noncurrent assets and liabilities		292			2,528
Net cash used in operating activities		(1,379	)		(6,065	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(1,772	)		(1,769	)
Sale of an equity investment		354			—
Proceeds from sale of property, plant and equipment		81			7
Purchases of marketable securities available-for-sale		—			(1,841	)
Proceeds from maturities or sales of marketable securities available-for-sale		5,113			12,360
Net cash provided by investing activities		3,776			8,757
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under stock option plan		93			208
Repurchases of common stock		—			(3,175	)
Dividends paid		(1,382	)		(1,284	)
Net cash used in financing activities		(1,289	)		(4,251	)
Effect of exchange rate changes on cash		235			157
Net increase (decrease) in cash and cash equivalents		1,343			(1,402	)
Cash and cash equivalents, beginning of period		25,564			8,973
Cash and cash equivalents, end of period	$	26,907		$	7,571

The accompanying notes are an integral part of the consolidated financial statements.

5

Lindsay Manufacturing Co. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1) Condensed Consolidated Financial Statements

The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America for financial statements contained in Lindsay Manufacturing Co.’s (the “Company”) annual Form 10-K filing. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Form 10-K for the fiscal year ended August 31, 2005.

     In the opinion of management, the consolidated financial statements of the Company reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. The results for interim periods are not necessarily indicative of trends or results expected by the Company for a full year.

     Notes to the consolidated financial statements describe various elements of the financial statements and the accounting policies, estimates, and assumptions applied by management. While actual results could differ from those estimated by management in the preparation of the consolidated financial statements, management believes that the accounting policies, assumptions, and estimates applied promote the representational faithfulness, verifiability, neutrality, and transparency of the accounting information included in the consolidated financial statements.

(2) Share Based Compensation

On September 1, 2005, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. SFAS 123(R) supersedes the Company’s previous accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) for periods beginning in fiscal 2006. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 (“SAB 107”) relating to SFAS 123(R). The Company has applied the provisions of SAB 107 in its adoption of SFAS 123(R).

     The Company adopted SFAS 123(R) using the modified prospective transition method, which requires the application of the accounting standard as of September 1, 2005, the first day of the Company’s fiscal year 2006. The Company’s Consolidated Financial Statements as of and for the three-months and six-months ended February 28, 2006 reflect the impact of SFAS 123(R). In accordance with the modified prospective transition method, the Company’s Consolidated Financial Statements for prior periods have not been restated to reflect, and do not include, the impact of SFAS 123(R). Share-based compensation expense recognized under SFAS 123(R) for the three-months and six-months ended February 28, 2006 was $239,000 and $460,000, net of tax, respectively. The share-based compensation expense is taxed at a blended deferred rate of 37.9%.

     SFAS 123(R) requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. Prior to the adoption of SFAS 123(R), the Company accounted for share-based awards to employees and directors using the intrinsic value method in accordance with APB 25. Under the intrinsic value method, no stock-based compensation expense had been recognized in the Company’s Consolidated Statement of Operations, because the exercise price of the Company’s stock options granted to employees and directors equaled the fair market value of the underlying stock at the date of grant.

     Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Share-based compensation expense recognized in the Company’s Consolidated Statement of Operations for the first six months of 2006 included compensation expense for share-based payment awards granted prior to, but not yet vested as of August 31, 2005 based on the grant date fair value estimated in accordance with the pro forma provisions of SFAS 123 and compensation expense for the share-based payment awards granted subsequent to August 31, 2005 based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). Because share-based compensation expense recognized in the Consolidated Statement of Operations for the six-months ended

6

February 28, 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. In the Company’s pro forma information required under SFAS 123 for the periods prior to fiscal 2006, the Company accounted for forfeitures as they occurred.

     The Company uses the Black-Scholes option-pricing model (“Black-Scholes model”) as its valuation method for share-based payment awards. Under the Black-Scholes model, the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

Computation of Net Income per Share

Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of stock options and restricted stock units.

     Statement of Financial Accounting Standards No. 128, “Earnings per Share,” requires that employee equity share options, nonvested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money options, which is calculated, based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

Share Based Compensation Program Descriptions

Share based compensation is designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company. The number and frequency of share grants are based on competitive practices, operating results of the Company, and individual performance. As of February 28, 2006, the Company’s share-based compensation plan was the 2006 Long-Term Incentive Plan (the “2006 Plan”). The 2006 Plan was approved by the stockholders of the Company and became effective on February 6, 2006 and replaced the Company’s 2001 Long Term Incentive Plan. No further grants will be made under the Company’s 2001 Long-Term Incentive Plan or its former 1991 Long-Term Incentive Plan. However, the Company has outstanding options under its 2001 and 1991 Long-Term Incentive Plans.

     The 2006 Plan provides for awards of stock options, restricted shares, restricted stock units, stock appreciation rights, performance shares and performance units to employees and non-employee directors of the Company. The maximum number of shares as to which stock awards may be granted under the 2006 Plan is 750,000 shares. Stock awards other than stock options will be counted against the 2006 Plan maximum in a 2 to 1 ratio. If options, restricted stock units or restricted shares awarded under the 2006 Plan or the 2001 Plan terminate without being fully vested or exercised, those shares will be available again for grant under the 2006 Plan. The 2006 Plan also limits the total awards that may be made to any individual. Any options granted under the 2006 Plan would have an exercise price equal to the fair market value of the underlying stock on the grant date and expire no later than ten years from the grant date. The restricted stock units granted to employees and non-employees under the 2006 Plan have a grant date fair value equal to the fair market value of the underlying stock on the grant date less present value of expected dividends. The restricted stock units granted to employees vest over a three year period at approximately 33% per year. The restricted stock units granted to non-employee directors vest over a nine-month period.

7

General Share Based Compensation Information

The following tables summarize information about stock options outstanding at February 28, 2006.

						Average
						Remaining		Aggregate
	Number of			Average		Contractual Term		Intrinsic Value
	Shares			Exercise Price		(years)		(‘000s)
Outstanding at August 31, 2004		1,229,133		$	19.05
Granted		128,872			24.45
Exercised		(81,712	)		12.22
Cancelled		(89,562	)		23.39
Outstanding at August 31, 2005		1,186,731			19.84		6.2
Granted
Stock options		45,000			19.33
Exercised		(6,500	)		18.50			$	13
Forfeitures		(2,600	)		23.85
Outstanding at November 30, 2005		1,222,631			19.82		6.1		1,769
Granted
Stock options		—
Exercised		(4,600	)		18.30			$	30
Forfeitures		(4,245	)		23.95
Outstanding at February 28, 2006		1,213,786			19.81		5.8		6,017
Exercisable at August 31, 2005		693,938		$	17.98		5.0	$	5,203
Exercisable at November 30, 2005		729,185		$	18.17		4.9	$	1,539
Exercisable at February 28, 2006		723,135		$	18.15		4.6	$	4,768

			Options Outstanding				Options Exercisable
			Weighted average
	Number		remaining				Number		Weighted
Range of	outstanding at		contractual life		Weighted		exercisable at		average
exercise prices	2/28/2006		(years)		average price		02/28/2006		price
$10.00-15.00		350,000		4.02	$	14.00		300,000	$	14.00
15.01-22.00		440,080		5.90		19.39		278,807		18.80
22.01-30.00		423,706		7.29		25.05		144,328		25.54
		1,213,786		5.84	$	19.81		723,135	$	18.15

The above tables excludes outstanding restricted stock units granted in fiscal 2006 covering 45,626 shares. For the six-months ended February 28, 2006, 35,242 outstanding stock options vested.

The table below summarizes the status of the Company’s nonvested restricted stock units as of February 28, 2006, and changes during the three and six-months ended February 28, 2006:

8

			Weighted-
			Average
			Grant-Date
Nonvested Shares	Shares		Fair Value
Nonvested at September 1, 2005		—	$	0.00
Granted		37,266		18.78
Vested		—		0.00
Forfeited		—		0.00
Nonvested at November 30, 2005		37,266	$	18.78
Granted		8,360	$	25.56
Vested		—		0.00
Forfeited		—		0.00
Nonvested at February 28, 2006		45,626	$	20.02

As of February 28, 2006, there was $4.4 million pre-tax of total unrecognized compensation cost related to nonvested share-based compensation arrangements which is expected to be recognized over a weighted-average period of 2.5 years.

Valuation and Expense Information under SFAS 123(R)

     On September 1, 2005, the Company adopted SFAS 123(R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to the Company’s employees and directors. The following table summarizes share-based compensation expense under SFAS 123(R) for the three months and six-months ended February 28, 2006:

	Three Months			Six Months
	Ended			Ended
	February 28,			February 28,
$ in thousands	2006			2006
Share-based compensation expense included in cost of operating revenues	$	27		$	52
Research and development		23			45
Sales and marketing		77			148
General and administrative		258			496
Share-based compensation expense included in operating expenses		358			689
Total Share-based compensation expense		385			741
Tax benefit		(146	)		(281	)
Share-based compensation expense, net of tax	$	239		$	460

9

The table below reflects the pro forma information for the three-months and six-months ended February 28, 2005 as follows:

	For the three-			For the six-
	months ended			months ended
	February			February
$ in thousands	2005			2005
Net earnings, as reported (1)	$	600		$	775
Share-based compensation expense		581			1,163
Tax benefit		(220	)		(441	)
Share-based compensation expense, net tax (2)		361			722
Net income, including the effect of share-based compensation expense (3)	$	239		$	53
Earnings per share:
Basic net earnings per share-as reported (1)	$	0.05		$	0.07
Basic net earnings per share, including the effect of share-based compensation expense (3) (4)	$	0.02		$	0.00
Diluted- as reported for the prior period (1)	$	0.05		$	0.06
Diluted net income per share, including the effect of share-based compensation expense (3) (4)	$	0.02		$	0.00

(1)	Net income and net income per share prior to fiscal 2006 did not include share-based compensation expense under SFAS 123 because the Company did not adopt the recognition provisions of SFAS 123.
(2)	Share-based compensation expense prior to fiscal 2006 was calculated based on the pro forma application of SFAS 123.
(3)	Net income and net income per share prior to fiscal 2006 represents pro forma information based on SFAS 123.
(4)	For the six-months ended February 28, 2005 basic and diluted net earnings per share, including the effect of share-based compensation expense was $0.0045 and $0.0044, respectively.

For the three-months and six-months ended February 28, 2006 net income before taxes was reduced by $385,000 and $741,000, respectively, for share based compensation, while the net of tax effect on earnings was $239,000 and $460,000, respectively. There was minimal impact on the Consolidated Statement of Cash Flows from the adoption of SFAS 123(R). Basic and diluted earnings per share were negatively effected by $0.02 and $0.04 per share, respectively, for the three-months and six-months ended February 28, 2006.

     The value of each employee stock option was estimated on the date of grant using the Black-Scholes model for the purpose of the pro forma financial information in accordance with SFAS 123.

     The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table. The Company uses a seven year period to calculate the historical volatility of its stock price for use in the valuation model. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from historical experience and represents the period of time that options granted are expected to be outstanding. The risk-free rate for options is based on a U.S. Treasury rate commensurate with the expected terms.

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          The use of the Black-Scholes model requires the use of a number of assumptions including volatility, risk-free interest rate, and expected dividends. There were no stock options granted in the three-months ended February 28, 2006 and 2005. There were 45,000 and 37,782 stock options granted in the six-months ended February 28, 2006 and 2005. The weighted-average estimated value of employee stock options granted during the six-months ended February 28, 2006 and 2005 was $8.13 and $10.63, per share, respectively, with the following weighted-average assumptions:

	Six Months			Six Months
	Ended			Ended
	February 28, 2006			February 28, 2005
Expected volatility		35.13	%		34.65 - 35.01	%
Expected dividends		0.76	%		0.68	%
Expected term (in years)		7.00			7.00
Risk-free interest rate		4.52	%		4.12 - 4.30	%

(3) Cash Equivalents, Marketable Securities, and Long-term Marketable Securities

Cash equivalents are included at cost, which approximates market. At February 28, 2006, a single financial institution held substantially all the Company’s cash equivalents. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents, while those having original maturities in excess of three months are classified as marketable securities or as long-term marketable securities when maturities are in excess of one year. Marketable securities and long-term marketable securities consist of investment-grade municipal bonds.

          At the date of acquisition of an investment security, management designates the security as belonging to a trading portfolio, an available-for-sale portfolio, or a held-to-maturity portfolio. In fiscal year 2004 management transferred all debt securities from the held-to-maturity portfolio to the available-for-sale portfolio. Currently, the Company holds no securities designated as held-to-maturity or trading. All investment securities are classified as available-for-sale and carried at fair value. Unrealized appreciation or depreciation in the fair value of available-for-sale securities is reported in accumulated other comprehensive income, net of related income tax effects. The Company monitors its investment portfolio for any decline in fair value that is other-than-temporary and records any such impairment as an impairment loss. No impairment losses for other-than-temporary declines in fair value have been recorded in the three-months and six-months ended February 28, 2006 and 2005. In the opinion of management, the Company is not subject to material market risks with respect to its portfolio of investment securities because the relatively short maturities of these securities make their value less susceptible to interest rate fluctuations.

Gross realized gains and losses from sale of available-for-sale securities are as follows:

	Three-months ended				Six-months ended
	February 28,				February 28,
$ in thousands	2006		2005		2006		2005
Gross realized gains	$	—	$	—	$	—	$	5
Gross realized losses	$	—	$	—	$	—	$	(51	)

Amortized cost and fair value of investments in marketable securities classified as available-for-sale according to management’s intent are summarized as follows:

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			Gross		Gross
	Amortized		unrealized		unrealized
$ in thousands	cost		gains		losses			Fair value
As of February 28, 2006:
Due within one year	$	13,165	$	9	$	(70	)	$	13,104
Due after one year through five years		11,075		5		(155	)		10,925
	$	24,240	$	14	$	(225	)	$	24,029
As of February 28, 2005:
Due within one year	$	11,705	$	26	$	(11	)	$	11,720
Due after one year through five years		24,650		21		(154	)		24,517
	$	36,355	$	47	$	(165	)	$	36,237
As of August 31, 2005:
Due within one year	$	14,163	$	1	$	(63	)	$	14,101
Due after one year through five years		15,315		1		(159	)		15,157
	$	29,478	$	2	$	(222	)	$	29,258

(4) Inventories

Inventories are stated at the lower of cost or market value. Cost is determined by the last-in, first-out (LIFO) method for the Company’s Lindsay, Nebraska inventory. Cost is determined by the weighted average method for inventories at the Company’s other operating locations in Washington State, France, Brazil, and South Africa. At all locations, the Company establishes reserves for obsolete, slow moving, and excess inventory by estimating the net realizable value based on the potential future use of such inventory.

	February			February			August
$ in thousands	2006			2005			2005
Inventory:
First-in, first-out (FIFO) inventory	$	21,387		$	22,610		$	15,373
LIFO reserves		(4,417	)		(5,333	)		(4,048	)
LIFO inventory		16,970			17,277			11,325
Weighted average inventory		9,912			13,221			8,599
Obsolescence reserve		(590	)		(640	)		(613	)
Total inventories	$	26,292		$	29,858		$	19,311

The estimated percentage distribution between major classes of inventory before reserves is as follows:

	February			February			August
	2006			2005			2005
Raw materials		17	%		30	%		23	%
Work in process		7	%		5	%		6	%
Finished goods and purchased parts		76	%		65	%		71	%

(5) Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation, as follows:

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	February			February			August
$ in thousands	2006			2005			2005
Property, plant and equipment:
Land	$	336		$	336		$	336
Buildings		10,665			10,460			10,625
Equipment		41,585			39,866			38,884
Other		5,195			4,661			6,175
Total property, plant and equipment		57,781			55,323			56,020
Accumulated depreciation and amortization		(40,230	)		(38,599	)		(38,752	)
Property, plant and equipment, net	$	17,551		$	16,724		$	17,268

Depreciation expense was $796,000 and $863,000 for the three-months February 28, 2006 and 2005 and $1.5 million and $1.7 million for the six-months ended February 28, 2006 and 2005, respectively.

(6) Credit Arrangements

          The Company’s European subsidiary, Lindsay Europe, has unsecured revolving lines of credit with two commercial banks under which it could borrow up to 2.3 million Euros, which equates to USD$2.7 million as of February 28, 2006, for working capital purposes. As of February 28, 2006, there was a $437,000 outstanding balance on this line. Under the terms of the line of credit, borrowings, if any, bear interest at a floating rate in effect from time to time designated by the commercial bank as LIBOR+200 basis points (3.85% at February 28, 2006).

(7) Net Earnings per Share

Basic net earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding during the period. Diluted net earnings per share includes the incremental dilutive effect of stock options and restricted stock units, which under the treasury stock method described in Note 2 are determined to be dilutive.

          The Company had additional stock options outstanding during the period, but these options were excluded from the calculation of diluted earnings per share because they were not dilutive, as set forth in the following table:

February 28, 2006			February 28, 2005
Weighted average			Weighted average
Shares	price	Expire	Shares	price	Expire
428,706	$25.01	September, 2007- August, 2015	289,250	$25.81	November, 2007- August, 2014

(8) Industry Segment Information

The Company manages its business activities in two reportable segments:

     Irrigation: This segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems. The irrigation segment consists of six operating segments that have similar economic characteristics and meet the aggregation criteria of Statement of Financial Accounting Standards (SFAS) No. 131 “Disclosures about Segments of an Enterprise and Related Information.”

     Diversified Products: This segment includes providing outsource manufacturing services and the manufacturing and selling of large diameter steel tubing.

          The accounting policies of the two reportable segments are the same as those described in the “Accounting Policies” in Note A to the consolidated financial statements contained in the Company’s 10-K for the fiscal year ended August 31, 2005. The Company evaluates the performance of its operating segments based on segment sales, gross profit, and operating income, with operating income for segment purposes excluding general and administrative expenses (which include corporate expenses), engineering and research expenses, interest income net, other income and expenses, net income taxes, and assets. Operating income for segment purposes does include selling expenses and other overhead charges directly attributable to the segment. There

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are no inter-segment sales. Because the Company utilizes common operating assets for its irrigation and diversified segments, it is not practical to separately identify assets by reportable segment.

          The Company had no single customer representing 10% or more of its total revenues during the three-months ended or six-months ended February 28, 2006 or 2005, respectively.

Summarized financial information concerning the Company’s reportable segments is shown in the following table:

	For the three-months ended				For the six-months ended
	February		February		February		February
$ in thousands	2006		2005		2006		2005
Operating revenues:
Irrigation	$	49,181	$	36,161	$	83,323	$	71,563
Diversified products		5,731		5,326		11,093		9,691
Total operating revenues	$	54,912	$	41,487	$	94,416	$	81,254
Operating income:
Irrigation	$	5,968	$	4,149	$	9,748	$	7,660
Diversified products		1,012		618		1,811		933
Segment operating income		6,980		4,767		11,559		8,593
Unallocated general & administrative and engineering & research expenses		4,892		4,057		9,108		8,350
Interest and other income, net		416		363		845		1,008
Earnings before income taxes	$	2,504	$	1,073	$	3,296	$	1,251

(9) Other Noncurrent Assets

	February		February		August
$ in thousands	2006		2005		2005
Cash surrender value of life insurance policies	$	2,017	$	1,945	$	1,975
Deferred income taxes		295		1,910		730
Equity method investments		—		1,594		1,621
Goodwill		1,393		1,351		1,364
Split dollar life insurance		954		916		954
Intangible pension assets		303		373		304
Other intangibles, net		595		740		695
Notes receivable (1)		1,311		—		—
Other		65		329		558
Total noncurrent assets	$	6,933	$	9,158	$	8,201

(1) Notes receivable consists of $1.0 million note from a sold irrigation dealership (see below) and other notes of $0.3 million.

Goodwill represents the excess of the allocable purchase price for assets acquired in certain business acquisitions over the fair value of these assets at the time of the acquisitions. Other intangible assets include non-compete agreements, trade names, patents, and plans and specifications. Goodwill and intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment of their values at least annually in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” The estimated fair value of these assets depends on a number of assumptions including forecasted sales growth and operating expenses of the reporting segment in which the assets are used. To the extent that the relevant reporting unit is unable to achieve these assumptions, impairment losses may be recognized. The Company completed its annual impairment evaluation of these non-amortizing assets at August 31, 2005 and determined that no impairment losses were indicated. Other intangible assets that have finite lives are amortized over their realizable lives. Amortization expense for these other intangible assets was $49,000 and $14,000 for the three-months ended February 28, 2006 and 2005 and $98,000 and $53,000 for the six-months ended February 28, 2006 and 2005, respectively The Company held a 39% minority investment in an irrigation dealership based outside of the United States. This investment was accounted for on the equity method. On September 1, 2005 the Company sold its minority position in the irrigation dealership for cash held in escrow of approximately $790,000 and notes receivable with a carrying value of $1.2 million. In the second quarter of February 28, 2006, the escrow was paid down by $354,000. These notes are due in annual installments through 2010 and bear interest at 6%. These notes are

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guaranteed by the acquirer. The sale closed on November 30, 2005. The Company realized an immaterial gain from the sale of the dealership.

The following table summarizes the Company’s other intangible assets:

	February			February			August
$ in thousands	2006			2005			2005
Other intangible assets:
Non-compete agreements	$	406		$	396		$	406
License		364			314			364
Tradenames		146			145			146
Patent		100			100			100
Plans and specifications		75			75			75
Other		35			34			38
Accumulated amortization		(531	)		(324	)		(434	)
Total other intangibles assets, net	$	595		$	740		$	695

(10) Comprehensive Income

The accumulated other comprehensive income or loss shown in the Company’s consolidated balance sheets includes the unrealized gains on securities and accumulated foreign currency translation adjustment. The following table shows the difference between the Company’s reported net earnings and its comprehensive income:

	For the three-months ended					For the six-months ended
	February		February			February		February
$ in thousands	2006		2005			2006		2005
Comprehensive income:
Net earnings	$	1,717	$	600		$	2,228	$	775
Other comprehensive (loss) income:
Unrealized gains (losses) on securities, net of tax		37		(105	)		6		(258	)
Foreign currency translation		492		149			857		1,780
Total comprehensive income	$	2,246	$	644		$	3,091	$	2,297

(11) Guarantees and Warranties

Guarantees of Customer Equipment Financing

In the normal course of its business, the Company has arranged for unaffiliated financial institutions to make favorable financing terms available to end-user purchasers of the Company’s irrigation equipment. In order to facilitate these arrangements, the Company provides limited recourse guarantees or full guarantees to the financial institutions on these equipment loans. All of the Company’s customer-equipment recourse guarantees are collateralized by the value of the equipment being financed. The estimated maximum potential future payments to be made by the Company on these guarantees equaled $2,056,000, $3,100,000 and $2,256,000 at February 28, 2006, February 28, 2005 and August 31, 2005, respectively.

          The Company maintains an agreement with one financial institution under which it guarantees the financial institution’s total pool of financing agreements with end users. Under this guarantee, the Company’s exposure is limited to unpaid principal and interest where the first and/or second annual customer payments on individual loans in the pool have not yet been made as and when due. The maximum exposure on this pool guarantees is equal to 2.75% of the aggregate original principal balance of the loans in the pool and equaled approximately $1.1 million at February 28, 2006, $1.5 million at February 28, 2005, and $1.3 million at August 31, 2005. As of March 1, 2006, the Company will no longer provide guarantees on any new financing arrangements under this pool guarantee. The Company will continue to guarantee loans in the pool of record as of February 28, 2006. The guarantee will be released as payments are made against those loans.

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          Separately, the Company provides guarantees on specific customer loans made by two unaffiliated financial institutions, including the institution for which the pool guarantee is provided. Generally, the Company’s exposure on these specific customer guarantees is limited to unpaid principal and interest on customer payments that have not been made as and when due. In some cases, the guarantee may cover all scheduled payments of a loan. The amount of these guarantees of specific customer loans equaled approximately $956,000 at February 28, 2006, approximately $1.6 million at February 28, 2005, and approximately $956,000 at August 31, 2005.

          The Company recorded, at estimated fair value, deferred revenue of $61,000 at February 28, 2006, compared to $64,000 at February 28, 2005 and $69,000 at August 31, 2005, classified with other current liabilities, for these guarantees. The estimated fair values of these guarantees are primarily based on the Company’s experience with these guarantee agreements and related transactions. The Company recognizes the revenue for the estimated fair value of the guarantees ratably over the respective terms of the guarantees. Separately, related to these guarantees, the Company has accrued a liability of $166,000, $367,000, and $190,000 at February 28, 2006 and 2005, and August 31, 2005, respectively, also classified with other current liabilities, for estimated losses on such guarantees.

Guarantees on Third Party Debt Related to Equity Investment

          The Company had guaranteed three bank loans and a standby letter of credit on behalf of the irrigation dealership based in Kansas in which the Company previously held a minority equity investment position. By the end of the second quarter fiscal 2005, all underlying bank loans guaranteed had been paid in full for approximately $250,000 and the guarantees released.

Product Warranties

          The Company generally warrants its products against certain manufacturing and other defects. These product warranties are provided for specific periods and/or usage of the product. The accrued product warranty costs are for a combination of specifically identified items and other incurred, but not identified, items based primarily on historical experience of actual warranty claims. This reserve is classified with other current liabilities.

The following tables provides the changes in the Company’s product warranties:

	For the three-months ended
	February			February
$ in thousands	2006			2005
Warranties:
Product warranty accrual balance, December 1	$	2,396		$	1,123
Liabilities accrued for warranties during the period		616			239
Warranty claims paid during the period		(573	)		(198	)
Product warranty accrual balance, end of period	$	2,439		$	1,164

	For the six-months ended
	February			February
$ in thousands	2006			2005
Warranties:
Product warranty accrual balance, September 1	$	2,456		$	1,339
Liabilities accrued for warranties during the period		893			429
Warranty claims paid during the period		(910	)		(604	)
Product warranty accrual balance, end of period	$	2,439		$	1,164

The warranty accrual increased approximately $1.5 million in the fourth quarter of fiscal year 2005 due to a voluntary repair campaign relating to the end gun solenoid valves on Zimmatic irrigation systems.

(12) Retirement Plan

The Company has a supplemental non-qualified, un-funded retirement plan for six current and former executives. Plan benefits are based on the participant’s average total compensation during the three highest compensation years of employment. This

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unfunded supplemental retirement plan is not subject to the minimum funding requirements of ERISA. The Company has purchased life insurance policies on four of the participants named in this supplemental retirement plan to provide partial funding for this liability. Components of net periodic benefit cost for the Company’s supplemental retirement plan include:

	For the three-months ended				For the six-months ended
	February		February		February		February
$ in thousands	2006		2005		2006		2005
Net periodic benefit cost:
Service cost	$	5	$	9	$	10	$	18
Interest cost		67		67		134		134
Net amortization and deferral		39		76		78		152
Total net periodic benefit cost	$	111	$	152	$	222	$	304

(13) Commitments and Contingencies

In the ordinary course of its business operations, the Company is involved, from time to time, in commercial litigation, employment disputes, administrative proceedings, and other legal proceedings. These include a consent decree that the Company entered in 1992 with the U.S. Environmental Protection Agency concerning groundwater contamination at its Lindsay, Nebraska facility, which is included as an EPA superfund site. Management does not believe that these matters, individually or in the aggregate, are likely to have a material adverse effect on the Company’s consolidated financial condition, results of operations, or cash flows.

(14) Income Taxes

It is the Company’s policy to report income tax expense for interim periods using an estimated annual effective income tax rate. However, the tax effects of significant or unusual items are not considered in the estimated annual effective tax rate. The tax effect of such events is recognized in the interim period in which the event occurs.

          The annual expected effective tax rate for the income tax provision for the year ended August 31, 2006 is expected to be between 33% and 34.5%. The Company has increased its annual expected effective tax rate for year ended August 31, 2006 primarily due to a change in its investment strategy regarding reinvesting in federal tax-exempt investments.

          The effective tax rate for the income tax provision for the three-month and six-month periods ended February 28, 2006 decreased primarily due to a change in estimate in the income tax provisions recorded for the previous year’s Federal and state income tax liabilities. All changes in estimates that have a tax effect are taken in the period when a change in the estimate is known. The effective rate for the income tax provision for the six-months ended February 28, 2006 and 2005 was 32.40% and 38.50%, respectively. The effective rate for the income tax provision for the three-months ended February 28, 2006 and 2005 was 31.43% and 44.08%, respectively. Overall, currently the Company benefits from a U.S. effective tax rate which is lower than the combined federal and state statutory rates primarily due to the federal tax-exempt interest income on its investment portfolio.

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ITEM 2 — Management’s Discussion and Analysis of Results of Operations and Financial Condition

Concerning Forward-Looking Statements

This quarterly report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements that are not historical are forward-looking and reflect expectations for future Company conditions or performance. In addition, forward-looking statements may be made orally or in press releases, conferences, reports, on the Company’s worldwide web site, or otherwise, in the future by or on behalf of the Company. When used by or on behalf of the Company, the words “expect”, “anticipate”, “estimate”, “believe”, “intend”, and similar expressions generally identify forward-looking statements. The entire section entitled “Market Conditions and Fiscal 2006 Outlook” should be considered forward-looking statements. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

          Forward-looking statements involve a number of risks and uncertainties, including but not limited to those discussed in the “Risk Factors” section in the Company’s annual report on Form 10-K for the year ended August 31, 2005. Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results or conditions, which may not occur as anticipated. Actual results or conditions could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. The risks and uncertainties described herein are not exclusive and further information concerning the Company and its businesses, including factors that potentially could materially affect the Company’s financial results, may emerge from time to time. Except as required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

Accounting Policies

In preparing the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management must make a variety of decisions, which impact the reported amounts and the related disclosures. These decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In making these decisions, management applies its judgment based on its understanding and analysis of the relevant circumstances and the Company’s historical experience.

          The Company’s accounting policies that are most important to the presentation of its results of operations and financial condition, and which require the greatest use of judgments and estimates by management, are designated as its critical accounting policies. Disclosure on these critical accounting policies is incorporated by reference under Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the Company’s year ended August 31, 2005. Management periodically re-evaluates and adjusts its critical accounting policies as circumstances change. During the second quarter of fiscal 2006, the Company has reevaluated its revenue recognition policy and has removed it from its critical accounting policies. This decision was made because there is not a significant amount of estimates or judgment used in determining revenue recognition. During the first quarter of fiscal 2006 the Company adopted SFAS 123(R). Management does not consider this a critical accounting policy and there were no other significant changes in the Company’s critical accounting policies during the three-months ended February 28, 2006.

Overview

Lindsay Manufacturing Co. (“Lindsay” or the “Company”) is a leading designer and manufacturer of self-propelled center pivot and lateral move irrigation systems, which are used, principally in the agricultural industry to increase or stabilize crop production while conserving water, energy, and labor. The Company has been in continuous operation since 1955, making it one of the pioneers in the automated irrigation industry. The Company markets its standard size center pivot and lateral move irrigation systems domestically and internationally under its Zimmatic brand. The Company also manufactures and markets separate lines of center pivot and lateral move irrigation equipment for use on smaller fields under its Greenfield and Stettyn brands, and hose reel travelers under the Perrot brand (Greenfield in the United States). The Company also produces irrigation controls and chemical injection systems and remote monitoring which it sells under its GrowSmart brand. In addition to whole systems, the Company manufactures and markets repair and replacement parts for its irrigation systems and controls. Lindsay also produces and sells large diameter steel tubing products and manufactures and assembles diversified agricultural and construction products on a contract manufacturing basis for certain large industrial companies. Industry segment information about Lindsay is included in Note 8 to the consolidated financial statements.

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          Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska, USA. The Company’s principal manufacturing facilities are located in Lindsay, Nebraska, USA. The Company also has foreign sales and production facilities in France, Brazil, and South Africa which provide it with important bases of operations in key international markets. Lindsay Europe SAS, located in France, manufactures and markets irrigation equipment for the European market. Lindsay America do Sul Ltda., located in Brazil, manufactures and markets irrigation equipment for the South American market. Lindsay Manufacturing Africa, (PTY) Ltd, located in South Africa, manufactures and markets irrigation equipment in markets in southern Africa.

          Lindsay has two additional operating subsidiaries including Irrigation Specialists, Inc., which is a retail irrigation dealership based in Washington State that operates at three locations and provides a strategic distribution channel in a key regional irrigation market and Lindsay Transportation, Inc. which supplies ground transportation in the United States and Canada for the Company’s products and the bulk of incoming raw materials.

Results of Operations

The following section presents an analysis of the Company’s consolidated operating results displayed in the consolidated statements of operations for the three-months and six-months ended February 28, 2006 and 2005. It should be read together with the industry segment information in Note 8 to the consolidated financial statements:

	For the three-months ended									For the six-months ended
							Percent									Percent
	February			February			Increase			February			February			Increase
($ in thousands)	2006			2005			(decrease)			2006			2005			(decrease)
Consolidated Operating revenues	$	54,912		$	41,487			32.4	%	$	94,416		$	81,254			16.2	%
Cost of operating revenues	$	45,048		$	33,721			33.6		$	77,125		$	66,915			15.3
Gross profit	$	9,864		$	7,766			27.0		$	17,291		$	14,339			20.6
Gross margin		18.0	%		18.7	%					18.3	%		17.6	%
Operating expenses	$	7,776		$	7,056			10.2		$	14,840		$	14,096			5.3
Operating income	$	2,088		$	710			194.1		$	2,451		$	243			908.6
Operating margin		3.8	%		1.7	%					2.6	%		0.3	%
Interest income, net	$	436		$	295			47.8		$	863		$	556			55.2
Other (loss) income, net	$	(20	)	$	68			(129.4	)	$	(18	)	$	452			(104.0	)
Income tax provision	$	787		$	473			66.4		$	1,068		$	476			124.4
Effective income tax rate		31.4	%		44.1	%					32.4	%		38.1	%
Net earnings	$	1,717		$	600			186.2		$	2,228		$	775			187.5
Irrigation Equipment Segment (1)
Operating revenues	$	49,181		$	36,161			36.0		$	83,323		$	71,563			16.4
Operating income	$	5,968		$	4,149			43.8		$	9,748		$	7,660			27.3
Operating margin		12.1	%		11.5	%					11.7	%		10.7	%
Diversified Products Segment (1)
Operating revenues	$	5,731		$	5,326			7.6		$	11,093		$	9,691			14.5
Operating income	$	1,012		$	618			63.8		$	1,811		$	933			94.1
Operating margin		17.7	%		11.6	%					16.3	%		9.6	%

(1) Excludes unallocated general & administrative and engineering & research expenses

For the Three-Months ended February 28, 2006

Revenues

Operating revenues for the three-months ended February 28, 2006 increased 32% to $54.9 million compared with $41.5 million for the three-months ended February 28, 2005. This increase was attributable to a 36% increase in irrigation equipment revenues and an 8% increase in revenues from the Company’s diversified manufacturing segment.

Domestic irrigation equipment revenues for the three-months ended February 28, 2006 of $36.5 million increased $10.8

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million or 42%, compared to the same period last year. The increase in revenues was primarily a result of an increase in the volume of units shipped during the period. In addition, price increases implemented during the quarter increased revenues. Demand was generally affected by an improving domestic farm economy. At the end of the fiscal quarter, commodity prices for the primary agricultural commodities on which our equipment is used remained relatively stable and improved over the first quarter of fiscal 2006. Increased ethanol demand and a projected reduction in corn acreage planted could move corn prices higher, in spite of the high carryover inventories. In addition, grower input costs for energy and fertilizer have stabilized. Even though USDA estimates project that Net Farm Income will be 22.6% lower in the 2006 crop year compared to the prior year, the domestic farmer’s sentiment for irrigation equipment is significantly improved over last year. Continued dry weather conditions in the Southwest and Midwest stabilized crop prices, and pent-up demand from the market decline in fiscal 2005 created a stronger market for irrigation equipment.

International irrigation equipment revenues for the three-months ended February 28, 2006 of $12.7 million increased $2.3 million or 22% as compared to the same prior year period. Each of the Company’s international subsidiaries realized increases in revenues over the same period last year, however, the international locations continue to experience depressed market conditions. Farmers in Brazil have experienced pressure on their profitability from drought conditions, Asian rust affecting soybeans, and a strengthening in the value of the Brazilian Real relative to the U.S. dollar. In South Africa, the profitability picture is now improving for farmers as maize prices have increased. In Western Europe, the market for pivots has remained strong, primarily on the Iberian Peninsula. Hose-reel demand was weaker due to wet-weather conditions in France. During the second quarter of fiscal 2006, the Company also continued to realize revenue growth in Latin America.

Diversified manufacturing revenues for the three-months ended February 28, 2006 of $5.7 million increased 8% from the same prior year period. The Company continues to realize strong revenues in its contract manufacturing business, and in commercial tubing. The Company continues its initiative of developing new customer relationships for its diversified manufacturing business and in seeking opportunities for growth and expansion of its diversified manufacturing business organically or through acquisition.

Gross Margin

Gross margin percentage for the quarter declined to 18.0% from the 18.7% achieved during the second quarter of fiscal 2005. Gross selling margins in the domestic irrigation market were slightly lower as compared to the second quarter of fiscal 2005. The positive affects on gross margin of the increase in the number of number of units sold during the quarter were more than offset by higher zinc and structural steel costs. The Company realized cost increases in structural steel, of approximately 4%, and at the same time, zinc costs rose approximately 50%. Due to the increase in product input costs, the Company implemented increases in its product prices in early January and February, but the full effect of these increases was not realized during the quarter. In addition, some domestic sales during the quarter were subject to competitive bidding which placed additional pressure on gross margin. In addition, the Company earned a percentage of its domestic revenues in the quarter from significant projects, where the Company faced competitive bidding. The competitive bidding environment placed additional pressure on gross margin. In addition, the international irrigation gross margins were impacted by competitive intensity, particularly in the Western European market. The Company expects to realize margin improvements in future quarters as input costs stabilize and the effect of price increases are fully realized.

Operating Expenses

Operating expenses for the quarter were $7.8 million or 10% higher than during the same period of fiscal 2005. The increase was primarily attributable to the inclusion of stock based compensation expenses of $358,000 and expenses related to our factory consolidation in South Africa of $186,000.

Interest Income, Other Income, and Taxes

Net interest income during the three-months ended February 28, 2006 of $436,000 increased 48 percent from the $295,000 earned during the same period of fiscal 2005. The increase is primarily the result of increased interest income from higher interest rates when compared to the average interest rate earned in the prior year period.

          Other (loss) income, net during the three-months ended February 28, 2006 decreased $88,000 when compared to the same period in fiscal 2005. This decrease primarily resulted from the loss of other income from a 39% minority ownership in the Canadian dealership due to the sale of this interest on September 1, 2005. In addition, the Company incurred a foreign currency transaction loss of $48,000 as compared to a $52,000 gain in the prior year period.

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     The annual expected effective tax rate for the income tax provision for the year ended August 31, 2006 is expected to be between 33% and 34.5%. The Company has increased its annual expected effective tax rate for the year ended August 31, 2006, primarily due to a change in its investment strategy regarding reinvesting in federal tax-exempt investments.

     The effective tax rate for the income tax provision for the three-months ended February 28, 2006 decreased primarily due to a change in estimate in the income tax provisions recorded for the previous year’s Federal and state income tax liabilities. All changes in estimates that have a tax effect are taken in the period when a change in the estimate is known. The effective rate for the income tax provision for the three-months ended February 28, 2006 and 2005 was 31.43% and 44.08%, respectively. Overall, currently the Company benefits from a U.S. effective tax rate which is lower than the combined federal and state statutory rates primarily due to the federal tax-exempt interest income on its investment portfolio.

Net Earnings

Net earnings were $1.7 million or $0.15 per diluted share, for the three-months ended February 28, 2006, compared with $600,000, or $0.05 per diluted share, for the same prior year period. The adoption of SFAS 123(R) had a negative net of tax effect on earning of $239,000 or $0.02 per diluted share.

Share-Based Compensation Expense

     On September 1, 2005, the Company adopted SFAS 123(R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to the Company’s employees and directors. The following table summarizes share-based compensation expense under SFAS 123(R) for the three months ended February 28, 2006:

	Three-
	Months Ended
	February 28,
$ in thousands	2006
Share-based compensation expense included in cost of operating revenues	$	27
Research and development		23
Sales and marketing		77
General and administrative		258
Share-based compensation expense included in operating expenses		358
Total Share-based compensation expense		385
Tax benefit		(146	)
Share-based compensation expense, net of tax	$	239

The share-based compensation expense is allocated based on the relative compensation split of individuals receiving share-based compensation. Total expected share-based compensation for fiscal 2006 is approximately $1.7 million on a pre-tax basis.

For the Six-Months ended February 28, 2006

Revenues

Operating revenues for the six-months ended February 28, 2006 increased 16% to $94.4 million compared with $81.3 million for the six-months ended February 28, 2005. This increase was attributable to a 16% increase in irrigation equipment revenues and a 14% increase in the diversified manufacturing segment.

Domestic irrigation equipment revenues for the six-months ended February 28, 2006 increased $10.0 million or 20% compared to the same period last year. Management believes that the combination of factors described above in the discussion of the three-months ended February 28, 2006 also contributed to the increase in domestic irrigation revenues for the six-months ended February 28, 2006.

International irrigation equipment revenues for the six-months ended February 28, 2006 increased $1.8 million or 8% over the first six-months of fiscal 2005. Management believes that the combination of factors described above in the discussion of the three-months ended February 28, 2006 also contributed to the increase in international irrigation revenues for the six-months

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ended February 28, 2006.

Diversified manufacturing revenues of $11.1 million for the six-months ended February 28, 2006 represented an increase of $1.4 million or 15% from the same prior year period. The Company continues to realize strong revenues in our contract manufacturing business, and has also achieved improved margins. The Company continues its initiative of developing new customer relationships for its diversified manufacturing business and in seeking opportunities for growth and expansion of its diversified manufacturing business organically or through acquisition.

Gross Margin

Gross profit for the six-months ended February 28, 2006 was $17.3 million, an increase of $3.0 million as compared to the same prior year period. Gross margin percentage for the six-months ended February 28, 2006 increased to 18.3% from the 17.6% achieved during the same prior year period. The increase in gross margin is largely attributable to the increase in volume of irrigation systems sold during the six-months ended February 28, 2006 as compared to the same period in fiscal 2005. This resulted in an increased number of units to which overhead and other fixed production costs were allocated. Gross margin was also positively affected by the decrease in the percentage of total sales represented by our international operations since margins achieved by these operations are typically lower than those achieved by our domestic operations.

Operating Expenses

Operating expenses during the first half of fiscal 2006 rose by $744,000 or 5% from the same prior year period. The increase was primarily attributable to the inclusion of stock based compensation expenses of $689,000 and expenses related to our factory consolidation in South Africa of $186,000. Theses expenses were partially offset by decreases in advertising, management relocation and recruiting expenses.

Interest Income, Other Income, and Taxes

Net interest income during the six-months ended February 28, 2006 of $863,000 increased 55% from the $556,000 earned during the same period of fiscal 2005. The increase is primarily the result of higher interest rates when compared to the average interest rate earned in the prior year period.

     Other (loss) income, net during the six-months ended February 28, 2006 decreased $470,000 when compared to the same period in fiscal 2005. This decrease primarily resulted from the loss of other income from a 39% minority ownership in the Canadian dealership due to the sale of this interest on September 1, 2005. In addition, the Company incurred a foreign currency transaction loss of $119,000 as compared to a $240,000 gain in the prior year period.

     The annual expected effective tax rate for the income tax provision for the year ended August 31, 2006 is expected to be between 33% and 34.5%. The Company has increased its annual expected effective tax rate for year the ended August 31, 2006, primarily due to a change in its investment strategy regarding reinvesting in federal tax-exempted investments.

     The effective tax rate for the income tax provision for the six-months ended February 28, 2006 decreased primarily due to a change in estimate in the income tax provisions recorded for the previous year’s Federal and state income tax liabilities. All changes in estimates that have a tax effect are taken in the period when a change in the estimate is known. The effective rate for the income tax provision for the six-months ended February 28, 2006 and 2005 was 32.40% and 38.50%, respectively. Overall, currently the Company benefits from a U.S. effective tax rate which is lower than the combined federal and state statutory rates primarily due to the federal tax-exempt interest income on its investment portfolio.

Net Earnings

Net earnings were $2.2 million or $0.19 per diluted share, for the six-months ended February 28, 2006, compared with $775,000, or $0.06 per diluted share, for the same prior year period. The adoption of SFAS 123(R) had a negative net of tax effect on earning of $460,000 or $0.04 per diluted share.

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Share-Based Compensation Expense

     The following table summarizes share-based compensation expense under SFAS 123(R) for the six-months ended February 28, 2006:

	Six-
	Months Ended
	February 28,
$ in thousands	2006
Share-based compensation expense included in cost of operating revenues	$	52
Research and development		45
Sales and marketing		148
General and administrative		496
Share-based compensation expense included in operating expenses		689
Total Share-based compensation expense		741
Tax benefit		(281	)
Share-based compensation expense, net of tax	$	460

Liquidity and Capital Resources

The Company requires cash for financing its receivables and inventories, paying operating costs and capital expenditures, and for dividends. The Company may also use cash to finance business acquisitions and additional stock repurchases from time to time. Historically, the Company has met its liquidity needs and financed all capital expenditures exclusively from its available cash and funds provided by operations.

     The Company’s cash and marketable securities totaled $50.9 million at February 28, 2006, $43.8 million at February 28, 2005, and $54.8 million at August 31, 2005. The Company’s marketable securities consist primarily of investment-grade municipal bonds.

     Cash flows used by operations totaled $1.4 million during the six-months ended February 28, 2006, compared to $6.1 million used in operations during the same prior year period. The $4.7 million decrease in cash flows used by operations was primarily due to a $1.5 million increase in cash provided by net income, $6.0 million increase in cash used by receivables, $2.1 million decrease in cash used by inventory, $0.9 million increase in cash used by current assets, $6.1 million increase in cash provided by accounts payable, $3.8 million increase in cash provided by current liabilities and $2.2 million decrease in cash provided by noncurrent assets and liabilities. The improvements in cash flows used by operations were a result of improved working capital management.

     Cash flows provided by investing activities totaled $3.8 million during the six-months ended February 28, 2006 compared to cash flows provided by investing activities of $8.8 million during the same prior year period. Cash flows provided by investing activities decreased by $5.0 million compared to the same prior year period primarily due to lower net proceeds from purchases, maturities and sales of marketable securities.

     Capital expenditures were $1.8 million during the six-months ended February 28, 2006 and 2005. Capital expenditures were used primarily for updating manufacturing plant and equipment, expanding manufacturing capacity, and further automating the Company’s facilities. Capital expenditures for fiscal 2006 are expected to be approximately $4.0 to $4.5 million and will be used to improve the Company’s facilities and expand its manufacturing capacity.

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     Cash flows used in financing activities totaled $1.3 million during the six-months ended February 28, 2006 compared to $4.3 million during the same prior year period. The $3.0 million decrease in cash used in financing is due primarily to $3.2 million used to repurchase common stock during the six-months ended February 28, 2005.

     The Company’s European subsidiary, Lindsay Europe, has unsecured revolving lines of credit with two commercial banks under which it could borrow up to 2.3 million Euros, which equates to USD$2.7 million as of February 28, 2006, for working capital purposes. As of February 28, 2006, there was a $437,000 outstanding balance on this line. Under the terms of the line of credit, borrowings, if any, bear interest at a floating rate in effect from time to time designated by the commercial bank as LIBOR+200 basis points (3.85% at February 28, 2006).

     The Company believes its current cash resources (including cash and marketable securities balances), projected operating cash flow, and bank lines of credit are sufficient to cover all of its expected working capital needs, planned capital expenditures, dividends, and other cash requirements, excluding potential acquisitions.

Off-Balance Sheet Arrangements

There have been no material changes in our off balance sheet arrangements as described on page 18 in our Form 10-K for the fiscal year ended August 31, 2005.

Contractual Obligations and Commercial Commitments

There have been no material changes in our contractual obligations and financial commitments as described on page 18 in our Form 10-K for the fiscal year ended August 31, 2005.

Market Conditions and Fiscal 2006 Outlook

Domestically, the USDA is projecting net farm income to be lower in 2006, due to lower commodity prices and higher input costs. In spite of this forecast, demand remains strong for irrigation systems due to improved farmer sentiment and continued dry conditions. The international locations continue to experience depressed market conditions. The Company expects diversified manufacturing to remain strong for fiscal 2006 due to the continued expansion and investment in this business segment. Management continues to take appropriate actions to control operating expenses for fiscal 2006.

Recently Issued Accounting Pronouncements

FSP FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. This FSP also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognize as other-than-temporary impairments. The Company adopted this FSP in the second quarter of fiscal 2006 and this FSP did not have an impact on the Company’s financial position and net income.

     SFAS No. 154, “Accounting Changes and Error Corrections” replaces APB Opinion No. 20, “Accounting Changes”, and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements” and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. This Statement requires retrospective application to prior periods’ financial statements of changes in accounting principle. This Statement shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, and the Company will adopt this pronouncement in the first quarter of fiscal 2007. The Company does not expect this pronouncement to have a material impact on the Company’s financial position and net income.

ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk

The market value of the Company’s investment securities fluctuates inversely with movements in interest rates because all of these investment securities bear interest at fixed rates. Accordingly, during periods of rising interest rates, the market value of these securities will decline. However, the Company does not consider itself to be subject to material market risks with respect to its portfolio of investment securities because the maturity of these securities is relatively short, making their value less susceptible to interest rate fluctuations.

     The Company has manufacturing operations in the United States, France, Brazil, and South Africa. The Company has sold products throughout the world and purchases certain of its components from third-party foreign suppliers. Export sales made from the United States are principally U.S. dollar denominated. Accordingly, these sales are not subject to significant

24

currency transaction risk. However, a majority of the Company’s revenue generated from operations outside the United States is denominated in local currency. The Company’s most significant transactional foreign currency exposures are the Euro, Brazilian real, and the South African rand in relation to the U.S. dollar. Fluctuations in the value of foreign currencies create exposures, which can adversely affect the Company’s results of operations. The Company attempts to manage its transactional foreign exchange exposure by monitoring foreign currency cash flow forecasts and commitments arising from the settlement of receivables and payables, and from future purchases and sales.

     The Company’s translation exposure resulting from translating the financial statements of foreign subsidiaries into U.S. dollars is not hedged.

ITEM 4 — Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation under the supervision and the participation of the Company’s management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of February 28, 2006.

     Additionally, the CEO and CFO determined that there have been no significant changes to the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II — OTHER INFORMATION

ITEM 1 — Legal Proceedings

In the ordinary course of its business operations, the Company is involved, from time to time, in commercial litigation, employment disputes, administrative proceedings, and other legal proceedings.

In 1992, the company entered into a consent decree with the Environmental Protection Agency of the United States Government (“the EPA”) in which it committed to remediate environmental contamination of the groundwater that was discovered in 1982 through 1990 at and adjacent to its Lindsay, Nebraska facility (“the site”). The site was added to the EPA’s list of priority superfund sites in 1989. Between 1993 and 1995, remediation plans for the site were approved by the EPA and fully implemented by the Company. Since 1998, the primary remaining contamination at the site has been the presence of volatile organic chemicals in the groundwater. In 2003, a second Five Year Review of the status of the remediation of the contamination of the site was conducted by the Company and the EPA. As a result of this review, the EPA issued a letter placing the Company on notice that additional remediation actions were required. The Company and its environmental consultants have completed and submitted a supplemental remedial action work plan that, when implemented, will allow the Company and the EPA to better identify the boundaries of the contaminated groundwater and will allow the Company and the EPA to more effectively assure that the contaminated groundwater is being contained by current and planned additional wells that pump and aerate it. The Company has been able to reasonably estimate the cost of completing the remediation actions defined in the supplemental remedial action work plan. Substantially all remediation actions were completed in fiscal 2004 and the Company expects to complete the outstanding actions in fiscal 2006. Related liabilities recognized were $133,000 at August 31, 2005 and $176,000 at February 28 2006.

ITEM 1A — Risk Factors

There have been no material changes in our risk factors as described on pages 7 & 8 in our Form 10-K for the fiscal year ended August 31, 2005.

ITEM 2 — Unregistered Sales of Equity Securities and Use of Proceeds

The Company made no repurchases of its common stock under the Company’s stock repurchase plan during the three-months ended February 28, 2006; therefore, tabular disclosure is not presented. From time to time, the Company’s Board of Directors has authorized management to repurchase shares of the Company’s common stock. Most recently, during August 2000, the Company announced a 1.0 million share increase in the number of shares authorized for repurchase. Under this share

25

repurchase plan, management has existing authorization to purchase, without further announcement, up to 881,139 shares of the Company’s common stock in the open market or otherwise.

ITEM 3 — Defaults Upon Senior Securities

     None

ITEM 4 — Submission of Matters to a Vote of Security Holders

The Company’s annual shareholders’ meeting was held on February 6, 2006. The shareholders voted to elect two directors, to approve the 2006 Long-Term Incentive Plan and to ratify the appointment of KPMG LLP as independent accountants for the fiscal year ending August 31, 2006. In addition to the election of Mr. Cunningham and Mr. Parod as directors, the following were directors at the time of the annual meeting and will continue in office: Mr. Christodolou, Mr. Buffett, Mr. Nahl, Mr. Welsh and Mr. McIntosh. There were 11,520,483 shares of common stock entitled to vote at the meeting and 10,323,244 shares (89.6%) were represented at the meeting. The voting results were as follows:

1.	Election of Directors:	Larry H. Cunningham	For – 9,945,045	Withheld – 378,199
		Richard W. Parod	For – 9,989,705	Withheld – 333,539
2.	Approval of 2006 Long-Term Incentive Plan
	For – 6,822,493	Against – 1,568,059	Abstain – 279,099	Broker Non-Vote – 1,653,593
3.	Auditors: Ratification of the appointment of KPMG LLP as independent auditors for the fiscal year ended August 31, 2006.
	For – 10,241,474	Against – 68,832	Abstain – 12,938	Broker Non-Vote – 0

ITEM 5 — Other Information

     None

ITEM 6 — Exhibits

3(a)	Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3(a) to the Company’s Report on Form 10-Q for the fiscal quarter ended February 28, 1997.
3(b)	By-Laws of the Company amended and restated by the Board of Directors on December 16, 2004, incorporated by reference to Exhibit 3(b) of the Company’s Report on Form 8-K filed on December 22, 2004.
3(c)	Certificate of Amendment of the Restated Certificate of Incorporation of Lindsay Manufacturing Co. dated February 7, 1997, incorporated by reference to Exhibit 3(b) to the Company’s Report on Form 10-Q for the fiscal quarter ended February 28, 1997.
4(a)	Specimen Form of Common Stock Certificate incorporated by reference to Exhibit 4 to the Company’s report on Form 10-Q for the fiscal quarter ended November 30, 1997.
10(a)*	Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan and forms of award agreements.
31(a)	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.

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31(b)	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.
32(a)	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350.

* - filed herein

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SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 7^th day of April 2006.

LINDSAY MANUFACTURING CO.
By:	/s/ david b. downing
Name:	David B. Downing
Title:	Vice President, Chief Financial Officer
	(Principal Financial Officer)

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EX-10.(A)

Exhibit 10(a)

LINDSAY MANUFACTURING CO.
2006 LONG-TERM INCENTIVE PLAN
(Effective February 6, 2006)

     1. Purpose. The purpose of Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (the “Plan”) is to attract and retain employees and directors for Lindsay Manufacturing Co. and its subsidiaries and to provide such persons with incentives and rewards for superior performance.

     2. Definitions. As used in this Plan, the following terms shall be defined as set forth below:

     2.1 “Award” means any Options, Stock Appreciation Rights, Restricted Shares, Deferred Shares (Restricted Stock Units), Performance Shares or Performance Units granted under the Plan.

     2.2 “Award Agreement” means an agreement, certificate, resolution or other form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award. An Award Agreement may be in an electronic medium, may be limited to a notation on the Company’s books and records and, if approved by the Committee, need not be signed by a representative of the Company or a Participant.

     2.3 “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Freestanding Stock Appreciation Right.

     2.4 “Board” means the Board of Directors of the Company.

     2.5 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     2.6 “Committee” means the committee of the Board described in Section 4.

     2.7 “Company” means Lindsay Manufacturing Co., a Delaware corporation, or any successor corporation.

     2.8 “Deferral Period” means the period of time during which Deferred Shares (Restricted Stock Units) are subject to deferral limitations under Section 8.

     2.9 “Deferred Shares” or “Restricted Stock Units” means an Award pursuant to Section 8 of the right to receive Shares at the end of a specified Deferral Period.

     2.10 “Employee” means any person, including an officer, employed by the Company or a Subsidiary.

     2.11 “Fair Market Value” means the fair market value of the Shares as determined by the Committee from time to time. Unless otherwise determined by the Committee, the fair market value shall be the closing price for the Shares reported on a consolidated basis on the New York Stock Exchange on the relevant date or, if there were no sales on such date, the closing price on the nearest preceding date on which sales occurred.

     2.12 “Freestanding Stock Appreciation Right” means a Stock Appreciation Right granted pursuant to Section 6 that is not granted in tandem with an Option or similar right.

     2.13 “Grant Date” means the date specified by the Committee on which a grant of an Award shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto.

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     2.14 “Incentive Stock Option” means any Option that is intended to qualify as an “incentive stock option” under Code Section 422 or any successor provision.

     2.15 “Nonemployee Director” means a member of the Board who is not an Employee.

     2.16 “Nonqualified Stock Option” means an Option that is not intended to qualify as an Incentive Stock Option.

     2.17 “Option” means any option to purchase Shares granted under Section 5.

     2.18 “Optionee” means the person so designated in an agreement evidencing an outstanding Option.

     2.19 “Option Price” means the purchase price payable upon the exercise of an Option.

     2.20 “Participant” means an Employee or Nonemployee Director who is selected by the Committee to receive benefits under this Plan, provided that only Employees shall be eligible to receive grants of Incentive Stock Options.

     2.21 “Performance Objectives” means the performance objectives established pursuant to this Plan for Participants who have received Awards. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, division, department or function within the Company or Subsidiary in which the Participant is employed. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance–Based Award shall be limited to specified levels of or increases in the Company’s or Subsidiary’s return on equity, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, earnings before interest and taxes, sales, sales growth, gross margin return on investment, increase in the fair market value of the Shares, share price (including but not limited to, growth measures and total stockholder return), operating income or profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on investment (which equals net cash flow divided by total capital), inventory turns, financial return ratios, total return to shareholders, market share, earnings measures/ratios, economic value added (EVA), balance sheet measurements such as receivable turnover, internal rate of return, increase in net present value or expense targets, working capital measurements (such as average working capital divided by sales), customer or dealer satisfaction surveys and productivity. Any Performance Objectives may provide for adjustments to exclude the impact of any significant acquisitions or dispositions of businesses by the Company, one-time non-operating charges, or accounting changes (including the early adoption of any accounting change mandated by any governing body, organization or authority). Except in the case of a Qualified Performance–Based Award, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable.

     2.22 “Performance Period” means a period of time established under Section 9 within which the Performance Objectives relating to Performance Shares, Performance Units, Deferred Shares (Restricted Stock Units) or Restricted Shares are to be achieved.

     2.23 “Performance Share” means a bookkeeping entry that records the equivalent of one Share awarded pursuant to Section 9.

     2.24 “Performance Unit” means a bookkeeping entry that records a unit equivalent to $1.00 awarded pursuant to Section 9.

     2.25 “Predecessor Plan” means the Lindsay Manufacturing Co. 2001 Long-Term Incentive Plan.

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     2.26 “Qualified Performance–Based Award” means an Award or portion of an Award that is intended to satisfy the requirements for “qualified performance–based compensation” under Code Section 162(m). The Committee shall designate any Qualified Performance–Based Award as such at the time of grant.

     2.27 “Restricted Shares” means Shares granted under Section 7 subject to a substantial risk of forfeiture.

     2.28 “Shares” means shares of the Common Stock of the Company, $1.00 par value, or any security into which Shares may be converted by reason of any transaction or event of the type referred to in Section 11.

     2.29 “Spread” means, in the case of a Freestanding Stock Appreciation Right, the amount by which the Fair Market Value on the date when any such right is exercised exceeds the Base Price specified in such right or, in the case of a Tandem Stock Appreciation Right, the amount by which the Fair Market Value on the date when any such right is exercised exceeds the Option Price specified in the related Option.

     2.30 “Stock Appreciation Right” means a right granted under Section 6, including a Freestanding Stock Appreciation Right or a Tandem Stock Appreciation Right.

     2.31 “Subsidiary” means a corporation or other entity in which the Company has a direct or indirect ownership or other equity interest, provided that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation (within the meaning of the Code) in which the Company owns or controls directly or indirectly more than 50 percent of the total combined voting power represented by all classes of stock issued by such corporation at the time of such grant.

     2.32 “Tandem Stock Appreciation Right” means a Stock Appreciation Right granted pursuant to Section 6 that is granted in tandem with an Option or any similar right granted under any other plan of the Company.

     3. Shares Available Under the Plan.

     3.1 Reserved Shares. Subject to adjustments as provided in Sections 3.5 and 11, the maximum number of Shares that may be (i) issued or transferred upon the exercise of Options or Stock Appreciation Rights, (ii) awarded as Restricted Shares and released from substantial risk of forfeiture, (iii) issued or transferred in payment of Deferred Shares (Restricted Stock Units) or Performance Shares, or (iv) issued or transferred in payment of dividend equivalents paid with respect to Awards, shall not in the aggregate exceed 600,000 Shares. Such Shares may be Shares of original issuance, Shares held in Treasury, or Shares that have been reacquired by the Company.

     3.2 Reduction Ratio. For purposes of Section 3.1, the number of Shares available for issuance under the Plan shall be reduced by two (2) Shares for each Share issued and transferred in settlement of an Award other than an Option and one (1) Share for each Share issued and transferred upon exercise of an Option. For purposes of Section 3.1, shares which are withheld from Awards to satisfy withholding taxes shall be treated as having been issued or transferred, and Shares which are tendered as payment of the Option Price shall not be added back as additional Shares available for issuance under the Plan.

     3.3 ISO Maximum. In no event shall the number of Shares issued upon the exercise of Incentive Stock Options exceed 600,000 Shares, subject to adjustment as provided in Section 11.

     3.4 Maximum Awards. No Participant may receive Awards representing more than 350,000 Shares in any rolling 36-month period, subject to adjustment as provided in Section 11. In addition, the maximum number of Performance Units that may be granted to a Participant in any rolling 36-month period is 5,000,000.

     3.5 Expired, Forfeited and Unexercised Awards. If any Option granted under this Plan expires, is forfeited or becomes unexercisable for any reason without having been exercised or paid in full, the Shares subject

34

thereto which were not exercised shall be available for future Awards under the Plan. Likewise, if any stock option that was outstanding on December 1, 2005 under the Company’s Predecessor Plan or Amended and Restated 1988 and 1991 Long-Term Incentive Plans or the stock options for 350,000 shares granted to Richard W. Parod on March 8, 2000 expires, is forfeited or becomes unexercisable for any reason, the shares subject thereto which were not exercised shall be added to the number of Shares which are available for Awards under Section 3.1. If any Restricted Shares or other Awards made in Shares under this Plan that reduce the number of Shares available for future Awards using a 2 for 1 share reduction ratio under Section 3.2 are forfeited, such shares shall be restored for future Awards under this Plan on a 2 for 1 share increase basis. Likewise, if any restricted stock units granted under the Predecessor Plan are forfeited, the Shares which are forfeited shall be added to the number of shares which are available for Awards under Section 3.1 using a 2 for 1 share increase basis.

     4. Plan Administration.

     4.1 Board Committee Administration. This Plan shall be administered by the Compensation Committee appointed by the Board from among its members, provided that the full Board may at any time act as the Committee. The interpretation and construction by the Committee of any provision of this Plan or of any Award Agreement and any determination by the Committee pursuant to any provision of this Plan or any such agreement, notification or document shall be final and conclusive. No member of the Committee shall be liable to any person for any such action taken or determination made in good faith. It is intended that the Compensation Committee will 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 Code Section 162(m) is sought, as an “Outside Director” under Section 1.162-27(e)(3)(i) of the Treasury Regulations issued under Code Section 162(m).

     4.2 Committee Delegation. The Committee may delegate to one or more officers of the Company the authority to grant Awards to Participants who arc not directors or executive officers of the Company, provided that the Committee shall have fixed the total number of Shares or Performance Units subject to such grants. Any such delegation shall be subject to the limitations of Section 157(c) of the Delaware General Corporation Law.

     4.3 Awards to Non-Employee Directors. Notwithstanding any other provision of this Plan to the contrary, all Awards to Non-Employee Directors must be authorized by the full Board pursuant to recommendations made by the Compensation Committee.

     5. Options. The Committee may from time to time authorize grants to Participants of Options to purchase Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions:

     5.1 Number of Shares. Each grant shall specify the number of Shares to which it pertains.

     5.2 Option Price. Each grant shall specify an Option Price per Share, which shall be equal to or greater than the Fair Market Value per Share on the Grant Date.

     5.3 Consideration. Each grant shall specify the form of consideration to be paid in satisfaction of the Option Price and the manner of payment of such consideration, which may include (i) cash in the form of currency or check or other cash equivalent acceptable to the Company, (ii) nonforfeitable, unrestricted Shares owned by the Optionee which have a value at the time of exercise that is equal to the Option Price, (iii) any other legal consideration that the Committee may deem appropriate, including without limitation any form of consideration authorized under Section 5.4, on such basis as the Committee may determine in accordance with this Plan, or (iv) any combination of the foregoing.

     5.4 Payment of Option Price in Shares. On or after the Grant Date of any Option other than an Incentive Stock Option, the Committee may determine that payment of the Option Price may also be made in whole or in part in the form of Restricted Shares or other Shares that are subject to risk of forfeiture or restrictions on transfer. Unless otherwise determined by the Committee, whenever any Option Price is paid in whole or in part by means of any of the forms of consideration specified in this Section 5.4, the Shares received by the Optionee upon the exercise of the Options shall be subject to the same risks of forfeiture or restrictions on transfer as those that applied to the consideration surrendered by the Optionee, provided that such risks of forfeiture and restrictions

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on transfer shall apply only to the same number of Shares received by the Optionee as applied to the forfeitable or restricted Shares surrendered by the Optionee.

     5.5 Cashless Exercise. To the extent permitted by applicable law, the Option Price and any applicable statutory minimum withholding taxes may be paid from the proceeds of sale through a bank or broker on the date of exercise of some or all of the Shares to which the exercise relates.

     5.6 Performance–Based Options. Any grant of an Option may specify Performance Objectives that must be achieved as a condition to exercise of the Option.

     5.7 Vesting. Each Option grant may specify a period of continuous employment of the Optionee by the Company or any Subsidiary (or, in the case of a Nonemployee Director, service on the Board) that is necessary before the Options or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of such rights in the event of a change in control of the Company or other similar transaction or event.

     5.8 ISO Dollar Limitation. Options granted under this Plan may be Incentive Stock Options, Nonqualified Stock Options or a combination of the foregoing, provided that only Nonqualified Stock Options may be granted to Nonemployee Directors. Each grant shall specify whether (or the extent to which) the Option is an Incentive Stock Option or a Nonqualified Stock Option. Notwithstanding any such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as Nonqualified Stock Options.

     5.9 Exercise Period. No Option granted under this Plan may be exercised more than ten years from the Grant Date.

     5.10 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with this Plan.

     6. Stock Appreciation Rights. The Committee may also authorize grants to Participants of Stock Appreciation Rights. A Stock Appreciation Right is the right of the Participant to receive from the Company an amount, which shall be determined by the Committee and shall be expressed as a percentage (not exceeding 100 percent) of the Spread at the time of the exercise of such right. Any grant of Stock Appreciation Rights under this Plan shall be upon such terms and conditions as the Committee may determine in accordance with the following provisions:

     6.1 Payment in Cash or Shares. Any grant may specify that the amount payable upon the exercise of a Stock Appreciation Right will be paid by the Company in cash, Shares or any combination thereof or may grant to the Participant or reserve to the Committee the right to elect among those alternatives.

     6.2 Maximum SAR Payment. Any grant may specify that the amount payable upon the exercise of a Stock Appreciation Right shall not exceed a maximum specified by the Committee on the Grant Date.

     6.3 Exercise Period. Any grant may specify (i) a waiting period or periods before Stock Appreciation Rights shall become exercisable and (ii) permissible dates or periods on or during which Stock Appreciation Rights shall be exercisable.

     6.4 Change in Control. Any grant may specify that a Stock Appreciation Right may be exercised only in the event of a change in control of the Company or other similar transaction or event.

     6.5 Dividend Equivalents. On or after the Grant Date of any Stock Appreciation Rights, the Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Shares on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company.

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     6.6 Award Agreement. Each grant shall be evidenced by an Award Agreement which shall describe the subject Stock Appreciation Rights, identify any related Options, state that the Stock Appreciation Rights are subject to all of the terms and conditions of this Plan and contain such other terms and provisions as the Committee may determine consistent with this Plan.

     6.7 Tandem Stock Appreciation Rights. Each grant of a Tandem Stock Appreciation Right shall provide that such Tandem Stock Appreciation Right may be exercised only (i) at a time when the related Option (or any similar right granted under any other plan of the Company) is also exercisable and the Spread is positive and (ii) by surrender of the related Option (or such other right) for cancellation.

     6.8 Exercise Period. No Stock Appreciation Right granted under this Plan may be exercised more than ten years from the Grant Date.

     6.9 Freestanding Stock Appreciation Rights. Regarding Freestanding Stock Appreciation Rights only:

     (a) Each grant shall specify in respect of each Freestanding Stock Appreciation Right a Base Price per Share, which shall be equal to or greater than the Fair Market Value on the Grant Date;

     (b) Successive grants may be made to the same Participant regardless of whether any Freestanding Stock Appreciation Rights previously granted to such Participant remain unexercised; and

     (c) Each grant shall specify the period or periods of continuous employment of the Participant by the Company or any Subsidiary (or, in the case of a Nonemployee Director, service on the Board) that are necessary before the Freestanding Stock Appreciation Rights or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of such rights in the event of a change in control of the Company or other similar transaction or event.

     7. Restricted Shares. The Committee may also authorize grants to Participants of Restricted Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions:

     7.1 Transfer of Shares. Each grant shall constitute an immediate transfer of the ownership of Shares to the Participant in consideration of the performance of services, subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to.

     7.2 Consideration. Each grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Fair Market Value on the Grant Date.

     7.3 Substantial Risk of Forfeiture. Each grant shall provide that the Restricted Shares covered thereby shall be subject to a “substantial risk of forfeiture” within the meaning of Code Section 83 for a period to be determined by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such risk of forfeiture in the event of a change in control of the Company or other similar transaction or event.

     7.4 Dividend, Voting and Other Ownership Rights. Unless otherwise determined by the Committee, an award of Restricted Shares shall entitle the Participant to dividend, voting and other ownership rights during the period for which such substantial risk of forfeiture is to continue.

     7.5 Restrictions on Transfer. Each grant shall provide that, during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares shall be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Grant Date. Such restrictions may include, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee.

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     7.6 Performance–Based Restricted Shares. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Shares and Performance Units.

     7.7 Dividends. Any grant may require that any or all dividends or other distributions paid on the Restricted Shares during the period of such restrictions be automatically sequestered and paid on a deferred basis when the restrictions lapse or reinvested on an immediate or deferred basis in additional Shares, which may be subject to the same restrictions as the underlying Award or such other restrictions as the Committee may determine.

     7.8 Award Agreements. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with this Plan. Unless otherwise directed by the Committee, all certificates representing Restricted Shares, together with a stock power that shall be endorsed in blank by the Participant with respect to such Shares, shall be held in custody by the Company until all restrictions thereon lapse.

     8. Deferred Shares (Restricted Stock Units). The Committee may authorize grants of Deferred Shares (Restricted Stock Units) to Participants upon such terms and conditions as the Committee may determine in accordance with the following provisions:

     8.1 Deferred Compensation. Each grant shall constitute the agreement by the Company to issue or transfer Shares to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify.

     8.2 Consideration. Each grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Fair Market Value on the Grant Date.

     8.3 Deferral Period. Each grant shall provide that the Deferred Shares (Restricted Stock Units) covered thereby shall be subject to a Deferral Period, which shall be fixed by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such period in the event of a change in control of the Company or other similar transaction or event.

     8.4 Dividend Equivalents and Other Ownership Rights. During the Deferral Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or after the Grant Date authorize the payment of dividend equivalents on such shares in cash or additional Shares on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company.

     8.5 Performance Objectives. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Shares and Performance Units.

     8.6 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with this Plan.

     9. Performance Shares and Performance Units. The Committee may also authorize grants of Performance Shares and Performance Units, which shall become payable to the Participant upon the achievement of specified Performance Objectives, upon such terms and conditions as the Committee may determine in accordance with the following provisions:

     9.1 Number of Performance Shares or Units. Each grant shall specify the number of Performance Shares or Performance Units to which it pertains, which may be subject to adjustment to reflect changes in compensation or other factors.

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     9.2 Performance Period. The Performance Period with respect to each Performance Share or Performance Unit shall be determined by the Committee and set forth in the Award Agreement and may be subject to earlier termination in the event of a change in control of the Company or other similar transaction or event.

     9.3 Performance Objectives. Each grant shall specify the Performance Objectives that are to be achieved by the Participant.

     9.4 Threshold Performance Objectives. Each grant may specify in respect of the specified Performance Objectives a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives.

     9.5 Payment of Performance Shares and Units. Each grant shall specify the time and manner of payment of Performance Shares or Performance Units that shall have been earned, and any grant may specify that any such amount will be paid by the Company in cash, Shares or any combination thereof or may grant to the Participant or reserve to the Committee the right to elect among those alternatives.

     9.6 Maximum Payment. Any grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee on the Grant Date. Any grant of Performance Units may specify that the amount payable, or the number of Shares issued, with respect thereto may not exceed maximums specified by the Committee on the Grant Date.

     9.7 Dividend Equivalents. Any grant of Performance Shares may provide for the payment to the Participant of dividend equivalents thereon in cash or additional Shares on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company.

     9.8 Adjustment of Performance Objectives. If provided in the terms of the grant, the Committee may adjust Performance Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the Grant Date that are unrelated to the performance of the Participant and result in distortion of the Performance Objectives or the related minimum acceptable level of achievement.

     9.9 Award Agreement. Each grant shall be evidenced by an Award Agreement which shall state that the Performance Shares or Performance Units are subject to all of the terms and conditions of this Plan and such other terms and provisions as the Committee may determine consistent with this Plan.

     10. Transferability.

     10.1 Transfer Restrictions. Except as provided in Sections 10.2 and 10.4, no Award granted under this Plan shall be transferable by a Participant other than upon death by will or the laws of descent and distribution or designation of a beneficiary in a form acceptable to the Committee, and Options and Stock Appreciation Rights shall be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity, by his guardian or legal representative acting in a fiduciary capacity on behalf of the Participant under state law. Any attempt to transfer an Award in violation of this Plan shall render such Award null and void.

     10.2 Limited Transfer Rights. The Committee may expressly provide in an Award Agreement (or an amendment to an Award Agreement) that a Participant may transfer such Award (other than an Incentive Stock Option), in whole or in part, to a spouse or lineal descendant (a “Family Member”), a trust for the exclusive benefit of Family Members, a partnership or other entity in which all the beneficial owners are Family Members, or any other entity affiliated with the Participant that may be approved by the Committee. Subsequent transfers of Awards shall be prohibited except in accordance with this Section 10.2. All terms and conditions of the Award, including provisions relating to the termination of the Participant’s employment or service with the Company or a Subsidiary, shall continue to apply following a transfer made in accordance with this Section 10.2.

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     10.3 Restrictions on Transfer. Any Award made under this Plan may provide that all or any part of the Shares that are (i) to be issued or transferred by the Company upon the exercise of Options or Stock Appreciation Rights, upon the termination of the Deferral Period applicable to Deferred Shares (Restricted Stock Units) or upon payment under any grant of Performance Shares or Performance Units, or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7, shall be subject to further restrictions upon transfer.

     10.4 Domestic Relations Orders. Notwithstanding the foregoing provisions of this Section 10, any Award made under this Plan may be transferred as necessary to fulfill any domestic relations order as defined in Code Section 414(p)(1)(B).

     10.5 Adjustments. The Committee may make or provide for such adjustments in the (a) number of Shares covered by outstanding Options, Stock Appreciation Rights, Deferred Shares (Restricted Stock Units), Restricted Shares and Performance Shares granted hereunder, (b) prices per share applicable to such Options and Stock Appreciation Rights, and (c) kind of shares covered thereby (including shares of another issuer), as the Committee in its sole discretion may in good faith determine to be equitably required in order to prevent dilution or enlargement of the rights of Participants that otherwise would result from (x) any stock dividend, stock split, combination or exchange of Shares, recapitalization or other change in the capital structure of the Company, (y) any merger, consolidation, spin–off, spin–out, split–off, split–up, reorganization, partial or complete liquidation or other distribution of assets (other than a normal cash dividend), issuance of rights or warrants to purchase securities or (z) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the cancellation or surrender of all Awards so replaced. The Committee may also make or provide for such adjustments in each of the limitations specified in Section 3 as the Committee in its sole discretion may in good faith determine to be appropriate in order to reflect any transaction or event described in this Section 11.

     10.6 Change in Control. The Committee shall also be authorized to determine and specify in any Award Agreement provisions which shall apply upon a change in control of the Company and for such purposes to define a change in control of the Company. Unless otherwise defined in an Award Agreement, a “Change in Control” of the Company for purposes of Awards made under this Plan shall mean any 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 Section 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.

     10.7 Cash-Out. In connection with any change in control, the Committee, without the consent of Participants, may determine that (i) any or all outstanding Options or Stock Appreciation Rights shall be automatically exercised and cashed out in exchange for a cash payment for such Options and Stock Appreciation Rights which may not exceed the Spread between the Option Price or Base Price and Fair Market Value on the date of exercise, and (ii) any or all other outstanding Awards shall be cashed out in exchange for such consideration as the Committee may in good faith determine to be equitable under the circumstances.

     11. Fractional Shares. The Company shall not be required to issue any fractional Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash.

     12. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, it shall be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of all such taxes required to be withheld. At the discretion of the Committee, such arrangements may include relinquishment of a portion of such benefit. The Fair Market Value of any Shares

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withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory tax withholding rates.

     13. Certain Terminations of Employment, Hardship and Approved Leaves of Absence. Notwithstanding any other provision of this Plan to the contrary, in the event of termination of employment by reason of death, disability, normal retirement, early retirement with the consent of the Company or leave of absence approved by the Company, or in the event of hardship or other special circumstances, of a Participant who holds an Option or Stock Appreciation Right that is not immediately and fully exercisable, any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, any Deferred Shares (Restricted Stock Units) as to which the Deferral Period is not complete, any Performance Shares or Performance Units that have not been fully earned, or any Shares that are subject to any transfer restriction pursuant to Section 10.3, the Committee may in its sole discretion take any action that it deems to be equitable under the circumstances or in the best interests of the Company, including, without limitation, waiving or modifying any limitation or requirement with respect to any Award under this Plan. However, any such actions taken by the Committee must comply with the provisions of Section 21 and the requirements of Code Section 409A.

     14. Foreign Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals, or who are employed by or perform services for the Company or any Subsidiary outside of the United States of America, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose, provided that no such supplements, amendments, restatements or alternative versions shall include any provisions that are inconsistent with the terms of this Plan, as then in effect, unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.

     15. Amendments and Other Matters.

     15.1 Plan Amendments. This Plan may be amended from time to time by the Board, but no such amendment shall increase any of the limitations specified in Section 3, other than to reflect an adjustment made in accordance with Section 11, without the further approval of the stockholders of the Company. The Board may condition any amendment on the approval of the stockholders of the Company if such approval is necessary or deemed advisable with respect to the applicable listing or other requirements of a national securities exchange or other applicable laws, policies or regulations.

     15.2 Award Deferrals. The Committee may permit Participants to elect to defer the issuance of Shares or the settlement of Awards in cash under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan. In the case of an award of Restricted Shares, the deferral may be effected by the Participant’s agreement to forego or exchange his of her award of Restricted Shares and receive an award of Deferred Shares (Restricted Stock Units). The Committee also may provide that deferred settlements include the payment or crediting of interest on the deferral amounts, or the payment or crediting of dividend equivalents where the deferral amounts are denominated in Shares. However, any Award deferrals which the Committee permits must comply with the provisions of Section 21 and the requirements of Code Section 409A.

     15.3 Conditional Awards. The Committee may condition the grant of any award or combination of Awards under the Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or any Subsidiary to the Participant, provided that any such grant must comply with the provisions of Section 21 and the requirements of Code Section 409A.

     15.4 Repricing Prohibited. The Committee shall not reprice any outstanding Option, directly or indirectly, without the approval of the stockholders of the Company, provided that nothing herein shall prevent the Committee from taking any action provided for in Section 11. For this purpose, repricing of an Option shall include (i) reducing the exercise price of an Option or (ii) cancelling or settling for cash or other consideration an outstanding Option and granting a replacement Option at a lower exercise price, within six months before or after the cancellation.

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     15.5 No Employment Right. This Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary and shall not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any Participant’s employment or other service at any time.

     15.6 Tax Qualification. To the extent that any provision of this Plan would prevent any Option that was intended to qualify under particular provisions of the Code from so qualifying, such provision of this Plan shall be null and void with respect to such Option, provided that such provision shall remain in effect with respect to other Options, and there shall be no further effect on any provision of this Plan.

     15.7 Amendments to Comply with Laws, Regulations or Rules. Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, in its sole and absolute discretion and without the consent of any Participant, the Board may amend the Plan, and the Committee may amend any Award Agreement, to take effect retroactively or otherwise as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Code Section 409A.

     16. Effective Date. This Plan shall become effective upon its approval by the stockholders of the Company.

     17. Termination. This Plan shall terminate on the tenth anniversary of the date upon which it is approved by the stockholders of the Company, and no Award shall be granted after that date.

     18. Limitations Period. Any person who believes he or she is being denied any benefit or right under the Plan may file a written claim with the Committee. Any claim must be delivered to the Committee within forty-five (45) days of the specific event giving rise to the claim. Untimely claims will not be processed and shall be deemed denied. The Committee, or its designated agent, will notify the Participant of its decision in writing as soon as administratively practicable. Claims not responded to by the Committee in writing within ninety (90) days of the date the written claim is delivered to the Committee shall be deemed denied. The Committee’s decision shall be final, conclusive and binding on all persons. No lawsuit relating to the Plan may be filed before a written claim is filed with the Committee and is denied or deemed denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred.

     19. Governing Law. The validity, construction and effect of this Plan and any Award hereunder will be determined in accordance with the Delaware General Corporation Law, except to the extent governed by applicable federal law.

     20. Compliance with Code Section 409A.

     20.1 Awards Subject to Section 409A. The provisions of this Section 21 shall apply to any Award or portion thereof that is or becomes subject to Code Section 409A (“Section 409A”), notwithstanding any provision to the contrary contained in the Plan or the Award Agreement applicable to such Award. Awards subject to Section 409A include, without limitation:

     (a) Any Nonstatutory Stock Option or Stock Appreciation Right that permits the deferral of compensation other than the deferral of recognition of income until the exercise of the Award.

     (b) Any other Award that either (i) provides by its terms for settlement of all or any portion of the Award on one or more dates following the Short-Term Deferral Period (as defined below) or (ii) permits or requires the Participant to elect one or more dates on which the Award will be settled.

Subject to any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, the term “Short-Term Deferral Period” means the period ending on the later of (i) the date that is two and one-half months from the end of the Company’s fiscal year in which the applicable portion of the Award is no longer subject to a substantial risk of forfeiture or (ii) the date that is two and one-half months from the end of the Participant’s taxable year in which the applicable portion of the Award is no longer subject to a substantial risk of

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forfeiture. For this purpose, the term “substantial risk of forfeiture” shall have the meaning set forth in any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance.

     20.2 Deferral and/or Distribution Elections. Except as otherwise permitted or required by Section 409A or any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, the following rules shall apply to any deferral and/or distribution elections (each, an “Election”) that may be permitted or required by the Committee pursuant to an Award subject to Section 409A:

     (a) All Elections must be in writing and specify the amount of the distribution in settlement of an Award being deferred, as well as the time and form of distribution as permitted by this Plan.

     (b) All Elections shall be made by the end of the Participant’s taxable year prior to the year in which services commence for which an Award may be granted to such Participant; provided, however, that if the Award qualifies as “performance-based compensation” for purposes of Section 409A and is based on services performed over a period of at least twelve (12) months, then the Election may be made no later than six (6) months prior to the end of such period.

     (c) Elections shall continue in effect until a written election to revoke or change such Election is received by the Company, except that a written election to revoke or change such Election must be made prior to the last day for making an Election determined in accordance with paragraph (b) above or as permitted by Section 21.3.

     20.3 Subsequent Elections. Any Award subject to Section 409A which permits a subsequent Election to delay the distribution or change the form of distribution in settlement of such Award shall comply with the following requirements:

     (a) No subsequent Election may take effect until at least twelve (12) months after the date on which the subsequent Election is made;

     (b) Each subsequent Election related to a distribution in settlement of an Award not described in Section 21.4(b), 21.4(c) or 21.4(f) must result in a delay of the distribution for a period of not less than five (5) years from the date such distribution would otherwise have been made; and

     (c) No subsequent Election related to a distribution pursuant to Section 21.4(d) shall be made less than twelve (12) months prior to the date of the first scheduled payment under such distribution.

     20.4 Distributions Pursuant to Deferral Elections. No distribution in settlement of an Award subject to Section 409A may commence earlier than:

     (a) Separation from service (as determined pursuant to U.S. Treasury Regulations or other applicable guidance);

     (b) The date the Participant becomes Disabled (as defined below);

     (c) Death;

     (d) A specified time (or pursuant to a fixed schedule) that is either (i) specified by the Committee upon the grant of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified by the Participant in an Election complying with the requirements of Section 21.2 and/or 21.3, as applicable;

     (e) To the extent provided by U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, a change in the ownership or effective control or the Company or in the ownership of a substantial portion of the assets of the Company; or

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     (f) The occurrence of an Unforeseeable Emergency (as defined below).

Notwithstanding anything else herein to the contrary, to the extent that a Participant is a “Specified Employee” (as defined in Code Section 409A(a)(2)(B)(i)), no distribution pursuant to Section 21.4(a) in settlement of an Award subject to Section 409A may be made before the date which is six (6) months after such Participant’s date of separation from service, or, if earlier, the date of the Participant’s death.

     20.5 Unforeseeable Emergency. The Committee shall have the authority to provide in the Award Agreement evidencing any Award subject to Section 409A for distribution in settlement of all or a portion of such Award in the event that a Participant establishes, to the satisfaction of the Committee, the occurrence of an Unforeseeable Emergency (as defined in Section 409A). In such event, the amount(s) distributed with respect to such Unforeseeable Emergency cannot exceed the amounts necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution(s), after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). All distributions with respect to an Unforeseeable Emergency shall be made in a lump sum as soon as practicable following the Committee’s determination that an Unforeseeable Emergency has occurred. The occurrence of an Unforeseeable Emergency shall be judged and determined by the Committee. The Committee’s decision with respect to whether an Unforeseeable Emergency has occurred and the manner in which, if at all, the distribution in settlement of an Award shall be altered or modified, shall be final, conclusive, and not subject to approval or appeal.

     20.6 Disabled. The Committee shall have the authority to provide in the Award Agreement evidencing any Award subject to Section 409A for distribution in settlement of such Award in the event that the Participant becomes Disabled. A Participant shall be considered “Disabled” if either:

     (a) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or

     (b) the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Participant’s employer.

All distributions payable by reason of a Participant becoming Disabled shall be paid in a lump sum or in periodic installments as established by the Participant’s Election, commencing as soon as practicable following the date the Participant becomes Disabled. If the Participant has made no Election with respect to distributions upon becoming Disabled, all such distributions shall be paid in a lump sum as soon as practicable following the date the Participant becomes Disabled.

     20.7 Death. If a Participant dies before complete distribution of amounts payable upon settlement of an Award subject to Section 409A, such undistributed amounts shall be distributed to his or her beneficiary under the distribution method for death established by the Participant’s Election as soon as administratively possible following receipt by the Committee of satisfactory notice and confirmation of the Participant’s death. If the Participant has made no Election with respect to distributions upon death, all such distributions shall be paid in a lump sum as soon as practicable following the date of the Participant’s death.

     20.8 No Acceleration of Distributions. Notwithstanding anything to the contrary herein, this Plan does not permit the acceleration of the time or schedule of any distribution under this Plan in settlement of an Award subject to Section 409A, except as provided by Section 409A and/or U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance.

     21. Predecessor Plan. Upon stockholder approval of this Plan pursuant to Section 17, no new awards will be granted under the Predecessor Plan, and any awards for Shares granted under the Predecessor Plan after December 1, 2005 will reduce the number of Shares available for Awards under Section 3.1 using the share reduction ratios set forth in Section 3.2.

44

LINDSAY MANUFACTURING CO.

Restricted Stock Units
Granted Pursuant to the
2006 Long-Term Incentive Plan

Agreement with U.S. Employee

Lindsay Manufacturing Co. (“Company”) grants to you, as a matter of separate inducement and not in lieu of salary or other compensation for services, the following award of Restricted Stock Units (“Units”) pursuant to the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). Except as otherwise specified in the attached Terms and Conditions or herein, vesting of the Units is conditioned upon you being continuously employed by the Company or a subsidiary from the Grant Date to each relevant vesting date.

Restricted Stock Units

You are awarded the following Restricted Stock Units. Each Unit is the equivalent of one Share of Common Stock and will be distributed on the relevant vesting date (or as soon thereafter as practicable) in the form of Shares of Common Stock. The Units will vest ratably (one-third each year) on November 1 of the next three calendar years following the Grant Date.

Grantee:

Grant Date:

Units Awarded: 

You acknowledge that you have received this Agreement with the attached Terms and Conditions, and you agree to accept and be bound by the provisions of the Plan and this Agreement including the Terms and Conditions effective as of the Grant Date.

LINDSAY MANUFACTURING CO.  

By:

I have received a copy of LMC Policy No. 14 concerning “Notice of Confidentiality of Information/Restrictions on “Trading” in Stock” and understand and agree to comply with said Policy.

GRANTEE
By:
	Name:

GRANT DATE:                     

LINDSAY MANUFACTURING CO.
2006 LONG-TERM INCENTIVE PLAN

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
GRANTED TO U.S. EMPLOYEES

These terms and condition are made part of the Agreement dated as of the Grant Date indicated above awarding Restricted Stock Units pursuant to the terms of the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). All capitalized terms used herein shall have the meaning set forth in the Plan, unless the Agreement (including these terms and conditions) specifies a different meaning.

          Section 1. Form and Purpose of Award. Each Restricted Stock Unit (“Unit”) represents a non-transferable right to receive one Share of the Company’s Common Stock ($1.00 par value) on the applicable vesting date (or as soon thereafter as practicable). The purpose of this award is to motivate your future performance and to align your interests with those of the Company and its shareholders.

          Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other than regular quarterly dividends) is paid by the Company on its Common Stock while Restricted Stock Units under this award are outstanding, you will be credited with additional Units, the number of which shall be determined by first (i) multiplying the number of your outstanding Units on the payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount of the special cash dividend, and then (ii) dividing the resulting amount by the Fair Market Value of a Share of Common Stock on the Dividend Payment Date (such additional Units being referred to herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other applicable terms and conditions) as if part of the original Units in relation to which such additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend equivalent shall be payable in connection with any regular quarterly dividends which are paid by the Company on its Common Stock.

          Section 3. Vesting Dates/Vesting Periods.

          3.1 The Units will vest according to the vesting schedule in your Agreement, provided that you are continuously employed by the Company through the relevant vesting date or you meet the requirements for vesting described below. The period from the Grant Date to each vesting date will be a separate vesting period.

          3.2 All outstanding Units shall become fully vested and immediately payable upon a Change in Control (as such term is defined in the Plan) of the Company.

          3.3 All outstanding Units shall become fully vested and immediately payable if your employment with the Company is terminated due to your death or permanent and total disability. In the event of your death, your outstanding Units will be distributed in Shares of Common Stock to your designated beneficiary on file with the Company, or if no beneficiary has been designated or survives you, then to your estate.

          3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited if your employment with the Company terminates for any reason (including retirement) prior to the relevant vesting date set forth in the vesting schedule in your Agreement.

          Section 4. Withholding Taxes. The Company will retain from each distribution the number of Shares of Common Stock required to satisfy the statutory minimum required amount of Federal and State tax withholding obligations.

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          Section 5. Miscellaneous Provisions.

          5.1 Restricted Stock Units do not convey the rights of ownership of Shares of Common Stock and do not carry voting rights. Shares of Common Stock will not be issued to you until Units have vested, and Shares will be issued in accordance with the Company’s procedures for issuing Common Stock. The Company’s obligation hereunder is unfunded.

          5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee in the event of any stock dividends, stock splits or reverse stock splits of Common Stock of the Company. No fractional Shares of Common Stock will be issued. The Company may make such adjustments as it deems appropriate to eliminate fractional Share interests.

          5.3 The Agreement may only be amended in writing with the approval of the Committee. The Agreement will be binding upon any successor in interest to Lindsay Manufacturing Co. by merger or otherwise.

          5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect to continuation of employment with the Company, or interfere with the right of the Company to terminate at any time and for any reason the employment of the Grantee.

          5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned, transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s death by will or the laws of descent and distribution or written designation of a beneficiary by the Grantee in a form acceptable to the Company. Any attempted action in violation of this paragraph shall be null, void and without effect.

          5.6 The Company intends that the grant of Units under the Agreement will not be subject to Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to the Units will qualify for the exception from coverage under Section 409A for short-term deferrals. The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. The Committee may not take any action or exercise any discretion under the Plan in a manner which will cause the Units granted under the Agreement to be subject to Code Section 409A. Each payment which becomes due under the Agreement shall be made as soon as practicable on or after the date when the right to receive the payment vests. The latest date for any payment shall be the end of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later than the 15^th day of the third month following the end of such calendar year.

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LINDSAY MANUFACTURING CO.

Restricted Stock Units
Granted Pursuant to the
2006 Long-Term Incentive Plan

Agreement with Director

Lindsay Manufacturing Co. (“Company”) grants to you, as a matter of separate inducement and not in lieu of other compensation for services, the following award of Restricted Stock Units (“Units”) pursuant to the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). Except as otherwise specified in the attached Terms and Conditions or herein, vesting of the Units is conditioned upon you continuing to serve as a Director of the Company from the Grant Date to the vesting date.

Restricted Stock Units

You are awarded the following Restricted Stock Units. Each Unit is the equivalent of one Share of Common Stock and will be distributed on the vesting date (or as soon thereafter as practicable) in the form of Shares of Common Stock. The Units will vest on November 1 next following the Grant Date.

Grantee: 

Grant Date:

Units Awarded:

You acknowledge that you have received this Agreement with the attached Terms and Conditions, and you agree to accept and be bound by the provisions of the Plan and this Agreement including the Terms and Conditions effective as of the Grant Date.

LINDSAY MANUFACTURING CO.

By:

I have received a copy of LMC Policy No. 14 concerning “Notice of Confidentiality of Information/Restrictions on “Trading” in Stock” and understand and agree to comply with said Policy.

GRANTEE
By:
	Name:

GRANT DATE:                     

LINDSAY MANUFACTURING CO.
2006 LONG-TERM INCENTIVE PLAN

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
GRANTED TO DIRECTORS

These terms and condition are made part of the Agreement dated as of the Grant Date indicated above awarding Restricted Stock Units pursuant to the terms of the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). All capitalized terms used herein shall have the meaning set forth in the Plan, unless the Agreement (including these terms and conditions) specifies a different meaning.

          Section 1. Form and Purpose of Award. Each Restricted Stock Unit (“Unit”) represents a non-transferable right to receive one Share of the Company’s Common Stock ($1.00 par value) on the vesting date (or as soon thereafter as practicable). The purpose of this award is to motivate your future performance and to align your interests with those of the Company and its shareholders.

          Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other than regular quarterly dividends) is paid by the Company on its Common Stock while Restricted Stock Units under this award are outstanding, you will be credited with additional Units, the number of which shall be determined by first (i) multiplying the number of your outstanding Units on the payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount of the special cash dividend, and then (ii) dividing the resulting amount by the Fair Market Value of a Share of Common Stock on the Dividend Payment Date (such additional Units being referred to herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other applicable terms and conditions) as if part of the original Units in relation to which such additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend equivalent shall be payable in connection with any regular quarterly dividends which are paid by the Company on its Common Stock.

          Section 3. Vesting Dates/Vesting Periods.

          3.1 The Units will vest on November 1 next following the Grant Date, provided that you are continuing to serve as a Director of the Company through the vesting date or you meet the requirements for vesting described below.

          3.2 All outstanding Units shall become fully vested and immediately payable upon a Change in Control (as such term is defined in the Plan) of the Company.

          3.3 All outstanding Units shall become fully vested and immediately payable if your service as a Director of the Company is terminated due to your death or permanent and total disability. In the event of your death, your outstanding Units will be distributed in Shares of Common Stock to your designated beneficiary on file with the Company, or if no beneficiary has been designated or survives you, then to your estate.

          3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited if your service as a Director of the Company terminates for any reason (including retirement) prior to the vesting date set forth in Section 3.1 above.

          Section 4. No Withholding Taxes. There are no withholding taxes applicable to this award.

          Section 5. Miscellaneous Provisions.

          5.1 Restricted Stock Units do not convey the rights of ownership of Shares of Common Stock and do not carry voting rights. Shares of Common Stock will not be issued to you until Units have vested, and

- 1 -

Shares will be issued in accordance with the Company’s procedures for issuing Common Stock. The Company’s obligation hereunder is unfunded.

          5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee in the event of any stock dividends, stock splits or reverse stock splits of Common Stock of the Company. No fractional Shares of Common Stock will be issued. The Company may make such adjustments as it deems appropriate to eliminate fractional Share interests.

          5.3 The Agreement may only be amended in writing with the approval of the Board upon recommendation of the Committee. The Agreement will be binding upon any successor in interest to Lindsay Manufacturing Co. by merger or otherwise.

          5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect to continuation of service as a Director of the Company.

          5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned, transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s death by will or the laws of descent and distribution or written designation of a beneficiary by the Grantee in a form acceptable to the Company. Any attempted action in violation of this paragraph shall be null, void and without effect.

          5.6 The Company intends that the grant of Units under the Agreement will not be subject to Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to the Units will qualify for the exception from coverage under Section 409A for short-term deferrals. The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. The Committee and Board may not take any action or exercise any discretion under the Plan in a manner which will cause the Units granted under the Agreement to be subject to Code Section 409A. Each payment which becomes due under the Agreement shall be made as soon as practicable on or after the date when the right to receive the payment vests. The latest date for any payment shall be the end of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later than the 15^th day of the third month following the end of such calendar year.

- 2 -

[NAME OF LINDSAY FOREIGN SUBSIDIARY]

AGREEMENT FOR CASH RESTRICTED STOCK UNITS

     THIS AGREEMENT is made and entered into this            day of                                         , 200     , by and between [name of Lindsay Foreign Subsidiary] (hereinafter, “Employer”) and                                                              (hereinafter “Grantee”).

W I T N E S S E T H:

     WHEREAS, Employer recognizes the value to it of the continuance of the services of Grantee as an employee, and desires to furnish Grantee a greater personal interest in the success of Employer and an added incentive to remain employed with Employer;

     NOW, THEREFORE, in consideration of the above premises and mutual covenants contained herein, and in consideration of Grantee’s future and continuing service on behalf of Employer, the parties hereby agree as follows:

     1. Grant of Units. Employer hereby grants to Grantee, as a matter of separate inducement and not in lieu of salary or other compensation for services, the following award of Cash Restricted Stock Units (“Units”). Except as otherwise specified herein, vesting of the Units is conditioned upon Grantee being continuously employed by the Employer from the Grant Date to each relevant vesting date.

Cash Restricted Stock Units

Grantee is awarded the following Cash Restricted Stock Units. Each Unit is the cash equivalent of one share of Common Stock of Lindsay Manufacturing Co. (“Parent”) and will be distributed on the relevant vesting date (or as soon thereafter as practicable) in the form of a cash payment. The Units will vest ratably (one-third each year) on November 1 of the next three calendar years following the Grant Date.

Grant Date:

Units Awarded:

     2. No Employment Rights. This Agreement shall not be construed to confer upon Grantee any right to continue employment with the Employer, nor does it interfere with the right of the Employer to terminate the employment of Grantee at any time with or without cause.

     3. No Acquired Rights. Grantee understands and agrees that the grant of Units provided under this Agreement is completely discretionary in nature and is not to be considered part of Grantee’s salary or compensation for purposes of calculating any severance, resignation, redundancy, end-of-service payments, bonuses, long-term service awards, pension or retirement benefits or similar payments, except as otherwise required under local law. Grantee further understands and agrees that the grant of Units under this Agreement does not create any obligation on the part of the Employer to grant Units or other rights to Grantee in the future.

     4. Forfeiture of Units. Grantee expressly acknowledges that, in the event Grantee’s employment with the Employer is terminated prior to vesting of Units granted hereunder for any reason, then all unvested Units granted hereunder to Grantee shall be cancelled, and Grantee shall not be entitled to any payment therefor.

     5. Data Privacy Consent. Grantee hereby requests and gives consent to Employer to access, store, process and transfer various personal data relating to Grantee, as often as necessary, to Parent and any designated third party administrator located abroad, any overseas broker and any other legitimate third parties for the purpose of implementing, administering and managing the Grantee’s award under the Agreement and any other compensation or

incentive plan or arrangement of Employer, Parent or its subsidiaries in which Grantee is eligible to participate. Grantee further understands that Grantee may, at any time, view the Grantee’s personal data so held and make any necessary amendments and corrections to the data, and withdraw this consent at any time in writing. Grantee hereby agrees that neither Employer, Parent or any of Parent’s subsidiaries, any designated plan administrator, any designated broker, or any legitimate third party appointed by Parent shall be liable for any loss or damage, whether direct or indirect or consequential, incurred by Grantee arising from the use of such personal data as authorized herein.

     6. Successors and Assigns. The rights and obligations of the parties under this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of Employer and to the personal representatives, executors, administrators and heirs of Grantee.

     7. Applicable Law. This Plan shall be construed in accordance with applicable United States of America federal law and, to the extent otherwise applicable, the laws of the State of Delaware.

     8. Entire Agreement. This Agreement (including the attached terms and conditions) contains the entire agreement of the parties regarding the subject matter hereof.

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first above written.

[NAME OF LINDSAY FOREIGN SUBSIDIARY]

By:

Its:

GRANTEE

By:

Name:

- 2 -

GRANT DATE:                     

[NAME OF LINDSAY FOREIGN SUBSIDIARY]

TERMS AND CONDITIONS OF CASH RESTRICTED STOCK UNITS

These terms and condition are made part of the Agreement dated as of the Grant Date indicated above awarding Cash Restricted Stock Units.

          Section 1. Form and Purpose of Award. Each Cash Restricted Stock Unit (“Unit”) represents a non-transferable right to receive in cash the “fair market value” of one share of Common Stock ($1.00 par value) of Lindsay Manufacturing Co. (“Parent”) on the applicable vesting date. The purpose of this award is to motivate your future performance and to align your interests with those of the Employer, Parent and its shareholders. For purposes of the Agreement, the “fair market value” of one share of Parent’s Common Stock shall be 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 relevant vesting date or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. The “fair market value” shall be determined based on United States dollars. All payments which become due under the Agreement shall be converted to local currency at the time each payment is made based on the then current exchange rate.

          Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other than regular quarterly dividends) is paid by Parent on its Common Stock while Cash Restricted Stock Units under this award are outstanding, you will be credited with additional Units, the number of which shall be determined by first (i) multiplying the number of your outstanding Units on the payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount of the special cash dividend, and then (ii) dividing the resulting amount by the “fair market value” of a share of Common Stock on the Dividend Payment Date (such additional Units being referred to herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other applicable terms and conditions) as if part of the original Units in relation to which such additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend equivalent shall be payable in connection with any regular quarterly dividends which are paid by Parent on its Common Stock.

          Section 3. Vesting Dates/Vesting Periods.

          3.1 The Units will vest according to the vesting schedule in your Agreement, provided that you are continuously employed by the Employer through the relevant vesting date or you meet the requirements for vesting described below. The period from the Grant Date to each vesting date will be a separate vesting period.

          3.2 All outstanding Units shall become fully vested and immediately payable upon a Change in Control (as such term is defined in the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”)) of Parent.

          3.3 All outstanding Units shall become fully vested and immediately payable if your employment with the Employer is terminated due to your death or permanent and total disability. In the event of your death, the value of your outstanding Units will be distributed in cash to your designated beneficiary on file with the Employer, or if no beneficiary has been designated or survives you, then to your estate.

          3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited if your employment with the Employer terminates for any reason (including retirement) prior to the relevant vesting date set forth in the vesting schedule in your Agreement.

          Section 4. Withholding Taxes. All payments of the vested portion of Units shall be subject to applicable withholding and reporting according to applicable law. The Employer will retain from each distribution the required amount of tax withholding obligations.

          Section 5. Miscellaneous Provisions.

          5.1 Cash Restricted Stock Units do not convey the rights of ownership of Common Stock and do not carry voting rights. The Employer’s obligation hereunder is unfunded.

          5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee which administers the Plan in the event of any stock dividends, stock splits or reverse stock splits of Common Stock of Parent.

          5.3 The Agreement may only be amended in writing with the approval of the President of Parent. The Agreement will be binding upon any successor in interest to the Employer by merger or otherwise.

          5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect to continuation of employment with the Employer, or interfere with the right of the Employer to terminate at any time and for any reason the employment of the Grantee.

          5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned, transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s death by will or the laws of descent and distribution or written designation of a beneficiary by the Grantee in a form acceptable to the Employer. Any attempted action in violation of this paragraph shall be null, void and without effect.

          5.6 The Employer and Parent intend that the grant of Units under the Agreement will not be subject to Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to the Units will qualify for the exceptions from coverage under Section 409A for short-term deferrals and foreign arrangements. The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. Each payment which becomes due under the Agreement shall be made as soon as practicable on or after the date when the right to receive the payment vests. The latest date for any payment shall be the end of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later than the 15^th day of the third month following the end of such calendar year.

- 1 -

EX-31.(A)

EXHIBIT 31(a)
CERTIFICATION

I, Richard W. Parod, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Lindsay Manufacturing Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ RICHARD W. PAROD	President and Chief Executive Officer
Richard W. Parod	April 7, 2006

29

EX-31.(B)

EXHIBIT 31(b)
CERTIFICATION

I, David B. Downing, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Lindsay Manufacturing Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(c)	Designed such internal control over financial reporting, or caused internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ david b. downing	Vice President and Chief Financial Officer
David B. Downing	April 7, 2006

30

EX-32.(A)

EXHIBIT 32(a)

CERTIFICATION

     In connection with the accompanying Quarterly Report on Form 10-Q (the “Report”) of Lindsay Manufacturing Co. (the “Company”) for the quarter ended February 28, 2006, I, Richard W. Parod, Chief Executive Officer of the Company and I, David B. Downing, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1)	the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard W. Parod

President and Chief Executive Officer

Richard W. Parod

/s/ David B. Downing

Vice President and Chief Financial Officer

David B. Downing

April 7, 2006

     A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

31