1
Exhibit 10.2
November 1, 1999
PERSONAL & CONFIDENTIAL
William M. Lasky
8721 Ponte Vedra
Holland, Ohio 43528
Dear Bill:
We are pleased to confirm to you our offer of employment with JLG
Industries, Inc. (the "Company") according to the terms set forth in this
letter:
Title: President and Chief Operating Officer.
Commencement Date: December 1, 1999 (the "Commencement Date").
Board Seat: You will be appointed to serve as a member of the
Company's Board of Directors and will continue to
hold such position during your tenure as Chief
Operating Officer, subject to annual election by
shareholders.
Base Salary: $375,000 per annum, payable semi-monthly.
Signing Bonus: $165,000 payable on the Commencement Date, plus an
amount equal to 50% of the amount, if any, by which
the gross cash bonuses (exclusive of any withholding)
paid to you by your current employer for 1999
performance under your current employer's Additional
Compensation Plan and any other individual or group
incentive plans in which you participate is less than
$250,000. Such additional amount shall be payable by
the Company within ten (10) days following your
providing the Company on or before June 30, 1999 with
satisfactory evidence of payment by your current
employer of your 1999 performance bonuses.
Incentive Plan: You will participate in the Company's Annual
Management Incentive Plan (the "MIP"). The MIP is
designed to offer "performance based compensation" in
compliance with Internal Revenue Code Section 162(m).
Accordingly, your participation will be evidenced by
a separate award letter pursuant to the terms of the
MIP.
The final amount awarded each year will determined by
the Company's Compensation Committee typically based
upon a percentage of your base salary, multiplied by
factors
2
determined by reference to the level of achievement
of your personal performance objective(s), and the
applicable Company performance modifier for the year,
with the resulting amount subject to reduction based
on other subjective criteria at the discretion of the
Committee.
For fiscal 2000, your award, before exercise of the
Committee's discretion, will range from $0 to
$480,000 based upon 97.5% (65% times 150%) of your
prorated base salary for the year, multiplied by a
percentage of up to 100% based upon achievement of
your personal performance objective(s) and by a
percentage ranging up to 175% for "distinguished"
Company performance based on a matrix of fully
diluted earnings per share outcomes for fiscal 2000.
Stock Options: On the Commencement Date, you will receive two sets
of options - Regular Options and Special Options - to
purchase shares of Common Stock of the Company. The
options will be granted pursuant to the Company's
Stock Incentive Plan (the "Stock Plan") and will be
evidenced by two separate stock option agreements
entered into pursuant to the Stock Plan. The exercise
price of all options will be the mean average of the
high and low prices at which the Company's shares are
traded on the New York Stock Exchange ("NYSE") on the
trading day immediately preceding the Commencement
Date. Unexercised options, including any unvested
options, will cease to be exercisable on the tenth
anniversary of the Commencement Date. The number of
options and principal vesting terms will be as
follows:
Regular Options: 60,300 options that, subject to your
continued employment with the Company, will vest in
three equal installments on the third, fourth and
fifth anniversaries of the Commencement Date.
Special Options: 123,500 options 50% of which will
vest upon your promotion to Chief Executive Officer,
with the remaining 50% vesting in three equal
installment on the first, second and third
anniversaries of your promotion to Chief Executive
Officer; provided, that, any options that remain
unvested as of the fifth anniversary of the
Commencement Date shall vest on that date if you are
then an employee of the Company.
Restricted Shares: On the Commencement Date you will receive 46,000
Restricted Shares granted pursuant to the Stock Plan
and evidenced by a separate Restricted Share
Agreement. The
3
Restricted Shares will vest ratably and
simultaneously with vesting of the Special Options.
Change in Control: All options and Restricted Shares will vest and
become fully exercisable immediately upon a "Change
in Control" as defined in the Stock Plan.
Other Benefit Plans: You will be eligible for the standard retirement and
other benefit programs provided for executive
officers of the Company. Without limiting the
generality of the foregoing, these benefits include:
(i) participation in the Company's 401(k) plan which
currently provides for Company matching of 50% of the
first 5% of Eligible Compensation contributed to the
plan (eligible compensation for 1999 is limited to
$160,000) and a discretionary profit sharing
contribution by the Company which typically has been
approximately 5% of Eligible Compensation not in
excess of the Social Security wage base plus 10% of
Eligible Compensation in excess of the Social
Security wage base, (ii) participation in the
Company's Supplemental Executive Retirement Plan
("SERP") which, for Executive Vice Presidents at full
vesting after five years of service currently
provides a retirement benefit of 60% of average
highest two-year salary plus MIP award reduced
principally by (a) all defined benefit or cash
balance plan amounts received from JLG contributions
or from other employers, (b) all other defined
contribution balances received from JLG contributions
or other employers, and (c) 50% of social security
benefits (SERP benefits vest 25% per year commencing
with the second anniversary of the Commencement Date
until fully vested), (iii) participation in the
Company's Executive Deferred Compensation Plan which
permits participants to elect to defer receipt of a
portion of salary and MIP award and to direct the
investment of deferred amounts among the investment
options available under the Company's 401(k) plan,
(iv) participation in the Company's medical insurance
plan and supplemental executive medical benefit
program, (v) term life insurance which currently
provides a death benefit equal to two times annual
base salary, and (vi) four weeks of paid vacation per
year (not including public or Company holidays). In
addition, the Company will reimburse you for
financial planning services on the same basis as this
benefit is provided to the Company's current Chief
Executive Officer and, to facilitate appropriate
business entertainment, during the term of your
employment the Company will pay reasonable membership
initiation fees and annual dues for your
4
admission as a member of a country club located
within a 50 mile radius of the Company's
headquarters.
Transition Benefits: In accordance with the Company's relocation policy,
the Company will reimburse you for all reasonable and
necessary expenses that you incur in connection with
your relocation within 12 months following the
Commencement Date from your current principal
residence to a new principal residence within a 50
mile radius of the Company's headquarters, including
associated commuting expense and temporary living
arrangements prior to relocation of your principal
residence. In addition, to the extent available from
the Company's medical insurance carrier, the Company
will provide medical insurance benefits for your
daughter; provided that the Company's annual
financial obligation for this benefit shall not
exceed $25,000 and; provided, further, that such
benefit will cease at such time as your daughter
receives any other comprehensive medical insurance
coverage.
Separation: Your employment will be "at will". Either you or the
Company may terminate your employment at any time for
any reason. Promptly upon termination of your
employment, you will return to the Company all
documents, papers, materials and other property of
the Company relating to its affairs or containing
proprietary information of the Company that are then
in your possession or under your control and resign
as a member of the Company's Board of Directors.
Pursuant to a separate agreement, you shall be
entitled to severance benefits on the same basis as
other participants in the Company's Executive
Severance Plan, which currently provides for any
"Dismissed" participant a "Severance Benefit" equal
to an "Applicable Percentage" of then current base
salary plus MIP awards for the 12 months preceding
the termination date. Your "Applicable Percentage"
will be 200%. In addition, if you become eligible to
receive a Severance Benefit prior to your promotion
to Chief Executive Officer, you also shall be
entitled to Company-provided outplacement counseling
services.
Confidentiality: You agree not to disclose to anyone (except to the
extent reasonably necessary for you to perform your
duties) any confidential or proprietary materials,
documents, records or other confidential or
proprietary information concerning the business or
affairs of the Company or any affiliates thereof
which you may have acquired in the course of or as an
incident to your employment with the Company or any
affiliates thereof.
5
You represent and warrant that there are no
contractual impediments which restrict your
acceptance of this employment and that you will not
bring to your employment or use in connection with
such employment any confidential or proprietary
information that you used or had access to by reason
of any previous employment that is the property of
any previous employer.
Non-Compete: During the term of your employment with the Company
and for a period of two years thereafter, you will
not, without the prior written consent of the Board
of Directors of the Company, directly or indirectly
engage in or assist any activity which is competitive
with the business of the Company (other than on
behalf of the Company) including, without limitation,
whether such engagement or assistance is an officer,
director, employee, partner or investor (other than
as a holder of less than 5% of the outstanding
capital stock of a publicly traded corporation),
anywhere in the world that the Company has been
engaged. For a period of two years after the
termination of your employment, you will not solicit
for employment any employees of the Company. You
agree that if the scope of these obligations are
determined to exceed that which may be enforceable
under applicable law, the scope of these obligations
shall be reformed to provide for enforcement to the
maximum extent permitted under applicable law.
Intellectual Property
Rights: You agree that any developments by way of invention,
design, copyright, trademark or other matters which
may be developed or perfected by you during the term
of your employment, and which relate to the business
of the Company, shall be the property of the Company
without any interest therein by you, and you will, at
the request and expense of the Company, apply for and
prosecute letters patent thereon in the United States
or in foreign countries if the Company so requests,
and will assign and transfer the same to the Company
together with any letters patent, copyrights,
trademarks and applications therefor; provided,
however, that that foregoing shall not apply to an
invention that you develop entirely on your own time
without using the Company's equipment, supplies,
facilities or trade secret information.
Assignment; Successors: This letter agreement is personal in its nature and
none of the parties hereto shall, without the consent
of others, assign or transfer this letter agreement
or any rights or obligations hereunder, provided
that, in the event of the merger, consolidation,
transfer, or sale of
6
all or substantially all of the assets of the Company
with or to any other individual or entity, this
letter agreement shall, subject to the provisions
hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and
perform all the promises, covenants, duties, and
obligations of the Company hereunder, and all
references herein to the "Company" shall refer to
such successor. The Company will require that any
successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or
substantially all of the business or assets of the
Company to assume expressly and agree to perform this
letter agreement in the same manner and to the same
extent that the Company would be required to perform
it if no such succession had taken place.
This letter agreement is governed by and is to be construed
and enforced in connection with the laws of the Commonwealth of Pennsylvania and
any action commenced hereunder must be brought in a court located in the such
Commonwealth. The obligations of the Company set forth in this letter agreement
are subject to approval of this letter agreement by the Company's Board of
Directors. This letter agreement, including the various separate agreements
referred to herein, embodies our entire understanding and supersedes all prior
understandings, whether oral or written, relating to this offer. This letter
agreement cannot be amended or otherwise modified except by a writing signed by
you and the Company.
We look forward to welcoming you to the Company.
Sincerely yours,
/s/ L. David Black
------------------------------------------
Chairman of the Board, President and Chief
Executive Officer
JLG Industries, Inc.
Employment Offer Accepted: /s/ William M. Lasky
Employment Date: