SCHEDULE 14A - INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JLG INDUSTRIES, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement)
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paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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JLG INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, NOVEMBER 21, 2002
Dear Fellow Shareholder:
It is my pleasure to invite you to attend the 2002 Annual Meeting of
Shareholders of JLG Industries, Inc. The meeting will be held at JLG Industries,
Inc., 560 Walnut Bottom Road, Shippensburg, Pennsylvania 17257, Thursday,
November 21, 2002 at 9:00 a.m. for the following purposes:
1. To elect a board of eight directors of the Company to hold office
until the next Annual Meeting of Shareholders or until their
successors shall be elected and qualified.
2. To ratify the selection of independent auditors for the 2003 fiscal
year.
3. To transact such other business as may properly come before the
Annual Meeting
Shareholders of record at the close of business on October 3, 2002 will be
entitled to vote at this meeting or any adjournments thereof.
Your vote is important to us. Please promptly sign, date and mail the
enclosed proxy card in the postage-paid return envelope provided.
By order of the Board of Directors,
/s/ Thomas D. Singer
Thomas D. Singer
Secretary
October 4, 2002
PROXY STATEMENT
GENERAL
The Notice of Annual Meeting, this Proxy Statement, the enclosed proxy
card, and the Annual Report of JLG Industries, Inc. (the "Company") are
furnished to shareholders of record at the close of business on October 3, 2002
(the "Record Date"). On the Record Date, there were 42,916,960 shares of Capital
Stock issued and outstanding. Each share of Capital Stock entitles the holder to
one vote at the Annual Meeting. There are no other voting securities of the
Company.
The Board of Directors is soliciting proxies to be voted at the 2002 Annual
Meeting of Shareholders of the Company to be held at JLG Industries, Inc., 560
Walnut Bottom Road, Shippensburg, Pennsylvania 17257 on November 21, 2002.
A proxy may be revoked by the person giving the proxy at any time before it
is exercised by filing with the Secretary of the Company a written revocation or
a duly executed proxy bearing a later date. During the Annual Meeting, a proxy
may be revoked by filing a written revocation or a duly executed proxy bearing a
later date or by attending the Meeting and voting in person. You may vote your
shares by signing, dating and mailing the proxy card(s) found in the address
pocket of the mailing envelope. If you hold shares in more than one account,
then you will receive more than one card. Please sign, date and mail each card
received to ensure that all of your shares will be represented and voted at the
Annual Meeting.
All expenses in connection with the solicitation of proxies will be borne
by the Company. In addition to soliciting proxies by mail, the officers,
directors, or other employees of the Company, as yet undesignated, and without
compensation other than their regular compensation, may solicit proxies in
person or by other appropriate means if authorized and if deemed advisable.
PROPOSAL 1
ELECTION OF DIRECTORS
The persons named in the following table have been nominated by the Board
of Directors for election as directors at the Annual Meeting to hold office
until the next Annual Meeting of Shareholders or until their successors shall be
elected and qualified. Directors are elected by a majority of the votes cast.
NOMINEES FOR DIRECTORS
<Table>
<Caption>
DIRECTOR BACKGROUND
NAME AGE SINCE INFORMATION
- ---- --- -------- -----------
Roy V. Armes............. 49 2000 Corporate Vice President and General Director, Whirlpool
Mexico, S.A. de C.V., Whirlpool Corporation; prior to 2002,
Corporate Vice President, Global Procurement Operations,
Whirlpool Corporation; prior to 1997, President and Managing
Director, Whirlpool Greater China.
George R. Kempton........ 68 1993 Retired Chairman of the Board and Chief Executive Officer,
Kysor Industrial Corporation.
William M. Lasky......... 55 1999 Chairman of the Board, President and Chief Executive Officer;
prior to 2001, President and Chief Executive Officer; prior to
2000, President and Chief Operating Officer; prior to 1999,
President, Dana Corporation, Worldwide Filtration Products
Group; prior to 1997, Vice President and General Manager, Dana
Corporation, North America Filtration Group.
James A. Mezera.......... 72 1984 President, Mezera and Associates, Inc., a management
consulting firm.
Stephen Rabinowitz....... 59 1994 Retired Chairman of the Board, President and Chief Executive
Officer, General Cable Corporation.
</Table>
2
<Table>
<Caption>
DIRECTOR BACKGROUND
NAME AGE SINCE INFORMATION
- ---- --- -------- -----------
Raymond C. Stark......... 59 2000 Retired Corporate Vice President, Six Sigma and Productivity,
Honeywell International, Inc.; prior to 1999, President &
General Manager, AlliedSignal Aerospace, Defense Electronics
Co.
Thomas C. Wajnert........ 59 1994 Managing Director, FairView Advisors, LLC.; Director, R.J.
Reynolds Tobacco Holdings, Inc.; prior to 2002, Chairman of
the Board, Seismiq, Inc.; Chairman of the Board, Epix
Holdings, Inc.; prior to 1998, Chairman of the Board, AT&T
Capital Corporation; prior to 1997, Chairman of the Board and
Chief Executive Officer, AT&T Capital Corporation.
Charles O. Wood, III..... 64 1988 President, Wood Holdings, Inc., a private investment firm;
Director, Boston Private Financial Holdings, Inc.
</Table>
Each nominee for director listed above has been employed in the capacity
noted for more than five years, except as indicated. There are no family
relationships among any of the above-named nominees for director.
BOARD OF DIRECTORS
The Company's Board of Directors held seven meetings during the 2002 fiscal
year. During that time, each director attended at least 75% of the aggregate of
(i) the number of meetings of the Board of Directors and (ii) the number of
meetings held by all committees of the Board of Directors on which he served.
The Board of Directors has five committees: Audit, Compensation, Directors
and Corporate Governance, Executive and Finance to devote attention to specific
subjects and to assist the Board of Directors in the discharge of its
responsibilities. All committees other than the Executive Committee are composed
of non-employee directors.
The Audit Committee, currently consisting of Messrs. Armes, Kempton, Mezera
(Chairman), Rabinowitz, Stark and Wood, who are all "independent" as defined in
the New York Stock Exchange listing standards, met three times during the 2002
fiscal year. Its functions include selecting and overseeing the selection of the
independent auditors; conferring with the independent auditors and reviewing the
scope and fees of the periodic audit and the results thereof; reviewing the
Company's annual report to shareholders and annual filings with the Securities
and Exchange Commission; reviewing the adequacy of the Company's internal audit
function, as well as the accounting and financial controls and procedures; and
approving the nature and scope of non-audit services performed by the
independent auditors. A copy of the Audit Committee Charter as amended on
September 19, 2002 is attached as Appendix A to this Proxy Statement.
The Compensation Committee, currently consisting of Messrs. Armes, Kempton,
Stark and Wajnert (Chairman), principally evaluates the performance of the Chief
Executive Officer; reviews his evaluation of the other officers' performance;
recommends compensation arrangements for all officers of the Company, including
salaries, bonuses and other supplemental compensation programs; administers the
Company's Stock Incentive Plan; and reviews all other officer-related benefit
plans and management development programs. The Compensation Committee held three
meetings during the 2002 fiscal year.
The Directors and Corporate Governance Committee, currently consisting of
Messrs. Kempton (Chairman), Mezera, Stark and Wood, held two meetings during the
2002 fiscal year. This committee is responsible for identifying and recommending
to the Board appropriate areas of expertise to be represented on the Board;
identifying qualified candidates to fill Board positions; reviewing and
recommending the slate of directors to be submitted for election by the
shareholders at each annual meeting; reviewing any such shareholder nominations
of directors to determine whether they comply with substantive and procedural
requirements; recommending to the Board staffing of committees and reviewing the
scope of each committees' responsibilities; reviewing shareholder proposals for
inclusion in the Company's proxy materials and determining whether they comply
with substantive and procedural requirements; recommending to the Board
appropriate levels of
3
director compensation and compensation programs; reviewing and advising the
Board regarding management succession plans; and evaluating the performance of
the Board and current directors.
The Executive Committee currently consisting of Messrs. Kempton, Lasky,
Mezera, Rabinowitz, and Wajnert, held no meetings during the 2002 fiscal year.
This committee's purpose is to permit Board action in unusual circumstances such
as during the unavailability of a quorum.
The Finance Committee, currently consisting of Messrs. Armes, Mezera,
Rabinowitz (Chairman), Wajnert and Wood, held four meetings during the 2002
fiscal year. This committee is responsible for overseeing the Company's capital,
finance and investment policies, objectives and transactions. Within this
oversight role, this committee exercises the full powers and authority of the
Board except for certain categories of transactions with respect to which its
role is limited to reviewing and making recommendations to the Board.
Directors, who are not employees of the Company, receive compensation for
their services as directors. Each such director currently receives a $45,000
annual retainer and each committee chairman receives a $5,000 annual retainer
for service as a committee chairman. Directors are also reimbursed for
out-of-pocket expenses incurred in connection with their attendance at meetings
and for other services rendered as a director. Directors, who are employees of
the Company, do not receive additional compensation for services as a director.
The JLG Industries, Inc. Directors Stock Option Plan provides for annual
grants to each non-employee director of an option to purchase 6,000 shares of
the Company's Capital Stock provided the Company earned a net profit, before
extraordinary items, for the preceding year.
The Company has a Directors' Deferred Compensation Plan which entitles each
eligible director to defer the receipt of fees payable for services as a
director. Any director, who is not an employee of the Company, is eligible to
participate in the plan. Mr. Mezera elected to participate in the plan during
fiscal 2002. Payments deferred under the plan are credited with an investment
rate of return based upon investment indices available under the plan as
selected by the participant.
Director nominations, other than those by or at the direction of the Board
of Directors, may be made pursuant to written notice received by the Secretary
of the Company at 1 JLG Drive, McConnellsburg, PA 17233 no later than ninety
days prior to the anniversary date of the previous year's annual meeting. Such
notice must be accompanied by written statements signed by each person so
nominated setting forth all information in respect of such person that would be
required by Rule 14a-3 promulgated by the Securities and Exchange Commission if
such person had been nominated by the Board of Directors and stating that such
person consents to such nomination and consents to serve as director of the
Company if elected.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities Exchange Act of 1934 require that the Company
disclose late filings of reports of stock ownership, or changes in ownership, by
its directors, officers, and 10% stockholders. Based on its review of the copies
of forms it received, or written representations from reporting persons that
they were not required to file a Form 5, the Company believes that, during
fiscal 2002, all reports required under Section 16(a) of the Securities Exchange
Act for its directors, officers, and 10% stockholders were filed on a timely
basis.
4
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION POLICIES
The Company's executive compensation programs are designed to retain or
attract qualified executives, to develop and manage implementation of the
Company's business plans and to provide appropriate incentives, based
principally on objective criteria, that link compensation to individual and
Company performance. The Compensation Committee, which is composed entirely of
non-employee directors, reviews executive compensation levels annually and
recommends for Board consideration an annual compensation package for each
executive officer. The package is comprised of:
- Annual Base Salary
- Cash bonus opportunity based upon annual performance objectives for the
Company and individual executive established under the Company's
Management Incentive Plan.
- Stock-based awards valued based upon the Black-Scholes valuation method
and designed to provide intermediate and long-term incentives to enhance
shareholder value.
Total compensation available in the combined package for each executive
officer will generally be set based on the Company's financial condition,
performance objectives correlated to the Company's annual business plan and
comparisons to the preceding year's package. The Committee also evaluates
compensation levels for comparable positions reflected in survey data provided
by the Committee's independent compensation consultant. The consultant seeks to
compile survey data drawn from a broad group of industrial companies of
generally comparable revenue size, with generally comparable officer positions
and responsibilities. In considering all of these factors, the Committee seeks
to set base salaries generally equivalent to median levels reflected in the
survey data. In setting performance-based compensation, the Committee seeks to
provide Company executives with the opportunity to earn total compensation
generally at or exceeding the 75th percentile levels reflected in the survey
data. As a secondary comparative measure for Chief Executive Officer
compensation, the Committee examines compensation practices of a selected group
of capital equipment manufacturers. However, the Committee believes that the
market for skilled senior management is not limited to capital equipment
manufacturers and that a broad industry comparison offers a better basis for
evaluating competitive compensation levels than comparison to executive
compensation paid by firms included in either the selected group of capital
equipment manufacturers examined by the Committee or the Peer Industry Group
identified in the Performance Graph included in this Proxy Statement.
COMPENSATION FOR FISCAL YEAR 2002
Compensation available for the Company's executive officers for fiscal year
2002 consisted of a base salary and opportunity to earn a year-end cash bonus.
The Committee also awarded stock options and restricted shares under the
Company's Stock Incentive Plan.
Base Salaries. For fiscal 2002, aggregate base salary competitiveness for
all officers as a group was generally within the range of the Committee's
compensation philosophy, but salaries for a majority of officer positions
remained below the median of survey data provided by the Committee's
compensation consultant.
Cash Bonus Opportunity. For fiscal 2002, the Committee established under
the Management Incentive Plan a cash bonus matrix based on various levels of
projected fiscal 2002 earnings per share (EPS). The Company's earnings before
restructuring and repositioning charges of $.40 per share in fiscal 2002 did not
reach the Management Incentive Plan's EPS threshold level and, accordingly, the
Company paid no bonuses under the Management Incentive Plan. This resulted in
total cash compensation significantly below the 50th percentile of compensation
survey data for all officers.
Stock-based Awards. For fiscal 2002, the Committee also awarded a blend of
stock options and restricted shares that provide intermediate and long-term
incentives and that offer opportunities for officers to earn total direct
compensation generally between the 50th and 65th percentile levels reflected in
survey data. The aggregate quantitative value of the stock-based awards was
determined on a basis similar to prior years
5
except that the Committee determined to limit the number of shares subject to
awards (including awards for non-officers) to approximately one-half of the
remaining shares reserved for issuance under the Stock Incentive Plan. Due in
part to this limit on number of shares and management's recommendations, the
Committee determined to allocate 50% of the quantitative value of stock-based
awards to stock options and 50% to restricted shares. For fiscal 2001, the
Committee allocated 60% to stock options and 40% to restricted shares. The
restricted share awards vest ratably over five years subject to each officer's
continued employment with the Company, with opportunities for accelerated
vesting if the market price of the Company's shares increases to exceed certain
thresholds. During fiscal 2002, half of the restricted shares awarded for fiscal
2001 vested on an accelerated basis when the Company's average share price
exceeded $16 for 20 trading days. This $16 threshold represented a 49% increase
relative to the $10.77 share price on the date of grant of the fiscal 2001
awards. For the 2002 awards the Committee established higher hurdles permitting
half of the awards to vest upon a 75% increase over the share price on the date
of grant determined on the basis of a 40-trading day average and the remaining
half to vest upon a 100% increase in the share price.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee believes that the CEO, Mr. Lasky, continues to demonstrate
sound leadership in navigating the Company through a challenging economic
environment and positioning the Company to prosper during improved economic
conditions.
For fiscal 2002, the Committee recommended and the Board approved an
increase in Mr. Lasky's annual salary from $450,000 to $475,000, which was
between the 25th and 50th percentile level reflected in survey data. As noted
above, fiscal 2002 EPS fell short of the threshold level under the Management
Incentive Plan resulting in no bonus being awarded to Mr. Lasky. Accordingly,
Mr. Lasky's total cash compensation for fiscal 2002, comprised of just his
salary, fell below the 25th percentile of survey data.
In considering intermediate and long-term incentives for fiscal 2002, the
Committee awarded Mr. Lasky 69,800 restricted shares and options to acquire
106,300 shares of Common Stock. The restricted shares vest at the end of five
years subject to Mr. Lasky's continued employment with the Company, with
accelerated vesting opportunities prior to the end of the fifth year as
described above. The options have an exercise price equal to the fair market
value of the Common Stock on the date of grant and vest ratably over each of the
next three years subject to Mr. Lasky's continued employment.
DISCUSSION OF CORPORATE TAX DEDUCTION FOR COMPENSATION IN EXCESS OF $1 MILLION A
YEAR
Section 162(m) of the Internal Revenue Code of 1986 (the "Internal Revenue
Code") precludes a public corporation from taking a tax deduction in any year
for compensation in excess of $1 million paid to its chief executive officer or
any of its four other highest-paid executive officers. The $1 million annual
deduction limit does not apply, however, to "performance-based compensation" as
that term is defined in Internal Revenue Code Section 162(m)(4)(C) and
regulations promulgated thereunder. Compensation deferred by an executive under
a qualifying deferred compensation program also is not subject to the $1 million
annual deduction limit if the compensation is paid after the individual ceases
to be an executive officer.
Compensation in respect of stock options granted under the Stock Incentive
Plan qualifies as "performance-based compensation." However, restricted share
awards that contain performance-based vesting features, but that otherwise vest
over time subject to an executive's continued employment with the Company do not
meet the technical requirements for "performance-based compensation."
Nonetheless, the Committee believes that this type of award promotes Company
interests by creating incentives both to retain key personnel and to increase
shareholder value. The Committee typically awards this type of restricted shares
in amounts that will not result in compensation in excess of the $1 million
deduction limit, except in years when an increase-in-share-price trigger for
accelerated vesting of shares is achieved. As a result of the accelerated
vesting during fiscal 2002 of restricted shares granted for fiscal 2001, Mr.
Lasky recognized compensation income of $558,000, which combined with his salary
of $475,000 exceeded the $1 million deduction limit. The
6
lost deduction for compensation in excess of the deduction limit did not have a
material effect on the Company's financial results.
This report is submitted by the Compensation Committee of the Board of
Directors.
Thomas C. Wajnert (Chairman)
Roy V. Armes
George R. Kempton
Raymond C. Stark
7
The following tables and narrative identify the Company's executive
officers and set forth compensation information for the Company's Chief
Executive Officer and its four most highly compensated executive officers (the
"Named Executive Officers") as of the end of the 2002 fiscal year.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG TERM COMPENSATION
AWARDS
------------------------
ANNUAL COMPENSATION OTHER RESTRICTED
NAME, AGE AND -------------------------- ANNUAL STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) AWARDS(3) (4) COMPENSATION(5)
- ------------------ ---- ------ -------- --------------- ------------ --------- ---------------
William M. Lasky, 55 2002 $475,008 -- -- $623,314 106,300 $34,133
Chairman of the Board, 2001 445,272 -- -- 746,361 155,300 68,804
President and Chief 2000 250,000 $381,169 -- 468,648 303,800 12,370
Executive Officer (6)
James H. Woodward, Jr., 49 2002 308,016 -- -- 292,904 49,900 12,307
Executive Vice President 2001 275,880 115,000 -- 292,944 104,500 899
and Chief Financial Officer
(7)
Craig E. Paylor, 46 2002 226,680 -- -- 138,415 23,500 6,416
Senior Vice President, 2001 200,016 -- -- 140,010 29,100 23,772
Sales, Marketing and 2000 190,008 135,894 -- 65,876 21,300 26,949
Customer Support (8)
Thomas D. Singer, 50 2002 225,000 -- -- 125,020 21,200 9,590
Senior Vice President, 2001 205,008 -- -- 143,241 29,800 36,694
General Counsel and Secretary
(9)
Barry L. Phillips, 61 2002 281,510 -- -- -- -- --
President and Chief 2001 285,928 -- -- -- 69,300 --
Executive Officer, 2000 285,848 123,465 -- 50,940 50,000 3,752
Gradall Industries, Inc. (10)
</Table>
- ---------------
(1) Reflects bonuses earned during the fiscal year, but paid during the
following fiscal year.
(2) Excludes the value of perquisites and other personal benefits. The
incremental cost to the Company of providing such perquisites and other
personal benefits did not exceed the lesser of either $50,000 or 10% of
annual salary and bonus for any of the Named Executive Officers.
(3) The 2002 shares were granted on August 7, 2002. The shares vest in five
years with the exceptions that i) if the share price of the Company's
Capital Stock averages $15.63 per share for forty consecutive trading days,
then 50% of the grant vests, and ii) if the share price of the Company's
Capital Stock averages $17.86 per share for forty consecutive trading days,
then the remaining 50% of the grant vests. Dividends are payable to the
Named Executive Officers on the restricted shares. Total restricted shares
held and the aggregate market value at July 31, 2002 for the Named
Executive Officers were as follows: Mr. Lasky, 34,650 shares valued at
$311,850; Mr. Woodward, 23,600 shares valued at $212,400; Mr. Paylor,
14,449 shares valued at $130,041; Mr. Singer, 17,791 shares valued at
$160,119; and Mr. Phillips, 1,667 shares valued at $15,003.
(4) The 2002 options were awarded on August 7, 2002.
(5) Includes payments pursuant to the Company's Supplemental Medical Care
Reimbursement Plan for the Named Executive Officers to reimburse medical
expenses incurred by them or their dependents and not paid by other
employee benefit plans (Mr. Lasky $3,648; Mr. Woodward $6,396; Mr. Paylor
$1,657; and Mr. Singer $3,926); and payments pursuant to the Company's
Annual Physical Examination Plan (Mr. Lasky $1,000); contributions to the
Company's discretionary, defined contribution retirement plan (Mr. Woodward
$5,911; Mr. Paylor $4,760; and Mr. Singer $4,540;) and contributions
pursuant to the Company's Executive Deferred Compensation Plan (Mr. Lasky
$29,485; and Mr. Singer $1,124).
(6) Mr. Lasky commenced employment with the Company on December 1, 1999.
8
(7) Mr. Woodward commenced employment with the Company on August 7, 2000.
(8) Mr. Paylor became an executive officer in August 1999.
(9) Mr. Singer became an executive officer in November 2000.
(10) Mr. Phillips served as President and Chief Executive Officer of Gradall
Industries, Inc. until August 15, 2002.
STOCK OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
INDIVIDUAL GRANTS
--------------------------------------- POTENTIAL REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL RATES OF STOCK PRICE
OPTIONS APPRECIATION FOR OPTION TERM(3)
OPTIONS/ GRANTED TO EXERCISE OR ---------------------------------------
SAR'S EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR PER SHARE DATE(2) 5% 10%
- ---- ---------- ------------ ----------- --------------- -------- ----------
William M. Lasky............ 106,300 11% $8.93 August 7, 2012 $609,104 $1,532,174
James H. Woodward, Jr. ..... 49,900 5 8.93 August 7, 2012 285,930 719,243
Craig E. Paylor............. 23,500 3 8.93 August 7, 2012 134,656 338,722
Thomas D. Singer............ 21,200 2 8.93 August 7, 2012 121,477 305,570
Barry L. Phillips........... -- -- -- -- -- --
</Table>
- ---------------
(1) Consists solely of options to purchase shares of Capital Stock. These
options were not granted during fiscal year 2002, but were part of the Named
Executive Officer's compensation for fiscal year 2002.
(2) Options become exercisable in equal amounts over a three-year period
beginning August 7, 2003. To the extent not already exercisable, the options
generally become exercisable upon a change in control. A change in control
means either (i) any person or group becomes the beneficial owner of 25% or
more of the voting power of the Company's Capital Stock; or (ii) the
election within a twelve-month period of three or more directors whose
election is not approved by the majority of the Board of Directors; or (iii)
the incumbent directors cease to be a majority of the Board of Directors.
(3) The potential realizable value illustrates value that might be realized upon
exercise of the options immediately prior to the expiration of their term,
assuming the specified compounded rates of appreciation in the market price
of the Capital Stock over the terms of the options. The potential realizable
value to all shareholders using the specified 5% and 10% rates of
appreciation and the outstanding shares at July 31, 2002 would be
$244,833,182 and $615,866,643, respectively. The Company's use of these
hypothetical appreciation rates specified by the Securities and Exchange
Commission should not be construed as an endorsement of the accuracy of this
method of valuing options. The value realized by the holders of the options
will depend upon the actual performance of the Capital Stock over the term
of the options.
9
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION/SAR VALUES
<Table>
<Caption>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR END(1) AT FISCAL YEAR END(2)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- ------------- ----------- -------------
William M. Lasky........... -- -- 214,099 351,301 $ -- $7,441
James H. Woodward, Jr. .... -- -- 20,333 134,067 -- 3,493
Craig E. Paylor............ -- -- 53,005 50,000 -- 1,645
Thomas D. Singer........... -- -- 41,041 45,234 -- 1,484
Barry L. Phillips.......... -- -- 86,599 66,201 -- --
</Table>
- ---------------
(1) The Company does not have any outstanding stock appreciation rights
(2) Value is calculated based on the difference between the option exercise
price and the closing market price of the Company's Capital Stock on July
31, 2002, multiplied by the number of shares underlying the option. The
calculation omits options where the exercise price exceeds the closing
market price. The exercise price of the options awarded on August 7, 2002
was equal to the fair market value of the Company's Capital Stock on the
date of grant. However, applying the closing market price of the Company's
Capital Stock on July 31, 2002 made these options in-the-money due to the
timing difference.
COMPENSATION PURSUANT TO PLANS
The Company maintains separate benefit plans for employees of the Company
and Gradall Industries, Inc. The following describe the Company's plans and
related benefits.
The Company maintains a non-qualified defined benefit plan that provides
for payments, following retirement or in other specified circumstances, equal to
the average of the officer's base salary plus cash bonus for the two calendar
years in which the sum is the highest, multiplied by 65% for Mr. Lasky, 60% for
Mr. Woodward and 55% for Messrs. Paylor and Singer; offset, however, by the
actuarial equivalent of benefits provided to the officer in conjunction with the
Company's contribution to other employer sponsored retirement plans, the
actuarial equivalent of retirement benefits provided by previous employers of
the officer; and 50% of the officer's social security benefit. The retirement
benefit is payable in the form of a ten year certain life annuity, with options
for a joint and survivor annuity and an actuarial equivalent lump sum payout.
The officer may elect to receive a reduced retirement benefit in the case of
early retirement. The plan provides for 25% vesting per year after two years of
service, with full vesting after five years of service. Based on their annual
compensation through the end of the Company's 2002 fiscal year, with the
benefits identified in the plan, assuming a 6% increase in their annual
compensation, attainment of their target bonus and normal retirement age, the
Named Executive Officers would be entitled to projected annual payments under
the plan as follows: Mr. Lasky, $658,634; Mr. Woodward, $357,445; Mr. Paylor,
$71,442; and Mr. Singer, $92,319. The Company also provides a separate retiree
medical plan for the officers, together with their spouse and eligible
dependents.
The Company has an executive deferred compensation plan that allows
officers to defer all or a portion of their base salary and/or cash bonus.
Provided that the officer elects to defer some portion of his base salary and/or
cash bonus, the Company will contribute to the officer's account an amount equal
to the amount that would have been contributed by the Company to the account in
the Company's Employees' Retirement Savings Plan in the form of matching and
profit sharing contributions, but for the various limitations in the Internal
Revenue Code for highly compensated employees. Payments deferred and
contributions received under the plan are credited with an investment rate of
return based upon investment indices available under the plan as selected by the
participant.
The Company also maintains an executive severance plan which will provide a
severance benefit of two times the aggregate of base salary and cash bonus for
Mr. Lasky and one times the aggregate of base salary and cash bonus for Messrs.
Singer, and Paylor, with base salary and cash bonus being the amounts paid the
10
officer for the final twelve calendar months of employment. The severance
benefit is payable in the form of a lump sum upon involuntary termination of
employment by the Company, unless the termination is for one of the specified
reasons which includes disloyalty or conviction of a felony. The severance
benefit is also payable in certain other circumstances in connection with a
change of control and will be adjusted to gross-up for any excise tax applicable
to compensation in excess of limits provided in Section 280G of the Internal
Revenue Code. No severance benefit is payable if the officer is entitled to a
retirement benefit under the supplemental executive retirement plan, except in
connection with a change of control. The severance benefit includes continuation
of Company provided life and medical insurance in the event of a change in
control.
Mr. Phillips is employed by a wholly owned subsidiary of the Company,
Gradall Industries, Inc., and the following plans and associated benefits apply
to him.
Under The Gradall Company Employees' Retirement Plan (the "Retirement
Plan"), benefits are payable to all eligible employees of Gradall, other than
employees who participate in a separate retirement plan for bargaining unit
employees. The Retirement Plan provides a benefit, based upon years of service
with Gradall since October 1983, and upon final average base compensation for
the five highest consecutive calendar years of the ten years preceding
retirement. The benefits under the Retirement Plan are not subject to any
deduction for Social Security or other amounts. Under terms of the Retirement
Plan, Mr. Phillips is entitled to receive annual payments of $59,760 at age 65.
Gradall has also adopted a non-qualified supplemental retirement plan for
certain officers and key employees (the "Restoration Plan"). The Restoration
Plan provides an additional benefit to participants retiring before age 65, and
is intended to minimize the effect of revised actuarial reduction factors
utilized in calculating normal benefits under certain provisions of the Code and
the Employee Retirement Income Security Act of 1974.
On August 15, 2002, Mr. Phillips retired from his position of President and
Chief Executive Officer, Gradall Industries, Inc. Pursuant to various agreements
between Gradall and Mr. Phillips, Mr. Phillips received life insurance policies
with an aggregate face amount of $394,303 and the Company granted a deferred
compensation benefit in the amount of $78,687 per year for fifteen years to Mr.
Phillips or his designated beneficiary in the event of death.
11
PERFORMANCE GRAPH
The following graph compares the cumulative return on the Company's Capital
Stock over the past five years with the cumulative total return on shares of
companies comprising a peer group index, the Standard & Poor's Diversified
Machinery Group Index and the Russell 2000 Index. We elected to present our own
peer group index for the proxy graph composed of the following seven companies:
Astec Industries, Inc., Caterpillar Inc., Deere & Company, Gehl Company, The
Manitowoc Company, Inc., Terex Corporation and United Rentals, Inc. The Standard
& Poor's Diversified Machinery Group Index consisted of the following four
companies: Caterpillar, Inc., Deer & Company, Dover Corporation and
Ingersoll-Rand Company, LTD. We chose to create a peer group because the S&P
eliminated the Diversified Machinery Group index and created two new indices
which we believed were no longer comparable to the Company. In doing so, we also
elected to change our broad based index from the S&P 500 to the Russell 2000
index. We believe this is a more appropriate index for us since it is a
benchmark index for small capitalization stocks and since JLG is a member of the
index. Cumulative total return is measured assuming an initial investment of
$100 on July 31, 1997 and the reinvestment of all dividends paid. The companies
in the peer group are weighted by market capitalization.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
Year Ended July 31, 1997 1998 1999 2000 2001 2002
- -----------------------------------------------------------------------------------------------------------
JLG Industries, Inc. $100 $140.31 $180.70 $92.64 $103.07 $82.27
Peer Group 100 82.62 95.82 69.10 97.50 87.45
S&P Diversified Machinery Group Index 100 84.28 104.12 81.49 99.53 88.05
Russell 2000 Index 100 102.31 108.76 122.15 118.31 118.31
</Table>
12
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table shows the number of shares of the Company's Capital
Stock beneficially owned on September 26, 2002 by each director-nominee, each
Named Executive Officer, and all current directors and executive officers as a
group. All ownership information is based upon filings made by such persons with
the Securities and Exchange Commission ("Commission") or upon information
provided to the Company.
<Table>
<Caption>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------
ACQUIRABLE
NAME OF PERSON CURRENTLY WITHIN 60 PERCENT OF
OR GROUP(1) OWNED(2) DAYS CLASS(3)
- ----------- -------- ---- ----------
William M. Lasky................................... 150,273 234,682 --
James H. Woodward, Jr. ............................ 65,111 69,667 --
Thomas D. Singer................................... 44,048 41,041 --
Charles O. Wood, III............................... 43,000(4) 96,000 --
George R. Kempton.................................. 42,000 60,000 --
Craig E. Paylor.................................... 37,519 53,005 --
James A. Mezera.................................... 37,000 48,000 --
Stephen Rabinowitz................................. 17,000 77,064 --
Thomas C. Wajnert.................................. 11,600 48,000 --
Barry L. Phillips.................................. 5,000 86,599 --
Raymond C. Stark................................... 1,000 7,167 --
Roy V. Armes....................................... 1,000 7,167 --
All directors and executive officers as a group (15
persons)......................................... 565,134 938,273 3.4%
</Table>
- ---------------
(1) The address of each of the named persons is in care of JLG Industries, Inc.,
1 JLG Drive, McConnellsburg, PA 17233.
(2) Each person listed has advised the Company that, except as otherwise
indicated, such person has sole voting and sole investment power with
respect to the shares indicated, except for certain shares as follows where
each person has voting but not investment power: Mr. Lasky, 104,450; Mr.
Woodward, 56,400; Mr. Paylor, 31,880; Mr. Singer, 43,592; and all directors
and executive officers as a group, 312,488.
(3) Percentages are not shown where less than 1.0%.
(4) Includes 10,000 shares owned by a family trust.
There were no shareholders known to the Company to be beneficial owner of
more than five percent of the outstanding shares of the Company's Capital Stock.
PROPOSAL 2
SELECTION OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP served as the Company's
independent auditors throughout fiscal year 2002 and the Board of Directors, on
the recommendation of the Audit Committee, has selected the firm as the
Company's independent auditors for fiscal 2003. The Board of Directors
recommends ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year 2003. Representatives of the firm of
Ernst & Young LLP are expected to be present at the Annual Meeting, with the
opportunity to make a statement if they desire to do so, and to respond to
appropriate questions. If the selection is not ratified, the Board of Directors
will reconsider its action.
13
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended July 31, 2002, with management
and Ernst & Young LLP, the Company's independent auditors. Management is
responsible for the Company's internal controls and the financial reporting
process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and for issuing a report
thereon. The Audit Committee has discussed with Ernst & Young LLP the matters
required to be discussed by Statement on Auditing Standards No. 61 relating to
the conduct of the audit. The Audit Committee has received written disclosures
and the letter from Ernst & Young LLP regarding its independence as required by
Independence Standards Board Standard No. 1 and has discussed with Ernst & Young
LLP its independence, including considering the compatibility of non-audit
services provided by Ernst & Young LLP with their independence. Based on the
Audit Committee's review and discussions with management and Ernst & Young LLP,
the Audit Committee recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended July 31, 2002 for filing with the Securities and Exchange
Commission.
James A. Mezera (Chairman)
Roy V. Armes
George R. Kempton
Stephen Rabinowitz
Raymond C. Stark
Charles O. Wood, III
DISCLOSURE OF AUDIT AND OTHER FEES
AUDIT FEES
The aggregate fees billed by Ernst & Young LLP for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended July 31, 2002 and the reviews of the financial statements
included in the Company's quarterly reports on Form 10-Q for that fiscal year
were $459,769.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by Ernst & Young LLP for professional services
relating to financial information systems design and implementation rendered
during the fiscal year ended July 31, 2002.
ALL OTHER FEES
The aggregate fees billed by Ernst & Young LLP for professional services
rendered during the fiscal year ended July 31, 2002 other than as stated above
under the captions Audit Fees and Financial Information Systems Design and
Implementation Fees were $2,471,393, which consisted of $2,190,911 and $280,482
for tax and other services, respectively. Other services included due diligence
on acquisitions and debt offering costs.
VOTING INSTRUCTIONS
The matters set forth in the Notice of Annual Meeting will be voted upon in
the order in which they are listed in the Notice. The proxy form accompanying
this Proxy Statement provides boxes by means of which shareholders executing the
proxy forms may vote for or withhold a vote on the election of all or any of the
Board of Director's nominees for election as directors. Each of the nominees has
consented to serve as a director and the Board of Directors has no reason to
believe that any of the nominees will not be available to serve if elected.
Should any of the nominees cease to be available for election before the Annual
Meeting, the proxy will, unless authority to vote has been withheld by the
person giving the proxy, be voted for a substitute nominee designated by the
Board of Directors if so designated. A majority of the shares entitled to vote
and
14
either present in person or represented by proxy will constitute a quorum for
the transaction of business at the Annual Meeting. Directors are elected by a
plurality and the eight nominees who receive the most votes will be elected.
Each other matter submitted for shareholder approval shall be approved upon the
affirmative vote of a majority of the votes cast by shareholders entitled to
vote and either present in person or represented by proxy at the Annual Meeting.
Abstentions and broker non-votes on any matter submitted to the shareholders for
approval will be counted in determining whether a quorum has been reached, but
will be excluded entirely from the vote and will not affect the vote. Broker
non-votes as to any matter are shares held by nominees which are present and
voted at the meeting on matters as to which the nominee has discretionary
authority but which are not voted on the matter in question because the nominee
does not have discretionary voting authority as to such matter.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2003 Annual Meeting
must be received in writing by the Company before June 9, 2003 in order to be
considered for inclusion in the Company's proxy materials relating to that
meeting. For any proposal that is not submitted for inclusion in next year's
Proxy Statement, but is instead sought to be presented directly at the 2003
Annual Meeting, SEC rules will permit management to vote proxies in its
discretion if the Company: (1) receives notice of the proposal before the close
of business on August 23, 2003, and advises share owners in the 2003 Proxy
Statement about the nature of the matter and how management intends to vote on
such matter; or (2) does not receive notice of the proposal prior to the close
of business on August 23, 2003. Shareholder proposals or notices of intention to
present proposals at the 2003 Annual Meeting should be addressed to Secretary,
JLG Industries, Inc., 1 JLG Drive, McConnellsburg, Pennsylvania 17233.
OTHER BUSINESS
The Board of Directors of the Company knows of no other matter that is to
be presented for action at the Annual Meeting other than those listed as items 1
through 2 in the Notice of Annual Meeting. As to any other business that may
properly come before the meeting, proxies will be voted in accordance with the
best judgment of the persons voting such proxies.
By order of the Board of Directors,
/s/ Thomas D. Singer
Thomas D. Singer
Secretary
October 4, 2002
15
APPENDIX A
JLG INDUSTRIES, INC.
AUDIT COMMITTEE CHARTER
I. AUTHORIZATION
The Audit Committee (the "Committee") of the Board of Directors (the
"Board") of JLG Industries, Inc. (the "Company") is authorized, pursuant to
Section 1731 of the Pennsylvania Business Corporation Law and Section 21 of the
Company's Bylaws, to exercise all the powers and authority of the Company
necessary to carry out the purposes and responsibilities set forth herein.
II. PURPOSE
The principal purposes of the Committee are:
- to assist the Board oversight of (i) the integrity of the Company's
financial statements, (ii) the Company's compliance with legal and
regulatory requirements, (iii) the independent auditor's qualifications
and independence, and (iv) the performance of the Company's internal
audit function and independent auditors;
- to prepare the report required by the rules of the Securities and
Exchange Commission (the "SEC") to be included in the Company's annual
proxy statement.
III. COMMITTEE MEMBERSHIP
The Committee shall consist of no fewer than three members, each of whom
shall meet the independence and experience requirements of the New York Stock
Exchange and such other independence and experience requirements, if any, as may
be established by law, regulation or the Company's Corporate Governance
Principles. The members of the Committee shall be designated by the Board, on
recommendation by the Directors and Corporate Governance Committee, during the
Board of Directors' reorganizational meeting held in November of each year.
Each year during the first Committee meeting following the reorganizational
meeting of the Board, the Committee shall select from its members a Chairman,
who may be the incumbent Chairman or another member of the Committee.
The Board shall have sole authority to appoint and remove members of the
Committee.
IV. AUTHORITY AND RESPONSIBILITIES
A. Independent Auditor Selection and Oversight
1. The Committee shall have the sole authority to appoint, retain,
or replace the Company's independent auditor (subject, if applicable, to
shareholder ratification) and to approve all audit engagement fees and
terms. The Committee shall meet annually with the independent auditors and
financial management of the Company to review the scope and plan of the
proposed audit for the year, including the independent auditor's
compensation and terms of engagement. At the conclusion of each audit the
Committee shall review the results of the audit, including any comments or
recommendations of the independent auditors and management's response to
such comments or recommendations.
2. The Committee shall review and approve any non-audit engagements
with the independent auditors and otherwise ensure that the independent
auditors submit on a periodic basis to the Committee a formal written
statement delineating all relationships between the independent auditors
and the Company. In addition, the Committee shall actively engage in
dialogue with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity independence of
the independent auditors.
3. The Committee shall, at least annually, obtain and review a
report by the independent auditor describing: (a) the independent auditor
firm's internal quality-control procedures; (b) any material issues raised
by the most recent internal quality-control review or peer review of the
firm, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, with respect to one or more independent audits
carried out by the firm, and any steps taken to deal with any such issues;
and (c) (to assess the auditor's independence) all relationships between
the independent auditor and the Company.
4. After reviewing the material described in paragraphs 2 and 3 and
the independent auditor's work throughout the year, the Committee shall
evaluate the qualifications, performance, and independence of the auditor.
Such evaluation shall include, without limitation: (a) a review and
evaluation of the lead partner of the independent auditor and (b) the
opinions of management and the company's internal auditors or any other
personnel responsible for the internal audit function. In addition to
assuring the regular rotation of the lead audit partner as required by law,
the Committee shall also consider whether, to assure continuing auditor
independence, there should be regular rotation of the independent auditor
firm itself. The Committee shall present its conclusions to the Board and,
if so determined by the Committee, recommend that the Board take additional
action to satisfy itself of the qualifications, performance, and
independence of the independent auditor.
5. The Committee shall recommend to the Board clear hiring policies
for employees or former employees of the independent auditors.
B. Financial Statements and Disclosures
1. The Committee shall review and discuss the annual audited
financial statements included in the Company's Form 10-K and quarterly
financial statements included in the Company's Form 10-Q, including the
Company's disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" with management and the
independent auditor prior to their release. This review should be
coordinated with the independent auditor's quarterly reviews and annual
audits of the Company's financial statements and issuance of their
applicable reports and opinions. The Committee shall determine that the
independent auditors are satisfied with the report's disclosure and
content.
2. The Committee shall review and discuss with management and the
independent auditor any significant financial reporting issues and
judgments made in connection with the preparation of the Company's
financial statements, including (a) major issues regarding accounting
principles and financial statement presentations, including any significant
changes in the Company's selection or application of accounting principles;
(b) any major issues as to the adequacy of the Company's internal controls
and any special audit steps adopted in light of material control
deficiencies; (c) analyses prepared by management and/or the independent
auditor setting forth significant financial reporting issues and judgments
made in connection with the preparation of the financial statements,
including, analyses of the effect of alternative assumptions, estimates, or
GAAP methods on the Company's financial statements; and (d) the effect of
regulatory and accounting initiatives, as well as off-balance sheet
structures on the financial statements of the Company.
3. The Committee shall provide the opportunity at all Committee
meetings and, in any event, shall regularly review and discuss with the
independent auditor any audit problems or difficulties and management's
response including: (a) any restrictions on the scope of the independent
auditor's activities or on access to requested information; and (b) any
significant disagreements with management. The Committee may also review
with the independent auditor (a) any accounting adjustments that were noted
or proposed by the auditor but were not incorporated into the financial
statements or disclosure (as immaterial or otherwise); (b) any
communications between the audit team and the audit firm's national office
respecting auditing or accounting issues presented by the engagement; and
(c) any "management" or "internal control" letter issue or proposed to be
issued, by the audit firm to the Company.
4. The Committee shall resolve all disagreements between management
and the independent auditor regarding financial reporting.
5. The Committee shall discuss generally (i.e., the types of
information to be disclosed and the type of presentation to be made)
earnings press releases (with particular attention to the use of "pro
A-2
forma," or "adjusted" non-GAAP, information) as well as financial
information and earnings guidance provided to analysts and rating agencies.
6. The Committee shall prepare the annual report of the Committee
required by SEC rules and undertake all matters necessary for the
preparation of such report.
C. Oversight of Internal Audit Function and Compliance
1. The Committee shall review the appointment and replacement of the
Company's senior internal auditor.
2. The Committee shall review the significant reports to management
prepared by the internal auditing department and meet privately with the
Company's senior internal auditor at all Committee meetings to discuss any
specific questions concerning internal or operational controls, or any
other matters which the Committee might wish to address. The Committee
shall also review management response to any significant reports prepared
by the internal auditing department or to any questions concerning internal
or operational controls raised by the Company's senior internal auditor or
the Committee.
3. The Committee shall review and discuss with the independent
auditors the internal audit function of the Company including the proposed
programs for the coming year and the coordination of such programs with the
independent auditors, with particular attention to maintaining an
appropriate effective balance between independent and internal auditing
resources. Such review shall include a discussion of the appropriate
budget, staffing, and any recommended changes in the scope of the Company's
internal auditing programs.
4. The Committee shall meet privately with the Company's Chief
Financial Officer at all Committee meetings.
5. The Committee shall review with the independent auditors and with
the Company's financial and accounting personnel the adequacy and
effectiveness of the internal auditing and accounting and financial
controls of the Company, and elicit any recommendations that they may have
for the improvement of such internal control procedures or particular areas
where new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions or procedures which might be deemed
illegal or otherwise improper.
6. The Committee shall monitor compliance with prescribed Company
policies and procedures designed to disclose conflicts of interest, illegal
payments and record-keeping, fraudulent financial practices, and unethical
corporate behavior.
7. The Committee shall discuss with management and the independent
auditor any correspondence with regulators or governmental agencies and any
employee complaints or published reports that raise material issues
regarding the Company's financial statements or accounting policies.
8. The Committee shall discuss with the Company's General Counsel
any legal matters that may have a material impact on the financial
statements or the Company's compliance policies.
9. The Committee shall establish procedures for the treatment of
complaints received by the Company regarding accounting, internal
accounting controls, or auditing matters and the confidential, anonymous
submission by employees of concerns regarding questionable accounting or
auditing matters. The Committee shall investigate and take appropriate
action with respect to any matter brought to its attention, within the
scope of the Committee's duties, and retain outside experts for this
purpose if appropriate in its judgment.
D. Risk Management and Other Matters
1. The Committee shall review and discuss with management guidelines
and policies with respect to risk assessment and risk management, including
major financial risk exposures and the steps taken by management to monitor
and control such exposures.
A-3
2. The Committee shall review with the Board any issues that arise
with respect to the performance and independence of the company's
independent auditors, the quality or integrity of the Company's financial
statements, the Company's compliance with legal or regulatory requirements,
or the performance of the internal audit function.
3. The Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain special legal, accounting, or other
consultants to advise the Committee.
4. The Committee shall review and assess this Charter and the
performance of this Committee annually to ensure that they are consistent
with the short-term and long-range goals of the Company and recommend any
proposed changes to the Board.
5. The Committee shall remain generally informed regarding current
and proposed changes in SEC financial reporting requirements, generally
accepted accounting principles and generally accepted auditing standards.
6. The Committee shall conduct such other duties as may be lawfully
delegated to the Committee from time to time by the Board.
V. LIMITATION OF AUDIT COMMITTEE'S ROLE
The purpose, authority, and responsibilities of the Committee, as set forth
in this Charter, do not impose upon the Committee the duty to (1) plan or
conduct audits of the Company, or (2) determine whether the Company's financial
statements and disclosures are complete and accurate and are in accordance with
generally accepted accounting principles and applicable state and federal
securities laws, rules, or regulations. This duty shall remain the
responsibility of the Company's independent auditors and management.
VI. MEETINGS AND MINUTES
The Committee shall hold meetings, in person or by telephone, at such times
and with such frequency as it deems necessary to carry out its duties and
responsibilities under this Charter, but in no event less than once per quarter.
In addition, the Committee shall meet with management, the internal auditors,
and the independent auditor in separate executive sessions at least quarterly.
Special meetings of the Committee may be called by the Chairman of the Board or
the CEO of the Company or by the Chairman of the Committee, with notice of any
such special meeting to be given in accordance with the Company's Bylaws. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business by the Committee. The Committee may request any officer
or employee of the Company or the Company's outside counsel or independent
auditor to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee. The Committee may also, to the extent that it
deems necessary or appropriate, meet with the Company's investment bankers or
financial analysts who follow the Company.
The Committee also may act by unanimous written consent in accordance with
the terms of the Company's Bylaws.
Minutes of each Committee meeting and records of all other Committee
actions shall be prepared by the Secretary of the Company or, if the Secretary
is not present at the meeting, any person appointed by the Chairman of the
Committee, and shall be retained with the permanent records of the Company.
The Committee shall report to the Board, no later than the next regular
Board meeting, all decisions made and actions taken by the Committee.
VII. ADOPTION AND AMENDMENT
This Charter has been adopted by, and may be amended at any time or from
time to time, in whole or in part, solely by a resolution adopted by the Board.
A-4
JLG INDUSTRIES, INC.
1 JLG DRIVE
MCCONNELLSBURG, PA 17233-9533
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, and does hereby appoint William M. Lasky,
James H. Woodward, Jr. and Thomas D. Singer, and each of them, or such person or
persons as they or any of them may substitute and appoint as proxy or proxies of
the undersigned, to represent the undersigned and to vote all shares of JLG
Industries, Inc., Capital Stock which the undersigned would be entitled to vote
if personally present at the Annual Meeting of Shareholders of JLG Industries,
Inc. to be held on Thursday, November 21, 2002 at 9:00 a.m., and at all
adjournments of such meeting.
THE PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, PROXIES
WILL BE VOTED FOR PROPOSALS 1 THROUGH 3.
The Board of Directors unanimously recommends a vote FOR its nominees and
Proposal 2.
Proposal 1. Election of Directors.
[ ] FOR all nominees listed (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for nominees listed
Nominees: R.V. Armes; G.R. Kempton; W.M. Lasky; J.A. Mezera;
S. Rabinowitz; R.C. Stark; T.C. Wajnert; and C.O. Wood, III.
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT
NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.
- ------------------------------------------------------------------------------
Proposal 2. Ratify the appointment of Ernst & Young LLP as independent auditors
for the ensuing year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal 3. In their discretion, upon any other business that may properly come
before the meeting or any adjournment thereof.
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, all should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If as a corporation, please
sign in corporate name by president or other authorized officer. If as a
partnership, please sign in partnership name by authorized person.
Dated: ________________, 2002
----------------------------
----------------------------
Signature(s)
PLEASE VOTE, DATE, SIGN AND
RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED
ENVELOPE.