October 11, 1994
Dear Fellow Shareholder:
The Annual Meeting of Shareholders of JLG Industries, Inc. will be held on
Monday, November 21, 1994, at 4:30 p.m. at the Company's headquarters in
McConnellsburg, Pennsylvania. The Board of Directors and management urge you
to attend this Meeting to give us the opportunity to meet you personally, to
allow us to introduce you to the key personnel responsible for the management
of your Company, and to answer your questions.
At the Meeting you will be asked to elect nine directors, to approve amendments
to the Company's Stock Incentive Plan and Directors Stock Option Plan, and to
ratify the selection of independent auditors for the ensuing year.
An update on recent developments and a review of the Company's operations and
financial performance for the 1994 fiscal year will be presented at the
Meeting. In addition, we will inform you of our business plans and
expectations for the future. We will also salute four retiring directors who
have faithfully served the Company for many years and who made valuable
contributions to JLG's growth and success.
We hope that you will be able to attend the Meeting in person. Whether or not
you plan to attend, please promptly sign, date and mail the enclosed proxy
card in the postage-paid return envelope provided. It is important that your
shares are represented and voted at the Meeting.
On behalf of the Board of Directors, I wish to thank you for your cooperation
and continued support.
Sincerely,
JLG INDUSTRIES, INC.
L. David Black
Chairman of the Board,
President and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Monday, November 21, 1994
The Annual Meeting of Shareholders of JLG Industries, Inc. will be held at the
Company's headquarters in McConnellsburg, Pennsylvania, on Monday, November 21,
1994, at 4:30 p.m. EST for the following purposes:
1. To elect a board of nine directors of the Company to hold office until
the next Annual Meeting of shareholders and until their successors
shall be elected and qualified.
2. To approve amendments to the JLG Industries, Inc. Stock Incentive
Plan.
3. To approve an amendment to the JLG Industries, Inc. Directors Stock
Option Plan.
4. To ratify the selection of independent auditors for the 1995 fiscal
year.
5. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors has designated the close of business on October 10,
1994, as the record date for the determination of shareholders entitled to vote
at the Annual Meeting and any adjournments thereof.
It is important that your shares are voted at the Annual Meeting. Whether or
not you plan to attend in person, we urge you to take a moment now to exercise
your right to vote 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 assure that all of your shares will be represented
and voted at the Annual Meeting. Your proxy is revocable up to the time it is
voted, and you may vote in person at the Annual Meeting even though you have
previously submitted your proxy.
A copy of the Company's 1994 Annual Report to Shareholders is enclosed for your
review.
Paul K. Shockey
Secretary
JLG INDUSTRIES, INC.
JLG Drive
McConnellsburg, PA 17233
PROXY STATEMENT
FOR THE 1994 ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 21, 1994
GENERAL
This Proxy Statement is furnished in connection with the solicitation by and on
behalf of the Board of Directors of JLG Industries, Inc. (the "Company") of
proxies to be voted at the 1994 Annual Meeting of Shareholders of the Company
to be held at the Company's headquarters in McConnellsburg, Pennsylvania
on November 21, 1994.
A proxy may be revoked by the person giving the proxy at any time prior to the
close of voting. Prior to the Annual Meeting, a proxy may be revoked by filing
with the Secretary of the Company a written revocation or a duly exercised
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 with the Secretary of the Annual Meeting prior to the close of voting.
All expenses in connection with the solicitation of proxies will be borne by
the Company. In addition tosoliciting 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.
As of October 10, 1994, the record date for the Annual Meeting as set by the
Board of Directors, there were 3,522,656 shares of Common Stock issued and
outstanding. Each share of Common Stock entitles the holder to one vote at the
Annual Meeting. There are no other voting securities of the Company.
This Proxy Statement is dated October 11, 1994.
ELECTION OF DIRECTORS
The persons named in the following table have been nominated by the Board of
Directors for election asdirectors at the Annual Meeting to hold office until
the next Annual Meeting of Shareholders and until their successors shall be
elected and qualified. Directors are elected by a plurality of the votes cast.
<TABLE>
Nominees for Directors
<CAPTION>
Director Background
Name Age Since Information
<S> <C> <C> <S>
L. David Black 57 1990 Chairman of the Board, President and Chief
Executive Officer; prior to 1993, President
and Chief Executive Officer; prior to 1991,
President and Chief Operating Officer; prior
to 1990, President and Chief Executive
Officer, ARO Corporation.
Charles H. Diller, Jr. 49 1984 Executive Vice President and Chief Financial
Officer; prior to 1990, Senior Vice President and
Chief Financial Officer.
George R. Kempton 60 1993 Chairman of the Board and Chief Executive Officer,
Kysor Industrial Corporation. Director, Simpson
Industries Inc. and Guardsman Products Inc.
James A. Mezera 64 1984 Vice President, Komatsu Dresser Company.
Gerald Palmer 49 1994 Vice President, Technical Services Division,
Caterpillar, Inc.; prior to 1992, Director of Technical
Services, Technical Services Division, Caterpillar,
Inc.; prior to 1991, President, Conek S.A. de C.V.
(Caterpillar, Mexico).
Stephen Rabinowitz 51 1994 President and Chief Executive Officer, General
Cable Corporation; prior to 1994, President,
AlliedSignal Braking Systems, AlliedSignal, Inc.;
prior to 1993, Vice President and Group Executive,
GE Electrical Distribution and Control, General
Electric Company.
Paul K. Shockey 71 1969 Secretary.
Thomas C. Wajnert 50 Chairman of the Board and Chief Executive Officer,
AT&T Capital Corporation; prior to 1990, President
and Chief Executive Officer, AT&T Credit
Corporation.
Charles O. Wood, III 56 1988 President, Wood Holdings, Inc., a private
investment firm.
</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 directors.
BOARD OF DIRECTORS
The Company's Board of Directors held twelve meetings (including regularly
scheduled and special meetings) during the 1994 fiscal year. During that time,
each director attended at least seventy-five percent of the aggregate of
(i) the number of meetings of the Board and (ii) the number of meetings held by
all committees of the Board on which he served.
The Board of Directors has established Audit, Compensation and Nominating
Committees to devote attention to specific subjects and to assist the Board in
the discharge of its responsibilities. The functions of those committees,
their current members and the number of meetings held during the 1994 fiscal
year are described below.
The Audit Committee, currently consisting of Messrs. Duffey (Chairman), Fries,
Hendrickson and Kempton, who are all outside directors, met two times during
the 1994 fiscal year. Its functions include recommending the selection of the
independent auditors; conferring with the independent auditors and reviewing
the scope and fees of the prospective annual audit and the results thereof;
reviewing the adequacy of the Company's internal audit function, and its
accounting and financial controls and procedures; and approving the nature and
scope of any nonaudit services performed by the independent auditors.
The Compensation Committee, currently consisting of Messrs. Duffey, Hendrickson
(Chairman), Mezera, Wigbels and Wood, who are all outside directors, evaluates
the performance of the Chief Executive Officer; reviews his evaluation of the
other officers' performance; approves compensation arrangements for all
officers of the Company, including salaries, bonuses and other supplemental
compensation programs; administers the Company's stock option plan; and reviews
all other officer-related benefit plans. The Compensation Committee held two
meetings during the 1994 fiscal year.
The Nominating Committee, currently consisting of Messrs. Kempton, Mezera
(Chairman) and Wood, who are all outside directors, held nine meetings during
fiscal 1994. The Nominating Committee is responsible for (1) identifying and
recommending to the Board appropriate areas of expertise to be represented on
the Board; (2) seeking out qualified candidates to fill Board positions;
(3) reviewing and recommending the slate of directors to be submitted for
election by the shareholders at each annual meeting; (4) recommending
to the Board appropriate deadlines for receiving shareholder nominations of
directors and reviewing any such shareholder nominations to determine whether
they comply with substantive and procedural requirements; and (5) evaluating
the performance of current directors. Nominations, other than those by
or at the direction of the Board, may be made pursuant to written notice
received by the Secretary of the Company at the principal executive offices of
the Company no later than ninety days prior to the date of the 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 required by
Items 401, 403 and 404 of Regulation S-K promulgated by the Securities and
Exchange Commission and stating that such person consents to such nomination
and consents to serve as director of the Company if elected.
The Board of Directors has also established a standing Executive Committee and
Operations Review Committee.
Directors who are not employees of the Company receive compensation for their
services as directors. Each such director currently receives a $10,000 annual
retainer and each committee chairman a $1,000 annual retainer for service
as a committee chairman. In addition, each such director receives $800 for
each Board meeting or committee meeting attended. 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. During fiscal 1994, Mr. Fries received $7,200 in fees for
consulting services performed for the Company.
The JLG Industries, Inc. Directors Stock Option Plan provides for annual grants
to each non-employee director of a single option to purchase 2,000 shares of
the Company's Common Stock provided the Company earned a net profit, before
extraordinary items, for the prior year. In fiscal 1994, single options for
2,000 shares of the Company's Common Stock were received by each non-employee
director in office as of November 22, 1993.
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. Messrs. Mezera and Wigbels elected to participate
in the plan during fiscal 1994. Payments deferred under the plan accrue
interest at the prime rate in effect from time to time.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth, as of October 3, 1994, the beneficial ownership
of the Company's Common Stock by (i) each director or nominee for director of
the Company, (ii) each executive officer of the Company named in the Summary
Compensation Table set forth under the caption "Executive Compensation", and
(iii) all directors and executive officers of the Company 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.
Amount and
Nature of
Name of Person Beneficial Percent of
or Group (1) Ownership(2) Class (8)
Paul K. Shockey 129,875 3.7%
Charles O. Wood, III 41,635(3) 1.2%
Charles H. Diller, Jr. 13,168
L. David Black 8,502(4)
J. Robert Fries 5,000
James A. Mezera 3,000
H. Lyle Duffey 1,800(5)
Lawrence G. Wigbels 1,300(6)
E. Mason Hendrickson 1,000
George R. Kempton 500
Stephen Rabinowitz
Gerald Palmer
Thomas C. Wajnert
All directors and executive
officers as a
group (16 persons) 230,979(7) 6.5%
(1) The address of each of the named persons is c/o JLG Industries, Inc.,
JLG Drive, McConnellsburg, PA 17233.
(2) Each person listed has advised the Company that, except as otherwise
indicated, such person has, or upon exercise of the stock options
indicated will have, sole voting and sole investment with respect to the
shares indicated.
(3) Includes 2,280 shares owned by a family trust.
(4) Includes 300 shares owned by spouse.
(5) Includes 900 shares held jointly with children.
(6) Includes 300 shares owned by spouse.
(7) Includes the 8800 shares issuable upon exercise of outstanding stock
options which are immediately exercisable or will become exercisable
within sixty days after October 3, 1994.
(8) Percentages are not shown where less than 1.0%.
The following table sets forth the only stockholders known to the Company, as
of October 3, 1994, to be the beneficial owners of more than five percent of
the outstanding shares of the Company's Common Stock, based solely upon
information supplied by such stockholders in filings with the Commission on a
Schedule 13D or a Schedule 13G.
Amount and
Nature of Percent of
Name and Address Beneficial Ownership Class
The Equitable Companies Incorporated 381,200 (1) 10.8%
787 Seventh Avenue
New York, New York 10019
Dimensional Fund Advisors 245,000 (2) 6.9%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(1) This amount, as reflected in a report on Schedule 13G dated February 9,
1994 filed on behalf of five French mutual insurance companies, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Alpha
Assurances I.A.R.D., Alpha Assurances Vie Mutuelle and Uni Europe
Assurance Mutuelle, as a group, AXA and The Equitable Companies,
Incorporated and their subsidiaries.
(2) This amount, as reflected in a report on Schedule 13G dated February 9,
1994 filed by Dimension Fund Advisors Inc., a registered investment
advisor, which shares are held in portfolios of DFA Investment
Dimensions Group Inc. and the DFA Investment Trust Company, registered
open-end investment companies, or the DFA Group Trust and the DFA
Participating Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimension Fund Advisors Inc. serves as
investment manager.
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
Executive Compensation Policies
During fiscal 1994, the Company implemented a new incentive bonus plan that is
designed to enhance the effectiveness of executive compensation by more closely
linking bonus compensation with performance of specific business plan
objectives. The new pay-for-performance plan supplements the Company's
existing Stock Incentive Plan, which provides long-term incentives through
stock options or other stock-based awards. Together, these plans create an
integrated compensation program designed to motivate executives to improve the
performance of the Company's stock and to thereby better align management's and
shareholders' interests.
The Compensation Committee, which is composed entirely of non-employee
directors, continues to review executive compensation levels annually and
recommend for Board consideration an annual compensation package for each
executive officer comprised of base salary, target bonus award and stock
options. Total compensation available in the package for each officer will
generally be set based on the Company's financial condition and performance
objectives and comparisons to the preceding year's package and median
compensation levels for comparable positions reflected in broad-based
industry surveys provided to the Committee by independent compensation
consultants. The total compensation packages are designed to retain or attract
qualified executives to manage the implementation of the Company's business
plans. 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 establishing annual compensation packages
than comparison to executive compensation paid by firms included in the Peer
Industry Group identified in the Performance Graph included in this Proxy
Statement.
Compensation for Fiscal Year 1994
Compensation paid to the Company's executive officers in fiscal year 1994
consisted of a base salary and a year-end cash bonus. In addition, in fiscal
1994 the Committee awarded stock options under the Company's Stock Incentive
Plan. The Company also maintains an Employee Stock Ownership Plan in which
executive officers participate on the same basis as all other eligible
employees.
As the fiscal year drew to a close and the Company's record financial
performance became clear, the Committee recommended and the Board approved
salary level increases for executive officers as well as cash bonuses under
the Company's incentive bonus plan. For all executive officers except Mr.
Black, the Committee considered and approved salary increases recommended by
Mr. Black based on his assessment of those officers' relative contributions
to the Company's accomplishments. With respect to the cash bonuses, the
Committee considered and approved bonuses determined pursuant to the incentive
bonus plan with certain adjustments recommended by Mr. Black to take into
consideration exceptional performance by certain officers. With the bonuses,
total cash compensation for executive officers as a group was slightly below
the median reflected in the survey data provided to the Committee by the
consulting firm of Alexander and Alexander Consulting Group, Inc. Without the
bonuses, cash compensation for executive officers as a group would have been
somewhat below the median.
The Committee also considered and approved performance criteria for the
incentive bonus plan for 1995 and a change in the plan to permit participants
to earn a higher maximum bonus.
Finally, the Committee considered and approved the grant of stock options for
the executive officers asrecommended by Mr. Black on the basis of his
evaluation of their performance and ability to contribute to the Company in the
future.
Chief Executive Officer Compensation
Mr. Black's compensation, consisting of base salary, initial year bonus and
stock options, was established for fiscal 1991 when he was recruited to join
the Company as Chief Operating Officer in August 1990. The compensation level
was designed to be competitive with compensation paid other chief operating
officers of corporations with similar revenues and scope of operations. Except
for an adjustment to compensate for the elimination of a Company provided
automobile in fiscal 1993, and notwithstanding his assuming the additional
duties of President and Chief Executive Officer beginning in fiscal 1992, Mr.
Black's base salary was not adjusted through 1993. He received no bonus in
fiscal 1992 and an $80,000 bonus in fiscal 1993.
The Committee continues to believe Mr. Black's leadership has been instrumental
in strengthening the Company during the recession, restoring it to
profitability and achieving recent record financial results. He has fostered a
cultural change through his emphasis on meeting customer needs and the
empowerment of individual employees through a teamwork approach to problem
solving. He also initiated the Company's shift to just-in-time inventory
management and spearheaded the conversion of manufacturing facilities to
continuous flow.
In fiscal 1994, the Company exceeded virtually every objective of its annual
plan including setting new sales and earnings records and nearly tripling net
income compared to the prior year. More important for the longer term,
the Company substantially completed implementation of cost reduction measures
that produced $9.8 million of annualized savings, substantially exceeding the
target of $8 million set two years ago. During the year, total return on the
Company's stock grew 134%, while the total return of its Peer Industry Group
increased 26% and the NASDAQ Market Index increased 9%.
In view of these results, the Committee in fiscal 1994 recommended and the
Board approved a 10% increase in Mr. Black's salary to $253,000 for fiscal
1995. The Committee also recommended and the Board approved payment to
Mr. Black of a $120,750 cash bonus. In setting the bonus, the Committee
considered Mr. Black's performance in relation to the criteria under the
incentive bonus plan and survey data provided by the Committee's compensation
consultant. With the bonus, Mr. Black's total cash compensation was somewhat
below the survey median. Without the bonus his cash compensation would have
been substantially below the median. The Committee also awarded Mr. Black
options to acquire 11,500 shares of Common Stock, with an exercise price equal
to the market price on the date the options were granted. The options become
exercisable ratably over the next three years subject to Mr. Black's continuing
employment with the Company. In determining the number of options awarded Mr.
Black, the Committee based its decision on Mr. Black's performance and on a
competitively determined percentage of his base salary.
Discussion of Corporate Tax Deduction for Compensation in Excess of $1 Million
a Year
Internal Revenue Code Section 162(m), enacted in 1993, precludes a public
corporation from taking a deduction in 1994 and in subsequent years for
compensation in excess of $1 million paid to its chief executive officer or any
of its four other highest-paid executive officers. Certain performance-based
compensation, however, is specifically exempt from the deduction limit.
As a general matter, the Company does not anticipate that the compensation
(including bonuses) paid to any of these executive officers in any year in the
foreseeable future will approach $1 million. However, there is the
possibility that, if the Company's stock price appreciates substantially, a
stock option exercise by an executive officer could cause the threshold to be
exceeded. Accordingly, the amendments to the Company's Stock Incentive
Plan being submitted to shareholders for approval include design changes to
conform to the requirements of Section 162(m) so that compensation expenses
in connection with the exercise of stock options and the vesting of certain
performance-based restricted share awards will be excluded from the deduction
limit.
The Committee will continue to monitor this matter and will take further
appropriate action if it is warranted in the future.
This report is submitted by the Compensation Committee of the Board of
Directors.
H. Lyle Duffey
E. Mason Hendrickson
James A. Mezera
Lawrence G. Wigbels
Charles O. Wood, III
The following tables and narrative 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 1994
fiscal year.
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Name and Other All
Principal Annual Other
Position Year Salary Bonus (1) Compensation(2) Options Compensation (3)
<S> <C> <C> <C> <C> <C>
L. David Black 1994 $230,016 $120,750 11,500 $13,806
Chairman of the Board, 1993 206,400 80,000 25,000 11,948
President and Chief 1992 200,016 10,911
Executive Officer
Charles H. Diller, Jr. 1994 150,000 75,000 5,400 12,557
Executive Vice 1993 135,508 55,000 10,000 8,245
President and Chief 1992 130,008 10,915
Financial Officer
Michael Swartz 1994 126,000 50,000 3,600 10,556
Senior Vice 1993 120,508 30,000 5,000 9,570
President-Marketing 1992 115,008 10,063
Raymond F. Treml 1994 115,008 42,996 3,300 13,292
Senior Vice 1993 110,500 38,000 5,000 9,388
President- 1992 105,000 8,863
Manufacturing
Rao G. Bollimpalli 1994 105,000 32,732 3,000 7,636
Senior Vice 1993 95,500 30,000 5,000 8,361
President-Engineering 1992 90,000 7,898
</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 $50,000 or 10% of annual
salary and bonus for any of the named executive officers.
(3) For fiscal 1994, includes payments pursuant to the Company's Supplemental
Medical Care Reimbursement Plan for its executive officers to reimburse
medical expenses incurred by the named officers or their dependents and not
paid by other employee benefit plans (Mr. Black $2,311; Mr. Diller $925;
Mr. Swartz $3,007; Mr. Treml $3,803 and Mr. Bollimpalli $1,129), and
contributions to the Company's two discretionary, defined contribution
retirement plans (Mr. Black $11,495; Mr. Diller $11,632; Mr. Swartz $7,549;
Mr. Treml $9,489 and Mr. Bollimpalli $6,507).
<TABLE>
Stock Options/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term(3)
% of Total
Options
Options/ Granted to
SAR's Employees Exercise or
Granted in Fiscal Base Price Expiration
Name (1) Year Per Share Date (2) 5% 10%
<S> <C> <C> <C> <S> <C> <C>
L. David Black 11,500 22% $35.25 July 20, 2004 $259,621 $653,520
Charles H. Diller, Jr. 5,400 10 35.25 July 20, 2004 121,909 306,870
Michael Swartz 3,600 7 35.25 July 20, 2004 81,273 204,580
Raymond F. Treml 3,300 6 35.25 July 20, 2004 74,500 187,532
Rao G. Bollimpalli 3,000 6 35.25 July 20, 2004 67,727 170,484
</TABLE>
(1) Consists solely of options to purchase shares of Common Stock.
(2) Options become exercisable in equal amounts over a three year period
beginning July 21, 1995. 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
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 Common Stock over the terms of the options.
The potential realizable value to all shareholders using the specified
5% and 10% rates of appreciation would be $78,838,073 and $198,451,743,
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 Common Stock over the term of the
options.
<TABLE>
Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Shares Options Options
Acquired Value At Fiscal Year End (1) At Fiscal Year End (2)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
L. David Black 15,000 31,500 $333,700 $442,875
Charles H. Diller, Jr. 9,500 13,400 224,900 177,350
Michael Swartz 2,000 $36,740 3,800 7,600 89,536 88,900
Raymond F. Treml 3,000 58,860 4,000 7,300 94,360 88,825
Rao G. Bollimpalli 4,800 100,176 1,000 7,000 22,000 88,750
</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 Common Stock on
July 31, 1994, multiplied by the number of shares underlying the
option.
Compensation Pursuant to Plans
The Company maintains a supplemental executive retirement plan, which is a
nonqualified defined benefit plan for all officers that provides for payments
during the 10-year period following retirement or in other specified
circumstances, including a change in control of the Company or a change in the
officer's responsibilities following a change in control, at an annual rate
of one-third of the average of their annual compensation for the five fiscal
years with the Company in which such compensation was the highest. The plan
provides for 20% vesting per year after three years of service, with full
vesting after seven years of service, and also provides for the reimbursement
of certain medical expenses incurred by the officers and their dependents
during the period in which benefits are paid under the plan. Based on their
compensation through the end of the Company's 1994 fiscal year, the named
executive officers would be entitled to annual payments under the plan as
follows: Mr. Black, $20,304; Mr. Diller,$59,435; Mr. Swartz, $37,821;
Mr. Treml, $44,328; and Mr. Bollimpalli, $39,538.
Performance Graph
The following graph compares the cumulative return on the Company's Common
Stock over the past five years with the cumulative total return on shares of
companies comprising the NASDAQ Market index and a peer industry group
consisting of companies manufacturing machinery for use in the construction,
material handling, farm and mining industries. Both indices are prepared by
edia General Financial Services and contain only those companies that were
public as of July 31, 1994 and have been public for the timeframe of the
performance graph. Cumulative total return is measured assuming an initial
investment of $100 on July 31, 1989 and the reinvestment of all dividends paid.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG JLG INDUSTRIES, INC., THE NASDAQ MARKET INDEX
AND A PEER INDUSTRY GROUP
Company 1989 1990 1991 1992 1993 1994
JLG Industries, Inc. 100 168.95 81.22 65.52 103.82 242.68
Industry Index 100 87.03 72.27 64.93 97.52 123.26
Broad Market 100 96.29 97.31 99.70 123.84 135.14
CERTAIN TRANSACTIONS
The First National Bank of McConnellsburg ("First National") has a $377,000
participation in industrial revenue notes issued by the Fulton County
Industrial Development Authority. Mr. Duffey is Chairman of the Board of the
FNB Financial Corporation, the parent company of First National. The Company
believes that the credit facility indirectly extended to it by First National
is on terms comparable to those available from unaffiliated lenders.
The Company has a stock redemption agreement with Mr. Shockey under which the
Company is obligated to purchase shares of the Company's Common Stock from his
estate, and the estate is obligated to sell such shares to the Company. The
purchase price of the shares will be determined, in accordance with the
agreement, by national market quotations or prices over the twenty trading days
preceding death, or by independent appraisal if such market quotations or
prices are not available. The number of shares to be purchased by the Company
from his estate will be the lesser of (A) 35% of the shares owned by Mr.
Shockey at his death, or (B) that number of shares as has a purchase price
equal to the greater of (i) $500,000 or (ii) the net proceeds (after reduction
for any outstanding policy loans) collected by the Company from any policy or
policies of life insurance maintained by the Company on the life of Mr.
Shockey. In order to fund its obligation under the stock redemption agreement,
the Company currently maintains life insurance policies on Mr. Shockey's life
in the amount of $860,850. For fiscal 1994, the premium cost was $8,184, net
of the increase in cash surrender value of the policies. Proceeds under
the policies are payable to the Company. Dividends on the policies may be used
by the Company either to purchase additional insurance or to reduce premium
expense. The Company is not obligated to maintain these life insurance
policies.
APPROVAL OF AMENDMENTS TO THE STOCK INCENTIVE PLAN
In 1991, the Board of Directors adopted, and the shareholders approved, the JLG
Industries, Inc. Stock Incentive Plan (the "Incentive Plan"). The Board of
Directors has adopted, and is submitting to the shareholders for approval
at the Annual Meeting, several amendments to the Incentive Plan as described
herein.
General Information
The purpose of the Incentive Plan is to encourage and facilitate the
acquisition and ownership of the Company's Common Stock by key employees, which
the Board of Directors believes will strengthen the commitment of such
employees to the Company's success and promote a closer identity of interests
between the Company's management and its shareholders. The Incentive Plan,
which is administered under the direction of the Compensation Committee (the
"Committee"), authorizes grants to key employees of the Company and its
subsidiaries of (i) stock options that are qualified as "incentive stock
options" under Section 422 (b) of the Internal Revenue Code of 1986 (the
"Code") and stock options that are not so qualified ("non-qualified stock
options"), (ii) shares of the Common Stock that are subject to various types of
restrictions on the receipt thereof ("restricted shares") and (iii) limited
stock appreciation rights ("LSARs"). The Committee is responsible for
determining, within the terms of the Incentive Plan, the key employees to
receive awards, the type of awards that such employees will receive, the number
of shares of Common Stock subject to each award and such other terms,
conditions, limitations and restrictions with respect to an award as are
specified in the instrument evidencing the award. Currently, there
are approximately 25 employees eligible to participate in the Incentive Plan.
Proposed Amendments to the Incentive Plan
The following amendments to the Incentive Plan are being submitted to
shareholders for approval at the Annual Meeting.
Authorization of Additional Shares
When the Incentive Plan was approved by the shareholders in 1991, a total of
150,000 shares of Common Stock were authorized for issuance under the Incentive
Plan. After giving effect to awards made since 1991, a total of 39,083 shares
of Common Stock remain eligible for stock option grants and restricted share
awards. Under the terms of the proposed amendment to the Incentive Plan, the
number of shares of Common Stock with respect to which the Committee is
authorized to make awards would be increased by 350,000 shares. The Board of
Directors believes that this amendment is needed to permit the Company to
continue to provide key employees with the opportunity to participate in the
long-term growth of the Company and to maintain the Company's ability to
attract and retain highly qualified and motivated employees through the future
grant of stock options and restricted share awards. Because future awards
under the Incentive Plan are at the discretion of the Committee, the amount
and terms of any future award to a specific participant is not determinable.
Limitation on Awards to Any Individual
Currently there is no limitation in the Incentive Plan on the number of shares
of Common Stock that can be the subject of an award (other than an incentive
stock option award) to any single individual. Under the terms of the plan as
proposed to be amended, no participant in the Incentive Plan will be entitled
to receive awards in any year covering in excess of 100,000 shares of Common
Stock. The purpose of this amendment is to ensure, in accordance with Section
162 (m) of the Code and the proposed regulations thereunder, that the federal
income tax deduction for any compensation expense incurred by the Company in
connection with the exercise of non-qualified stock options or in connection
with the vesting of performance-based restricted share awards will not be
disallowed by reason of the $1,000,000 limit on the amount that may be deducted
in any year for compensation paid to the Company's chief executive officers and
the Company's other four most highly paid executive officers. See
"Compensation Committee Report -- Discussion of Corporate Tax Deduction for
Compensation in Excess of $1 Million a Year."
Performance-Based Restricted Share Awards
Under the current terms of the Incentive Plan, the Committee is authorized to
make restricted share awards having such terms, conditions and restrictions
as the Committee shall determine, including the date on which, or the
circumstances in which, the restrictions imposed on the receipt of the shares
will expire, lapse or be removed. In order to exempt a performance-based award
from the deduction limitation imposed by Section 162 (m) of the Code and the
proposed regulations thereunder, the compensation must be paid solely on the
account of the attainment of one or more objective performance goals. To
satisfy the requirements of Section 162(m), the Incentive Plan is proposed to
be amended to specify that the business criteria that will be used by the
Committee in establishing the terms of performance-based restricted share
awards will consist of the following: (i) earnings per share, (ii) return
on equity, (iii) return on assets, (iv) stock price appreciation (v) annual
sales and (vi) annual net income. Using one or more of these business
criteria, the Committee, at the time that an award is made, would establish
specific performance targets for the vesting of each qualified
performance-based restricted share award. This amendment to the Incentive Plan
will not prevent the Committee from also making restricted share awards that
vest solely on the basis of continued employment or the lapse of time.
However, any awards that are not based on the preestablished performance
targets will not meet the requirements of Section 162(m).
Post-Employment Exercise of Stock Options
Under the current terms of the Incentive Plan, if the employment of the holder
of a stock option ceases due to retirement, after at least six months of
continuous employment, the stock option will remain exercisable (to the extent
that it was exercisable on the date of termination) for a period of three
months. If the employment of the holder of a stock option ceases due to
disability, after at least six months of continuous employment, the stock
option currently will remain exercisable (to the extent that it was exercisable
on the date of termination) for a period of twelve months. The Incentive Plan
is proposed to be amended to extend to two years the period during which an
option can be exercised following termination of employment due to retirement
or disability (in each case to the extent that the option is exercisable as of
the date of termination). This proposed change will allow employees whose
employment has terminated for either reason a longer period within which
to realize the benefits earned while the person was employed. The proposed
amendment will apply both to stock options that are granted in the future and
to outstanding stock options previously granted under the Incentive Plan.
Recommendation of the Board of Directors
The Board of Directors believes that the proposed amendments to the Incentive
Plan are in the best interests of the Company and its shareholders.
Accordingly, the Board of Directors recommends a vote FOR the approval of
the proposed amendments to the JLG Industries, Inc. Stock Incentive Plan.
APPROVAL OF AMENDMENT TO THE DIRECTORS STOCK OPTION PLAN
In 1993, the Board of Directors adopted, and the shareholders approved, the JLG
Industries, Inc. Directors Stock Option Plan (the "Directors Plan"). The Board
of Directors has adopted, and is submitting to the shareholders for approval at
the Annual Meeting, the following amendment to the Directors Plan.
General Information
The purpose of the Directors Plan is to enable directors who are not employees
of the Company ("Outside Directors") to acquire or increase a proprietary
interest in the Company and thereby promote a closer identity of interests
between the Outside Directors and the shareholders. Under the terms of the
Directors Plan, each Outside director automatically receives an annual grant
of an option to purchase 2,000 shares of Common Stock, if the Company in the
immediately preceding fiscal year realizes a net profit before extraordinary
events (as determined by the Company's independent auditors and reflected in
the Annual Report). Each such option has a term of up to ten years and an
exercise price equal to the fair market value of the Common Stock on the date
of the grant and becomes fully exercisable on the first anniversary of the
grant.
Proposed Amendment to the Directors Plan
Under the current terms of the Directors Plan, if the holder of a stock option
granted under the Directors Plan ceases to be a director due to disability,
the stock option will remain exercisable for a period of twelve months. If
the holder of a stock option ceases to be a director due to retirement, the
stock option currently will remain exercisable (to the extent that it was
exercisable on the date of termination) for a period of six months. The
Directors Plan is proposed to be amended to extend to two years the
post-termination option exercise period in each situation. This proposed
change will allow directors whose status as a director has terminated for
either reason a longer period within which to realize the benefits earned while
the person served as a director. The proposed amendment will apply both to
stock options that are granted in the future and to outstanding stock options
previously granted under the Directors Plan.
Each of the incumbent Outside Directors who are nominees for election as
directors at the Annual Meeting hold options under the Directors Plan to
purchase 2,000 shares of Common Stock, with the exception of Mssrs. Palmer
and Rabinowitz who hold 422 and 419 shares, respectively.
Recommendation of the Board of Directors
The Board of Directors believes that the proposed amendment to the Directors
Plan is in the best interests of the Company and its shareholders.
Accordingly, the Board of Directors recommends a vote FOR the approval of the
proposed amendment to the JLG Industries, Inc. Directors Stock Option Plan.
VOTE REQUIRED
Approval of the proposed amendments to the Incentive Plan and the Directors
Plan in accordance with the terms of the respective Plans requires the
affirmative vote of the majority of the shares of Common Stock present or
represented and entitled to vote at the Annual Meeting. Shares as to which a
holder abstains from voting on the proposed amendments effectively will
constitute a "no" vote. Shares held in "street name" by a broker or nominee
that are not voted due to the absence of the discretionary authority of the
holder to vote such shares (a "broker nonvote") will not be counted as shares
entitled to vote.
SELECTION OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP served as the Company's independent
auditors throughout fiscal year 1994 and the Board of Directors, on the
recommendation of the Audit Committee, has selected the firm as the Company's
independent auditors for fiscal 1995. The Board of Directors recommends
ratification of the selection of Ernst & Young LLP as the Company's independent
auditors for the fiscal year 1995. 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.
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
Board of Director's nominees for election as directors. Proxies will be voted
in accordance with such direction or, if no such direction is indicated, will
be voted in favor of the election of each of the nominees. Each of the
nominees has consented to serve as 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 Annualmeeting, 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. Duly executed proxies will be voted as directed on the
other questions specified on the proxy and, in the absence of such direction,
will be voted for each proposal.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1995 Annual Meeting must
be received in writing by the Company before June 17, 1995, in order to be
considered for inclusion in the Company's proxy materials relating to that
meeting.
OTHER BUSINESS
The Board of Directors of the Company knows of no other matters that may come
before the 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
Dated October 11, 1994 Paul K. Shockey, Secretary
JLG DRIVE
MCCONNELLSBURG, PA 17233
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 L. David Black and
Paul K. Shockey, 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. Common
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
Monday, November 21, 1994 at 4:30 p.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 ALL THE PROPOSALS.
The Board of Directors unanimously recommends a vote FOR its nominees and
proposals 2, 3 and 4.
1. ELECTION OF DIRECTORS
FOR all nominees listed (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for nominees listed
Nominees: L.D.Black; C.H.Diller,Jr.; G.R. Kempton; J.A. Mezera; G. Palmer;
S. Rabinowitz; P.K. Shockey; T.C. Wajnert; and C.O. Wood, III.
Instructions: To withhold authority to vote for any nominee, write that
nominee's name on the space provided below.
2. Approval of amendments to the JLG Industries, Inc. Stock Incentive Plan.
FOR AGAINST ABSTAIN
3. Approval of amendment to the JLG Industries, Inc. Directors Stock Option
Plan.
FOR AGAINST ABSTAIN
4. Ratify the appointment of Ernst & Young LLP as independent auditors for the
ensuing year.
FOR AGAINST ABSTAIN
5. In their discretion, upon any other business that may properly come before
the meeting or any adjournment thereof.
Please sign exactly as your name appears hereon. When shares are held by
joint tenants, all should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If as a
corporation, please sign in corporate name by president or other authorized
officer. If as a partnership, please sign in partnership name by authorized
person.
Dated: , 1994
Signature
PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY
