SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12
</Table>
JLG INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
JLG INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, NOVEMBER 20, 2003
Dear Fellow Shareholder:
It is my pleasure to invite you to attend the 2003 Annual Meeting of
Shareholders of JLG Industries, Inc. The meeting will be held at the Company's
headquarters in McConnellsburg, Pennsylvania on Thursday, November 20, 2003 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 approve the Company's 2003 Long-Term Incentive Plan.
3. To ratify the selection of independent auditors for the 2004 fiscal
year.
4. To transact such other business as may properly come before the
Annual Meeting
Shareholders of record at the close of business on October 1, 2003 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 6, 2003
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 1, 2003
(the "Record Date"). On the Record Date, there were 43,372,432 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 2003 Annual
Meeting of Shareholders of the Company to be held at Company's headquarters in
McConnellsburg, Pennsylvania on November 20, 2003.
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............. 50 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.
George R. Kempton........ 69 1993 Retired Chairman of the Board and Chief Executive Officer,
Kysor Industrial Corporation.
William M. Lasky......... 56 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.
James A. Mezera.......... 73 1984 President, Mezera and Associates, Inc., a management
consulting firm.
Stephen Rabinowitz....... 60 1994 Retired Chairman of the Board, President and Chief Executive
Officer, General Cable Corporation.
Raymond C. Stark......... 60 2000 Retired Corporate Vice President, Six Sigma and Productivity,
Honeywell International, Inc.; prior to 1999, President and
General Manager, AlliedSignal Aerospace, Defense Electronics
Co.
</Table>
2
<Table>
<Caption>
DIRECTOR BACKGROUND
NAME AGE SINCE INFORMATION
- ---- --- -------- -----------
Thomas C. Wajnert........ 60 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.
Charles O. Wood, III..... 65 1988 President, Wood Holdings, Inc., a private investment firm;
prior to 2003, 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 ten meetings during the 2003 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,
with the exception of Mr. Armes who attended 61% of such meetings.
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, met five times during the 2003 fiscal
year. The Audit Committee of the Board of Directors consists entirely of
directors who satisfy the independence requirements of the New York Stock
Exchange and the Securities and Exchange Commission.
The role and responsibilities of the Audit Committee are set forth in a
written Charter adopted by the Board, which is attached as Appendix A to this
Proxy Statement. The Audit Committee reviews and reassesses the Charter annually
and recommends any changes to the Board for approval. Based on the attributes,
education and experience requirements set forth in Section 407 of the
Sarbanes-Oxley Act of 2002 and associated regulations, the Board of Directors
has determined that Mr. Mezera qualifies as an "Audit Committee Financial
Expert."
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 2003 fiscal year.
The Directors and Corporate Governance Committee, currently consisting of
Messrs. Kempton (Chairman), Mezera, Stark and Wood, held three meetings during
the 2003 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 committee's 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 director compensation and compensation programs; reviewing
and advising the Board regarding management succession plans; and evaluating the
performance of the Board and current directors.
3
The Executive Committee currently consisting of Messrs. Kempton, Lasky,
Mezera, Rabinowitz, and Wajnert, held no meetings during the 2003 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 five meetings during the 2003
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 2003. 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 2003, 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, except that Mr. Rehbein filed one late report of acquisition of
securities.
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, independent 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 expected value at date of grant
using the Black-Scholes valuation method for options and fair market
value of restricted shares 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 approximating 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 2003
Compensation available for the Company's executive officers for fiscal year
2003 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 2003, aggregate base salary competitiveness for
all officers as a group was generally within the range of the Committee's
compensation philosophy with almost all officers' salaries falling within plus
or minus 15% of median of survey data provided by the Committee's compensation
consultant.
Cash Bonus Opportunity. For fiscal 2003, the Committee established under
the Management Incentive Plan opportunities for a cash bonus that could be
earned on the basis of specific individual performance objectives and on the
basis of the Company's achievement of various levels of earnings per share
(EPS), manufacturing profit, and trade working capital as a percentage of total
sales. While certain officers earned bonuses based on achievement of their
individual objectives, the Company did not meet the threshold level of
performance on any of the Company metrics. Accordingly, total bonuses paid under
the Management Incentive Plan were below targeted levels which resulted in total
cash compensation below the 50th percentile of compensation survey data for all
officers.
5
Stock-based Awards. For fiscal 2003, the Committee also awarded to
officers 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 above the 50th percentile levels reflected in
survey data. The aggregate quantitative value of the stock-based awards was
determined on a basis similar to prior years except that total number of shares
subject to awards (including awards for non-officers) was constrained by the
limit of shares remaining available 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 40% of the quantitative value of
stock-based awards to stock options and 60% to restricted shares. For fiscal
2002, the Committee had allocated 50% to stock options and 50% to restricted
shares. As with prior years, the stock options are exercisable at a price equal
to fair market value of the Company's share price as of the date of the grant
and vest ratably over three years subject to each officer's continued employment
with the Company. The restricted share awards vest at the end of 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. Specifically, half of the awards
will vest on an accelerated basis upon the Company's share price attaining a 75%
increase over the share price on the date of grant and the remaining half will
vest upon a 100% increase in the share price.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee believes that the CEO, Mr. Lasky, continues to demonstrate
strong leadership and strategic foresight in navigating the Company through a
challenging economic environment and positioning the Company to prosper during
improved economic conditions.
For fiscal 2003, the Committee recommended and the Board approved an
increase in Mr. Lasky's annual salary from $475,000 to $600,000, which was at
the 50th percentile level reflected in survey data. As noted above, Company
performance metrics fell short of the threshold level under the Management
Incentive Plan, but Mr. Lasky earned a bonus of $153,000, based on his
achievement of individual performance objectives including the achievement of
stated pricing goals for fiscal 2003 and the successful establishment of a
global human resources infrastructure. Mr. Lasky's total cash compensation for
fiscal 2003, comprised of his salary and bonus below target, fell below the 50th
percentile of survey data.
In considering intermediate and long-term incentives for fiscal 2003, the
Committee awarded Mr. Lasky 152,700 restricted shares and options to acquire
137,800 shares of Common Stock. The quantitative value of the awards was
determined by the Committee based upon a multiple of Mr. Lasky's salary
established at the 58th percentile of compensation survey data. 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
6
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. However, during fiscal year 2003 no
executive received non-performance-based compensation exceeding $1 million.
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 2003 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, 56 2003 $600,000 $153,000 -- $1,206,330 137,800 $17,790
Chairman of the Board, 2002 475,008 -- -- 623,314 106,300 34,133
President and Chief 2001 445,272 -- -- 746,361 155,300 68,804
Executive Officer
James H. Woodward, Jr., 50 2003 350,016 102,721 -- 372,880 42,600 8,083
Executive Vice President 2002 308,016 -- -- 292,904 49,900 12,307
and Chief Financial 2001 275,880 115,000 -- 292,944 104,500 899
Officer (6)
Craig E. Paylor, 47 2003 270,428 44,720 -- 175,380 20,000 11,667
Senior Vice President, 2002 226,680 -- -- 138,415 23,500 6,416
Sales, Marketing and 2001 200,016 -- -- 140,010 29,100 23,772
Customer Support
Thomas D. Singer, 51 2003 245,016 49,781 -- 154,840 17,700 15,912
Senior Vice President, 2002 225,000 -- -- 125,020 21,200 9,590
General Counsel and 2001 205,008 -- -- 143,241 29,800 36,694
Secretary (7)
Peter L. Bonafede, Jr., 53 2003 235,008 50,365 -- 148,520 16,900 10,578
Senior Vice President, 2002 215,016 -- -- 118,769 20,300 8,393
Manufacturing 2001 200,016 -- -- 140,010 29,100 34,567
</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 2003 restricted shares were awarded on July 23, 2003. The shares vest
in five years with the exceptions that i) if the share price of the
Company's Capital Stock averages $13.83 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 $15.80 per share for forty consecutive
trading days, then the remaining 50% of the grant vests. The 2002
restricted shares were awarded on August 7, 2002 and 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, 2003 for the Named Executive
Officers were as follows: Mr. Lasky, 257,150 shares valued at $2,311,779;
Mr. Woodward, 103,600 shares valued at $931,364; Mr. Paylor, 44,200 shares
valued at $397,358; Mr. Singer, 43,584 shares valued at $391,820; and Mr.
Bonafede, 41,934 shares valued at $376,987.
(4) The 2003 and 2002 options were awarded on July 23, 2003 and August 7, 2002,
respectively.
(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 $4,353; Mr. Woodward $1,684; Mr. Paylor
$6,123; Mr. Singer $8,000; and Mr. Bonafede $3,834); and payments pursuant
to the Company's Annual Physical Examination Plan (Mr. Lasky $1,190);
contributions to the Company's discretionary, defined
8
contribution retirement plan (Mr. Woodward $2,097; Mr. Paylor $5,544; Mr.
Singer $5,265; and Mr. Bonafede $5,294) and contributions pursuant to the
Company's Executive Deferred Compensation Plan (Mr. Lasky $12,247; Mr.
Woodward $4,302; Mr. Singer $2,647; and Mr. Bonafede $1,451).
(6) Mr. Woodward commenced employment with the Company on August 7, 2000.
(7) Mr. Singer became an executive officer in November 2000.
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............ 137,800 18% $7.90 July 23, 2013 $929,290 $2,124,565
James H. Woodward, Jr. ..... 42,600 6 7.90 July 23, 2013 287,284 656,796
Craig E. Paylor............. 20,000 3 7.90 July 23, 2013 134,875 308,355
Thomas D. Singer............ 17,700 2 7.90 July 23, 2013 119,365 272,894
Peter L. Bonafede, Jr. ..... 16,900 2 7.90 July 23, 2013 113,970 260,560
</Table>
- ---------------
(1) Consists solely of options to purchase shares of Capital Stock.
(2) Options become exercisable in equal amounts over a three-year period
beginning July 23, 2004. 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, 2003 would be
$292,459,670 and $668,627,996, 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.
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........... -- -- 346,549 356,651 $ -- $156,580
James H. Woodward, Jr. .... -- -- 55,166 141,834 -- 49,428
Craig E. Paylor............ -- -- 69,805 53,200 -- 23,210
Thomas D. Singer........... -- -- 55,141 48,834 -- 20,565
Peter L. Bonafede, Jr. .... -- -- 64,800 46,900 -- 19,639
</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, 2003, multiplied by the number of shares underlying the option. The
calculation omits options where the exercise price exceeds the closing
market price.
9
COMPENSATION PURSUANT TO PLANS
The Company maintains separate benefit plans for employees of the Company.
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, Singer and Bonafede; 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 2003 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 has
been attained or retirement dates are announced, the Named Executive Officers
would be entitled to projected annual payments under the plan as follows: Mr.
Lasky, $735,608; Mr. Woodward, $465,472; Mr. Paylor, $265,885; Mr. Singer,
$176,980; and Mr. Bonafede, $221,980. 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, cash bonus, Restricted
Share award and/or gain on an Option. Provided that the officer elects to defer
some portion of his base salary, cash bonus, Restricted Share award and/or gain
on an Option, 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
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.
10
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 and the Russell 2000 Index. Our own peer
group index for the proxy graph is 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. Cumulative
total return is measured assuming an initial investment of $100 on July 31, 1998
and the reinvestment of all dividends paid. The companies in the peer group are
weighted by market capitalization.
<Table>
<Caption>
JLG PEER GROUP RUSSELL 2000 INDEX
--- ---------- ------------------
1998 $100.00 $100.00 $100.00
1999 $128.79 $115.94 $106.31
2000 $ 66.02 $ 83.23 $119.39
2001 $ 73.46 $117.31 $115.63
2002 $ 58.63 $104.89 $ 93.60
2003 $ 58.76 $146.44 $113.53
</Table>
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
Year Ended July 31, 1998 1999 2000 2001 2002 2003
- -----------------------------------------------------------------------------------------------------------
JLG Industries, Inc. $100 $128.79 $ 66.02 $ 73.46 $ 58.63 $ 58.76
Peer Group Index 100 115.94 83.23 117.31 104.89 146.44
Russell 2000 Index 100 106.31 119.39 115.63 93.60 113.53
</Table>
11
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table shows the number of shares of the Company's Capital
Stock beneficially owned on September 5, 2003 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................................... 322,235 402,566 1.6%
James H. Woodward, Jr. ............................ 119,411 86,299 --
Craig E. Paylor.................................... 86,012 77,638 --
Peter L. Bonafede, Jr. ............................ 78,022 71,566 --
Thomas D. Singer................................... 63,246 62,207 --
George R. Kempton.................................. 62,000(4) 54,000 --
James A. Mezera.................................... 47,000 54,000 --
Charles O. Wood, III............................... 43,000(5) 102,000 --
Stephen Rabinowitz................................. 17,000 83,064 --
Thomas C. Wajnert.................................. 11,600 54,000 --
Roy V. Armes....................................... 3,000 13,167 --
Raymond C. Stark................................... 1,000 13,167 --
All directors and executive officers as a group (14
persons)......................................... 993,055 1,135,939 4.8%
</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, 257,150; Mr.
Woodward, 103,600; Mr. Paylor, 52,965; Mr. Singer, 57,465; Mr. Bonafede,
41,934; and all directors and executive officers as a group, 584,194.
(3) Percentages are not shown where less than 1.0%.
(4) Includes 10,000 shares owned by a Charitable Remainder Trust and 10,000
shares owned by family trusts.
(5) Includes 10,000 shares owned by a family trust.
The following table sets forth the name and address of each shareholder
known to the Company to be beneficial owner of more than five percent of the
outstanding shares of the Company's Capital Stock.
<Table>
<Caption>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP CLASS
- ---------------- -------------------- ----------
Fisher Investments 2,196,600(1) 5.1%
13100 Skyline Boulevard
Woodside, CA 94062-4547
</Table>
- ---------------
(1) As of August 22, 2003, based on information supplied to the Company by
Fisher Investments.
12
PROPOSAL 2
ADOPTION AND APPROVAL OF THE 2003 LONG TERM INCENTIVE PLAN
The following summary information is being provided in connection with the
solicitation of proxies for adoption and approval of our proposed 2003 Long Term
Incentive Plan (the "2003 Plan"). The 2003 Plan is intended to replace our
current Amended and Restated Stock Incentive Plan (the "Employee Plan") that was
approved by shareholders in 1999 and expires on December 31, 2004, and our
current Director's Stock Option Plan (the "Directors Plan") that was approved by
shareholders in 1994 and expires on December 31, 2003. This will allow us to
combine the Employee Plan and the Directors Plan (together the "Prior Plans")
into a single integrated plan that will also provide greater flexibility for
additional types of awards, including performance based cash awards.
As of July 31, 2003, only 230,254 shares of capital stock of the Company
remained available for issuance under the Employee Plan, while 1,421,610 shares
remained available for issuance under the Directors Plan. The 2003 Plan will
preserve for future award grants authorization for issuance of substantially all
of the shares that remained available under the Employee Plan as of July 31,
2003 (but not the Directors Plan) and will authorize the use of 2,920,000
additional shares. In addition, awards granted under the Prior Plans that are
surrendered before exercise, lapse or terminate without being exercised, or are
forfeited, will be available for issuance under the 2003 Plan, subject to a
limit of 5,800,000 shares.
On September 18, 2003 our Board of Directors approved the 2003 Plan subject
to shareholder approval, and directed that it be submitted to shareholders at
this year's annual meeting. If the 2003 Plan is approved, no awards will be
granted under the Prior Plans after November 20, 2003 (the "Effective Date").
The adoption of the 2003 Plan will not affect the terms of any outstanding
awards and such awards will continue to be governed by the terms of the
applicable Prior Plans, except that, if approved, the annual grant under the
Directors Plan of 6,000 options to each outside director will not be made.
Instead, immediately following the annual meeting each outside director will be
granted a combination of restricted shares and options having an expected value
of $38,000. 80% of the value will be allocated to restricted shares and 20% to
options both vesting upon each director's first reelection to serve an
additional term at the first annual meeting after the date of grant.
Determination of the number of shares and options to deliver the expected value
will be based on the average closing price of our capital stock for the twenty
trading days preceding the fifth day prior to the date of grant. The exercise
price of the options will be based on the fair market value of our capital stock
on the date of grant. The Board of Directors believes that director stock-based
compensation in predominantly the form of restricted shares equating to a fixed
targeted annual value is more consistent with current market practices than
grants of a fixed number of stock options having unpredictable value that varies
from year-to-year. If shareholders do not approve the 2003 Plan, the Prior Plans
will remain in effect in their current form until their scheduled expiration.
Approval of the 2003 Plan by shareholders will also constitute approval of
(i) the performance criteria upon which performance-based awards that are
intended to be deductible by the Company may be based, and (ii) the limits on
the amount of cash and shares that may be awarded to any individual participant
to comply with the requirements of Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"). This approval is required every five years in
order for such awards to continue to be treated as performance based
compensation under the Code.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS BELIEVES THAT THE 2003 LONG TERM INCENTIVE PLAN IS
IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS. ACCORDINGLY, THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE JLG INDUSTRIES,
INC. 2003 LONG TERM INCENTIVE PLAN.
13
SUMMARY OF 2003 PLAN
Below is a summary of significant terms of the 2003 Plan. The summary does
not purport to be complete and is qualified in its entirety by reference to the
text of the 2003 Plan which is attached as Appendix B to this Proxy Statement.
Purpose....................... The 2003 Plan is intended to enable the key
personnel of the Company and its subsidiaries
and outside directors to acquire or increase a
proprietary interest in the Company, and to
motivate key personnel by means of
growth-related incentives to achieve long-
range goals. Accordingly, the 2003 Plan is
intended as a further means not only of
attracting and retaining outstanding personnel
and directors, but also of promoting a closer
identity of interests between management,
outside directors, and shareholders.
Total Number of Shares
Covered....................... 3,150,254 shares of Capital Stock ("Shares")
(includes up to 230,254 Shares that were
available as of July 31, 2003, under the
Employee Plan as approved by shareholders in
1999), plus no more than 5,800,000 shares that
may become available because of lapse or
forfeiture of outstanding options or restricted
shares under the Prior Plans.
Administration of the 2003
Plan.......................... The Compensation Committee (the "Committee")
will administer the 2003 Plan. The Committee is
expected to consist only of directors that
qualify as "non-employee directors" within the
meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and "outside
directors" within the meaning of Section 162(m)
of the Code. We also believe that such
directors will meet the new independence
criteria contained in the proposed listing
standards for the New York Stock Exchange. In
administering the 2003 Plan the Committee will
determine which key employees are eligible to
participate, the number and types of awards to
be granted and the terms and conditions of such
awards. In addition, each fiscal year, the
chief executive officer is authorized to grant
an amount of awards fixed by the Committee. All
questions of interpretation and administration
of the 2003 Plan will be made by the Committee.
Eligible Participants......... Key employees (including officers and
directors) of the Company and its subsidiaries
and outside directors.
Types of Grants/Awards........ The Committee may authorize the grants of the
following awards:
(i) Incentive Stock Options -- stock options
that are qualified as "incentive stock options"
under Section 422 (b) of the Code;
(ii) Non-qualified Stock Options -- stock
options that are not qualified as "incentive
stock options under Section 422(b) of the Code;
(iii) Restricted Shares -- Shares that are
subject to various types of restrictions on the
receipt thereof;
(iv) Bonus Shares -- Shares that are not
subject to restrictions, but that are awarded
only to non-executive officers to recognize
outstanding job performance;
(v) Rights -- SARs and LSARs -- rights to
receive cash based on the appreciation in value
of the Company's Capital Stock over a specified
period;
14
(vi) Performance Units -- rights, denominated
in cash or cash units, to receive, at a
specified future date, payment in cash or
Shares based on certain performance criteria
established by the Committee; and
(vii) Performance Shares -- rights, denominated
in Shares or stock units equivalent to Shares,
to receive, at a specified future date, payment
in cash or Shares based on certain performance
criteria established by the Committee.
Limits on Awards.............. No participant may be granted awards in any
fiscal year covering in excess of 400,000
shares, Bonus Shares in excess of 5,000 Shares,
or Performance Units paying in excess of $5
million in cash. In addition, no more than
850,000 shares may be issued in the aggregate
as Restricted Shares, Bonus Shares or in
settlement of Performance Units or Performance
Shares.
Incentive Stock Options....... Option Term. Established by the Committee, but
may not exceed 10 years, or 5 years in the
event that the participant, at the time the
option is granted, owns more than 10% of the
combined voting power of all classes of stock
of the Company or its subsidiaries.
Exercise Price. Fair market value of a Share
on the date the option is granted, except in
the event that the participant, at the time the
option is granted, owns more than 10% of the
combined voting power of all classes of stock
of the Company or its subsidiaries, in which
event the exercise price shall be not less than
110% of the fair market value of a Share.
Non-qualified Stock Options... Option Term. Established by the Committee, but
may not exceed 10 years.
Exercise Price. Determined by the Committee at
the time of the grant, but may not be less than
the fair market value of a Share.
Restricted Shares. The Committee may determine
whether shares purchased pursuant to the
exercise of a Non-qualified Stock Option will
be Restricted Shares.
Restricted Shares............. Price. Determined by the Committee, but may
not be less than the par value of a Share.
Rights. Holder of Restricted Share has
beneficial ownership of Restricted Shares,
including the right to receive dividends and
the right to vote.
Transfer Restrictions. Restricted Shares may
not be sold, assigned, transferred, pledged
hypothecated or otherwise disposed of, and must
be returned to the Company upon termination of
participant's employment with the Company
(unless termination is due to disability or
death of employee) prior to vesting.
Vesting. Restrictions may lapse based on
criteria determined by the Committee, including
Performance Based Criteria.
Change in Control. All restrictions shall
lapse upon the Company receiving knowledge of a
Change in Control.
Bonus Shares.................. Grant. Unrestricted Shares that may be awarded
only to non-executive officers. Intended to be
a tool for recognizing and rewarding
extraordinary performance.
15
SARs.......................... Grant. The Committee may grant stock
appreciation rights (SARs) that, on exercise,
entitle the Grantee to receive cash equal to
the excess of (i) the Fair Market Value of a
Share on the date of exercise over (ii) the
Fair Market Value of a Share on the date of
grant, multiplied by the number of Shares with
respect to which the SAR is exercised.
LSARs......................... Grant. The Committee may authorize the grant
of limited stock appreciation rights (LSARs) in
connection with all or part of any option.
Grant of LSARs may be with or after the grant
of any option.
Term. May be exercised only to the extent the
related option is exercisable and only within
the 60 day period beginning on the date on
which the Company obtains knowledge that a
Change in Control (as defined in the 2003 Plan)
has occurred.
Exercise. Upon exercise of a LSAR, the holder
is paid cash in an amount which equals the
difference of the option price of the related
option and the fair market value of a share of
Common Stock (or, in the case of LSARs granted
in connection with a Non-qualified Stock
Option, the highest price paid by a person
effecting a Change in Control).
Director Awards............... Grant. In each year during the term of the
2003 Plan, the Committee may determine an
annual grant of awards to be granted to each
individual who is an outside director on the
date of grant for that year; provided however,
that no such award shall be granted unless the
Company had a net profit before extraordinary
events for the preceding year. Unless otherwise
specified by the Committee, any Awards to
outside directors for a year shall be made on
the date on which the results of the election
of directors held at the Company's annual
meeting for that year are certified by the
judge of elections.
Performance Criteria.......... The Committee, at the time that an award is
made, may establish specific performance
targets for the vesting of performance-based
Restricted Shares or to measure the value of
Performance Units or Performance Shares. The
objective performance targets established by
the Committee may be based on one or more of
the following criteria: (i) increase in net
sales; (ii) pretax income before allocation of
corporate overhead and/or bonus; (iii) budget;
(iv) earnings per share; (v) net income; (vi)
attainment of division, group or corporate
financial goals; (vii) return on stockholders'
equity; (viii) return on assets; (ix)
attainment of strategic and operational
initiatives; (x) appreciation in or maintenance
of the price of the common stock or any other
publicly-traded securities of the Company; (xi)
increase in market share; (xii) gross profits;
(xiii) earnings before interest and taxes;
(xiv) earnings before interest, taxes,
depreciation and amortization; (xv) economic
value-added models; (xvi) comparisons with
various stock market indices; (xvii)
comparisons with performance metrics of peer
companies; or (xviii) reductions in costs.
The performance period with respect to any
performance based award will not exceed five
years.
16
Limitations on Exercise....... Options, SARs and LSARs may not be exercised
for a minimum of six months after their grant.
The Committee may also establish quotas
limiting the amount of options exercisable in
full at any time during their term.
Change in Control............. Immediately following the date that the Company
obtains actual knowledge that a Change in
Control has occurred, all vesting and
forfeiture conditions, restrictions and
limitations in effect with respect to Options,
SARs, and Restricted Shares, will immediately
lapse and such awards will automatically become
fully vested and each shall be immediately
exercisable in its entirety. The Committee may,
in its discretion, provide that the performance
criteria for Performance Units and Performance
Shares are deemed met upon a Change in Control.
Termination, Suspension or
Modification.................. The Board may amend or terminate the 2003 Plan
at any time, provided that it may not, without
shareholder approval, modify (i) the aggregate
number of Shares for which awards may be
granted; (ii) the class of persons eligible for
awards; (iii) the minimum option price,
applicable to Options or SARs, that is provided
for under the terms of the 2003 Plan; (iv) the
maximum duration of the 2003 Plan; (v) the
Shares with respect to which awards are
granted, or (vi) the granting corporation for
purposes of awards under the 2003 Plan. In
addition, the Board shall seek shareholder
approval for any "material revision" of the
Plan as defined in Section 303A(8) of the New
York Stock Exchange Listed Company Manual, or
any successor provision. No amendment or
termination of the 2003 Plan shall diminish any
rights of a participant pursuant to a
previously granted award without his or her
consent, subject to the Committee's authority
to adjust awards upon certain events.
Adjustments................... The Board may, in accordance with the terms of
the Plan, make appropriate adjustments to the
number of Shares available for the grant of
awards and the terms of outstanding options and
other awards to reflect any stock dividend or
distribution, stock split, reverse stock split,
recapitalization, reorganization, merger,
consolidation, split-up, combination or
exchange of shares (and certain other events
affecting our capital structure or business).
Effect of Merger or Other
Reorganization................ If the Company is the surviving corporation in
a merger or other reorganization, any option
shall extend to stock and securities of the
Company after the merger or other
reorganization to the same extent that a person
who held, immediately before the merger or
reorganization, the number of shares of Common
Stock issuable upon exercise of the option
would be entitled to have or obtain stock or
securities of the Company under the terms of
the merger or reorganization.
TAX STATUS
The following discussion of the federal income tax status of awards under
the 2003 Plan, as proposed, is based on present federal tax laws and regulations
and does not purport to be a complete description of the federal income tax
laws. Participants may also be subject to certain employment, state and local
taxes that are not described below.
17
INCENTIVE STOCK OPTIONS
If the option is an incentive stock option, no income shall be realized by
the participant upon award or exercise of the option, and no deduction shall be
available to the Company at such times. If the Shares purchased upon the
exercise of an incentive stock option are held by an employee for at least two
years from the date of the award of such option and for at least one year after
exercise, any resulting gain shall be taxed at long-term capital gains rates. If
the Shares purchased pursuant to the option are disposed of before the
expiration of that period, any gain on the disposition, up to the difference
between the fair market value of the Shares at the time of exercise and the
option price, shall be taxed at ordinary rates as compensation paid to the
participant, and the Company shall be entitled to a deduction for an equivalent
amount. Any amount realized by the employee in excess of the fair market value
of the stock at the time of exercise shall be taxed at capital gains rates.
NON-QUALIFIED STOCK OPTIONS
If the option is a non-qualified stock option, no income shall be realized
by the participant at the time of award of the option, and no deduction shall be
available to the Company at such time. At the time of exercise (other than by
delivery of Shares to the Company), ordinary income shall be realized by the
participant in an amount equal to the difference between the option price and
the fair market value of the Shares on the date of exercise, and the Company
shall receive a tax deduction for the same amount. If an option is exercised by
delivering Shares to the Company, a number of Shares received by the optionee
equal to the number of Shares so delivered will be received free of tax and will
have a tax basis and holding period equal to the Shares so delivered. The fair
market value of additional Shares received by the optionee will be taxable to
the optionee as ordinary income, and the optionee's tax basis in such Shares
will be their fair market value on the date of exercise. Upon disposition, any
appreciation or depreciation of the Shares after the date of exercise may be
treated as capital gain or loss depending on how long the Shares have been held.
SARS
No income shall be realized by the participant at the time a SAR is
awarded, and no deduction shall be available to the Company at such time. When
the right (including a limited SAR) is exercised, ordinary income shall be
realized in the amount of the cash received by the participant, and the Company
shall be entitled to a deduction of equivalent value.
RESTRICTED SHARES, STOCK AWARDS AND BONUS SHARES
The Company shall receive a deduction and the participant shall recognize
taxable income equal to the fair market value of the Restricted Shares at the
time the restrictions on the Shares awarded lapse (or the Shares become
transferable), unless the participant elects, within 30 days after receipt of
such Restricted Shares, to pay such tax earlier, in which case both the
Company's deduction and the participant's inclusion in income occur on the award
date. The value of any part of a stock award distributed to participants shall
be taxable as ordinary income to such participants in the year in which such
Shares are received, and the Company will be entitled to a corresponding tax
deduction. The value of the Shares awarded to participants as Bonus Shares
(minus the participant's purchase price, if any) will be taxable as ordinary
income to such participants in the year received, and the Company will be
entitled to a corresponding tax deduction.
SECTION 162(M)
Section 162(m) of the Code generally disallows a tax deduction to public
companies for compensation over $1,000,000 paid to the chief executive officer
and the four other most highly compensated executive officers in any year.
Qualifying performance-based compensation is not subject to the deduction limit.
In order to qualify as performance-based compensation, the shareholders of the
Company must approve the material terms under which the compensation will be
paid, including (i) the performance criteria upon which performance-based awards
may be based, (ii) the annual per-participant limits on grants of performance-
based awards and stock options and SARs and (iii) the class of employees
eligible to receive awards. The
18
Committee is required to seek reapproval of the materials terms of Performance
Shares, Performance Awards, and Performance-Based Restricted Shares every five
years, because the 2003 Plan grants the Committee discretion to set the
performance targets with respect to these awards, using one or more of the
criteria set forth above. The reapproval requirement does not apply to options
and SARs because the performance criteria with respect to options and SARs
(increase in stock price) is not within the discretion of the Committee.
Compensation received on vesting of performance-based awards and exercise of
options and SARs granted under the 2003 Plan in compliance with the requirements
of Section 162(m) of the Code is exempt from the $1,000,000 deduction limit.
AWARDS UNDER THE 2003 PLAN
Because awards under the 2003 Plan are discretionary and will be based upon
prospective factors including the nature of services to be rendered by
directors, officers and key employees, actual awards cannot be determined at
this time. If the 2003 Plan had been in effect during fiscal 2003, the stock
options and restricted shares received by our executive officers would have been
the same as the awards actually received under the Prior Plans. Directors would
have received different awards. The following table sets forth awards granted
under the Prior Plans for fiscal 2003, to each of the persons and groups of
persons listed in the table:
<Table>
<Caption>
RESTRICTED
STOCK
NAME AND POSITION OPTIONS AWARDS
- ----------------- ------- ----------
William M. Lasky, Chairman of the Board, President and Chief
Executive Officer......................................... 137,800 152,700
James H. Woodward, Jr., Executive Vice President and Chief
Financial Officer......................................... 42,600 47,200
Craig E. Paylor, Senior Vice President, Sales, Marketing and
Customer Support.......................................... 20,000 22,200
Thomas D. Singer, Senior Vice President, General Counsel and
Secretary................................................. 17,700 19,600
Peter L. Bonafede, Jr., Senior Vice President,
Manufacturing............................................. 16,900 18,800
All executive officers...................................... 261,000 289,300
All directors who are not executive officers*............... 7,210 19,943
All employees including officers who are not executive
officers.................................................. 508,150 83,000
</Table>
- ---------------
* Calculated on the basis of a hypothetical share price of $11.00 per share
PROPOSAL 3
SELECTION OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP served as the Company's
independent auditors throughout fiscal year 2003 and the Board of Directors, on
the recommendation of the Audit Committee, has selected the firm as the
Company's independent auditors for fiscal 2004. The Board of Directors
recommends ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year 2004. 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.
REPORT OF THE AUDIT COMMITTEE
In fulfilling its responsibilities during the fiscal year ended July 31,
2003, the Audit Committee:
- Reviewed and discussed the Company's audited financial statements for the
year ended July 31, 2003 with management and Ernst & Young LLP ("E&Y"),
the Company's independent auditors;
- Discussed with E&Y the matters required to be discussed by Statement on
Auditing Standards No. 61, as amended, relating to the conduct of the
audit; and
19
- Received written disclosures and the letter from E&Y regarding its
independence as required by Independence Standards Board Standard No. 1
and discussed with E&Y their independence, including considering the
compatibility of E&Y's performance of non-audit services with their
independence.
Based on the Audit Committee's review of the audited financial statements
and discussions with management and E&Y, 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 year ended July 31, 2003 for filing with the
Securities and Exchange Commission.
THE AUDIT COMMITTEE
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 E&Y for professional services rendered for the
audit of the Company's annual financial statements, the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q, and
services provided in connection with other statutory or regulatory filings was
$564,000 for the fiscal year ended July 31, 2003, and $328,000 for the fiscal
year ended July 31, 2002.
AUDIT-RELATED FEES
The aggregate fees billed by E&Y in each of the last two fiscal years for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company's financial statements and not reported under
the caption Audit Fees were $271,000 for the year ended July 31, 2003, and
$296,000 for the year ended July 31, 2002. These services included due diligence
and accounting consultations related to mergers, acquisitions and dispositions
and accounting consultations concerning regulatory reporting.
TAX FEES
The aggregate fees billed by E&Y in each of the last two fiscal years for
professional services rendered for tax compliance, tax advice, and tax planning
were $2,640,000 for the year ended July 31, 2003, which included $1,161,000 for
tax compliance services and $1,479,000 for tax advice and planning services, and
$2,230,000 for the year ended July 31, 2002, which included $498,000 for tax
compliance services and $1,732,000 for tax advice and planning services. These
services included assistance in the preparation of the Company's tax returns and
expatriate, value-added tax and executive tax returns and assistance with tax
audits and appeals.
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 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
20
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 not be deemed to be votes cast, and
therefore will not affect the outcome of the vote. Broker non-votes as to any
matter are shares held by broker nominees which are present and voted at the
meeting on matters as to which the broker has discretionary authority but which
are not voted on the matter in question because the broker does not have
discretionary voting authority as to such matter. Under rules of the New York
Stock Exchange ("NYSE"), if your broker holds shares in your name, your broker
is permitted to vote your shares on proposals 1 and 3 even if your broker does
not receive voting instructions from you. Your broker may not vote your shares
on proposal 2 without instructions from you. Accordingly, you are encouraged to
instruct your broker how you wish to vote your shares.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2004 Annual Meeting
must be received in writing by the Company before June 12, 2004 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 2004
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 26, 2004, and advises share owners in the 2004 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 26, 2004. Shareholder proposals or notices of intention to
present proposals at the 2004 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 3 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 6, 2003
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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 auditor;
- 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,
evaluate, compensate or terminate 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 auditor 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 auditor
and management's response to such comments or recommendations.
2. The Committee shall review and approve all non-audit engagements
with the independent auditor and otherwise ensure that the independent
auditor submits on a periodic basis to the Committee a formal written
statement delineating all relationships between the independent auditor and
the Company. In addition, the Committee shall actively engage in dialogue
with the independent auditor with respect to any disclosed relationships or
services that may impact the objectivity or independence of the independent
auditor.
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 and senior manager 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 determine clear hiring policies for employees
or former employees of the independent auditor.
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 auditor is 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 issued 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.
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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
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
auditor the internal audit function of the Company including the proposed
programs for the coming year and the coordination of such programs with the
independent auditor, 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 auditor 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 receipt,
retention and 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.
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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.
2. The Committee shall review with the Board any issues that arise
with respect to the performance and independence of the Company's
independent auditor, 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.
7. The Committee shall determine appropriate funding for payment of
compensation: (a) to any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other audit,
review or attest services for the Company, (b) to any consultants or
advisers employed by the Committee; and (c) for ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying out
its duties.
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 auditor 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.
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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.
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APPENDIX B
JLG INDUSTRIES, INC.
LONG TERM INCENTIVE PLAN
1. PURPOSE
The JLG Industries, Inc. Long Term Incentive Plan (the "Plan"), is designed
to enable key personnel and Outside Directors of JLG Industries, Inc. (the
"Company") and its Subsidiaries to acquire or increase a proprietary interest in
the Company, and thus to share in the future success of the Company's business.
In addition, the Plan is designed to motivate key personnel by means of
growth-related incentives to achieve long-range goals. Accordingly, the Plan is
intended as a further means not only of attracting and retaining outstanding
personnel and directors, but also of promoting a closer identity of interests
between management, Outside Directors, and shareholders. This Plan reflects the
consolidation of the Company's prior plans, the JLG Industries, Inc. Stock
Incentive Plan (for employees) and the JLG Industries, Inc. Directors Stock
Option Plan (for Outside Directors).
2. DEFINITIONS
In this Plan document, unless the context clearly indicates otherwise,
words in the masculine gender shall be deemed to refer to females as well as
males, any term used in the singular also shall refer to the plural, and the
following capitalized terms shall have the following meanings set forth in this
Section 2:
(a) "Award" means an Option, Restricted Share, Right, Bonus Share,
Performance Unit, or Performance Share. Unless the context clearly
indicates otherwise, the term "Awards" shall include Options, Restricted
Shares, Rights, Bonus Shares, Performance Units, or Performance Shares.
"Equity Award" means any Option, Restricted Share, Bonus Share, Performance
Unit, Performance Share, or other Award that is settled in Shares; "Cash
Award" means any Right, Performance Unit, Performance Share, or other Award
that is settled in cash.
(b) "Beneficiary" means the person or persons designated in writing
by the Grantee as his beneficiary in respect of an Award; or, in the
absence of an effective designation or if the designated person or persons
predecease the Grantee, the Grantee's Beneficiary shall be the person or
persons who acquire by bequest or inheritance the Grantee's rights in
respect of an Award. In order to be effective, a Grantee's designation of a
Beneficiary must be on file with the Company before the Grantee's death.
Any such designation may be revoked and a new designation substituted for
it at any time before the Grantee's death.
(c) "Board of Directors" or "Board" means the Board of Directors of
the Company.
(d) "Bonus Share" means a Share granted pursuant to Section 12(g)
hereof without restriction.
(e) "Change in Control" means the first to occur of the following
events:
(1) an acquisition (other than directly from the Company) of
securities of the Company by any person, immediately after which such
person, together with all securities law affiliates and associates of
such person, becomes the beneficial owner of securities of the Company
representing 25 percent or more of the voting power; provided that, in
determining whether a Change in Control has occurred, the acquisition of
securities of the Company in a non-control acquisition will not
constitute an acquisition that would cause a Change in Control; or
(2) three or more directors, whose election or nomination for
election is not approved by a majority of the members of the Incumbent
Board, are elected within any single 12-month period to serve on the
Board of Directors; provided that an individual whose election or
nomination for election is approved as a result of either an actual or
threatened election contest or proxy contest, including by reason of any
agreement intended to avoid or settle any election contest or proxy
contest, will be deemed not to have been approved by a majority of the
incumbent Board for purposes of this definition; or
(3) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors; or
(4) approval by shareholders of the Company of:
(i) a merger, consolidation, or reorganization involving the
Company, unless
(A) the shareholders of the Company, immediately before
the merger, consolidation, or reorganization, own, directly or
indirectly immediately following such merger, consolidation, or
reorganization, at least 75 percent of the combined voting power
of the outstanding voting securities of the corporation resulting
from such merger, consolidation, or reorganization in
substantially the same proportion as their ownership of the
voting securities immediately before such merger, consolidation,
or reorganization;
(B) individuals who were members of the incumbent Board
immediately prior to the execution of the agreement providing for
such merger, consolidation, or reorganization constitute at least
a majority of the board of directors of the surviving
corporation; and
(C) no person (other than (I) the Company or any
Subsidiary thereof, (II) any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, any Subsidiary
thereof, or the surviving corporation, or (III) any person who,
immediately prior to such merger, consolidation, or
reorganization, had beneficial ownership of securities
representing 25 percent or more of the voting power) has
beneficial ownership of securities representing 25 percent or
more of the combined voting power of the surviving corporation's
then outstanding voting securities;
(ii) a complete liquidation or dissolution of the Company; or
(iii) an agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any person (other
than a transfer to a Subsidiary).
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means a committee consisting of such number of
members of the Compensation Committee of the Board of Directors with such
qualifications as are required to qualify as an outside director for
purposes of (i) Rule 16b-3 under the Securities Exchange Act of 1934, as in
effect from time to time (or any successor rule of similar import) and (ii)
Section 162(m) of the Code, and the regulations thereunder, as in effect
from time to time (or any successor provision of similar import), to the
extent that Awards made under the Plan are intended to qualify as
performance-based compensation thereunder.
(h) "Company" means JLG Industries, Inc.
(i) "Covered Executive" means an individual who is determined by the
Committee to be reasonably likely to be a "covered employee" under Section
162(m) of the Code, and to receive compensation that would exceed the
deductibility limits under Section 162(m), as of the end of the Company's
taxable year for which an Award to the individual will be deductible.
(j) "Disability" or "Disabled" means having a total and permanent
disability as defined in Section 22(e)(3) of the Code.
(k) "Effective Date" means November 20, 2003, provided that the Plan
shall have been approved by the Company's shareholders.
(l) "Election Contest" means an election contest described in Rule
14a-11 promulgated under the Securities Exchange Act.
(m) "Employee" means any person who is an employee, as defined in
Section 3401(c) of the Code, of the Company, any Subsidiary, or any Parent.
(n) "Fair Market Value" means, when used in connection with the
Shares on a certain date, the fair market value of a Share as determined by
the Committee, and shall be deemed equal to the closing
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price at which Shares are traded on such date (or on the next preceding day
for which such information is ascertainable at the time of the Committee's
determination) as reported for such date by The Wall Street Journal (or if
Shares are not traded on such date, on the next preceding day on which
Shares are traded) (or if Shares are traded on such date but no edition of
The Wall Street Journal reporting such prices for such date is published,
the fair market value shall be deemed equal to the closing price at which
Shares are traded on such date as reported through the National Association
of Securities Dealers Automated Quotations System in any other newspaper).
(o) "Grantee" means a person to whom an Award has been granted under
the Plan.
(p) "Incentive Stock Option" means an Option granted in accordance
with Section 8 hereof that complies with the terms and conditions set forth
in Section 422(b) of the Code and is designated by the Committee as an
Incentive Stock Option.
(q) "Incumbent Board" means individuals who, as of the close of
business on the Effective Date, are members of the Board of Directors;
provided that, if the election, or nomination for election by the Company's
shareholders, of any new director was approved by a vote of at least 75
percent of the Incumbent Board, such new director shall, for purposes of
the Plan, be considered as a member of the Incumbent Board; provided
further that no individual shall be considered a member of the Incumbent
Board if such individual initially assumed office as a result of either an
actual or threatened Election Context or other actual or threatened Proxy
Contest, including by reason of any agreement intended to avoid or settle
any Election Contest or Proxy Contest.
(r) "Limited Stock Appreciation Right" means a right that provides
for payment in accordance with Section 11 hereof.
(s) "Non-qualified Stock Option" means an Option granted under the
Plan other than an Incentive Stock Option.
(t) "Option" means any option to purchase a Share or Shares pursuant
to the provisions of the Plan. Unless the context clearly indicates
otherwise, the term "Option" shall include both Incentive Stock Options and
Non-qualified Stock Options.
(u) "Option Agreement" means the written, or to the extent permitted
by law, electronic, agreement to be entered into by the Company and the
Grantee, as provided in Section 7 hereof.
(v) "Outside Director" means each member of the Board of Directors
who is not an Employee.
(w) "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code (or a successor provision of similar
import).
(x) "Performance Share" means an Award made pursuant to Section 14.
(y) "Performance Unit" means an Award made pursuant to Section 13.
(z) "Performance-Based Restricted Shares" means Restricted Shares
that are intended to qualify as performance-based compensation under
Section 162(m) of the Code, and the regulations thereunder.
(aa) "Plan" means the JLG Industries, Inc. Long Term Incentive Plan,
as set forth herein and as amended from time to time (except where the
context makes clear that the reference is either to the JLG Industries,
Inc. Stock Incentive Plan or to the JLG Industries, Inc. Directors Stock
Option Plan, both as in effect prior to the Effective Date).
(bb) "Prior Plans" shall mean the JLG Industries, Inc. Stock
Incentive Plan or the JLG Industries, Inc. Directors Stock Option Plan, as
the context requires, which were replaced by the Plan as of the Effective
Date.
(cc) "Proxy Contest" means a solicitation of proxies or consents by
or on behalf of a person or entity other than the Board of Directors.
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(dd) "Quota" means the portion of the total number of Shares subject
to an Option that the Grantee of the Option may purchase during each of the
several periods of the Term of the Option (if the Option is subject to
Quotas), as provided in Section 17(a) hereof.
(ee) "Restricted Shares" means Shares granted pursuant to Section
12(a) through 12(f) hereof or purchased under a Non-qualified Stock Option
pursuant to Section 9(d) hereof and subject to such restrictions and other
terms and conditions as the Committee shall determine in accordance with
the Plan.
(ff) "Retirement" means retirement pursuant to the JLG Industries,
Inc. Employees' Retirement Savings Plan, as amended from time to time.
(gg) "Right" means a Stock Appreciation Right or a Limited Stock
Appreciation Right.
(hh) "Shares" means shares of the Company's $.20 par value common
stock, or any security into which such shares may be converted by reason of
any event of the type referred to in Sections 22 or 23 of the Plan.
(ii) "Stock Appreciation Right" or "SAR" means a right that provides
payment in accordance with Section 10.
(jj) "Subsidiary" means a subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code (or a successor provision
of similar import.)
(kk) "Term" means the period during which a particular Option or
Right may be exercised.
3. EFFECTIVE DATE AND DURATION OF THE AMENDED AND RESTATED PLAN
(a) Upon adoption by the Company's Board of Directors and approval
by the Company's shareholders at the Company's annual meeting on November
20, 2003, the Plan shall be effective as of the Effective Date and shall
continue in effect until December 31, 2013; provided, however, that no
Incentive Stock Options shall be granted under the Plan more than 10 years
from the earlier of the date the Plan is adopted or approved by
shareholders. The adoption of the Plan as of the Effective Date shall not
affect the terms of any Option or Award that was outstanding prior to the
Effective Date; all such Options and Awards shall continue to be governed
by the terms of the applicable Prior Plan in effect immediately prior to
the Effective Date.
(b) Awards may be granted at any time prior to the earlier of the
expiration of the term of the Plan, as described in subsection (a) above,
or the termination of the Plan pursuant to Section 24 hereof. For the
purpose of commencing the ten-year period specified in Section 422(b)(2) of
the Code during which Incentive Stock Options may be granted, the adoption
of this Plan as of the Effective Date shall constitute the adoption of a
new plan. An Award outstanding at the time the Plan is terminated (either
by expiration of the term of the Plan or by termination of the Plan
pursuant to Section 24 hereof) shall not cease to be or cease to become
exercisable pursuant to its terms solely because of the termination of the
Plan.
(c) No Awards of Performance-Based Restricted Shares, Performance
Shares, or Performance Units shall be made on any date to a Covered
Executive, unless the material terms of the performance goals have been
approved by shareholders within the preceding five years.
4. NUMBER AND SOURCE OF SHARES SUBJECT TO THE PLAN
(a) The Company may grant Equity Awards under the Plan with respect
to not more than (i) 230,254 Shares with respect to which Awards were
authorized but not granted under the Prior Plans, as of July 31, 2003, plus
(ii) 2,920,000 additional Shares, plus (iii) no more than 5,800,000
additional Shares pursuant to subsection (d), below. The aggregate limit of
3,150,254 Shares available (plus no more than 5,800,000 Shares available
pursuant to subsection (d), below, if any) for Equity Awards shall be
subject to adjustment as provided in Section 22 hereof. Shares available
for Equity Awards shall be provided from Shares in the treasury or by the
issuance of Shares authorized but unissued.
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(b) If an Option granted on or after the Effective Date is
surrendered before exercise, or lapses or is terminated without being
exercised, in whole or in part, for any reason other than the exercise of a
Limited Stock Appreciation Right, the Shares subject to the Option shall be
restored to the aggregate maximum number of Shares (specified in subsection
(a) above) with respect to which Equity Awards may be granted under the
Plan, but only to the extent that the Option or any related Right has not
been exercised. Similarly, if any Restricted Share is forfeited and
returned to the Company, such forfeited Share shall be restored to the
aggregate maximum number of Shares with respect to which Equity Awards may
be granted under the Plan. Shares surrendered in payment of the exercise
price of an Option also shall be restored to the aggregate maximum number
of Shares with respect to which Equity Awards may be granted under the
Plan.
(c) Awards of Restricted Shares, Bonus Shares, and Performance Units
or Performance Shares settled in stock shall not in the aggregate exceed
850,000 Shares, and shall also count against the overall limit on Shares
available for Equity Awards under subsection (a).
(d) If, on or after the Effective Date, any of the Equity Awards
granted under the Prior Plans before the Effective Date which remain
unexercised or unvested on the Effective Date is surrendered before
exercise, lapses or is terminated without being exercised, or is forfeited,
in whole or in part, for any reason, the Company may grant Equity Awards
under this Plan with respect to the Shares subject to such Equity Awards in
addition to the maximum number of Shares specified in clauses (i) and (ii)
of subsection (a), above, provided that no more than 5,800,000 shall be
available for issuance under this Plan pursuant to this subsection (d).
(e) The maximum number of Shares that can be the subject of Equity
Awards to any individual in any fiscal year of the Company is 400,000
Shares. For purposes of this subsection (e), if an Equity Award is
canceled, the Shares covered by the canceled Award shall be counted against
the maximum number of Shares for which Equity Awards may be granted to the
individual.
(f) The Plan replaces the Prior Plans as of the Effective Date. Upon
shareholder approval of the Plan, all remaining Shares with respect to
which additional Awards were authorized but not granted under the Prior
Plans will be cancelled and Shares available for Equity Awards on or after
the Effective Date shall be provided solely in Section 4 hereof. Awards may
be made under the Prior Plans prior to the Effective Date of the Plan;
provided that no Awards may be made under the Prior Plan with respect to
the Shares described in clause (i) of subsection (a). If shareholders do
not approve the Plan, the Prior Plans shall remain in effect in accordance
with their terms.
5. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Committee.
(b) Except as provided in the following sentence, the Committee may
adopt, amend and rescind rules and regulations relating to the Plan as it
may deem proper, shall make all other determinations necessary or advisable
for the administration of the Plan, and may provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company, to the extent not contrary to the express provisions of the Plan;
provided, however, that the Committee may take action only upon the
agreement of a majority of its members then in office. No action or
determination by the Committee may adversely affect any right acquired by
any Grantee or Beneficiary under the terms of any Award granted before the
date such action or determination is taken or made, unless the affected
Grantee or Beneficiary shall expressly consent; but it shall be
conclusively presumed that any adjustment pursuant to Section 22 does not
adversely affect any such right. Any action that the Committee may take
through a written instrument signed by all of its members then in office
shall be as effective as though taken at a meeting duly called and held.
(c) The powers of the Committee shall include plenary authority to
interpret the Plan, and, subject to the provisions hereof, the Committee
may determine (i) the persons to whom Awards shall be granted; (ii) the
number of Shares subject to each Award; (iii) the Term of each Award; (iv)
the frequency of Awards and the date on which each Award shall be granted;
(v) the type of each Award;
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(vi) the Quotas (if any), exercise periods, and other terms and conditions
applicable to each Option and Right, and the provisions of each Option
Agreement; (vii) any performance criteria pursuant to which Awards may be
granted; and (viii) the restrictions and other terms and conditions of each
grant of Restricted Shares and the provisions of any instruments evidencing
such grants. The Committee also may accelerate at any time the
exercisability of outstanding Options, provided that no Option shall be
exercisable prior to the expiration of the mandatory six-month holding
period specified in Section 17(a) hereof.
(d) The determinations, interpretations, and other actions made or
taken by the Committee pursuant to the provisions of the Plan shall be
final, binding, and conclusive for all purposes and upon all persons.
(e) Subject to the limits established by the Committee pursuant to
this Section 5(e), the Company's Chief Executive Officer is authorized to
grant Awards to key Employees (excluding those Employees required to file
ownership reports with the Securities and Exchange Commission under Section
16(a) of the Securities and Exchange Act of 1934) having such terms,
consistent with the terms of the Plan, as the Chief Executive Officer shall
determine. No later than 90 days after the commencement of each fiscal year
of the Company, the Committee may establish (i) a maximum aggregate amount
of Awards which the Chief Executive Officer may grant during such fiscal
year and (ii) the maximum amount of Awards which the Chief Executive
Officer may grant to any one Grantee during such fiscal year. Upon granting
any Awards pursuant to the Plan, the Chief Executive Officer, promptly, but
in any event not later than the next Committee meeting, shall inform the
Committee of the terms and number of Awards granted to any Grantee. The
types of Awards that the Chief Executive Officer may grant shall be limited
to Restricted Shares, Bonus Shares, and Non-qualified Stock Options which,
in each case, are not intended to qualify as performance-based compensation
for purposes of Section 162(m) of the Code. The exercise price of any
Options granted by the Chief Executive Officer pursuant to the Plan shall
not be less than the Fair Market Value of the Shares on the date the Option
is granted.
6. EMPLOYEES AND OUTSIDE DIRECTORS ELIGIBLE TO RECEIVE AWARDS
(a) Awards may be granted under the Plan to key Employees of the
Company or any Subsidiary (including employees who are directors and/or
officers). All determinations by the Committee as to the identity of the
persons to whom Awards shall be granted hereunder shall be conclusive.
(b) Outside Directors may be granted Awards (excluding Incentive
Stock Options), subject to the provisions of Section 16 hereof.
(c) An individual Grantee may receive more than one Award.
7. OPTION AGREEMENT
(a) No Option or Right shall be exercised by a Grantee unless he
shall have executed and delivered an Option Agreement evidencing the grant
of such Option or Right. The Agreement shall set forth the number of Shares
subject to the Option or Right and the terms, conditions, and restrictions
applicable thereto.
(b) Appropriate officers of the Company are hereby authorized to
execute and deliver Option Agreements in the name of the Company as
directed from time to time by the Committee.
8. INCENTIVE STOCK OPTIONS
(a) The Committee may authorize the grant of Incentive Stock Options
to officers and key Employees, subject to the terms and conditions set
forth in the Plan. The Option Agreement relating to an Incentive Stock
Option shall state that the Option evidenced by the Option Agreement is
intended to be an "incentive stock option" within the meaning of Section
422(b) of the Code.
(b) The Term of each Incentive Stock Option shall end (unless the
Option shall have terminated earlier under another provision of the Plan)
on a date fixed by the Committee and set forth in the
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applicable Option Agreement. In no event shall the Term of an Incentive
Stock Option extend beyond ten years from the date of grant. In the case of
any Grantee who, on the date the Option is granted, owns (within the
meaning of Section 424(d) of the Code) more than ten percent of the total
combined voting power of all classes of stock of the Company, a Parent, or
a Subsidiary, the Term of the Option shall not extend beyond five years
from the date of grant.
(c) To the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options (determined without regard to
this paragraph (c)) are exercisable by any Grantee for the first time
during any calendar year (under all stock option plans of the Company, its
Parent and its Subsidiaries) exceeds $100,000 (excluding any Options that
do not qualify as Incentive Stock Options at the time of grant), the
portion of any such Option that exceeds the $100,000 limit shall be a
Non-qualified Stock Option. For the purpose of this subsection (c), the
Fair Market Value of Shares shall be determined as of the time the Option
with respect to such stock is granted.
(d) For purposes of applying the limitation in subsection (c), the
following rules shall apply, except to the extent that final regulations
issued under Code Sections 421, 422, or 424 provide or require otherwise:
(1) The limitation in subsection (c) shall be applied by taking
Options into account in the order in which they were granted.
(2) An Incentive Stock Option shall be considered to be first
exercisable at any time during a calendar year if the Incentive Stock
Option will become exercisable during the year assuming that any
condition on the optionee's ability to exercise the Incentive Stock
Option related to performances of services is satisfied. If the
optionee's ability to exercise the Incentive Stock Option in the year is
subject to an acceleration provision, then the Incentive Stock Option is
considered first exercisable in the calendar year in which the
acceleration provision is triggered.
(3) After an acceleration provision is triggered, the Options
subject to such provision are then taken into account in accordance with
subsection (d)(1) for purposes of applying the limitation in subsection
(c) to all Options first exercisable during a calendar year.
(4) An Option (or portion thereof) is disregarded if, prior to
the calendar year during which it would otherwise have become
exercisable for the first time, the Option (or portion thereof) is
modified and thereafter ceases to be an Incentive Stock Option, is
canceled, or is transferred in violation of the nontransferability
requirements of Code Section 421.
(5) If an Option (or portion thereof) is modified, canceled, or
transferred at any other time, such Option (or portion thereof) is
treated as outstanding according to its original terms until the end of
the calendar year during which it would otherwise have become
exercisable for the first time.
(e) The Option price to be paid by the Grantee to the Company for
each Share purchased upon the exercise of an Incentive Stock Option shall
be equal to the Fair Market Value of a Share on the date the Option is
granted, except that with respect to any Incentive Stock Option granted to
a Grantee who, on the date the Option is granted, owns (within the meaning
of Section 424(d) of the Code) more than ten percent of the total combined
voting power of all classes of stock of the Company, a Parent, or a
Subsidiary, the Option price for each Share purchased shall not be less
than 110 percent of the Fair Market Value of a Share on the date the Option
is granted. In no event may an Incentive Stock Option be granted if the
Option price per Share is less than the par value of a Share.
(f) Any Grantee who disposes of Shares purchased upon the exercise
of an Incentive Stock Option either (i) within two years after the date on
which the Option was granted, or (ii) within one year after the transfer of
such Shares to the Grantee, shall promptly notify the Company of the date
of such disposition and of the amount realized upon such disposition.
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9. NON-QUALIFIED STOCK OPTIONS
(a) The Committee may authorize the grant of Non-qualified Stock
Options subject to the terms and conditions set forth in the Plan. Unless
an Option is designated by the Committee as an Incentive Stock Option, it
is intended that the Option will not be an "incentive stock option" within
the meaning of Section 422(b) of the Code and, instead, will be a
Non-qualified Stock Option. The Option Agreement relating to a
Non-qualified Stock Option shall state that the Option evidenced by the
Option Agreement will not be treated as an Incentive Stock Option.
(b) The Term of each Non-qualified Stock Option shall end (unless
the Option shall have terminated earlier under another provision of the
Plan) on a date fixed by the Committee and set forth in the applicable
Option Agreement. In no event shall the Term of a Non-qualified Stock
Option extend beyond ten years from the date of grant of the Option.
(c) In no event may a Non-qualified Stock Option be granted if the
Option price per Share is less than the Fair Market Value at the time of
grant.
(d) At the time of the grant of a Non-qualified Stock Option, the
Committee shall specify whether the Shares purchased under the Option shall
or shall not be Restricted Shares (or whether they shall be a specified
combination of Shares that are, and Shares that are not, Restricted
Shares). Restricted Shares purchased under an Option shall be subject to
the terms, conditions and restrictions set out in subsections (b) through
(e) of Section 12, and such additional terms, conditions and restrictions
as the Committee may determine. Subject to the provisions of subsections
(b) through (e) of Section 12, the Committee, at the time of grant, shall
determine (and the Option Agreement shall specify) the terms and conditions
of any Restricted Shares that may be purchased under the Non-qualified
Stock Option, including the duration of the restrictions that shall be
imposed on the Restricted Shares, and the dates on which, or circumstances
in which, the restrictions shall expire, lapse or be removed or the
Restricted Shares shall be forfeited. Shares purchased under an Option
after the Company obtains actual knowledge that a Change in Control has
occurred shall not be subject to any restrictions.
10. STOCK APPRECIATION RIGHTS
(a) The Committee may authorize the grant of Stock Appreciation
Rights subject to the terms and conditions set forth in the Plan. SARs are
rights that, on exercise, entitle the Grantee to receive the excess of (i)
the Fair Market Value of a Share on the date of exercise over (ii) the Fair
Market Value of a Share on the date of grant, multiplied by the number of
Shares with respect to which the SAR is exercised.
(b) The amount to be paid to a Grantee upon the exercise of an SAR
shall be paid in cash.
11. LIMITED STOCK APPRECIATION RIGHTS
(a) The Committee may authorize the grant of Limited Stock
Appreciation Rights in connection with all or part of any Option.
(b) A Limited Stock Appreciation Right may be exercised only at such
times, by such persons, and to such extent, as the related Option is
exercisable. Furthermore, a Limited Stock Appreciation Right may be
exercised only within the 60-day period beginning on the date on which the
Company obtains actual knowledge that a Change in Control has occurred. As
soon as the Company obtains actual knowledge that a Change in Control has
occurred, the Company shall promptly notify each Grantee in writing of the
Change in Control, whether or not the Grantee holds a Limited Stock
Appreciation Right.
(c) The Shares that are subject to a Limited Stock Appreciation
Right shall not be used more than once to calculate the amount to be
received pursuant to the exercise of the Limited Stock Appreciation Right.
The right of a Grantee to exercise an Option shall be canceled if and to
the extent that the Shares subject to the Option are used to calculate the
amount to be received upon the exercise of the related Limited Stock
Appreciation Right, and the right of a Grantee to exercise a Limited Stock
Appreciation Right shall be canceled if and to the extent that the Shares
with respect to which the
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Limited Stock Appreciation Right may be exercised are purchased upon the
exercise of the related Option.
(d) A Limited Stock Appreciation Right may be granted coincident
with or after the grant of any related Option, provided that the Committee
shall consult with counsel before granting a Limited Stock Appreciation
Right after the grant of a related Incentive Stock Option.
(e) The amount to be paid to the Grantee upon exercise of a Limited
Stock Appreciation Right that is related to a Non-qualified Stock Option
shall be paid in cash, and shall be equal to the number of Shares with
respect to which the Limited Stock Appreciation Right is exercised
multiplied by the excess of
(1) the higher of (i) the highest Fair Market Value of a Share
during the period commencing on the ninetieth (90th) day preceding the
exercise of the Limited Stock Appreciation Right and ending on the date
of exercise; or (ii) if an event described in paragraph (i) of the
definition of "Change in Control", above, has occurred, the highest
price per Share (A) paid for any Share in any transaction occurring
during the period described in clause (i) by any person or group (as
defined in the definition of "Change in Control", above) whose
acquisition of Shares caused the Change in Control to occur, or (B) paid
for any Share as shown on Schedule 13D (or an amendment thereto) filed
pursuant to Section 13(d) of the Securities Exchange Act of 1934 by any
such person or group, over
(2) the Option price of the related Non-qualified Stock Option.
(f) The amount to be paid to the Grantee upon exercise of a Limited
Stock Appreciation Right that is related to an Incentive Stock Option shall
be paid in cash, and shall be equal to the number of Shares with respect to
which the Limited Stock Appreciation Right is exercised multiplied by the
excess of (i) the Fair Market Value (as of the exercise date of the Limited
Stock Appreciation Right) of a Share over (ii) the Option price of the
related Incentive Stock Option.
12. RESTRICTED SHARES AND BONUS SHARES
(a) The Committee may authorize the grant of Restricted Shares
subject to the terms and conditions set forth in the Plan. The following
terms, conditions and restrictions and such additional terms, conditions
and restrictions as may be determined by the Committee shall apply to
Restricted Shares. Subject to the provisions of this Section 12 (including,
in the case of Performance-Based Restricted Shares, paragraph (f)), the
Committee shall determine at the time of grant the size and the terms and
conditions of each grant of Restricted Shares, including the duration of
the restrictions that shall be imposed on the Restricted Shares, the dates
on which, or circumstances in which, the restrictions shall expire, lapse
or be removed or the Restricted Shares shall be forfeited, and the price to
be paid to the Company by the Grantee (and the terms of payment thereof)
for the Restricted Shares. In no event, however, shall the price of a
Restricted Share be less than the par value of a Share on the date of
grant. The Committee may cause to be issued an instrument evidencing the
grant of the Restricted Shares to the Grantee, which instrument may set
forth the restrictions and other terms and conditions of the grant.
(b) A Grantee who has acquired Restricted Shares (pursuant to either
a grant of Restricted Shares or the exercise of an Option to purchase
Restricted Shares) shall have beneficial ownership of the Restricted
Shares, including the right to receive dividends on (subject, in the case
of Performance-Based Restricted Shares, to the provisions of paragraph (f))
and the right to vote, the Restricted Shares. A certificate or certificates
representing the number of Restricted Shares acquired shall be registered
in the name of the Grantee. The Committee, in its sole discretion, shall
determine when the certificate or certificates shall be delivered to the
Grantee (or, in the event of the Grantee's death, to his Beneficiary), may
provide for the holding of such certificate or certificates in custody by a
bank or other institution or by the Company itself pending their delivery
to the Grantee or Beneficiary, and may provide for any appropriate legend
to be borne by the certificate or certificates referring to the terms,
conditions and restrictions applicable to the Shares. Any attempt to
dispose of the Shares in contravention of such terms, conditions and
restrictions shall be ineffective.
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(c) While subject to the restrictions imposed by the Committee in
accordance with this Section 12, Restricted Shares
(1) shall not be sold, assigned, conveyed, transferred, pledged,
hypothecated, or otherwise disposed of, and
(2) shall be returned to the Company forthwith, and all the
rights of the Grantee to such Shares shall immediately terminate, if the
Grantee's continuous employment with the Company or any Subsidiary shall
terminate for any reason, except as provided in Section 12(d). The
return of the Shares shall be accomplished, if necessary, by the
Grantee's delivering or causing to be delivered to the Company the
certificate(s) for the Shares, accompanied by such endorsement(s) and/or
instrument(s) of transfer as may be required by the Company. Upon the
return of Shares in accordance with this paragraph (2), the Company
shall pay to the Grantee an amount in cash equal to the lesser of the
aggregate price paid for the Shares returned or the current fair market
value of the Shares returned.
(d) Subject to the following provisions of this Section 12(d), the
restrictions imposed on Restricted Shares shall lapse on such date or dates
as the Committee shall determine when the Restricted Shares (or any Option
to purchase them) are granted. In addition, if a Grantee who has been in
the continuous employment of the Company or a Subsidiary since the date on
which he acquired the Restricted Shares becomes Disabled or dies while in
such employment, then the restrictions imposed on the Restricted Shares
shall lapse; provided that, if such Restricted Shares are intended to
qualify as Performance-Based Restricted Shares, they shall cease to qualify
as performance-based compensation for purposes of Section 162(m) of the
Code if the restrictions lapse on the account of the Disability or death of
the Grantee. All restrictions imposed on Restricted Shares shall lapse
immediately following the date on which the Company obtains actual
knowledge that a Change in Control has occurred.
(e) If, after Restricted Shares are transferred to a Grantee
(pursuant to either a grant of Restricted Shares or the exercise of an
Option to purchase Restricted Shares), the Grantee properly elects,
pursuant to section 83(b) of the Code, to include in gross income for
Federal income tax purposes the amount determined under section 83(b) of
the Code, the Grantee shall furnish to the Company a copy of his completed
and signed election form, and shall pay (or make arrangements satisfactory
to the Company to pay) to the Company any Federal, state or local taxes
required to be withheld with respect to the Shares. If the Grantee fails to
make such payments, the Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Grantee any Federal, state or local taxes of any kind
required by law to be withheld with respect to the Shares.
(f) The Committee may authorize the grant of Performance-Based
Restricted Shares subject to the following terms and conditions, in
addition to all other applicable terms and conditions set forth in the
Plan:
(1) The restrictions imposed on Performance-Based Restricted
Shares shall expire, lapse or be removed based solely on the account of
the attainment of performance targets established by the Committee using
one or more of the criteria set forth in Section 15 hereof.
(2) Dividends shall be payable on Performance-Based Restricted
Shares only to the extent of the Shares received based upon the
attainment of the pre-established performance target(s).
(3) Prior to the release of restrictions on any Performance-Based
Restricted Shares, the Committee shall certify in writing (which may be
set forth in the minutes of the Committee) that the pre-established
performance target(s) have been satisfied.
(g) The Committee may authorize the grant of Bonus Shares in
consideration for services rendered by a Grantee to the Company or a
Subsidiary subject to the terms and conditions set forth in the Plan. Bonus
Shares may be awarded pursuant to an Award Agreement containing such terms
and conditions as may be established by the Committee. Notwithstanding the
foregoing, Bonus Shares may
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not be awarded to any Grantee required to file ownership reports with the
Securities and Exchange Commission under Section 16(a) of the Securities
and Exchange Act of 1934, and no Grantee may receive more than 5,000 Bonus
Shares during any fiscal year of the Company.
13. PERFORMANCE UNITS
(a) The Committee may authorize the grant of Performance Units
subject to the terms and conditions set forth in the Plan. Performance
Units are rights, denominated in cash or cash units, to receive, at a
specified future date, payment in cash or Shares, as determined by the
Committee of an amount equal to all or a portion of the value of a unit
granted by the Committee.
(b) At the time of the Award of Performance Units, the Committee
shall determine the performance factors applicable to the determination of
the ultimate payment value of the Performance Units, using one or more of
the criteria set forth in Section 15 hereof.
(c) Prior to the payment of any Performance Units, the Committee
shall certify in writing (which may be set forth in the minutes of the
Committee) that the pre-established performance target(s) have been met.
(d) The maximum value of an Award of Performance Units granted to
any one Grantee in any fiscal year shall not exceed $5 million. The
foregoing limitation shall be applied at the time of settlement, regardless
of whether such settlement is made in cash or Shares.
14. PERFORMANCE SHARES
(a) The Committee may authorize the grant of Performance Shares
subject to the terms and conditions set forth in the Plan. Performance
Shares are rights, denominated in Shares or stock units equivalent to
Shares, to receive, at a specified future date, payment in cash or Shares,
as determined by the Committee. Such payment shall be of an amount equal to
all or a portion of the Fair Market Value of Shares of the Company on the
last day of the specified performance period of a specified number of
Shares, based on performance during the period.
(b) At the time of the Award of Performance Shares, the Committee
shall determine the performance factors applicable to the determination of
the ultimate payment value of the Performance Shares, using one or more of
the criteria set forth in Section 15 hereof.
(c) Prior to the payment of any Performance Shares, the Committee
shall certify in writing (which may be set forth in the minutes of the
Committee) that the pre-established performance target(s) have been met.
(d) The maximum number of Shares (or the equivalent value in cash)
of any Award of Performance Shares granted to any one Grantee in a fiscal
year shall not exceed the limit set forth in Section 4(d).
15. PERFORMANCE CRITERIA
(a) The Committee shall provide for the lapse or expiration of
restrictions on Performance-Based Restricted Shares, and shall determine
the extent to which Awards of Performance Units and Performance Shares are
earned, using one or more of the following objectives: (i) increase in net
sales; (ii) pretax income before allocation of corporate overhead and/or
bonus; (iii) budget; (iv) earnings per share; (v) net income; (vi)
attainment of division, group or corporate financial goals; (vii) return on
stockholders' equity; (viii) return on assets; (ix) attainment of strategic
and operational initiatives; (x) appreciation in or maintenance of the
price of the common stock or any other publicly-traded securities of the
Company; (xi) increase in market share; (xii) gross profits; (xiii)
earnings before interest and taxes; (xiv) earnings before interest, taxes,
depreciation and amortization; (xv) economic value-added models; (xvi)
comparisons with various stock market indices; (xvii) comparisons with
performance metrics of peer companies; or (xviii) reductions in costs.
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(b) The performance objective shall be sufficiently specific that a
third party having knowledge of the relevant facts could determine whether
the objective is met. The Committee shall, at the time it establishes the
performance target(s) for an Award, specify the period over which the
performance target(s) relate. The establishment of the actual performance
targets and, if an Award is based on more than one of the foregoing
criteria, the relative weighting of such criteria, shall be at the sole
discretion of the Committee; provided, however, that in all cases the
performance targets must be established by the Committee in writing no
later than 90 days after the commencement of the period to which the
performance target(s) relates (or, if less, no later than after 25 percent
of the period has elapsed) and when achievement of the performance
target(s) is substantially uncertain. Once established by the Committee,
the performance target(s) may not be changed to increase the amount of
compensation that otherwise would be due upon the attainment of the
performance target(s).
(c) If a Grantee who has been in the continuous employment of the
Company or a Subsidiary since the date on which he acquired Performance
Based-Restricted Shares becomes Disabled or dies while in such employment,
then the restrictions imposed on the Restricted Shares shall lapse. All
restrictions imposed on Performance-Based Restricted Shares shall lapse
immediately following the date on which the Company obtains actual
knowledge that a Change in Control has occurred. The Committee may, in its
discretion, provide that the performance target(s) under a Performance Unit
or Performance Share shall be deemed satisfied when (i) the Company obtains
actual knowledge that Change in Control has occurred, (ii) the Grantee
becomes Disabled or (iii) the Grantee dies. Performance-Based Restricted
Shares, Performance Units, and Performance Shares that become fully payable
on account of (i) the Grantee's death, (ii) the Grantee becoming disabled,
or (iii) a Change in Control, shall cease to qualify as performance-based
compensation for purposes of Section 162(m) of the Code.
(d) The performance target(s) with respect to any Performance-Based
Restricted Share, Performance Share or Performance Unit shall be measured
over a period no greater than five consecutive years.
16. GRANTS OF AWARDS TO OUTSIDE DIRECTORS
(a) In the discretion of the Committee, from time to time, Awards
may be granted to Outside Directors, excluding Incentive Stock Options.
Unless otherwise specified by the Committee, any Awards to Outside
Directors for a year shall be made on the date on which the results of the
election of directors held at the Company's annual meeting for that year
are certified by the judge of elections. Notwithstanding the foregoing, no
Awards shall be granted to any Outside Director in a year unless the
Company had a net profit before extraordinary events (as determined by the
Company's independent auditors and reflected in the Company's annual
report) for the immediately preceding fiscal year.
(b) The Committee may, in its discretion, grant Awards, excluding
Incentive Stock Options, to any individual who is appointed to the Board
for the first time by action of the Board and not action of the Company's
shareholders. Unless otherwise specified by the Committee, the date of such
grant shall be the date on which the Outside Director is appointed to the
Board for the first time.
17. TERMS AND QUOTAS OF OPTION
(a) Each Option and Right granted under the Plan shall be
exercisable only during a Term commencing at least six months after the
date on which the Option or Right was granted. The Committee shall have
authority to grant both Options exercisable in full at any time during
their Term and Options exercisable in Quotas. In exercising an Option that
is subject to Quotas, the Grantee may purchase less than the full Quota
available under the Option during any period. Quotas or portions thereof
not purchased in earlier periods shall accumulate and shall be available
for purchase in later periods within the Term of the Option.
(b) Upon the expiration of the mandatory six-month holding period
specified in subsection (a) above, any Option shall be exercisable in full,
notwithstanding the applicability of any Quota or other limitation on the
exercise of such Option, immediately following the date on which the
Company obtains actual knowledge that a Change in Control has occurred.
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(c) Repricing of Options, within the meaning of Section 303A(8) of
the New York Stock Exchange Listed Company Manual, shall not be permitted
under the Plan. For purposes of the preceding sentence, the cancellation of
an Option in exchange for another Option, Restricted Shares, or other
equity shall not be considered a repricing of the original option if the
cancellation and exchange occurs in connection with a merger, acquisition,
spin-off, or other similar corporate transaction.
18. EXERCISE OF OPTION OR RIGHT
(a) Options or Rights shall be exercised by delivering or mailing to
the Committee:
(1) a notice, in the form and in the manner prescribed by the
Committee, specifying the number of Shares to be purchased, or the
number of Shares with respect to which a Limited Stock Appreciation
Right shall be exercised, and
(2) if an Option is exercised, payment in full of the Option
price for the Shares so purchased
(i) by money order, cashier's check, certified check; or other
cash equivalent approved by the Committee
(ii) subject to paragraph (v), below, by the tender of Shares
to the Company, or by the attestation to the ownership of the Shares
that otherwise would be tendered to the Company in exchange for the
Company's reducing the number of Shares that it issues to the Grantee
by the number of Shares necessary for payment in full of the Option
price for the Shares so purchased;
(iii) by money order, cashier's check, or certified check and
the tender of Shares to the Company, or by money order, cashier's
check, or certified check and (subject to paragraph (v), below) the
attestation to the ownership of the Shares that otherwise would be
tendered to the Company in exchange for the Company's reducing the
number of Shares that it issues to the Grantee by the number of
Shares necessary for payment in full of the Option price for the
Shares so purchased; or
(iv) unless the Committee expressly notifies the Grantee
otherwise (at the time of grant in the case of an Incentive Stock
Option or at any time prior to full exercise in the case of a
Non-qualified Stock Option), and except to the extent that the Option
is an Option to purchase Restricted Shares, by the Grantee's (a)
irrevocable instructions to the Company to deliver the Shares
issuable upon exercise of the Option promptly to the broker for the
Grantee's account and (b) irrevocable instruction letter to the
broker to sell Shares sufficient to pay the exercise price and upon
such sale to deliver the exercise price to the Company, provided that
at the time of such exercise, such exercise would not subject the
Grantee to liability under section 16(b) of the Securities Exchange
Act of 1934, or would be exempt pursuant to Rule 16b-3 promulgated
under such Act or any other exemption from such liability. The
Company shall deliver an acknowledgment to the broker upon receipt of
instructions to deliver the Shares. The Company shall deliver the
Shares to the broker upon the settlement date. The broker shall
deliver to the Company cash sale proceeds sufficient to cover the
exercise price upon receipt of the Shares from the Company.
(v) Shares tendered or attested to in exchange for Shares
issued under the Plan must be held by the Grantee for at least six
months prior to their tender or their attestation to the Company, and
may not be Restricted Shares at the time they are tendered or
attested to. The Committee shall determine acceptable methods for
tendering or attesting to Shares to exercise an Option under the
Plan, and may impose such limitations and prohibitions on the use of
Shares to exercise Options as it deems appropriate. For purposes of
determining the amount of the Option price satisfied by tendering or
attesting to Shares, such Shares shall be valued at their Fair Market
Value on the date of tender or attestation, as applicable. Except as
provided in this paragraph, the date of exercise shall be deemed to
be the date that the notice of exercise and payment of the Option
price are received by the Committee. For exercise pursuant to
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Section 18(a)(2)(iv) of the Plan, the date of exercise shall be
deemed to be the date that the notice of exercise is received by the
Committee.
(b) Subject to subsection (c) below, upon receipt of the notice of
exercise and, if an Option is exercised, upon payment of the Option price,
the Company shall promptly deliver to the Grantee (or Beneficiary) a
certificate or certificates for the Shares purchased, without charge to him
for issue or transfer tax, and if a Limited Stock Appreciation Right is
exercised, shall promptly distribute cash to be paid upon the exercise of
the Right.
(c) The exercise of each Option and Right and the grant or
distribution of Restricted Shares under the Plan shall be subject to the
condition that if at any time the Company shall determine (in accordance
with the provisions of the following sentence) that it is necessary as a
condition of, or in connection with, such exercise (or the delivery or
purchase of Shares thereunder), grant or distribution
(i) to satisfy tax withholding or other withholding liabilities,
(ii) to effect the listing, registration, or qualification on any
securities exchange or under any state or Federal law of any Shares
otherwise deliverable in connection with such exercise, grant or
distribution, or
(iii) to obtain the consent or approval of any regulatory body,
then in any such event such exercise, grant or distribution shall not be
effective unless such withholding, listing, registration, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company in its reasonable and good
faith judgment. Any such determination (described in the preceding
sentence) by the Company must be reasonable, must be made in good faith,
and must be made without any intent to postpone or limit such exercise,
grant or distribution beyond the minimum extent necessary and without
any intent otherwise to deny or frustrate any Grantee's rights in
respect of any Award. In seeking to effect or obtain any such
withholding, listing, registration, qualification, consent or approval,
the Company shall act with all reasonable diligence. Any such
postponement or limitation affecting the right to exercise an Option or
Right or the grant or distribution of Restricted Shares shall not extend
the time within which the Option or Right may be exercised or the
Restricted Shares may be granted or distributed, unless the Company and
the Grantee choose to amend the terms of the Award to provide for such
an extension; and neither the Company nor its directors or officers
shall have any obligation or liability to the Grantee or to a
Beneficiary with respect to any Shares with respect to which the Award
shall lapse, or with respect to which the grant or distribution shall
not be effected, because of a postponement or limitation that conforms
to the provisions of this subsection (c).
(d) Except as provided in Section 18(e) below, Options and Rights
granted under the Plan shall be nontransferable other than by will or by
the laws of descent and distribution in accordance with Section 19(a)
hereof, and an Option or Right may be exercised during the lifetime of the
Grantee only by the Grantee.
(e) Subject to the approval of the Committee in its sole discretion,
Non-qualified Stock Options, Limited Stock Appreciation Rights that are
granted in connection with Non-qualified Stock Options, and Restricted
Shares may be transferable to members of the immediate family of the
Grantee and to one or more trusts for the benefit of such family members,
partnerships in which such family members are the only partners, or
corporations in which such family members are the only stockholders.
"Members of the immediate family" means the Grantee's spouse, children,
stepchildren, grandchildren, parents, grandparents, siblings (including
half brothers and sisters), and individuals who are family members by
adoption.
(f) Upon the purchase of Shares under an Option, the stock
certificate or certificates may, at the request of the purchaser, be issued
in his name and the name of another person as joint tenants with right of
survivorship.
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19. EXERCISE OF OPTION OR RIGHT AFTER DEATH, DISABILITY, RETIREMENT, OTHER
TERMINATION OF EMPLOYMENT, OR CHANGE IN CONTROL
(a) Death
If a Grantee's employment with the Company and its Subsidiaries or
status as a member of the Board shall cease due to the Grantee's death,
or if the Grantee shall die within three months after cessation of
employment or Board membership while an Option or Right is exercisable
pursuant to subsection (d) or (e) below, any Option or Right held by the
Grantee on the date of his death may be exercised only within twelve
months after the Grantee's death, and only by the Grantee's Beneficiary,
to the extent that the Option or Right could have been exercised
immediately before the Grantee's death.
(b) Disability
If a Grantee's employment with the Company and its Subsidiaries or
status as a member of the Board shall cease due to his Disability, after
at least six months of continuous employment with the Company and/or a
Subsidiary immediately following the date on which an Option or Right
was granted (with respect to Grantees other than Outside Directors), the
Grantee may exercise the Option or Right, to the extent that the Option
or Right could be exercised at the cessation of employment or
termination of membership on the Board, at any time within two years
after the Grantee shall so cease to be an employee or Outside Director.
(c) Retirement
If a Grantee's employment with the Company and its Subsidiaries or
status as a member of the Board ceases due to his Retirement, after at
least six months of continuous employment with the Company and/or a
Subsidiary immediately following the date on which an Option or Right
was granted (with respect to Grantees other than Outside Directors), the
Grantee may exercise the Option or Right, to the extent the Option or
Right could be exercised at the cessation of employment, at any time
within five years after the Grantee's Retirement.
(d) Termination of Employment for Any Other Reason
The Option Agreement shall specify the period, if any, during which
an Option or Right may be exercised subsequent to the termination of a
Grantee's employment with the Company and its Subsidiaries, or
termination of status as a member of the Board at any time other than
within three months after the date on which the Company obtains actual
knowledge that a Change in Control has occurred and for any reason other
than those specified in subsections (a) through (c) above; provided,
however, that the Option Agreement shall not permit the exercise of any
Option or Right later than three months after such termination; and
provided further that the Option or Right may not be exercised to an
extent greater than the extent to which it could be exercised at the
cessation of employment or termination of membership on the Board.
(e) Termination of Employment After a Change in Control
If, within three months after the Company obtains actual knowledge
that a Change in Control has occurred, a Grantee's employment with the
Company and its Subsidiaries or status as a member of the Board ceases
for any reason other than those specified in subsections (a) through (c)
above, the Grantee may exercise the Option at any time within three
months after such cessation of employment or termination of membership
on the Board.
(f) Notwithstanding any other provision of this Section 19, in no
event shall an Option be exercisable after the expiration date specified in
the Option Agreement.
20. TAX WITHHOLDING
(a) The Company shall have the right to collect an amount sufficient
to satisfy any Federal, State and/or local tax withholding requirements
that might apply with respect to any Award to a Grantee
B-15
(including, without limitation, the exercise of an Option or Right, the
disposition of Shares, or the grant or distribution of Restricted Shares or
Bonus Shares) in the manner specified in subsection (b) or (c) below.
Alternatively, a Grantee may elect to satisfy any such tax withholding
requirements in the manner specified in subsection (d) or (e) below to the
extent permitted therein.
(b) The Company shall have the right to require Grantees to remit to
the Company an amount sufficient to satisfy any such tax withholding
requirements. For purposes of determining the amount withheld, the value of
the Shares subject to an Award generally shall be the Fair Market Value on
the date the tax becomes due. If Shares are sold in a broker-assisted
cashless exercise, however, the Company shall use the sale price as the
value of the Shares on the sale date.
(c) The Company and its Subsidiaries also shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
(whether or not related to the Plan) otherwise due to a Grantee any such
taxes required to be withheld.
(d) If the Committee in its sole discretion approves, a Grantee may
irrevocably elect to have any tax withholding obligation satisfied by (i)
having the Company withhold Shares otherwise deliverable to the Grantee, or
(ii) delivering Shares (other than Restricted Shares) to the Company,
provided that the Shares withheld or delivered have a Fair Market Value (on
the date that the amount of tax to be withheld is determined) equal to the
amount required to be withheld.
(e) A Grantee may elect to have any tax withholding obligation
satisfied in the manner described in Section 18(a)(2)(iv) hereof, to the
extent permitted therein.
(f) A Grantee who is eligible to participate in the JLG Industries,
Inc. Executive Deferred Compensation Plan or the JLG Industries, Inc.
Directors' Deferred Compensation Plan (each a "Deferred Compensation Plan")
may elect to surrender Equity Awards prior to vesting and/or to forgo
receipt of Shares upon exercise of Options and to receive in lieu thereof
an equivalent number of Company Stock Units under the applicable Deferred
Compensation Plan, subject to the terms and conditions prescribed from time
to time in such Deferred Compensation Plan.
21. SHAREHOLDER RIGHTS
No person shall have any rights of a shareholder by virtue of an Option or
Right except with respect to Shares actually issued to him, and the issuance of
Shares shall confer no retroactive right to dividends.
22. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
(a) Subject to the provisions of Section 23 hereof, in the event
that there is any change in the Shares through merger, consolidation,
reorganization, recapitalization or otherwise; or if there shall be any
dividend on the Shares, payable in Shares; or if there shall be a stock
split or a combination of Shares, the aggregate number of shares available
for Awards, the number of Shares subject to outstanding Awards, and the
Option price per Share of each out standing Option may be proportionately
adjusted by the Board of Directors as it deems equitable in its absolute
discretion to prevent dilution or enlargement of the rights of the
Grantees; provided that any fractional Shares resulting from such
adjustments shall be eliminated.
(b) Subject to the provisions of Section 23 hereof, any Shares to
which a Grantee shall become entitled as a result of a stock dividend on
Restricted Shares, or as a result of a stock split, combination of Shares,
merger, consolidation, reorganization, recapitalization or other event
affecting Restricted Shares, shall have the same status, be subject to the
same restrictions, and bear the same legend (if any) as the Shares with
respect to which they were issued, except as may be otherwise provided by
the Board of Directors.
(c) The Board's determination with respect to any such adjustments
shall be conclusive.
B-16
23. EFFECTS OF MERGER OR OTHER REORGANIZATION
If the Company shall be the surviving corporation in a merger or other
reorganization, Awards shall extend to stock and securities of the Company after
the merger or other reorganization to the same extent that a person who held,
immediately before the merger or reorganization, the number of Shares
corresponding to the number of Shares covered by the Award would be entitled to
have or obtain stock and securities of the Company under the terms of the merger
or reorganization.
24. TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN
The Board of Directors may at any time terminate, suspend, or modify the
Plan, except that the Board shall not, without approval by the affirmative votes
of the holders of a majority of the securities of the Company present, or
represented, and entitled to vote, at a meeting duly held in accordance with
applicable law, change (other than through adjustment for changes in
capitalization as provided in Section 22 hereof) (a) the aggregate number of
Shares for which Awards may be granted; (b) the class of persons eligible for
Awards; (c) the minimum Option price, applicable to Options or Rights, that is
provided for under the terms of the Plan; (d) the maximum duration of the Plan;
(e) the Shares with respect to which Awards are granted; or (f) the granting
corporation for purposes of Awards under the Plan. In addition, the Board shall
seek shareholder approval for any "material revision" of the Plan as defined in
Section 303A(8) of the New York Stock Exchange Listed Company Manual, or any
successor provision. No termination, suspension or modification of the Plan
shall adversely affect any right acquired by any Grantee, or by any Beneficiary,
under the terms of any Award granted before the date of such termination,
suspension or modification, unless such Grantee or Beneficiary shall expressly
consent; but it shall be conclusively presumed that any adjustment pursuant to
Section 22 hereof does not adversely affect any such right.
25. APPLICATION OF PROCEEDS
The proceeds received by the Company from the sale of Shares (including
Restricted Shares) under the Plan shall be used for general corporate purposes.
26. GENERAL PROVISIONS
The grant of an Award in any year shall not give the Grantee any right to
similar grants in future years or any right to be retained in the employ or on
the Board of the Company or its Subsidiaries.
27. GOVERNING LAW
The Plan shall be construed and its provisions enforced and administered in
accordance with the laws of the Commonwealth of Pennsylvania except to the
extent that such laws may be superseded by any Federal law.
B-17
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 20, 2003 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.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF
JLG INDUSTRIES, INC.
November 20, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
- -------------------------------------------------------------------------------
The Board of Directors unanimously recommends a vote FOR
its nominees and Proposals 2 and 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x]
Proposal 1. Election of Directors.
NOMINEES:
[ ] FOR ALL NOMINEES O R.V. Armes
O G.R. Kempton
[ ] WITHHOLD AUTHORITY O W.M. Lasky
FOR ALL NOMINEES O J.A. Mezera
O S. Rabinowitz
[ ] FOR ALL EXCEPT O R.C. Stark
(See instructions below) O T.C. Wajnert
O C.O. Wood, III
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: O
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted
via this method. [ ]
FOR AGAINST ABSTAIN
Proposal 2. Approve the JLG Industries, Inc. 2003
Long Term Incentive Plan. [ ] [ ] [ ]
Proposal 3. Ratify the appointment of Ernst &
Young LLP as independent auditors for
the ensuing year. [ ] [ ] [ ]
Proposal 4. In their discretion, upon any other business that may properly come
before the meeting or any adjournment thereof.
Signature of Shareholder Date:
-------------------------------------- ----------
Signature of Shareholder Date:
-------------------------------------- ----------
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.