UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended July 31, 1996 Commission file number 0-8454
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
JLG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1199382
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
JLG Drive, McConnellsburg, PA 17233
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (7l7) 485-5161
Securities registered pursuant to Section 12(b) of the Act:
Capital Stock ($.20 par value) New York Stock Exchange
(Title of class) (Name of Exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _________
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
At October 1, 1996, there were 43,544,034 shares of capital stock of the
Registrant outstanding, and the aggregate market value of the voting stock held
by nonaffiliates of the Registrant at that date was $800,121,625.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 1996 annual meeting of shareholders are
incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
General
The Company, organized in 1969, is the leading manufacturer,
distributor and international marketer of aerial work platforms. Sales
are made principally to independent distributors who rent and sell the
Company's products to a broad customer base, which includes users in
the industrial, commercial, institutional and construction markets.
Products
Aerial Work Platforms. Aerial work platforms are designed to
permit workers to position themselves and their tools and materials
easily and quickly in elevated work areas that otherwise might have to
be reached by the erection of scaffolding, by the use of ladders, or
through some other device. Elevating work platforms consist of self-
propelled boom-type, scissor-type and vertical-type lifts. These work
platforms are mounted either at the end of a telescoping and/or articulating
lifting mechanism, which in turn are mounted on mobile,
four-wheel chassis. The Company offers elevating work platforms
powered by electric motors or gasoline, diesel, or propane engines.
All of the Company's elevating work platforms are designed for stable
operation in elevated positions and self-propelled models travel on
grades of up to twenty-four degrees.
Boom-type self-propelled aerial work platforms are especially
useful for reaching over machinery and equipment that is mounted on
floors and for reaching other elevated positions not easily approached
by a vertical lifting device. The Company produces boom-type self-
propelled aerial work platform models of various sizes with
platform heights ranging up to 150 feet. The boom may be rotated up
to 360 degrees in either direction, raised or lowered from vertical to
below horizontal, and extended while the work platform remains
horizontal and stable. Vehicles on which the booms are mounted may be
maneuvered forward or backward and steered in any direction by the
operator from the work platform. Boom-type models have standard-sized
work platforms, which vary in size up to 3 by 8 feet, and the rated
lift capacities range from 500 to 2,000 pounds. The distributor net
price of the Company's standard models at July 31, 1996 ranged from
approximately $18,735 to $325,000.
Scissor-type self-propelled aerial work platforms are designed to
provide larger work areas, and generally to allow for heavier loads
than boom-type lifts. Scissor-type lift vehicles may be maneuvered in
a manner similar to boom-type models, but the platforms may be
extended only vertically, except for an available option that extends
the deck horizontally up to 6 feet. The scissor-type models have
maximum elevation capabilities of up to 50 feet and various platform
sizes up to 6 by 14 feet. The rated lift capacities range from 500 to
2,500 pounds. The distributor net price of the Company's standard
models at July 31, 1996 ranged from approximately $9,476 to $49,091.
Self-propelled and push-around vertical lifts consist of a work
platform attached to an aluminum mast that extends vertically, which
in turn, is mounted on either a push-around or self-propelled base.
Available in various models, these machines can be rolled in their
retracted position through standard door openings. They have maximum
elevation capabilities of up to 36 feet and rated lift capacities from
300 to 750 pounds. The distributor net price of the Company's
standard models at July 31, 1996 ranged from approximately $3,397 to
$8,619.
The Company has eleven registered trademarks and nineteen patents and
considers them to be beneficial in its business.
Marketing
The Company's products are marketed internationally primarily through
a network of independent distributors. The North American distributor
network approximates 100 companies operating through nearly 300
branches. In Europe, the Company's distribution base includes
approximately 60 locations. The Company also has established a
presence in eight countries in the Asia/Pacific region as well as
Australia and Japan and has distributor locations in the major
countries of Latin America. The Company's distributors sell and rent
the Company's products and provide service support. The Company also
sells directly through its own marketing organizations to certain
major accounts as well as to customers in parts of the world where
independent distribution is either not available or not commercially
feasible.
The Company supports the sales, service, and rental programs of its
distributors with product advertising, cooperative promotional
programs, major trade show participation, and distributor personnel
training in both service and product attributes. The Company
supplements domestic sales and service support to its international
customers through its overseas facilities in the United Kingdom and
Australia.
The Company maintains a national rental fleet of elevating work
platforms. The purpose of this fleet is to assist the Company's
distributors in servicing large, one-time projects and in meeting
periods of unanticipated rental demand, and to make available more
equipment to distributors with growing markets, but limited financial
resources. It also repairs and refurbishes equipment for its own use or for
sale to its distributors.
Product Development
The Company invests significantly in product development and
diversification, including improvement of existing products and
modification of existing products for special applications. Product
development expenditures totaled $6,925,000, $5,542,000, and
$4,373,000 for the fiscal years 1996, 1995 and 1994, respectively.
New products introduced in the past two years accounted for
approximately 27% percent of fiscal 1996 sales.
Competition
In selling its major products, the Company experiences two types of
competition. The Company competes with more traditional means of
accomplishing the tasks performed by elevating work platforms, such as
ladders, scaffolding and other devices.
The Company believes that its elevating work platforms in many
applications are safer, more versatile and more efficient, taking into
account labor costs, than those traditional methods and that its
elevating work platforms enjoy competitive advantages when the job
calls for frequent movement from one location to another at the same
site or when there is a need to return to the ground frequently for
tools and materials.
The Company competes principally with nine elevating work platform
manufacturers. Some of the Company's competitors are part of, or are
affiliated with, companies which are larger and have greater financial
resources than the Company. The Company believes that its product
quality, customer service, experienced distribution network, national
rental fleet and reputation for leadership in product improvement and
development provide the Company with significant competitive
advantages.
The Company believes it commands the largest share of the market for
boom and scissor lift products and is one of the three largest
producers of vertical lifts.
Executive Officers of the Registrant
Positions with the Company
Name Age (date of initial election)
L. David Black 59 Chairman of the Board,
President and Chief Executive
(1993); prior to 1993,
President and Chief Executive
Officer (1991).
Charles H. Diller, Jr. 51 Executive Vice President and
Chief Financial Officer (1990).
Michael Swartz 51 Senior Vice President -
Marketing (1990).
Rao Bollimpalli 58 Senior Vice President -
Engineering (1990).
Raymond F. Treml 56 Senior Vice President -
Manufacturing (1990).
All executive officers listed above are elected to hold office for one
year or until their successors are elected and qualified, and have been
employed in the capacities noted for more than five years, except as
indicated. No family relationship exists among the above named executive
officers.
Product Liability
Because the Company's products are used to elevate and move personnel and
materials above the ground, use of the Company's products involves
exposure to personal injury as well as property damage, particularly if
operated carelessly or without proper maintenance.
The Company is a party to personal injury and property damage litigation
arising out of incidents involving the use of its products. The
Company's program for fiscal 1996 to insure against exposure to such
litigation is comprised of a self-insurance retention of $5 million and
catastrophic coverage of $20 million in excess of the retention. The
Company has accrued as a reserve $8.9 million with respect to pending and
potential claims for all years in which the Company is liable under its
self-insurance retention. The number of product liability claims filed
each year fluctuates significantly. The number of potential claims has
been affected by the substantial growth in sales over the past several years
which has dramatically increased machine population and number of users.
This has exerted upward pressure on the number of claims, which the
Company has countered through product design safety innovations. Product
liability costs, based upon the Company's best estimate of anticipated
losses, for years ended July 31, 1996, 1995 and 1994, approximated 0.9%,
1.4% and 2.6% of net sales, respectively.
For additional information relative to product liability insurance
coverage and cost, see Item 3 Legal Proceedings.
Employees
The Company had 2,705 and 2,222 persons employed as of July 31, 1996 and
1995, respectively. The Company believes its employee relations are
good, and it has experienced no work stoppages as a result of labor
problems.
Foreign Operations
The Company manufactures its products in the U.S. for sales throughout
the world. Sales to customers outside the U.S. were 24%, 18% and 16% of
net sales for 1996, 1995 and 1994, respectively. Export sales were up
substantially in dollar terms, but the percentage gain was only modest
due to the continued strong growth of domestic sales.
ITEM 2. PROPERTIES
The Company has manufacturing plants and office space at five sites in
Pennsylvania totaling 571,000 square feet and situated on 108 acres of
land. Of this, 497,000 square feet are owned, with the remainder under
long-term lease. The Company has several international sales offices
under short-term operating leases.
The Company's McConnellsburg and Bedford, Pennsylvania facilities with
a book value of $9.4 million have been encumbered as security for
Company long-term borrowings aggregating $1.9 million.
The Company's properties used in its operations are considered to be in
good operating condition, well-maintained and suitable for their present
purposes.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to personal injury and property damage litigation
arising out of incidents involving the use of its products. The
Company's program for fiscal 1996 to insure against exposure to such
litigation is comprised of a self-insurance retention of $5 million and
catastrophic coverage of $20 million in excess of the retention.
Catastrophic coverage for fiscal year 1997 was increased to $25 million.
The Company contracts with an independent insurance firm to provide
claims handling and adjustment services. The Company's estimates with
respect to claims are based on internal evaluations of the merits of
individual claims and the reserves assigned by the Company's independent
insurance carrier. The methods of making such estimates and establishing
the resulting accrued liability are reviewed frequently, and any
adjustments resulting therefrom are reflected in current earnings.
Claims are paid over varying periods, which generally do not exceed five
years. Accrued liabilities for future claims are not discounted.
With respect to all claims of which the Company is aware, accrued
liabilities of $8.9 million and $8.4 million were established at July 31,
1996 and 1995, respectively. While the Company's ultimate liability may
exceed or be less than the amounts accrued, the Company believes that it
is unlikely that it would experience losses that are materially in excess
of such reserve amounts. As of July 31, 1996 and 1995, there were no
insurance recoverables or offset implications and there were no claims by
the Company being contested by insurers.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS
The Company's capital stock is traded on the New York Stock Exchange
under the symbol JLG. Prior to September 18, 1996, the Company's shares
were traded on the NASDAQ National Market under the symbol JLGI. The
table below sets forth the market prices and average shares traded daily
for the past two fiscal years.
Price per Share Average Shares
1996 1995 1996 1995
Quarter Ended High Low High Low
October 31, $8.33 $5.67 $3.48 $2.83 261,809 164,289
January 31 $10.17 $7.67 $3.48 $2.83 219,170 248,763
April 30 $19.08 $8.83 $3.58 $2.83 397,375 270,300
July 31 $29.50 $12.00 $6.04 $3.21 916,362 321,744
All share and per share data in the table above has been adjusted for the
two-for-one stock splits distributed in April and October 1995, and the
three-for-one split distributed in July 1996. The cash dividend was also
increased on the same dates on a pre-split basis by 20%, 33% and 50%,
respectively. Combined, the three splits increased the number of shares
outstanding twelve-fold and the cash dividend 140%. The Company's three
consecutive years of record performance have contributed to a significant
increase in its share price. When combined, the share price and dividend
increases have provided shareholders a total return of 207% in 1996 and
in excess of 100% for each of the prior two fiscal years. The Company's
quarterly cash dividend rate is currently $.005 per share, or $.02 on an
annual basis.
The Company believes approximately 56% of the stock is held by about 140
institutions, mutual funds, banks, insurance and investment companies and
pension funds. In addition, there are about 3,400 shareholders of
record, including 1,800 employees.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
ELEVEN YEAR FINANCIAL SUMMARY
(in thousands of dollars,
except per share data)
<CAPTION>
Year ended July 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
RESULTS OF OPERATIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $413,407 $269,211 $176,443 $123,034 $110,479 $94,439 $149,281 $121,330 $81,539 $59,827 $59,323
Gross profit 108,716 65,953 42,154 28,240 22,542 20,113 37,767 32,384 23,598 17,075 16,347
Selling, general
and administrative
expenses (44,038) (33,254) (27,147) (23,323) (22,024) (21,520) (21,834) (18,974) (14,117) (11,946) (12,910)
Restructuring charges (4,922) (2,781) (1,015)
Income (loss) from
operations 64,678 32,699 15,007 4,917 (4,404) (4,188) 14,918 13,410 9,481 5,129 3,437
Interest expense (293) (376) (380) (458) (1,218) (1,467) (2,344) (1,375) (925) (1,039) (1,750)
Other income
(expense), net 1,281 376 (24) 180 (149) (707) 858 399 485 958 51
Income (loss) before
taxes and
extraordinary
credit 65,666 32,699 14,603 4,639 (5,771) (6,362) 13,432 12,434 9,041 5,048 1,738
Extraordinary credit 1,063
Income tax
(provision) benefit (23,558) (11,941) (5,067) (1,410) 2,733 3,122 (4,950) (4,882) (3,766) (3,008) (1,063)
Net income (loss) 42,108 20,758 9,536 3,229 (3,038) (3,240) 8,482 7,552 5,275 2,040 1,738
PER SHARE DATA
Net income (loss) 0.95 0.49 0.23 0.07 (0.07) (0.08) 0.20 0.18 0.13 0.05 0.04
Cash dividends 0.015 0.0092 0.0083 0.005 0.0208 0.0167 0.0125 0.0083
Shares used in
computation (in
thousands) 44,392 42,508 41,950 43,634 43,077 42,542 42,121 42,019 41,331 40,854 40,772
PERFORMANCE MEASURES
Return on sales 10.2% 7.7% 5.4% 2.6% (2.8%) (3.4%) 5.7% 6.2% 6.5% 3.4% 2.9%
Return on assets 28.5% 20.2% 12.1% 4.6% (4.0%) (4.2%) 10.4% 11.9% 10.8% 4.9% 4.1%
Return on
shareholders' equity 47.9% 37.1% 23.8% 8.5% (7.9%) (7.7%) 21.8% 23.5% 21.2% 9.8% 9.0%
FINANCIAL POSITION
Working capital 71,807 45,404 32,380 26,689 33,304 36,468 47,289 34,745 27,378 16,895 20,070
Current assets as a
percent of current
liabilities 226% 216% 208% 217% 268% 266% 304% 254% 250% 216% 369%
Property, plant and
equipment, net 34,094 24,785 19,344 13,877 13,511 13,726 14,402 11,343 8,677 7,975 8,422
Total assets 182,628 119,708 91,634 72,518 73,785 74,861 86,741 70,570 57,692 42,431 42,478
Total debt 2,194 2,503 7,578 4,471 12,553 14,175 18,404 13,799 11,805 5,513 12,238
Total debt as a
percent of total
capitalization 2% 4% 14% 10% 25% 27% 29% 28% 29% 20% 37%
Shareholders' equity 113,208 68,430 45,706 38,939 37,186 38,596 44,109 35,331 28,465 22,582 20,512
Book value per share 2.61 1.60 1.09 0.89 0.86 0.90 1.05 0.84 0.68 0.55 0.50
OTHER DATA
Product development
expenditures 6,925 5,542 4,373 3,385 3,628 3,430 3,520 2,904 2,910 2,010 2,313
Capital expenditures,
net of retirements 16,668 8,618 7,762 3,570 1,364 1,637 4,615 4,054 1,619 1,197 1,605
Depreciation and
amortization 6,505 3,875 2,801 2,500 2,569 1,953 1,771 1,609 1,968 1,830 2,266
Employees 2,705 2,222 1,620 1,324 1,014 1,182 1,565 1,455 972 804 600
</TABLE>
This summary should be read in conjunction with Management's Discussion and
Analysis. All share and per share data have been adjusted for the two-for-one
stock splits distributedin April and October, 1995 and the three-for-one stock
split distributed in July, 1996.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information given below is intended to assist in understanding the
Company's financial condition and results of operations as reflected in
the Consolidated Financial Statements.
The Company is the world's leading manufacturer, distributor and
international marketer of mobile elevating work platforms used primarily
in industrial, commercial, institutional and construction applications.
Sales are made principally to independent equipment distributors that
rent the Company's products and provide service support to equipment
users. The Company also sells its products to large independent rental
companies. Equipment purchases by end-users, either directly from the
Company or through distributors, comprise a significant, but smaller
portion of sales. The Company also generates a small, but growing amount
of revenue from sales of used equipment and from equipment rentals and
services provided by JLG's Equipment Services operations.
Demand for the Company's products tends to be cyclical, responding
historically to varying levels of construction and industrial activity,
principally in the United States and, to a lesser extent, in other
industrialized nations. During recessionary conditions, demand for
rental equipment typically declines more sharply than demand for
equipment purchased by end-users. Other factors affecting demand include
the availability and cost of financing for equipment purchases and the
market availability of used equipment.
Due to the cyclical demand, the Company's financial performance and cash
flows tend to fluctuate. However, the Company continually strives to
reduce operating costs and increase manufacturing efficiencies. The
Company also considers the development and introduction of new and
improved products and expansion into underserved geographic markets to be
important factors in maintaining and strengthening its market position
and reducing cyclical fluctuations in its financial performance and cash
flows.
RESULTS OF OPERATIONS
Net sales reached a new high in 1996, rising by 54% over 1995 and by 53%
from 1994 to 1995. The growth in revenues for both years included
increased demand across virtually all product classes. Strong U.S. and
European demand for both 1996 and 1995 was the primary contributor to the
record sales. Sales outside the U.S., as a percent of total sales, were
24%, 18% and 16% in 1996, 1995 and 1994, respectively. New and
redesigned products introduced over a two-year period contributed 27%,
24% and 25% to sales in 1996, 1995 and 1994, respectively. Though the
Company has a broad base of customers, each of whose purchases may vary
significantly from year to year, the Company has recently experienced
some consolidation among its largest customers, and sales to these
customers are increasing in significance.
Gross profit, as a percent of sales, increased to 26% in 1996 from 24% in
1995, primarily due to the effects of spreading fixed overhead expenses
over a higher production base, lower product liability costs and higher
selling prices. This improvement was partially offset by changes in
product mix. Gross profit, as a percent of sales, was 24% for both 1995
and 1994. Lower manufacturing costs due to continued improvements in
manufacturing processes, lower warranty and product liability costs, and
higher selling prices offset increased material costs, a less profitable
product mix and costs associated with outsourcing additional production
as a result of the substantial increase in demand and capacity
limitations.
Selling, general and administrative expenses increased $10.8 million and
$6.1 million for 1996 and 1995,respectively, but as a percent of sales
decreased to 11% in 1996 from 12% in 1995 and 15% in 1994. The dollar
increase for both years included higher personnel and related costs,
increased consulting and advertising expenses and increased expenses from
foreign operations, all of which primarily related to increased business
levels. The increase in expenditures between 1996 and 1995 were
partially offset by a reduction in bad debt expenses. The increase
between 1995 and 1994 also included higher research and development
spending.
The effective income tax rate was 36% in 1996 compared to 37% and 35% in
1995 and 1994, respectively. The effective income tax rate for 1996 was
lower than the rate in 1995, primarily due to a larger tax benefit
associated with export sales in 1996, while the rate for 1995 was higher
than the rate for 1994 due to the tax benefit from closing an overseas
facility in 1994.
FINANCIAL CONDITION
The Company strengthened its financial position during 1996 through
increased cash from operations and the sale of its Material Handling
Division. Cash generated from operating activities improved by $3.8
million in 1996 and $6.0 million in 1995, principally due to the
increased profitability of the Company. Working capital increased by
$26.4 million in 1996 and $13.0 million in 1995 primarily due to higher
business levels. The Company also invested an additional $9.9 million in
1996 and $1.5 million in 1995 to expand its JLG Equipment Services
operation. Capital expenditures were $16.7 and $8.6 million in 1996 and
1995, respectively.
At July 31, 1996, the Company had unused credit lines totaling $20
million and cash balances of $30.4 million. The Company considers these
resources, coupled with cash expected to be generated by operations,
adequate to meet its foreseeable funding needs, including about $55
million budgeted for capital-related projects in 1997. The major items
budgeted are approximately $25 million to further expand the JLG
Equipment Services fleet of rental machines, $7 million to complete the
scissor lift plant expansion and $13 million to increase boom lift
manufacturing capacity. The Company intends to finance about $3 million
of these projects with borrowed capital.
The Company's exposure to product liability claims is discussed in the
Commitments and Contingencies note to the Consolidated Financial
Statements. Future results of operations, financial condition and
liquidity may be affected to the extent that the Company's ultimate
liability with respect to product liability varies from current
estimates.
OUTLOOK
This Outlook section and other parts of this Management's Discussion and
Analysis contain forward-looking information and involve risks and
uncertainties. Certain factors that could significantly impact expected
results are described in "Cautionary Statements Pursuant to the
Securities Litigation Reform Act" which is an exhibit to this Form 10-K.
Demand for the Company's products continues strong and the level of
unfilled orders remains high. Demand for the Company's new products and
from increased distribution globally should contribute to additional sales
growth. Rental fleet utilization also remains strong throughout the
United States and used equipment available for resale is scarce.
Additional manufacturing throughput, capacity and efficiency gains in
both the McConnellsburg plant and the new Bedford facility should improve
the Company's ability to satisfy customer demand and should improve
product profit margins. Product mix also affects gross margins and is
difficult to forecast. All of these factors bode well for another strong
year in fiscal 1997, provided there is no unanticipated softening in
customer demand.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of JLG Industries, Inc.
and its subsidiaries, are included herein as indicated below:
Consolidated Balance Sheets - July 31, 1996 and 1995
Consolidated Statements of Income - Years Ended July 31,
1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity - Years Ended
July 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years Ended July 31,
1996, 1995 and 1994
Notes to the Consolidated Financial Statements - July 31,
1996
Report of Independent Auditors
JLG INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
July 31
1996 1995
ASSETS
Current Assets
Cash $30,438 $12,973
Accounts receivable, less allowance for
doubtful accounts of $1,215 in 1996 and
$1,325 in 1995 54,342 33,466
Inventories:
Finished goods 12,925 7,630
Work in process 13,972 13,357
Raw materials 12,536 12,459
39,433 33,446
Other current assets 4,649 4,683
Total Current Assets 128,862 84,568
Property, Plant and Equipment
Land and improvements 3,443 3,038
Buildings and improvements 14,119 11,524
Machinery and equipment 37,960 29,290
55,522 43,852
Less allowance for depreciation 21,428 19,067
34,094 24,785
Equipment Held for Rental 13,459 5,052
Other Assets 6,213 5,303
$182,628 $119,708
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $243 $243
Accounts payable 34,535 20,028
Accrued expenses 22,277 18,893
Total Current Liabilities 57,055 39,164
Long-Term Debt 1,951 2,260
Other Liabilities and Deferred Credits 10,414 9,854
Shareholders' Equity
Capital stock:
Authorized shares: 50,967 at $.20 par value
Issued and outstanding shares: 1996 -
43,382 shares; 1995 - 42,825 shares 8,676 8,565
Additional paid-in capital 7,879 4,411
Equity adjustment from translation (2,060) (1,799)
Retained earnings 98,713 57,253
Total Shareholders' Equity 113,208 68,430
$182,628 $119,708
The accompanying notes are an integral part of these financial statements.
JLG INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Fiscal Years Ended July 31
1996 1995 1994
Net Sales $413,407 $269,211 $176,443
Cost of sales 304,691 203,258 134,289
Gross Profit 108,716 65,953 42,154
Selling, general and
administrative expenses 44,038 33,254 27,147
Income from Operations 64,678 32,699 15,007
Other income (deductions):
Interest expense (293) (376) (380)
Miscellaneous, net 1,281 376 (24)
Income before Taxes 65,666 32,699 14,603
Income tax provision 23,558 11,941 5,067
Net Income $42,108 $20,758 $9,536
Net Income per Share $.95 $.49 $.23
The accompanying notes are an integral part of these financial statements.
<TABLE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands except share data)
<CAPTION>
Equity
Additional Adjustment
Capital Stock Paid-in from Retained Treasury
Shares Par Value Capital Translation Earnings Stock
<S> <C> <C> <C> <C> <C> <C>
Balances at July 31, 1993 43,877 $8,775 $4,498 ($2,034) $27,700
Net income for the year 9,536
Dividends paid: $.0083 per share (352)
Aggregate translation adjustment, net
of deferred tax benefit of $1,032 135
Stock option transactions 203 41 282
Purchase of treasury stock (2,471) (3,500)
Contribution to employee benefit plan 297 204 421
Balances at July 31, 1994 41,906 8,816 4,984 (1,899) 36,884 (3,079)
Net income for the year 20,758
Dividends paid: $.0092 per share (389)
Aggregate translation adjustment, net
of deferred tax benefit of $837 100
Stock option transactions 553 111 985
Contribution to employee benefit plan 366 640 519
Retirement of treasury stock (362) (2,198) 2,560
Balances at July 31, 1995 42,825 8,565 4,411 (1,799) 57,253
Net income for the year 42,108
Dividends paid: $.015 per
share (648)
Aggregate translation adjustment, net
of deferred tax benefit of $737 (261)
Stock option transactions 557 111 3,468
Balances at July 31, 1996 43,382 $8,676 $7,879 ($2,060) $98,713
</TABLE>
The accompanying notes are an integral part of these statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended July 31
1996 1995 1994
Operations
Net income $42,108 $20,758 $9,536
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 6,505 3,875 2,801
Provision for self-insured losses 2,938 2,800 3,950
Deferred income taxes 502 (596) (1,233)
Changes in operating assets and liabilities:
Accounts receivable (23,748) (7,522) (4,686)
Inventories (13,686) (9,867) (3,682)
Other current assets (278) 1,412 21
Accounts payable 16,680 5,251 3,728
Accrued expenses 3,076 4,328 2,659
Changes in equipment held for rental (9,873) (1,548) (1,455)
Changes in other assets and liabilities (3,406) (1,857) (601)
Cash provided by operations 20,818 17,034 11,038
Investments
Purchases of property, plant
and equipment (16,690) (11,035) (7,963)
Proceeds from sale of property, plant
and equipment 22 2,417 201
Proceeds from sale of Material Handling
Division 10,954
Cash used for investments (5,714) (8,618) (7,762)
Financing
Repayment of long-term debt (309) (5,081) (1,904)
Issuance of long-term debt 5,000
Payment of dividends (648) (389) (352)
Purchase of treasury stock (3,500)
Exercise of stock options 3,579 915 326
Stock issued for employee benefit plans 1,159 625
Cash provided by (used for) financing 2,622 (3,396) 195
Currency Adjustments
Effect of exchange rate changes on cash (261) (135) (231)
Cash
Net change in cash 17,465 4,885 3,240
Beginning balance 12,973 8,088 4,848
Ending balance $30,438 $12,973 $8,088
The accompanying notes are an integral part of these statements.
JLG INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except per share data)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
Principles of Consolidation and Statement Presentation
The consolidated financial statements include the accounts of the Company
and its subsidiaries. Significant intercompany accounts and transactions
have been eliminated in consolidation. In preparing the financial
statements, management is required to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates. Certain prior
year amounts in the consolidated financial statements have been
reclassified to conform to the presentation used for 1996.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents and classifies
such amounts as cash.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined using the LIFO (last-in, first-out) method. Inventories at
July 31, 1996 and 1995 would have been higher by $4,307 and $4,528,
respectively, had the Company used FIFO cost, which approximates current
cost, rather than LIFO cost for valuation of its inventories.
Property, Plant and Equipment and Equipment Held for Rental
Property, plant and equipment and equipment held for rental are stated at
cost, net of accumulated depreciation. Depreciation is computed using
the straight-line method, based on useful lives of 15 years for land
improvements, 10 to 20 years for buildings and improvements, three to 10
years for machinery and equipment and three to seven years for equipment
held for rental.
Income Taxes
Deferred income tax assets and liabilities arise from differences between
the tax basis of assets or liabilities and their reported amounts in the
financial statements. Deferred tax balances are determined by using the
tax rate expected to be in effect when the taxes are paid or refunds
received.
Capital Stock
In July 1996, the Company distributed a three-for-one stock split and in
April 1995 and October 1995, the Company distributed two-for-one stock
splits of the Company's then outstanding common stock. The splits were
effected by stock dividends. All share and per share data included in
this Annual Report have been restated to reflect the stock splits.
Product Development
The Company incurred product development and other engineering expenses
of $6,925, $5,542 and $4,373 in 1996, 1995 and 1994, respectively, which
were charged to expense as incurred.
Fair Value of Financial Instruments
The carrying values reported in the consolidated balance sheet for cash,
accounts receivable, accounts payable, other assets and accrued expenses
approximate their fair values. The fair value of the Company's long-term
debt is estimated to approximate the carrying amount reported in the
consolidated balance sheet based on current interest rates for similar
types of borrowing arrangements.
Stock-Based Compensation
The Financial Accounting Standards Board recently issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." This new standard encourages, but does not require,
companies to recognize compensation expense for grants of stock, stock
options and other equity instruments based on the fair-value method of
accounting. The Company is required to adopt SFAS No. 123 for its fiscal
year 1997. The Company expects to continue to follow the accounting
provisions of APB No. 25 for stock based compensation and to furnish the
pro-forma disclosure required under SFAS No. 123, if material.
Translation of Foreign Currencies
The financial statements of the Company's Australian operation are
measured in its local currency and then translated into U.S. dollars.
All balance sheet accounts have been translated using the current rate of
exchange at the balance sheet date. Results of operations have been
translated using the average rates prevailing throughout the year.
Translation gains or losses resulting from the changes in the exchange
rates from year to year are accumulated in a separate component of
shareholders' equity.
The financial statements of the Company's European operation are prepared
using the U.S. dollar as its functional currency. The transactions of
this operation that are denominated in foreign currencies have been
remeasured in U.S. dollars, and any resulting gain or loss is reported in
income.
Net Income per Share
Net income per share for 1996 is computed by dividing net income by the
weighted average number of common shares outstanding plus the incremental
shares that would have been outstanding upon the assumed exercise of
dilutive stock options. In 1995 and 1994, the dilutive effect of stock
option shares was immaterial, and therefore, not considered in the
calculation of net income per share.
INCOME TAXES
The income tax provision consisted of the following for the years ended
July 31:
1996 1995 1994
Current:
Federal $20,476 $10,641 $5,373
State 2,580 1,896 927
23,056 12,537 6,300
Deferred:
Federal 435 (483) (833)
State 67 (113) (400)
502 (596) (1,233)
$23,558 $11,941 $5,067
The Company made income tax payments of $24,435, $11,858, and $5,700 in
1996, 1995, and 1994, respectively.
The difference between the U.S. federal statutory income tax rate and the
Company's effective tax rate is as follows for the years ended July 31:
1996 1995 1994
Statutory U.S. federal income
tax rate 35% 35% 35%
State tax provision, net of
federal effect 3 4 4
Net tax effect of foreign
operations (2)
Other (2) (2) (2)
36% 37% 35%
Components of deferred tax assets and liabilities were as follows at July 31:
1996 1995
Future income tax benefits:
Contingent liabilities provisions $4,065 $3,811
Employee benefits 1,331 1,154
Translation adjustments 1,193 918
Inventory valuation provisions 649 887
Other 966 1,360
8,204 8,130
Deferred tax liabilities:
Depreciation and asset basis differences 1,165 925
Other 153 145
1,318 1,070
6,886 7,060
Less valuation allowance (222) (234)
Net deferred tax assets $6,664 $6,826
The current and long-term deferred tax asset amounts are included in
other current and other asset amounts on the consolidated balance sheets.
BANK CREDIT LINES AND LONG-TERM DEBT
The Company has available a $20 million unsecured bank revolving line of
credit with a term of two years, renewable annually, and at an interest
rate of prime or a spread over LIBOR. The facility further provides for
borrowings using bankers acceptances at prevailing discount rates. The
Company also has the option to convert outstanding borrowings under the
facility to an amortizing term loan with a repayment period of up to five
years, and at an interest rate based on the yield of U.S. Treasury
securities with the same maturity. There were no amounts outstanding
under this facility at July 31, 1996 and 1995.
Long-term debt was as follows at July 31:
1996 1995
Industrial revenue bonds due in 1999
with interest at 7% $1,000 $1,000
Industrial revenue mortgages due through
2004 with interest at 5.5% 601 677
State agency mortgages due through 2004
with interest averaging 3% 506 662
Other 87 164
2,194 2,503
Less current portion (243) (243)
$1,951 $2,260
The bank revolving line of credit requires the maintenance of certain
financial ratios. Borrowings aggregating $1.9 million under certain
long-term loans are secured by $9.4 million in assets of the Company.
Interest paid on all borrowings was $293, $378 and $461 in 1996 1995, and
1994, respectively.
The aggregate amounts of long-term debt outstanding at July 31, 1996
which will become due in 1997 through 2001 are: $243, $159, $1,142, $143
and $144, respectively.
EMPLOYEE BENEFIT PLANS
The Company's stock incentive plan has reserved 5,617 common shares that
may be awarded to key employees in the form of options to purchase
capital stock, or restricted shares. The option price is set by the
Company's Board of Directors. For all options currently outstanding, the
option price is the fair market value of the shares on their date of
grant.
The directors stock option plan provides for annual grants to each
outside director of a single option to purchase six thousand shares of
capital stock, providing the Company earned a net profit, before
extraordinary items, for the prior fiscal year. The option price shall
be equal to the shares' fair market value on their date of grant. An
aggregate of 1,968 shares of Common stock is authorized to be issued
under the plan.
Outstanding options and transactions involving the plans are summarized
as follows:
1996 1995
Outstanding options at the beginning of the year 1,911 2,077
Options granted ($3.30 to $14.75 per share) 275 455
Options cancelled ($1.12 to 2.93 per share) (8) (44)
Options exercised ($.43 to $5.64 per share) (473) (577)
Outstanding options at the end of the year 1,705 1,911
Exercisable options at the end of the year
($.43 to $5.64 per share) 728 526
The Company has a discretionary, defined-contribution retirement plan
covering all its eligible U.S. employees. The Company's policy is to
fund the pension cost as accrued. Plan assets are invested in money
market funds, government securities, mutual funds and the Company's
capital stock. The aggregate expense relating to these plans was $4,355,
$2,298 and $1,888 in 1996, 1995 and 1994, respectively.
ACCRUED EXPENSES
Components of accrued expenses were as follows at July 31:
1996 1995
Salaries, wages and related taxes $8,904 $6,609
Income taxes 2,111 2,718
Contingent liabilities, current portion 2,231 2,378
Employee benefits 1,491 1,563
Sales rebates 3,409 884
Other 4,131 4,741
$22,277 $18,893
INDUSTRY AND EXPORT DATA
The Company operates in one dominant industry segment - the manufacturing
and selling of mobile, hydraulically-operated equipment. The Company
manufactures its products in the U.S. and its customers are principally
U.S. based equipment rental firms. Additionally, its receivables from
these customers are generally not collateralized. Sales to one customer,
as a percent of total sales, were 13% for 1996 and 1995 and 12% for 1994.
Export sales, as a percent of total sales, were 24%, 18% and 16% of net
sales for 1996, 1995 and 1994, respectively.
COMMITMENTS AND CONTINGENCIES
The Company is a party to personal injury and property damage litigation
arising out of incidents involving the use of its products. The
Company's insurance program for fiscal year 1996 was comprised of a self-
insured retention of $5 million and catastrophic coverage of $20 million
in excess of the retention. Catastrophic coverage for fiscal year 1997
was increased to $25 million. The Company contracts with an independent
insurance firm to provide claims handling and adjustment services. The
Company's estimates with respect to claims are based on internal
evaluations of the merits of individual claims and the reserves assigned
by the Company's independent insurance carrier. The methods of making
such estimates and establishing the resulting accrued liability are
reviewed frequently, and any adjustments resulting therefrom are
reflected in current earnings. Claims are paid over varying periods,
which generally do not exceed five years. Accrued liabilities for future
claims are not discounted.
With respect to all outstanding claims of which the Company is aware,
accrued liabilities of $8.9 million and $8.4 million were established at
July 31, 1996 and 1995, respectively. While the Company's ultimate
liability may exceed or be less than the amounts accrued, the Company
believes that it is unlikely that it would experience losses that are
materially in excess of such estimated amounts. As of July 31, 1996 and
1995, there were no insurance recoverables or offset implications and
there were no claims by the Company being contested by insurers.
The Company leases equipment under operating leases expiring in various
years. These leases require the Company to pay all maintenance and
general operating costs. Future minimum lease payments are: $1,387,
$1,367, $143, $85 and $85 in 1997 through 2001, respectively. Rental
expense for all operating leases was $1,408, $906, and $955 in 1996, 1995
and 1994, respectively.
UNAUDITED QUARTERLY FINANCIAL INFORMATION
Unaudited financial information was as follows for the fiscal quarters
within the years ended July 31:
Gross Net Net Income
Net Sales Profit Income Per Share
1996
October 31 $86,701 $21,494 $7,780 $.18
January 31 87,558 22,458 8,268 .19
April 30 113,217 31,296 12,461 .28
July 31 125,931 33,468 13,599 .30
$413,407 $108,716 $42,108 $.95
1995
October 31 $53,724 $12,984 $3,863 $.09
January 31 52,175 13,449 3,752 .09
April 30 75,809 18,082 6,089 .14
July 31 87,503 21,438 7,054 .17
$269,211 $65,953 $20,758 $.49
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To The Board of Directors and Shareholders
JLG Industries, Inc.
McConnellsburg, Pennsylvania
We have audited the accompanying consolidated balance sheets of JLG
Industries, Inc. as of July 31, 1996 and 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended July 31, 1996. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
JLG Industries, Inc. at July 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years
in the period ended July 31, 1996 in conformity with generally accepted
accounting principles.
Baltimore, Maryland
September 3, 1996
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 relating to identification of
directors is incorporated herein by reference from pages 2 through 4 of
the Company's Proxy Statement under the caption "Election of Directors."
Identification of officers is presented in Item 1 of this report under
the caption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 relating to executive
compensation is hereby incorporated by reference from pages 3 through 4,
under the caption "Board of Directors," and pages 5 through 11, under the
caption "Executive Compensation," of the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 relating to security ownership
of certain beneficial owners and management is hereby incorporated by
reference from pages 4 and 5 of the Company's Proxy Statement under the
caption "Voting Securities and Principal Holders." There is no required
disclosure regarding change in control.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 relating to certain
relationships and related transactions is hereby incorporated by
reference from page 12 of the Company's Proxy Statement under the caption
"Certain Transactions."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) and (2) The following consolidated financial statements of the
registrant and its subsidiaries are included in Item 8.
Consolidated Balance Sheets - July 31, 1996 and 1995
Consolidated Statements of Income - Years ended July 31, 1996, 1995
and 1994
Consolidated Statements of Shareholders' Equity - Years ended
July 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended July 31, 1996,
1995 and 1994
Notes to Consolidated Financial Statements - July 31, 1996
The following consolidated financial schedule of the registrant and its
subsidiaries is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and,
therefore, have been omitted.
(a) (3) Listing of Exhibits
Exhibit
Number Exhibit
3.1 Certificate of incorporation of JLG Industries, Inc., which
appears as Exhibit 1 (a) to the Company's Form 10
Registration Statement (File No. 0-8454 -- filed April 22,
1977), is hereby incorporated by reference.
3.2 Amendment to Section 5 of the Company's Articles of
Incorporation effective as of June 14, 1966.
3.3 Amendment to Section 5 of the Company's Articles of
Incorporation effective as of June 14, 1996.
3.4 Revised By-Laws of JLG Industries, Inc.
4.1 Trust Indenture between the Bedford County, Pennsylvania
Industrial Development Authority and the Fulton County
National Bank and Trust Company, as Trustee, which appears
as Exhibit B5 to the Company's Form 10-K (File No. 0-8454 --
filed October 24, 1979), is hereby incorporated by reference.
4.2 Installment Sale Agreement between Bedford County,
Pennsylvania Industrial Development Authority and JLG
Industries, Inc. which appears as Exhibit B6 to the
Company's Form 10-K (File No. 0-8454 -- filed October 24,
1979), is hereby incorporate by reference.
4.3 Agreement to disclose upon request.
10.1 Stock Redemption Agreement dated August 27, 1980, between
JLG Industries, Inc. and Paul K. Shockey, which appears as
Exhibit 25 to the Company's Form S-7 (Registration No. 2-
69194 -- filed September 18, 1980), is hereby incorporated
by reference.
10.2 Directors' Deferred Compensation Plan dated July 29, 1986,
which appears as Exhibit 10.5 to the Company's Form 10-K
(File No. 0-8454 -- filed October 28, 1986), is hereby
incorporated by reference.
10.3 JLG Industries, Inc. Stock Incentive Plan dated May 23, 1991
which appears as Exhibit 10.10 to the Company's Form 10-K
(File No. 0-8454 -- filed October 27, 1992), is hereby
incorporated by reference.
10.4 Credit Agreement dated December 21, 1989 among JLG
Industries, Inc., the First National Bank of Maryland, and
Philadelphia National Bank, which appears as Exhibit 4.1 to
the Company's 10-Q (File No. 0-8454 -- filed March 12,
1990), is hereby incorporated by reference.
10.5 First Modification Agreement, dated January 29, 1990 to the
Credit Agreement dated December 21, 1989 among JLG
Industries, Inc., the First National Bank of Maryland, and
Philadelphia National Bank, which appears as Exhibit 4.3 to
the Company's 10-Q (File No. 0-8454 -- filed March 12,
1990), is hereby incorporated by reference.
10.6 Second Modification Agreement, dated September 17, 1993 to
the Credit Agreement dated December 21, 1989 among JLG
Industries, Inc., the First National Bank of Maryland, and
Philadelphia National Bank, which appears as Exhibit 10.12
to the Company's 10-K (File No. 0-8454 -- filed October 20,
1993), is hereby incorporated by reference.
10.7 JLG Industries, Inc. Directors Stock Option Plan amended and
restated as of September 7, 1995 which appears as Exhibit
10.12 to the Company's 10- K (File No. 0-8454 -- filed
October 20, 1993), is hereby incorporated by reference.
10.8 JLG Industries, Inc. Supplemental Executive Retirement Plan
effective June 1, 1995
10.9 JLG Industries, Inc. Executive Retiree Medical Benefits Plan
effective June 1, 1995
10.10 JLG Industries, Inc. Executive Severance Plan effective June
1, 1995
22 Listing of subsidiaries.
23 Consent of independent auditors.
27 Financial Data Schedule
(b) The Company was not required to file Form 8-K pursuant to
requirements of such form in the fourth quarter of fiscal 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
JLG INDUSTRIES, INC.
(Registrant)
By: /s/ L. David Black Date: October 10, 1996
L. David Black, Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities on the dates indicated.
By: /s/ Charles H. Diller, Jr. Date: October 10, 1996
Charles H. Diller, Jr., Executive Vice President,
Chief Financial Officer, Secretary and
Director
By: /s/ George R. Kempton Date: October 10, 1996
George R. Kempton, Director
By: /s/ Gerald Palmer Date: October 10, 1996
Gerald Palmer, Director
By: /s/ Stephen Rabinowitz Date: October 10, 1996
Stephen Rabinowitz, Director
<TABLE>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
JLG INDUSTRIES, INC. AND SUBSIDIARIES
(thousands of dollars)
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
Additions
Balance at Charged to Charged to Balance at
Beginning of Costs and Other Accounts Deductions- End of
Classification Period Expenses Describe Describe(1)(2) Period
<S> <C> <C> <C> <C>
Year ended July 31, 1996:
Allowance for Doubtful
Accounts $1,325 107 (217) $1,215
Year ended July 31, 1995:
Allowance for Doubtful
Accounts $965 360 $1,325
Year ended July 31, 1994:
Allowance for Doubtful
Accounts $664 644 (343) $965
</TABLE>
Note:
(1)Amounts written off and transferred to other accounts in the current year.
(2)Adjustment resulting from conversion of foreign currencies.
EXHIBIT 3.2
Section 5 of the Company's Articles of Incorporation shall be
amended and restated to read in its entirety as follows:
5. The aggregate number of shares which the corporation shall
have authority to issue is Fifty Million Nine Hundred Sixty-Six
Thousand Eight Hundred Fifty-Six (50,966,856) shares $.20 par value
capital stock with a total par value of Ten Million One Hundred
Ninety-Three Thousand Three Hundred Seventy-One Dollars
($10,193,371). The Board of Directors is hereby authorized to
issue, from time to time, in whole or in part, such shares, with
such full, limited, multiple or fractional or non-voting rights and
with such designations, preferences, qualifications, privileges,
limitations, options, conversion rights and other special rights as
may be adopted by the Board of Directors in the resolution provided
for the issue of such shares.
EXHIBIT 3.3
Section 5 of the Company's Articles of Incorporation shall be
amended and restated to read in its entirety as follows:
5. The aggregate number of shares which the corporation shall
have authority to issue is Fifty Million Nine Hundred Sixty-Six
Thousand Eight Hundred Fifty-Six (50,966,856) shares $.20 par value
capital stock with a total par value of Ten Million One Hundred
Ninety-Three Thousand Three Hundred Seventy-One Dollars
($10,193,371.20).
Exhibit 4.3
AGREEMENT TO DISCLOSE UPON REQUEST
JLG Industries, Inc. (the "Company") hereby agrees that, with respect to
any agreement relating to long-term debt of the Company that has not been
filed as an exhibit to the Company's reports filed pursuant to the
Securities Exchange Act of 1934 because such filing is not required
pursuant to the provisions of S-K Item 601 (b) (4) (iii) (A), the Company
will furnish a copy of any such agreement to the Securities and Exchange
Commission upon request.
Signed_______________________________
Charles H. Diller, Jr.
Secretary
BY-LAWS
OF JLG INDUSTRIES, INC.
(A Pennsylvania Corporation)
OFFICES
1. The registered office shall be at P.O. Box 695,
McConnellsburg, Pennsylvania 17233.
2. The Corporation may also have offices at such other
places as the Board of Directors may from time to time appoint or
the business of the Corporation may require.
SEAL
3. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the
words "Corporate Seal, Pennsylvania".
SHAREHOLDERS' MEETING
4. All meetings of the shareholders shall be held at such
place within or without the Commonwealth of Pennsylvania as the
Board of Directors may designate from time to time and in the
absence of such
designation shall be held at the principal office of the
Corporation in Ayr Township, Pennsylvania.
5. The annual meeting of the shareholders shall be held
on the fourth Monday of November in each year, or at such other
date as may be fixed by the Board of Directors, in order to elect
the Board of Directors of the Corporation and transact such other
business as may properly be brought before the meeting. If the
annual meeting shall not be called and held within six months
after the fourth Monday in November, any shareholder may call
such meeting.
6. The presence, in person or by proxy, of the holders of
a majority of the outstanding shares entitled to vote, shall
constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise provided by law, by
articles of incorporation or by these by-laws. If however, such
quorum shall not be present or represented at any meeting of the
shareholders, those entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until the requisite number of shares shall be present.
In the case of any meeting called for the election of directors,
adjournment or adjournments may be taken only from day to day
until such directors have been elected, and those who attend the
second of such adjourned meetings, although less than a quorum,
shall nevertheless constitute a quorum for the purpose of
electing directors.
7. At each meeting of the shareholders every shareholder
having the right to vote shall be entitled to vote in person or
by proxy appointed by an instrument in writing subscribed by such
shareholder and delivered to the Secretary at or prior to the
meeting. No unrevoked proxy shall be valid after eleven months
from the date of its execution, unless a longer time is expressly
provided therein, but in no event shall a proxy, unless coupled
with an interest, be voted on after three years from the date of
its execution. In all elections for directors cumulative voting
shall not be permitted. No share shall be voted at any meeting
upon which any installment is due and unpaid. The original share
ledger or transfer book, or a duplicate thereof kept in this
Commonwealth shall be prima facie evidence of the right of the
person named therein to vote thereon.
8. Written notice of the annual meeting shall be mailed
to each shareholder entitled to vote thereat, at such address as
appears on the books of the Corporation, at least five days prior
to the meeting.
9. In advance of any meeting of shareholders, the Board
of Directors may appoint judges of election, who need not be
shareholders, to act at such meeting or any adjournment thereof.
If judges of election be not so appointed, the chairman of any
such meeting may, and on the request of any shareholders or his
proxy, shall make such appointment at the meeting. The number of
judges may be one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of
shares present and entitled to vote shall determine whether one
or three judges are to be appointed. On request of the chairman
of the meeting, or of any shareholder or his proxy, the judges
shall make a report in writing of any challenge or question or
matter determined by them, and execute a certificate of any fact
found by them. No person who is a candidate for office shall act
as a judge.
10. Special meetings of the shareholders may be called at
any time by resolution adopted by the Board of Directors. At any
time upon adoption of a resolution by the Board of Directors to
call a special meeting, it shall be the duty of the Secretary to
call a special meeting of the shareholders, to be held at such
time as the Secretary may fix, not less than 10 nor more than 60
days after receipt of the request.
11. Business transacted at all special meetings shall be
confined to the objects stated in the call and matters germane
thereto.
12. Written notice of a special meeting of the
shareholders, stating the time and place and object thereof,
shall be mailed, postage prepaid, to each shareholder entitled to
vote thereat at such address as appears on the books of the
Corporation, at least five days before such meeting, unless a
greater period of notice is required by statute in a particular
case.
VOTING LIST
13. The officer or agent having charge of the transfer
books shall make a complete list of the shareholders entitled to
vote at the meetings, arranged in alphabetical order, with the
address of and the number of shares held by each. Such list
shall be produced and kept open at the time and places of the
meeting, and shall be subject to the inspection of any such
shareholder during the whole time of the meeting. The original
share ledger or transfer book, or a duplicate thereof kept in
this Commonwealth, shall be prima facie evidence as to who are
the shareholders entitled to examine such list or share ledger or
transfer book, or to vote in person or by proxy, at any meeting
of shareholders.
DIRECTORS
14. The business of this Corporation shall be managed by
its Board of Directors, which shall consist of such number of
persons, not less than 3 and no more than 15, as may be
determined from time to time by the Board of Directors; provided
that no determination by the Board of Directors may reduce the
term of office of any incumbent Director. Directors shall be
elected by the shareholders at the annual meeting of shareholders
of the Corporation. Any person to be eligible for election by
the shareholders must meet the requirements of a "Qualified
Nominee" as defined below in this section and must be nominated
by either the Board of Directors or by a shareholder or group of
shareholders that own, as reflected on the Corporation's share
register, at least one share of the Corporation's stock that is
then currently entitled to vote at a meeting called for the
election of directors. Any such nominations by persons other
than the Board of Directors must be received by the Secretary of
the Corporation no later than the anniversary of the date which
shall have been ninety (90) days prior to the date of the
immediately preceding year's annual meeting accompanied by
written statements signed by each person so nominated setting
forth all information in respect of such person as would be
required to be included in a proxy statement filed with the
Securities and Exchange Commission pursuant to Rule 14(a) under
the Securities Exchange Act of 1934, as amended, had such person
been nominated, or intended to be nominated, by the Board of
Directors, and stating that such person consents to such
nomination and consents to serve as a Director of the Corporation
if elected. The Secretary shall promptly refer all such proposed
nominations to the Nominating Committee of the Board of
Directors. Within fifteen (15) days following the receipt by the
Secretary of a stockholder notice of nomination pursuant hereto,
the Nominating Committee shall instruct the Secretary of the
Corporation to advise the notifying stockholder of any
deficiencies in the notice as determined by the Committee. The
notifying stockholder shall cure such deficiencies within fifteen
(15) days of receipt of such notice. No persons shall be
eligible for election as a director of the Corporation unless
nominated in accordance herewith. Nominations not made in
accordance herewith may, in the discretion of the presiding
officer at the meeting and with the advice of the Nominating
Committee, be disregarded by the presiding officer and, upon his
or her instructions, all votes cast for each such nominee may be
disregarded. The determinations of the presiding officer at the
meeting shall be conclusive and binding upon all stockholders of
the Corporation for all purposes. A person will be a "Qualified
Nominee" if such person (A)(i) beneficially owns at least one
thousand shares of the Corporation's Common Stock, par value $.20
per share, such amount to be adjusted from time to time following
September 5, 1996, by any stock split, stock dividend,
reclassification or recapitalization by the Corporation (the
"Minimum Shares"), or (ii) commits to the Corporation in writing
to purchase the Minimum Shares within 18 months of being
nominated as a director candidate, provided that any person who
fails to acquire the Minimum Shares within 18 months of being
nominated may not be considered a Qualified Nominee until such
person beneficially owns the Minimum Shares, and (B) will not
reach age 70 prior to the next scheduled annual meeting of
shareholders.
15. In addition to the powers and authorities by these by-
laws expressly conferred upon them, the Board may exercise all
such powers of the Corporation and do all such lawful acts and
things as are not be statute or by the articles of incorporation
or by these by-laws directed or required to be exercised or done
by the shareholders.
MEETINGS OF THE BOARD OF DIRECTORS
16. The meetings of the Board of Directors may be held at
such place within this Commonwealth, or elsewhere, as a majority
of the directors may from time to time appoint, or as may be
designated in the notice calling the meeting.
17. Each newly elected Board may meet at such place and
time as shall be fixed by the shareholders at the meeting at
which such directors are elected, and no notice shall be
necessary to the newly elected directors in order legally to
constitute the meeting, or they may meet at such place and time
as may be fixed by the consent in writing of all the directors.
18. Regular meetings of the Board shall be held without
notice at such time and place as shall be determined by the
Board.
19. Special meetings of the Board may be called by the
Chairman of the Board on at least three days notice to each
director, either personally or by mail or by telegram; special
meetings shall be called by the Chairman of the Board of
Secretary in a like manner and on like notice on the written
request of two directors, or more.
20. A majority of the directors in office shall be
necessary to constitute a quorum for the transaction of business,
and the acts of a majority of the directors present at a meeting
at which a quorum is present shall be the acts of the Board of
Directors. If all the directors shall severally or collectively
consent in writing to any action to be taken by the Corporation,
such action shall be as valid corporate action as though it had
been authorized at a meeting of the Board of Directors.
21. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees,
each committee to consist of two or more of the directors of the
Corporation. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such
committee, to the extent provided by resolution of the Board of
Directors, shall have and shall exercise the powers of the Board
of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it. In the absence or
disqualification of any member of any such committee or
committees, the member of members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may, by unanimous vote, appoint another
member of the Board of Directors to act at the meeting in place
of any such absent or disqualified member.
LIABILITY OF DIRECTORS
22. A director, as such, shall not be personally liable
for monetary damages for any action taken, or any failure to take
any action, unless the director has breached or failed to perform
the duties of his or her office under 42 Pa. C.S. Section 8363
and the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness. The provisions of this
Section shall not apply to the responsibility or liability of a
director pursuant to any criminal statue or the liability of a
director for the payment of taxes pursuant to local, state or
federal law.
COMPENSATION OF DIRECTORS
23. Directors as such, shall not receive any stated salary
for their services, but by resolution of the Board, a fixed sum
and expenses of attendance, if any, may be allowed for attendance
at each regular or special meeting of the Board PROVIDED, that
nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and
receiving compensation therefor.
OFFICERS
24. The officers of the Corporation shall be chosen by the
Board of Directors and shall be a Chairman of the Board, a
President, a Vice-President, a Secretary and a Treasurer. The
Board of Directors may also choose additional Vice-Presidents,
and one or more Assistant Secretaries and Assistant Treasurers.
Any number of offices may be held by the same person. It shall
not be necessary for the officers to be directors.
25. The Board of Directors shall fix the salaries of all
officers of the Corporation.
26. The officers of the Corporation shall hold office for
one year and until their successors are chosen and have
qualified. Any officer elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in
their judgment the best interests of the Corporation will be
served thereby.
LIABILITY OF OFFICERS
27. An officer, as such, shall not be personally liable to
the Corporation or its shareholders, for monetary damages, unless
the officer has breached or failed to perform the duties of his
or her office under the Corporation's articles of incorporation,
these by-laws or applicable provisions of law, and the breach or
failure to perform constitutes self-dealing, willful misconduct
or recklessness. The provisions of this Section shall not apply
to the responsibility or liability of an officer pursuant to any
criminal statute or the liability of an officer for the payment
of taxes pursuant to local, state or federal law.
CHAIRMAN OF THE BOARD
28. The Chairman of the Board shall preside at all
meetings of the stockholders and of the Board of Directors, and
shall see that all orders and resolutions of the Board of
Directors are carried into effect. He may sign certificates
representing stock of the Corporation the issuance of which shall
have been authorized by the Board of Directors. From time to
time he shall report to the Board of Directors all matters within
his knowledge which the interests of the Corporation may require
to be brought to their notice. He shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation. He
shall be ex-officio a member of all committees of the Board of
Directors. He shall perform such other duties as are given to
him by these by-laws or as from time to time may be assigned to
him by the Board of Directors.
PRESIDENT
29. The President shall be the chief executive officer of
the Corporation, and subject to the direction of the Board of
Directors, shall have general supervision over the business and
affairs of the Corporation and over its officers and agents and
general management and control of all of its properties. In the
absence of the Chairman of the Board, he shall preside at all
meetings of the stockholders or of the Board of Directors at
which he is present. He may sign certificates of stock of the
Corporation the issuance of which shall have been authorized by
the Board of Directors. He shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation. He
shall perform such other duties as are given to him by these by-
laws or as may from time to time be assigned to him by the Board
of Directors.
VICE-PRESIDENT
30. In the absence of the President to perform the duties
of chief executive officer of the Corporation, or in the event of
his inability to act, the Vice-President (or in the event there
be more than one Vice-President, the Vice-Presidents in the order
designated by the directors, or in the absence of any
designation, then in the order of their election) shall have all
the powers of and be subject to all the restrictions upon the
President. The Vice-Presidents, under the supervision of the
President, shall perform such other duties and have such other
powers as may be prescribed by the Board of Directors or the
President.
SECRETARY
31. The Secretary shall attend all sessions of the Board
and all meetings of the shareholders and act as clerk thereof,
and record all the votes of the Corporation and the minutes of
all its transactions in a book to be kept for that purpose; and
shall perform like duties for all committees of the Board of
Directors when required. He shall give, or cause to be given,
notice of all meetings of the shareholders and of the Board of
Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or President, and under
whose supervision he shall be. He shall keep in safe custody the
corporate seal of the Corporation, and when authorized by the
Board, affix the same to any instrument requiring it.
32. The Assistant Secretary, or if there be more than one,
the Assistant Secretaries in the order determined by the Board of
Directors (or if there be no such determination, then in the
order of their election) shall, in the absence of the Secretary
or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Secretary, under the
supervision of the President, and shall perform such other duties
and have such other powers as may be prescribed by the Board of
Directors or President.
TREASURER
33. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation,
and shall keep the moneys of the Corporation in a separate book
account to the credit of the Corporation.
34. He shall disburse the funds of the Corporation as may
be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and directors,
at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and
of the financial condition of the Corporation.
35. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurer in the order determined by the
Board of Directors (or if there be no such determination, then in
the order of their election), shall, in the absence of the
Treasurer or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Treasurer,
under the supervision of the President, and shall perform such
other duties and have such other powers as may be prescribed by
the Board of Directors or President.
VACANCIES
36. If the office of any officer or agent, one or more,
becomes vacant for any reason, the Board of Directors may choose
a successor or successors, who shall hold office for the
unexpired term in respect of which such vacancy occurred.
Vacancies in the Board of Directors shall be filled,
by persons who are Qualified Nominees as defined in Section 14 of
those By-Laws, by the vote of a majority of the remaining members
of the Board though less than a quorum, and each person so
elected shall be a director until his successor is elected by the
shareholders, who may make such election at the next annual
meeting of the shareholders or at any special meeting duly called
for that purpose and held prior thereto.
CORPORATE RECORDS
37. There shall be kept at the principal office of the
Corporation an original or duplicate record of the proceedings of
the shareholders and of the directors, and the original or a copy
of its by-laws, including all amendments or alterations thereto
to date, certified by the Secretary of the Corporation. An
original or duplicate share register shall also be kept at the
principal office, or at the office of a transfer agent or
registrar within this Commonwealth, giving the names of the
shareholders in alphabetical order, and showing their respective
addresses and the number and classes of shares held by each.
SHARE CERTIFICATES
38. The share certificates of the Corporation shall be
numbered and registered in the transfer books of the Corporation,
as they are issued. They shall be signed by either the Chairman
of the Board or the President and by the Secretary and shall bear
the corporate seal. Any or all signatures on the certificates
may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of
issue.
TRANSFERS OF SHARES
39. Assuming no conflict with valid share transfer
restrictions, transfers of shares shall be made on the books of
the Corporation upon surrender of the certificates therefor,
endorsed by the person named in the certificate or by his
attorney, lawfully constituted in writing.
CLOSING TRANSFER BOOKS OR FIXING RECORD DATE
40. The Board of Directors may fix a time, not less than
ten or more than ninety days, prior to the date of any meeting of
shareholders, or the date fixed for the payment of any dividend
or distribution, or the date for the allotment of rights, or the
date when any change, conversion or exchange of shares will be
made or go into effect, as a record date for the determination of
the shareholders entitled to notice of, and to vote at, any such
meeting, or entitled to receive payment of any such dividend or
distribution or to receive any such allotment of rights, or to
exercise the rights in respect to any change, conversion or
exchange of shares. In such cases, only such shareholders as
shall be shareholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting, or to
receive payment of such dividend or distribution, or to receive
such allotment of rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any shares on the books
of the Corporation after any record date fixed, as aforesaid.
The Board of Directors may close the books of the Corporation
against transfers of shares during the whole or any part of such
period, and in such case written or printed notice thereof shall
be mailed at least ten days before the closing thereof to each
shareholder of record at the address appearing on the records of
the Corporation or supplied by him to the Corporation for the
purpose of notice. While the stock transfer books of the
Corporation are closed, no transfer of shares shall be made
thereon. If no record date is fixed for the determination of
shareholders entitled to receive notice of, or vote at, a
shareholders meeting, transferees of shares which are transferred
on the books of the Corporation within ten days next preceding
the date of such meeting shall not be entitled to notice of or
vote at such meeting.
LOST CERTIFICATE
41. Any person claiming a share certificate to be lost or
destroyed shall make an affidavit or affirmation of that
fact and advertise the same in such manner as the
Corporation may require, and shall, if required by the
Corporation, give the Corporation a bond of indemnity
with sufficient surety to protect the Corporation or any
person injured by the issue of a new certificate from any
liability or expense which it or they may incur by reason
of the original certificate remaining outstanding,
whereupon a new certificate may be issued of the same
tenor and for the same number of shares as the one
alleged to be lost or destroyed, but always subject to
the approval of the Corporation.
CHECKS
42. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers as the
Board of Directors may from time to time designate.
FISCAL YEAR
43. The fiscal year shall begin the 1st day of August of
each year.
DIVIDENDS
44. Subject to the provisions of the statutes, the Board
of Directors may declare and pay dividends upon the outstanding
shares of the Corporation out of its surplus from time to time
and to such extent as they deem advisable, in cash, property or
in shares of the Corporation.
Before payment of any dividend there may be set aside
out of the net profits of the Corporation such sum or sums as the
directors, from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the directors shall
think conducive to the interests of the Corporation, and the
directors may abolish any such reserve in the manner in which it
was created.
DIRECTORS' ANNUAL STATEMENT
45. The Chairman of the Board and Board of Directors shall
present at each annual meeting a full and complete statement of
the business and affairs of the Corporation for the preceding
year. Such statement shall be prepared and presented in whatever
manner the Board of Directors shall deem advisable and need not
be verified by a certified public accountant.
NOTICES
46. Whenever written notice is required to be given to any
person, it may be given to such person, either personally or by
sending a copy thereof through the mail, or by telegram, charges
prepaid, to his address appearing on the books of the
Corporation, or supplied by him to the Corporation for the
purpose of notice. If the notice is sent by mail or by
telegraph, it shall be deemed to have been given to the person
entitled thereto when deposited in the United States mail or with
a telegraph office for transmission to such person. Such notice
shall specify the place, day and hour of the meeting and, in the
case of a special meeting, the general nature of the business to
be transacted.
Any shareholder or director may waive any notice
required to be given under these by-laws.
INDEMNIFICATION
47.A. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the Corporation), by reason of the fact
that he is or was a director or officer of the Corporation, or is
or was serving at the request of the Corporation as a director,
officer or member of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and with
respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
B. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer or member of another corporation, partnership,
joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action
or suit if he acted in good faith in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Corporation; provided, however, that no indemnification shall be
made in respect of any claim, issue or matter as to be which such
person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation
unless and only to the extent that the court of common pleas of
the county in which the registered office of the Corporation is
located or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which the court of common pleas or such other court
shall deem proper.
C. To the extent that a director or officer of the
Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
paragraphs A or B of this Section 47 or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
D. Any indemnification under paragraphs A or B of this
Section 47 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is
proper in the circumstances because he had met the applicable
standard of conduct set forth in such paragraph. Such
determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding; or (2) if such
quorum is not obtainable, or, even if obtainable, a majority vote
of a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or (3) by the shareholders.
E. Expenses incurred in defending a civil or criminal
action, suit, or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in paragraph D of
this Section 47 upon receipt of an undertaking by or on behalf of
the director or officer to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by
the Corporation as authorized in this Section 47.
F. The indemnification provided by this Section 47 shall
not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law,
agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors
and administrators of such a person.
48.A. The Corporation shall indemnify any person who was or
is an "authorized representative" of the Corporation (which shall
mean for purposes of this Section a director or officer of the
Corporation, or a person serving at the request of the
Corporation as a director, officer, partner, trustee or fiduciary
of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity or enterprise) and who was
or is a party (which shall mean for purposes of this Section any
threatened, pending or completed action, suit, appeal or
proceeding of any nature, whether civil, criminal,
administrative, or investigative, whether formal or informal,
including an action by or in the right of the Corporation or a
class of its security holders) by reason of the fact that he or
she was or is an authorized representative of the Corporation,
against any liability (which shall mean for purposes of this
Section any damage, judgment, penalty, fine, amount paid in
settlement, punitive damages, excise tax assessed with respect to
an employee benefit plan, or cost or expense of any nature
including, without limitation, attorneys' fees and disbursements)
including, without limitation, liabilities resulting from any
actual or alleged breach or neglect of duty, error, misstatement
or misleading statement, negligence, gross negligence or act
giving rise to strict or products liability, except where such
indemnification is for acts or failures to act constituting self-
dealing, willful misconduct or recklessness. If an authorized
representative is entitled to indemnification in respect of a
portion, but not all, of any liabilities to which such person may
be subject, the Corporation shall indemnify such authorized
representative to the maximum extent for such portion of the
liabilities. The termination of any proceeding by judgment,
order, settlement, indictment or conviction or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the authorized representative is not entitled to
indemnification.
B. Notwithstanding any other provision of this Section,
the Corporation shall not indemnify under this Section an
authorized representative for any liability incurred in a
proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an
intervenor or amicus curiae by the person seeking indemnification
unless such initiation of or participation in the proceeding is
authorized, either before or after its commencement, by the
affirmative vote of a majority of the directors in office. This
paragraph does not apply to reimbursement of expenses incurred in
successfully prosecuting or defending the rights of an authorized
representative granted by or pursuant to this Section.
C. Expenses (including attorneys' fees and disbursements)
incurred in good faith shall be paid by the Corporation on behalf
of an authorized representative in advance of the final
disposition of a proceeding described in paragraph A of this
Section upon receipt of an undertaking by or on behalf of the
authorized representative to repay such amount if it shall
ultimately be determined pursuant to paragraph F of this Section
that such person is not entitled to be indemnified by the
Corporation as authorized in this Section. The financial ability
of such authorized representative to make such repayment shall
not be a prerequisite to the making of an advance.
D. To further effect, satisfy or secure the
indemnification obligations provided herein or otherwise, the
Corporation may maintain insurance, obtain a letter of credit,
act as self-insurer, create a reserve, trust, escrow, cash
collateral or other fund or account, enter into indemnification
agreements, pledge or grant a security interest in any assets or
properties of the Corporation, or use any other mechanism or
arrangement whatsoever in such amounts, at such costs, and upon
such other terms and conditions as the Board of Directors shall
deem appropriate. Absent fraud, the determination of the Board
of Directors with respect to such amounts, costs, terms and
conditions shall be conclusive against all security holders,
officers and directors and shall not be subject to voidability.
E. An authorized representative shall be entitled to
indemnification within 30 days after a written request for
indemnification has been received by the Secretary of the
Corporation.
F. Any dispute related to the right to indemnification or
advancement of expenses as provided under this Section, except
with respect to indemnification for liability arising under the
Securities Act of 1933 which the Corporation has undertaken to
submit to a court for adjudication, shall be decided only by
arbitration, to be conducted at the Corporation's executive
offices (or such other location to which the Corporation has
given its consent), in accordance with the commercial arbitration
rules then in effect of the American Arbitration Association,
before a panel of three arbitrators, one of whom shall be
selected by the Corporation, the second of whom shall be selected
by the authorized representative and the third of whom shall be
selected by the other two arbitrators. In the absence of the
American Arbitration Association or if for any reason arbitration
under the arbitration rules of the American Arbitration
Association cannot be initiated, or if the arbitrators selected
by the Corporation and the authorized representative cannot agree
on the selection of the third arbitrator within 30 days after
such time as the Corporation and the authorized representative
have each been notified of the selection of the other's
arbitrator, the necessary arbitrator or arbitrators shall be
selected by the presiding judge of the Court of Common Pleas of
Fulton County, Pennsylvania (or of the court of general
jurisdiction in the municipality in which the Corporation's
executive offices are located). Each arbitrator selected as
provided herein is required to be or have been a director of a
corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or
the American Stock Exchange or quoted on the National Association
of Securities Dealers Automated quotations Systems. The party or
parties challenging the right of an authorized representative to
the benefits of this Section shall have the burden of proof. The
Corporation shall reimburse an authorized representative for the
expenses (including attorneys' fees and disbursements) incurred
in successfully prosecuting or defending such arbitration. Any
award entered by the arbitrators shall be final, binding and
nonappealable, and judgement may be entered thereon by any party
in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically
enforceable.
G. An authorized representative shall be deemed to have
discharged such person's duty to the Corporation if he or she has
relied in good faith on information, advice or an opinion, report
or statement prepared by:
(1) one or more officers or employees of the
Corporation whom such authorized representative reasonably
believes to be reliable and competent with respect to the
matter presented;
(2) legal counsel, public accountants or other
persons as to matters that the authorized representative
reasonably believes are within the person's professional or
expert competence; or
(3) a committee of the Board of Directors on which he
or she does not serve as to matters within its area of
designated authority, which committee he or she reasonably
believes to merit confidence.
H. All rights to indemnification under this Section shall
be deemed a contract between the Corporation and the authorized
representative pursuant to which the Corporation and each
authorized representative intend to be legally bound. Any
repeal, amendment or modification hereof shall be prospective
only and shall not affect any rights or obligations then
existing.
I. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section shall not be
deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under
any statute, certificate or articles of incorporation, by-law,
agreement, vote of shareholders or directors or otherwise, both
as to action in his or her official capacity and as to action in
any other capacity, and shall continue as to a person who has
ceased to be an authorized representative in respect of matters
arising prior to such time and shall inure to the benefit of the
heirs, executors, administrators and personal representatives of
such a person.
J. Each person who shall act as an authorized
representative of the Corporation shall be deemed to be doing so
in reliance upon the rights of indemnification provided by this
Section.
AMENDMENTS
49 Except as otherwise provided by the Business Corporation Law,
these by-laws may be amended (i) at any regular or special
meeting of the Board of Directors by the affirmative vote of a
majority of the members of the Board, or (ii) at any annual or
special meeting of the shareholders by the affirmative vote of
shareholders entitled to cast at least a majority of the votes
which all shareholders are entitled to cast thereon, provided
that in the case of any such meeting of the shareholders, notice
of the proposed amendment shall have been contained in the notice
of such meeting and provided further that the shareholders shall
always have the power to change any such action by the Board.
EXHIBIT 10.8
JLG Industries, Inc.
Supplemental Executive Retirement Plan
Effective June 1, 1995
Section 1. Establishment and Purpose of the Plan.
1.1. Establishment. Effective June 1, 1995, the Company established the
Plan for the benefit of the Participants and, in the case of Participants
described in Section 0, for the purpose of replacing their benefits under the
Prior Plan.
1.2. Purpose. The Plan is an unfunded plan maintained primarily for the
purpose of providing deferred compensation to a select group of management and
highly compensated employees. The Plan provides supplemental retirement income
to Participants in excess of their employer-provided benefits under certain
other plans and arrangements up to the maximum benefit specified in the Plan.
The Plan also provides supplemental survivor's income to Participant's Bene-
ficiaries.
Section 2. Participation by Eligible Executives.
2.1. Eligible Executives on Effective Date. An employee who is an Eligible
Executive on the Effective Date will become a Participant in the Plan beginning
on the Effective Date if he agrees in writing to waive all rights he may have
under the Prior Plan.
2.2. Eligible Executives After Effective Date. An employee who first becomes
an Eligible Executive after the Effective Date will not become a Participant
in the Plan unless the Compensation Committee, in its sole discretion, permits
him to do so. If the Compensation Committee does permit him to participate in
the Plan, the Eligible Executive will become a Participant in the Plan on the
date specified by the Compensation Committee in its sole discretion.
2.3. Written Proof of Participation Required. No employee will become a
Participant in the Plan unless he and the Company execute a copy of the Plan
document recognizing his participation in the Plan. The executed copy will
constitute an agreement between the Company and the employee that binds both
of them to the terms of the Plan. Their agreement will be binding on their
heirs, executors, administrators, successors, and assigns, both present and
future. The executed copy must be signed on the Company's behalf by an
authorized officer (other than the employee) and by the employee on his own
behalf. In the case of an employee who becomes a Participant under Section
0, the executed copy will also constitute his written agreement to waive all
rights he may have under the Prior Plan.
Section 3. Accrued Benefit.
3.1. Definition. A Participant's Accrued Benefit under the Plan is a monthly
benefit equal to the Applicable Percentage of his Final Average Compensation,
payable in the form of a Ten-Year Certain Life Annuity beginning on his Normal
Retirement Date, and reduced in accordance with Section 0.
3.2. Applicable Percentage. A Participant's Applicable Percentage is the
percentage that is specified by the Compensation Committee with respect to the
Participant for purposes of the Plan and that is reflected in the written
agreement between the Company and the Participant executed in accordance with
Section 0.
3.3. Final Average Compensation. A Participant's Final Average Compensation
is one-twelfth the average of his Annual Compensation for the 2 consecutive or
nonconsecutive calendar years during which the average of his Annual
Compensation is the highest. The Annual Compensation of a Participant for a
calendar year is the amount of base salary and cash bonus paid to him for the
calendar year. Annual Compensation earned more than 10 years before the year
in which the Participant's employment with the Company terminates is ignored.
Annual Compensation does not include any amount realized as a result of the
grant, modification, or exercise of a stock option.
3.4. Required Reductions. The monthly installments otherwise included in a
Participant's Accrued Benefit will be reduced as follows:
(a) First, each monthly installment will be reduced by the monthly amount of
a benefit that is the Actuarial Equivalent of all employer-provided benefits
the Participant has received, is receiving, or is expected to receive under any
defined benefit plan (other than this Plan), regardless of whether the defined
benefit plan is maintained by the Company or another employer, including an
unrelated employer. Employer-provided benefits provided to an alternate payee
under a domestic relations order will be treated as if they were provided to
the Participant.
(b) Second, each monthly installment will be further reduced by the monthly
amount of a benefit that is the Actuarial Equivalent of all employer-provided
account balances accumulated on the Participant's behalf under any defined
contribution plan, regardless of whether the defined contribution plan is
maintained by the Company or another employer, including an unrelated employer.
Employer-provided account balances do not include any portion of an account
balance attributable to salary reduction contributions made by the Participant,
regardless of whether the contributions are made on a pre-tax or an after-tax
basis. Account balances will be determined as of 30 days before the
Participant's Benefit Starting Date. Distributions previously made from the
Participant's accounts will be taken into account, plus interest from the date
of distribution. Employer-provided account balances provided to an alternate
payee under a domestic relations order will be treated as if they were provided
to the Participant.
(c) Third, after the preceding reductions have been made, each monthly
installment that is scheduled to be made after the Participant reaches Social
Security Retirement Age will be further reduced by one-half the monthly amount
of the federal Social Security old-age benefit he is entitled to begin
receiving on his Social Security Retirement Age.
(d) Fourth, if the Participant elects to begin receiving benefits before his
Normal Retirement Date, the monthly installment resulting after the preceding
reductions have been made will be further reduced by one-half of one percent
for each month during which benefits are scheduled to be paid before his Normal
Retirement Date.
(e) Fifth, after the preceding reductions have been made, the resulting
monthly installment will be further reduced by multiplying it by the
Participant's Vested Percentage. The Vested Percentage is 100 percent in the
case of a Participant with 5 or more Years of Service, 75 percent in the case
of a Participant with 4 but less than 5 Years of Service, 50 percent in the
case of a Participant with 3 but less than 4 Years of Service, 25 percent in
the case of a Participant with 2 but less than 3 Years of Service, and zero
percent in the case of a Participant with less than 2 Years of Service. A
Participant is deemed to have completed 5 Years of Service if he dies or
becomes Disabled, or if a Change in Control occurs, before his Benefit Starting
Date.
(f) Sixth, after the preceding reductions have been made, each monthly
installment made during a month for which the Participant receives benefits
under a long-term disability plan maintained by the Company will be further
reduced by the amount of the employer-provided long-term disability benefit he
receives for that month.
Section 4. Retirement Benefits.
4.1. Normal Retirement Benefit. A Participant who retires from service with
the Company on his Normal Retirement Date is entitled to a Normal Retirement
Benefit. Unless he elects otherwise, he will receive his Normal Retirement
Benefit in the form of a Ten-Year Certain Life Annuity beginning on his Normal
Retirement Date. The monthly installments made under his Normal Retirement
Benefit will be the same as the monthly installments under his Accrued Benefit.
4.2. Late Retirement Benefit. A Participant who retires from service with
the Company after his Normal Retirement Date is entitled to a Late Retirement
Benefit. Unless he elects otherwise, he will receive his Late Retirement
Benefit in the form of a Ten-Year Certain Life Annuity beginning on the first
day of the month after he retires from service with the Company. The monthly
installments made under his Late Retirement Benefit will be the same as the
monthly installments under his Accrued Benefit, beginning with the monthly
installment for the month that includes his Late Retirement Date. However,
he will not receive any monthly installments that would have been made under
his Accrued Benefit before his Late Retirement Date, and no adjustment will be
made in his Late Retirement Benefit to reflect the loss of these installments.
For purposes of calculating the Final Average Compensation of a Participant
entitled to a Late Retirement Benefit, Annual Compensation paid after the
Participant's Normal Retirement Date will be taken into account.
4.3. Early Retirement Benefit. A Participant who retires from service with
the Company on or after age 55 but before his Normal Retirement Date is
entitled to an Early Retirement Benefit. Unless he elects otherwise, he will
receive his Early Retirement Benefit in the form of a Ten-Year Certain
Life Annuity beginning on his Normal Retirement Date. The monthly
installments made under his Early Retirement Benefit will be the same as the
monthly installments under his Accrued Benefit. However, he may elect to begin
receiving his Early Retirement Benefit on the first day of any month before
his Normal Retirement Date and on or after the date he retires from service
with the Company.
4.4. Vested Retirement Benefit. A Participant whose employment with the
Company terminates for any reason before age 55 following a Change in Control
is entitled to a Vested Retirement Benefit. Unless he elects otherwise, he
will receive his Vested Retirement Benefit in the form of a Ten-Year Certain
Life Annuity beginning on his Normal Retirement Date. The monthly installments
made under his Vested Retirement Benefit will be the same as the monthly
installments under his Accrued Benefit. However, he may elect to begin
receiving his Vested Retirement Benefit on the first day of any month before
his Normal Retirement Date and on or after age 55.
4.5. Disability Retirement Benefit. A Participant who becomes Disabled
before his employment with the Company terminates and before he satisfies the
requirements for another Retirement Benefit under this Section 0 is entitled to
a Disability Retirement Benefit. Unless he elects otherwise, he will receive
his Disability Retirement Benefit in the form of a Ten-Year Certain Life
Annuity beginning on his Normal Retirement Date. The monthly installments
made under his Disability Retirement Benefit will be the same as the monthly
installments under his Accrued Benefit. However, he may elect to begin
receiving his Disability Retirement Benefit on the first day of any month
before his Normal Retirement Date and on or after age 55.
4.6. Joint & Survivor Annuity Option. A Participant may elect to receive his
Retirement Benefit in the form of a Ten-Year Certain Joint & Survivor Annuity
rather than a Ten-Year Certain Life Annuity. The Ten-Year Certain Joint &
Survivor Annuity may begin on the first day of any month on which the
Participant is entitled to begin receiving his Retirement Benefit and will be
the Actuarial Equivalent of the Retirement Benefit that would have been payable
to him in the form of a Ten-Year Certain Life Annuity beginning on that day.
Any election under this Section 0 must be made before the Participant's Benefit
Starting Date and may not be changed or revoked after that date.
4.7. Lump Sum Option. Alternatively, a Participant may elect to receive his
Retirement Benefit in the form of a lump sum rather than a Ten-Year Certain
Life Annuity. The lump sum may be paid on the first day of any month on which
the Participant is entitled to begin receiving his Retirement Benefit and
will equal the Actuarial Present Value of the Retirement Benefit that would
have been payable to him in the form of a Ten-Year Certain Life Annuity
beginning on that day. Any election under this Section 0 must be made before
the Participant's Benefit Starting Date and may not be changed or revoked after
that date.
Section 5. Preretirement Death Benefits.
5.1. Lump Sum Benefit. If a Participant dies before his Benefit Starting
Date, his Beneficiary is entitled to a Preretirement Death Benefit, even if the
Participant has not satisfied the requirements for a Retirement Benefit under
Section 0 at the time of his death. Except as provided in Section 0,
the Preretirement Death Benefit will be paid as soon as administratively
feasible after the Participant's death in the form of a lump sum equal to the
Actuarial Present Value of the first 120 monthly installments that would have
been paid to the Participant under a Ten-Year Certain Life Annuity that began
on the earliest date after his death on which he could have elected to begin
receiving benefits under Section 0, had he not died.
5.2. Annuity Options Available to Spouse Beneficiaries. In lieu of the lump
sum described in Section 0, a Beneficiary who is married to the Participant at
the time of his death may elect to receive the Preretirement Death Benefit
in the form of either a Single Life Annuity or a Ten-Year Certain Fixed
Annuity. The Beneficiary may elect to begin receiving the Single Life Annuity
or Ten-Year Certain Fixed Annuity on any date after the Participant's death on
which the Participant could have elected to begin receiving benefits under
Section 0, had he not died. Any election under this Section 0 must be made
before the Beneficiary's Benefit Starting Date and may not be changed or
revoked after that date.
Section 6. Nature of Participant's Interest in Plan.
6.1. No Right to Assets. Participation in the Plan does not create, in favor
of any Participant or Beneficiary, any right or lien in or againsy any asset of
the Company. Nothing contained in the Plan, and no action taken under its
provisions, will create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and a Participant or any other
person. The Company's promise to pay benefits under the Plan will at all times
remain unfunded as to each Participant and Beneficiary, whose rights under the
Plan are limited to those of a general and unsecured creditor of the Company.
6.2. No Right to Transfer Interest. Rights to benefits payable under the
Plan are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, or encumbrance. However, the Administrative Committee may
permit a Participant or Beneficiary to enter into a revocable arrangement to
pay all or part of his benefits under the Plan to a revocable grantor trust (a
so-called "living trust"). In addition, the Administrative Committee may
recognize the right of an alternate payee named in a domestic relations order
to receive all or part of a Participant's benefits under the Plan, but only if
(a) the domestic relations order would be a "qualified domestic relations
order" within the meaning of section 414(p) of the Code (if section 414(p)
applied to the Plan), (b) the domestic relations order does not attempt to give
the alternate payee any right to any asset of the Company, (c) the domestic
relations order does not attempt to give the alternate payee any right to
receive payments under the Plan at a time or in an amount that the Participant
could not receive under the Plan, and (d) the amount of the Participant's
benefits under the Plan are reduced to reflect any payments made or due the
alternate payee.
6.3. No Employment Rights. No provisions of the Plan and no action taken by
the Company, the Board of Directors, the Compensation Committee, or the
Administrative Committee will give any person any right to be retained in the
employ of the Company, and the Company specifically reserves the right and
power to dismiss or discharge any Participant.
6.4. Withholding and Tax Liabilities. The amount of any withholdings
required to be made by any government or government agency will be deducted
from benefits paid under the Plan to the extent deemed necessary by the
Administrative Committee. In addition, the Participant or Beneficiary (as the
case may be) will bear the cost of any taxes not withheld on benefits provided
under the Plan, regardless of whether withholding is required.
Section 7. Administration, Interpretation, and Modification of Plan.
7.1. Plan Administrator. The Administrative Committee will administer the
Plan.
7.2. Powers of Committee. The Administrative Committee's powers include, but
are not limited to, the power to adopt rules consistent with the Plan; the
power to decide all questions relating to the interpretation of the terms and
provisions of the Plan; and the power to resolve all other questions arising
under the Plan (including, without limitation, the power to remedy possible
ambiguities, inconsistencies, or omissions by a general rule or particular
decision). The Administrative Committee has discretionary authority to
exercise each of the foregoing powers.
7.3. Finality of Committee Determinations. Determinations by the
Administrative Committee and any interpretation, rule, or decision adopted by
the Administrative Committee under the Plan or in carrying out or administering
the Plan will be final and binding for all purposes and upon all interested
persons, their heirs, and their personal representatives.
7.4. Incapacity. If the Administrative Committee determines that any person
entitled to benefits under the Plan is unable to care for his affairs because
of illness or accident, any payment due (unless a duly qualified guardian or
other legal representative has been appointed) may be paid for the benefit
of such person to his spouse, parent, brother, sister, or other party deemed
by the Administrative Committee to have incurred expenses for such person.
7.5. Amendment, Suspension, and Termination. The Board of Directors has the
right by written resolution to amend, suspend, or terminate the Plan at any
time. However, no amendment, suspension, or termination will apply to an
employee who already is a Participant in the Plan without his express written
consent.
7.6. Power to Delegate Board Authority. The Board of Directors may, in its
sole discretion, delegate to any person or persons all or part of its authority
and responsibility under the Plan, including, without limitation, the authority
to amend the Plan.
7.7. Headings. The headings used in this document are for convenience of
reference only and may not be given any weight in interpreting any provision of
the Plan.
7.8. Severability. If any provision of the Plan is held illegal or invalid
for any reason, the illegality or invalidity of that provision will not affect
the remaining provisions of the Plan, and the Plan will be construed and
enforced as if the illegal or invalid provision had never been included in the
Plan.
7.9. Governing Law. The Plan will be construed, administered, and regulated
in accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent that those laws are preempted by federal law.
7.10. Complete Statement of Plan. This Plan supersedes the Prior Plan with
respect to the Participants. This Plan contains a complete statement of its
terms. The Plan may be amended, suspended, or terminated only in writing and
then only as provided in Section 0. A Participant's right to any benefit of a
type provided under the Plan will be determined solely in accordance with the
terms of the Plan. No other evidence, whether written or oral, will be taken
into account in interpreting the provisions of the Plan. Notwithstanding
the preceding provisions of this Section 0, for purposes of determining
benefits with respect to a Participant, this Plan will be deemed to include (a)
the provisions of the written agreement between the Company and the Participant
executed in accordance with Section 0, and (b) the provisions of any other
written agreement between the Company and the Participant to the extent such
other agreement explicitly provides for the incorporation of some or all of its
terms into this Plan.
Section 8. Terms Used in the Plan.
8.1. Gender and Number. Words used in the masculine gender in the Plan are
intended to include the feminine and neuter genders, where appropriate. Words
used in the singular form in the Plan are intended to include the plural form,
where appropriate, and vice versa.
8.2. Definitions. When used in capitalized form in the Plan, the following
words and phrases have the following meanings, unless the context clearly
indicates that a different meaning is intended:
"Accrued Benefit" means the benefit described in Section 0.
"Actuarial Equivalent" means the following: an amount or benefit is the
"Actuarial Equivalent" of, or is "Actuarially Equivalent" to, another amount
or benefit as of a specified date, if the Actuarial Present Value as of the
specified date of the first amount or benefit equals the Actuarial Present
Value as of the specified date of the second amount or benefit,
when calculated using the same actuarial assumptions. Actuarial Equivalence
under Section 0 will be determined as of the Participant's Normal Retirement
Date, and the resulting benefit will be expressed in the form of a Ten-Year
Certain Life Annuity beginning on the Participant's Normal Retirement Date.
Actuarial Equivalence under Section 0 will be determined as of the
Participant's Benefit Starting Date, and the resulting benefit will be ex-
pressed in the form of a Ten-Year Certain Joint & Survivor Annuity beginning on
the Participant's Benefit Starting Date. Actuarial Equivalence under the
definition of "Single Life Annuity" in this Section 0 will be determined as of
the Beneficiary's Benefit Starting Date, and the resulting benefit will be
expressed in the form of a Single Life Annuity beginning on the Beneficiary's
Benefit Starting Date.
"Actuarial Present Value" means the value as of a specified date of an amount
or a series of amounts due before or thereafter, where each amount is
multiplied by the probability that the condition or conditions on which payment
of the amount is contingent will be satisfied, and where each amount so
multiplied is then increased (if due before) or discounted (if due thereafter)
according to an assumed rate of interest to reflect the time value of money.
Unless the Plan specifies otherwise, the mortality table and interest rate -
used to calculate the Actuarial Present Value of an amount or series of amounts
will be the mortality table and interest rate in effect under section
417(e)(3)(A)(ii) of the Code 90 days before the Participant's Benefit Starting
Date.
"Administrative Committee" means the Administrative Committee appointed to
administer the JLG Industries, Inc. Employees' Retirement Savings Plan.
However, following a Change in Control, "Administrative Committee" means the
trustee under the grantor trust maintained by the Company in connection with
the Plan.
"Annual Compensation" has the meaning assigned to that term in Section 0.
"Applicable Percentage" has the meaning assigned to that term in Section 0.
"Associate" has the meaning assigned to that term for purposes of Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act.
"Beneficial Owner" means the following: a Person is deemed to be the
"Beneficial Owner" of, to "Beneficially Own," and to have "Beneficial
Ownership" of, any securities:
(1) which such Person or any of such Person's Securities Law Affiliates or
Associates beneficially owns, directly or indirectly;
(2) which such Person or any of such Person's Securities Law Affiliates or
Associates has (A) the right or obligation to acquire (whether such right or
obligation is exercisable or effective immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided that a Person shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," or to have "Beneficial
Ownership" of, securities tendered pursuant to a tender or exchange offer made
by such Person or any of such Person's Securities Law Affiliates or Associates
until such tendered securities are accepted for purchase or exchange; or (B)
the right to vote pursuant to any agreement, arrangement, or understanding
(whether or not in writing); providedthat a Person shall not be deemed the
"Beneficial Owner" of, or to "BeneficiallyOwn," or to have "Beneficial
Ownership" of, any security under this clause (B)if the agreement, arrangement,
or understanding to vote such security (i)arises solely from a revocable proxy
given in response to a public proxy orconsent solicitation made pursuant to,
and in accordance with, the applicablerules and regulations of the Securities
Exchange Act, and (ii) is not also then reported by such Person on Schedule 13D
under the Securities Exchange Act (or any comparable or successor report); or
(3) which are beneficially owned, directly or indirectly, by any other
Person (or any Securities Law Affiliate or Associate thereof) with which such
Person or any of such Person's Securities Law Affiliates or Associates has any
agreement, arrangement, or understanding (whether or not in writing) or with
which such Person or any of such Person's Securities Law Affiliates have
otherwise formed a group for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (B)(i) of paragraph (2),
above), or disposing of any securities of the Company.
"Beneficiary" means the person designated in writing by a Participant to
receive benefits under the Plan after the Participant's death. If a
Participant dies before his Benefit Starting Date and he has failed to
designate a Beneficiary or his designated Beneficiary fails to survive him, his
Beneficiary will be the person to whom he is married at the time of
his death, or if he is not married at that time, his Beneficiary will be the
executor of his will or the administrator of his estate. If a Participant
ho has elected a Ten-Year Certain Life Annuity dies on or after his Benefit
Starting Date and he has failed to designate a Beneficiary or his Beneficiary
fails to survive him, his Beneficiary will be the person to whom he is married
at the time of his death, or if he is not married at that time, the Actuarial
Present Value of the payments (if any) to be made after his death will be paid
in an immediate lump sum to the executor of his will or the administrator of
his estate. A Participant may revoke in writing a prior designation of a
Beneficiary at any time before the earlier of the Participant's death or his
Benefit Starting Date. In addition, a Participant may revoke in writing a
prior designation of a Beneficiary under a Ten-Year Certain Life Annuity at any
time before the Participant's death. A Beneficiary under a Ten-Year Certain
Life Annuity or a Ten-Year Certain Fixed Annuity may designate in writing a
person to receive any benefits due under the Plan after the Beneficiary's death
(a "Beneficiary's Beneficiary"). The Beneficiary may revoke this designation
in writing at any time before his death.
"Benefit Starting Date" means the date on which a Participant or Beneficiary
is scheduled to begin receiving benefits under the Plan.
"Board of Directors" means the Board of Directors of the Company.
"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 then serving
as members of the Board of Directors, 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:
(A) a merger, consolidation, or reorganization involving the
Company, unless
(i) 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;
(ii) 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
(iii) no Person (other than (1) the Company or any Subsidi-
ary thereof, (2) any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, any Subsidiary thereof,
or the Surviving Corporation, or (3) 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 re-
presenting 25 percent or more of the combined voting power of
the Surviving Corporation's then outstanding voting securities;
(B) a complete liquidation or dissolution of the Company; or
(C) 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 of the Company).
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time.
"Company" means JLG Industries, Inc., and any successor to JLG Industries,
Inc. Employment with the Company includes employment with any corporation,
partnership, or other organization required to be aggregated with the Company
under sections 414(b) and (c) of the Code.
"Compensation Committee" means the Compensation Committee of the Board of
Directors.
"Disability Retirement Benefit" means the benefit described in Section 0.
"Disabled" means entitled to receive benefits under a long-term disability
plan maintained by the Company.
"Early Retirement Benefit" means the benefit described in Section 0.
"Effective Date" means June 1, 1995.
"Election Contest" means an election contest described in Rule 14a-11 promul-
gated under the Securities Exchange Act.
"Eligible Executive" means an employee of the Company who is an officer of
the Company or who holds any other key position designated by the Compensation
Committee in its sole discretion.
"Final Average Compensation" has the meaning assigned to that term in Section
0.
"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 Contest or other actual or
threatened Proxy Contest, including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest.
"Late Retirement Benefit" means the benefit described in Section 0.
"Late Retirement Date" means the first day of the month following the month
in which a Participant retires from service with the Company, if he retires
from service with the Company after his Normal Retirement Date.
"Non-Control Acquisition" means an acquisition by (1) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) the Company or (B)
any of its Subsidiaries, (2) the Company or any of its Subsidiaries, or (3) any
Person in connection with a Non-Control Transaction.
"Non-Control Transaction" means any transaction described in clauses
(4)(A)(i) through (iii) of the definition of "Change in Control."
"Normal Retirement Benefit" means the benefit described in Section 0.
"Normal Retirement Date" means the first day of the month following the month
in which a Participant reaches age 62, unless a Change in Control occurs, in
which case Normal Retirement Date means the first day of the month following
the month in which the Participant reaches age 60. In the case of a
Participant who dies before reaching his Normal Retirement Date, Normal
Retirement Date means the day on which the Participant would have reached
his Normal Retirement Date had he not died.
"Participant" means a member of a select group of management or highly com-
pensated employees of the Company who has become a participant in the Plan
under Section 0.
"Person" means any individual, firm, corporation, partnership, joint
venture, association, trust, or other entity.
"Plan" means the JLG Industries, Inc. Supplemental Executive Retirement Plan
as set forth in this document.
"Preretirement Death Benefit" means the benefit described in Section 0.
"Prior Plan" means an individual agreement (customarily denominated a
"Deferred Compensation Benefit Agreement") between the Company and the employee
that provides for unfunded deferred compensation benefits and certain other
benefits specified in the agreement.
"Proxy Contest" means a solicitation of proxies or consents by or on behalf
of a Person other than the Board of Directors.
"Retirement Benefit" means a Normal Retirement Benefit, a Late Retirement
Benefit, an Early Retirement Benefit, a Vested Retirement Benefit, or a
Disability Retirement Benefit.
"Section" means a section of this Plan. For example, a reference to Section
2 includes a reference to Sections 2.1 through 2.3, while a reference to
Section 2.1 is intended as a reference to Section 2.1 only.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time.
"Securities Law Affiliate" means an "affiliate" as defined for purposes of
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act.
"Single Life Annuity" means an annuity payable in equal monthly installments
to a Beneficiary, beginning with the calendar month in which the Beneficiary's
Benefit Starting Date occurs and ending with the calendar month in which the
Beneficiary dies. The Single Life Annuity payable to a Beneficiary will be the
Actuarial Equivalent of the Preretirement Death Benefit that the Beneficiary
could have elected to receive in the form of a Ten-Year Certain Fixed Annuity
beginning on the same day.
"Social Security Retirement Age" means the earliest age at which the
Participant is entitled to begin receiving federal Social Security old-age
benefits. In the case of a Participant who dies before reaching his Social
Security Retirement Date, Social Security Retirement Date means the day on
which the Participant would have reached his Social Security Retirement Date
had he not died.
"Subsidiary" of any Person means any corporation or other entity of which at
least 80 percent (or such lesser percentage as the Administrative Committee may
determine) of the voting power of the voting equity securities or voting
interest therein is owned, directly or indirectly, by such Person.
"Surviving Corporation" means a corporation resulting from a merger,
consolidation, or reorganization described in paragraph (4)(A)(i) of the
definition of "Change in Control."
"Ten-Year Certain Fixed Annuity" means an annuity payable in 120 monthly
installments that are equal to the first 120 monthly installments that would
have been paid to the Participant (had he not died) under a Ten-Year Certain
Life Annuity that began on the Beneficiary's Benefit Starting Date. The 120
monthly installments will be paid to the Beneficiary unless the Beneficiary
dies before all 120 monthly installments have been paid, in which case the
Actuarial Present Value of the remaining installments will be paid to the
Beneficiary's Beneficiary in an immediate lump sum.
"Ten-Year Certain Joint & Survivor Annuity" means an annuity payable in equal
monthly installments to the Participant, beginning with the calendar month in
which his Benefit Starting Date occurs and ending with the calendar month in
which he dies, and thereafter in equal monthly installments of the same or a
lesser amount to his surviving Beneficiary (if any), beginning with the
calendar month following the calendar month in which he dies and ending with
the calendar month in which the Beneficiary dies, provided that if the
Participant and his Beneficiary both die before the end of the 120-month period
that begins on the Participant's Benefit Starting Date, the Actuarial Present
Value of the additional monthly installments that would have been paid to the
last to survive of the Participant and his Beneficiary (had the last survivor
not died until the end of the 120-month period) will be paid in an immediate
lump sum to the executor of the last survivor's will or the administrator of
the last survivor's estate. At the time he elects a Ten-Year Certain Joint &
Survivor Annuity, the Participant must designate a named natural person as his
Beneficiary and must specify whether the monthly amount payable to the
Beneficiary will be 50 or 100 percent of the monthly amount payable to him
under the Ten-Year Certain Joint & Survivor Annuity. After his Benefit
Starting Date, the terms of his election may not be changed or revoked.
"Ten-Year Certain Life Annuity" means an annuity payable in monthly install-
ments to the Participant, beginning with the calendar month in which his
Benefit Starting Date occurs and ending with the calendar month in which he
dies, provided that if he dies before the end of the 120-month period that
begins on his Benefit Starting Date, the monthly installments will be continued
to his Beneficiary, beginning with the calendar month following the calendar
month in which the Participant dies and ending with the calendar month in which
the 120-month period ends. Except as required under Section 0(e) and (f),
the monthly installments payable under a Ten-Year Certain Life Annuity will be
equal in amount.
"Year of Service" has the meaning assigned to that term under the JLG
Industries, Inc. Employees' Retirement Savings Plan.
"Vested Retirement Benefit" means the benefit described in Section 0.
"Voting Power" means the voting power of all securities of the Company then
outstanding generally entitled to vote for the election of directors of the
Company.
JLG INDUSTRIES, INC.
Attest: By:
Title: Title:
EXHIBIT 10.9
JLG Industries, Inc.
Executive Retiree Medical Benefits Plan
Effective June 1, 1995
Section 1. Establishment and Purpose of the Plan.
1.1. Establishment. Effective June 1, 1995, the Company
established the Plan for the benefit of the Participants and to replace -
their retiree medical benefits under the Prior Plan.
1.2. Purpose. The Plan is an unfunded plan maintained primarily
for the purpose of providing medical benefits to a select group of
management and highly compensated employees.
Section 2. Participation by Eligible Executives.
2.1. Eligible Executives. An employee who has an agreement in
effect on the Effective Date under the Prior Plan will become a
Participant in the Plan beginning on the Effective Date if he agrees in
writing to waive all rights he may have under the Prior Plan. Other key
employees may become Participants in the Plan if selected by the
Compensation Committee in its sole discretion. If selected for
participation, an employee will become a Participant in the Plan on the
date specified by the Compensation Committee in its sole discretion.
2.2. Written Proof of Participation Required. No employee will
become a Participant in the Plan unless he and the Company execute a copy
of the Plan document recognizing his participation in the Plan. The exe-
cuted copy will constitute an agreement between the Company and the
employee that binds both of them to the terms of the Plan. Their
agreement will be binding on their heirs, executors, administrators,
successors, and assigns, both present and future. The executed copy must
be signed on the Company's behalf by an authorized officer (other than
the employee) and by the employee on his own behalf. The executed copy
will constitute the employee's written agreement to waive all rights he
may have under the Prior Plan.
Section 3. Coverage and Benefits.
3.1. Coverage. Medical coverage under the Plan will commence upon
the date as of which the Participant's benefits under the SERP commence,
regardless of the amount of benefit actually received under the SERP. If
the Participant elects payment under the SERP in the form of a lump sum,
medical coverage under the Plan will commence on the date as of which the
lump sum is to be paid. If the Participant delays the commencement of
benefits under the SERP, medical coverage under the Plan also will be
delayed until SERP benefits commence. Subject to Sections 3.2 and 3.4,
below, a Participant's medical coverage under the Plan will continue for
the remainder of the Participant's life.
3.2. Benefits Provided.
(a) General. Subject to subsection (b), below, the benefits
provided under the Plan will be medical benefits equivalent to the
medical benefits provided under the Company Medical Plan and the
Company Medical Expense Reimbursement Plan. The benefits may be
provided through insurance or otherwise at the discretion of the
Company regardless of the method by which benefits are provided
under the Company Medical Plan or the Company Medical Expense
Reimbursement Plan. If benefits under the Company Medical Plan or
the Company Medical Expense Reimbursement Plan are provided in a
form other than payment of expense reimbursement amounts,
Participants and Covered Dependents may be provided benefits in a
like manner. If the Company is not providing medical benefits to
any active employee of the Company, no benefits will be provided
under the Plan.
(b) Coordination of Benefits. The benefits provided under
the Plan will be adjusted to take into account any coverage or
benefits for which a Participant (or Covered Dependent) is
eligible under other plans or arrangements as specified below;
provided, however, that if a benefit has already been adjusted to
reflect eligibility for coverage or benefits under a particular
plan or arrangement in accordance with the terms of the Company
Medical Plan or the Company Medical Expense Reimbursement Plan,
the benefit under the Plan will not be adjusted again for the same
coverage or benefit.
(i) The benefits provided under the Plan will be
secondary to the benefits that a Participant (or a Covered
Dependent) is eligible to receive under any plan or
arrangement sponsored by the Participant's subsequent
employer.
(ii) The benefits provided under the Plan will be
secondary to the benefits that a Participant (or a Covered
Dependent) is eligible to receive:
(A) under any governmental program (including
Part A and Part B of Medicare, regardless of whether
the individual is in fact covered under Part B of
Medicare, and Social Security);
(B) under any coverage required or provided by
any statute; and
(C) as a recovery for an injury or illness
caused by a third party (to the extent the recovery
reimburses expenses covered by the Plan).
3.3. Coverage of Covered Dependents.
(a) Period of Coverage. Subject to the limitations of
subsection (b), and Section 3.4, below, a Participant's Covered
Dependents are eligible for medical coverage under the Plan for
the periods specified below.
(i) During Participant's Life. A Participant's
Covered Dependents are eligible for medical coverage under
the Plan at the Participant's election while the Participant
is receiving medical coverage under the Plan and for as long
as the Covered Dependents remain Covered Dependents.
(ii) Following Participant's Death After Commencement
of Coverage. If the Participant dies after medical coverage
under the Plan has commenced, the Participant's Covered
Dependents are eligible for medical coverage under the Plan
for either:
(A) the remainder, if any, of the ten-year
certain payment period of the SERP benefit, provided
that the spouse (or if there is no spouse, a dependent
child) is the beneficiary of such payments under the
SERP; or
(B) the remainder, if any, of the ten-year
period that begins as of the date the Participant's
lump sum is scheduled to be paid.
Medical coverage under the preceding sentence shall commence
as of the first of the month following the month of the
Participant's death.
(iii) Following Participant's Death Before
Commencement of Coverage. If Participant dies before the
commencement of medical coverage under the Plan, the
Participant's Covered Dependents are eligible for medical
coverage under the Plan for a period of up to ten years,
provided that the spouse is the beneficiary of any payments
under the SERP and that SERP benefits are paid in an annuity
form of payment. Medical coverage under the preceding
sentence will commence with the commencement of payments
under the SERP.
(b) Limitations on Coverage Period.
(i) A Participant's Covered Dependents will not be
eligible for medical coverage under the Plan during any
period of time that the Participant's spouse is employed by
an employer offering any medical benefits for which the
spouse is eligible.
(ii) A Participant's Covered Dependents will not be
eligible for medical coverage under the Plan after they cease
to be Covered Dependents.
3.4. Contribution Toward Cost of Coverage.
(a) Commencement On or After Normal Retirement Date. If
medical coverage begins on or after the Participant's Normal
Retirement Date there will be no required contribution toward the
cost of coverage.
(b) Commencement Before Normal Retirement Date. If medical
coverage begins before the Participant's Normal Retirement Date,
the contribution toward the cost of coverage for that year, and
for each year thereafter, will be a percentage of the Company's
cost for providing the relevant coverage (individual or family),
determined as follows:
(i) The percentage will be determined in the year that
medical coverage begins and will remain the same for each
year of medical coverage thereafter. The percentage will be
determined by multiplying six (6) times the number of years
by which the beginning date precedes the Participant's Normal
Retirement Date. For example, if the Participant's Normal
Retirement Date is the first day of the month following the
month in which the Participant reaches age 62, and if medical
coverage begins when the Participant is age 60, the
percentage for that year and for each year thereafter will be
twelve percent (12%). Similarly, assuming the same Normal
Retirement Date, if a surviving spouse begins medical
coverage when the Participant would have reached age 55, the
percentage for that year and for each year thereafter will be
forty-two percent (42%).
(ii) The Company's cost for providing the relevant
medical coverage will be:
(A) in the event that the Company Medical Plan
is insured (or that medical coverage is otherwise
provided by a third party under a contract), the amount
of the premium (or other payment) paid by the Company
to the insurance company (or other contractor)
providing the medical coverage; or
(B) in the event that the Company Medical Plan
is self-insured, the amount of the applicable premium
as determined by the Company for purposes of statutory
continuation coverage under COBRA (as defined in
section 4980B of the Code), or any successor
continuation coverage provision, as specified in the
Company Medical Plan.
(iii) For purposes of determining the percentage in
paragraph (i), above, medical coverage begins on the date as
of which the Participant's benefits under the SERP commence,
as provided in Section 3.1, above, whether or not the
Participant makes the required contribution at that time.
The amount of the contribution may be unrelated to any
contribution that might be required from active employees under
the Company Medical Plan. At the discretion of the Administrative
Committee, the contribution may be made on a pre-tax basis if any
plan of the Company so provides.
(c) Failure to Make Required Contribution. If the
Participant, or his Covered Dependent as appropriate, fails to
make the required contribution when such contribution is due, no
further medical coverage will be provided under the Plan for the
year. If the Participant or the Covered Dependent fails to make
the required contribution for a given year, the Participant (or,
subject to the limitations of Section 3.3, above, the Covered
Dependent) may obtain medical coverage in a later year by paying
the required contribution for such later year.
3.5 Payment or Other Distribution of Benefits. Benefits under
the Plan will be paid or otherwise made available in accordance with
procedures established by the Administrative Committee. The Participant
or Covered Dependents may be required to submit relevant bills, receipts
or other documentation requested by the Administrative Committee as a
condition of receiving benefits.
3.6 Procedures. The procedures for determining eligibility for
benefits, claiming benefits, requesting review of denied claims, and
making any required contributions will be as specified by the
Administrative Committee.
Section 4. Nature of Participant's Interest in Plan.
4.1. No Right to Assets. Participation in the Plan does not
create, in favor of any Participant or Covered Dependent, any right or
lien in or against any asset of the Company. Nothing contained in the
Plan, and no action taken under its provisions, will create or be
construed to create a trust of any kind, or a fiduciary relationship,
between the Company and a Participant or any other person. The Company's
promise to pay benefits under the Plan will at all times remain unfunded
as to each Participant and Covered Dependent, whose rights under the Plan
are limited to those of a general and unsecured creditor of the Company.
4.2. No Right to Transfer Interest. Rights to benefits under the
Plan are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, or encumbrance.
4.3. No Employment Rights. No provisions of the Plan and no
action taken by the Company, the Board of Directors, the Compensation
Committee, or the Administrative Committee will give any person any right
to be retained in the employ of the Company, and the Company specifically
reserves the right and power to dismiss or discharge any Participant.
4.4. Withholding and Tax Liabilities. The amount of any
withholdings required to be made by any government or government agency
will be deducted from benefits paid under the Plan to the extent deemed
necessary by the Administrative Committee. In addition, the Participant
or Covered Dependent (as the case may be) will bear the cost of any taxes
not withheld on benefits provided under the Plan, regardless of whether
withholding is required.
Section 5. Administration, Interpretation, and Modification of Plan.
5.1. Plan Administrator. The Administrative Committee will
administer the Plan.
5.2. Powers of Committee. The Administrative Committee's powers
include, but are not limited to, the power to adopt rules consistent with
the Plan; the power to decide all questions relating to the interpreta-
tion of the terms and provisions of the Plan; and the power to resolve
all other questions arising under the Plan (including, without
limitation, the power to remedy possible ambiguities, inconsistencies, or
omissions by a general rule or particular decision). The Administrative
Committee has discretionary authority to exercise each of the foregoing
powers.
5.3. Finality of Committee Determinations. Determinations by the
Administrative Committee and any interpretation, rule, or decision
adopted by the Administrative Committee under the Plan or in carrying out
or administering the Plan will be final and binding for all purposes and
upon all interested persons, their heirs, and their personal representa-
tives.
5.4. Incapacity. If the Administrative Committee determines that
any person entitled to benefits under the Plan is unable to care for his
affairs because of illness or accident, any payment due (unless a duly
qualified guardian or other legal representative has been appointed) may
be paid for the benefit of such person to his spouse, parent, brother,
sister, or other party deemed by the Administrative Committee to have
incurred expenses for such person.
5.5. Amendment, Suspension, and Termination. The Board of
Directors has the right by written resolution to amend, suspend, or
terminate the Plan at any time. However, no amendment, suspension, or
termination will adversely affect an employee who already is a
Participant in the Plan without his express written consent.
5.6. Power to Delegate Board Authority. The Board of Directors
may, in its sole discretion, delegate to any person or persons all or
part of its authority and responsibility under the Plan, including,
without limitation, the authority to amend the Plan.
5.7. Headings. The headings used in this document are for
convenience of reference only and may not be given any weight in
interpreting any provision of the Plan.
5.8. Severability. If any provision of the Plan is held illegal
or invalid for any reason, the illegality or invalidity of that provision
will not affect the remaining provisions of the Plan, and the Plan will
be construed and enforced as if the illegal or invalid provision had
never been included in the Plan.
5.9. Governing Law. The Plan will be construed, administered, and
regulated in accordance with the laws of the Commonwealth of
Pennsylvania, except to the extent that those laws are preempted by
federal law.
5.10. Statutory Continuation Coverage. Statutory
continuation coverage under the Plan will be provided as and to the
extent required under section 4980B of the Code and section 601 et. seq.
of ERISA, or any successor provisions thereto, in the manner specified in
the Company Medical Plan.
5.11. Qualified Medical Child Support Orders. The Administrative
Committee will establish a written procedure to determine the qualified
status of medical child support orders and to provide for the
administration of the Plan appropriately under such orders.
Section 6. Terms Used in the Plan.
6.1. Gender and Number. Words used in the masculine gender in the
Plan are intended to include the feminine and neuter genders, where
appropriate. Words used in the singular form in the Plan are intended to
include the plural form, where appropriate, and vice versa.
6.2. Definitions. When used in capitalized form in the Plan, the
following words and phrases have the following meanings, unless the
context clearly indicates that a different meaning is intended:
"Administrative Committee" means the Administrative Committee
appointed to administer the JLG Industries, Inc. Employees'
Retirement Savings Plan. However, following a Change in Control,
"Administrative Committee" means the trustee under the grantor
trust maintained by the Company in connection with the SERP.
"Board of Directors" means the Board of Directors of the
Company.
"Change in Control" means "Change in Control" as defined in
the SERP.
"Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time.
"Company" means JLG Industries, Inc., and any successor to
JLG Industries, Inc.
"Company Medical Plan" means the Company's then current plan
(or portion thereof) under which medical benefits, if any, are
being provided to active employees of the Company.
"Company Medical Expense Reimbursement Plan" means the
Company's medical expense reimbursement plan in which the
Participant was a participant, if any, as in effect on the earlier
of the date as of which the Participant's benefits under the SERP
commence or the date of a Change in Control.
"Compensation Committee" means the Compensation Committee of
the Board of Directors.
"Covered Dependent" means
(1) a Participant's spouse until the first to occur of
the following: the spouse's death, the spouse's divorce from the
Participant, or the spouse's remarriage following the Participant's
death; and
(2) a Participant's dependent child until the first to
occur of the following: the child's death, or the child's
ceasing to be a dependent as defined for purposes of the Company
Medical Plan (as if the Participant were still alive and an active
employee).
"Effective Date" means June 1, 1995.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
"Normal Retirement Date" means the first day of the month
following the month in which a Participant reaches age 62, unless a
Change in Control occurs, in which case Normal Retirement Date means the
first day of the month following the month in which the Participant
reaches age 60. In the case of a Participant who dies before reaching
his Normal Retirement Date, Normal Retirement Date means the day on which
the Participant would have reached his Normal Retirement Date had he not
died.
"Participant" means a member of a select group of management
or highly compensated employees of the Company who has become a
participant in the Plan under Section 0.
"Plan" means the JLG Industries, Inc. Executive Retiree
Medical Benefits Plan as set forth in this document.
"Prior Plan" means an individual agreement (customarily
denominated a "Deferred Compensation Benefit Agreement") between
the Company and the employee that provides for unfunded deferred
compensation benefits and certain other benefits specified in the
agreement.
"Section" means a section of this Plan. For example, a
reference to Section 2 includes a reference to Sections 2.1
through 2.3, while a reference to Section 2.1 is intended as a
reference to Section 2.1 only.
"SERP" means the JLG Industries, Inc. Supplemental Executive
Retirement Plan, as amended from time to time.
JLG INDUSTRIES, INC.
Attest: By:
Title: Title:
EXHIBIT 10.10
JLG Industries, Inc.
Executive Severance Plan
Effective June 1, 1995
Section 1. Establishment and Purpose of the Plan.
1.1. Establishment. Effective June 1, 1995, the Company established the
Plan for the benefit of the Participants and to replace their severance pay
benefits under the Prior Plan.
1.2. Purpose. The Plan is an unfunded plan maintained primarily for the
purpose of providing severance pay benefits to a select group of management and
highly compensated employees.
Section 2. Participation by Eligible Executives.
2.1. Eligible Executives. An employee who has an agreement in effect on the
Effective Date under the Prior Plan will become a Participant in the Plan
beginning on the Effective Date if he agrees in writing to waive all rights he
may have under the Prior Plan.
2.2. No Other Participants. No employee other than an employee described in
Section 0 will become a Participant in the Plan.
2.3. Written Proof of Participation Required. No employee will become a
Participant in the Plan unless he and the Company execute a copy of the Plan
document recognizing his participation in the Plan. The executed copy will
constitute an agreement between the Company and the employee that binds both of
them to the terms of the Plan. Their agreement will be binding on their heirs,
executors, administrators, successors, and assigns, both present and future.
The executed copy must be signed on the Company's behalf by an authorized
officer (other than the employee) and by the employee on his own behalf. The
executed copy will constitute the employee's written agreement to waive all
rights he may have under the Prior Plan.
Section 3. Severance Benefits.
3.1. Lump Sum Benefit. A Participant who is Dismissed from employment with
the Company is entitled to a Severance Benefit. The Severance Benefit will be
paid to the Participant in an immediate lump sum equal to the Applicable
Percentage of his base salary and cash bonus for the final twelve calendar
months of his employment with the Company. If the Participant dies after
being Dismissed from employment with the Company but before receiving his
Severance Benefit, the lump sum described in the preceding sentence will be
paid to his Beneficiary. Notwithstanding any other provision of this Section
0, a Participant will not be entitled to a Severance Benefit if he is entitled
to a retirement benefit under the SERP unless, at the time he is Dismissed
from employment with the Company, a Change in Control has occurred.
3.2. Applicable Percentage. A Participant's Applicable Percentage is the
percentage that is specified by the Compensation Committee with respect to the
Participant for purposes of the Plan and that is reflected in the written
agreement between the Company and the Participant executed in accordance with
Section 0.
3.3. Dismissal from Employment. A Participant is Dismissed from employment
with the Company if his employment with the Company is terminated involuntarily
by the Company for any reason other than disloyalty, mismanagement,
abdication of job responsibility, or conviction of a felony, any one of which
results in significant injury to the business of the Company. A Participant
also will be considered Dismissed from employment with the Company if his
employment with the Company is terminated for Good Reason in connection with a
Change in Control. For purposes of this Section 0, a Participant's employment
with the Company is not considered terminated merely because there is a change
in the ownership of the Company, or merely because all or part of the Company
is merged, consolidated, spun off, liquidated, or otherwise reorganized, or
merely because all or part of the tangible and intangible assets of the Company
are sold or otherwise transferred to new ownership, if the Participant
continues to be employed by the Company or a successor business immediately
following any of the foregoing transactions.
3.4. Good Reason in Connection with Change in Control. A Participant's em-
ployment with the Company is terminated for Good Reason in connection with a
Change in Control if his termination occurs no earlier than six months before
the Change in Control, no later than two years after the Change in Control, and
no later than six months after any of the following triggering events:
(a) A change in the Participant's status or position with the Company that,
in his reasonable judgment, represents a demotion from his prior status or
position with the Company;
(b) The assignment to the Participant of duties or responsibilities that, in
his reasonable judgment, are inconsistent with his status or position with the
Company;
(c) A reduction by the Company in the Participant's base salary;
(d) A change in the terms of the compensation arrangements applicable to the
Participant that represents a significant reduction in the value of such
compensation arrangements to him;
(e) A material increase in the Participant's responsibilities or duties
without a commensurate increase in his base salary;
(f) The imposition of any requirement that the Participant be based anywhere
other than within 50 miles of where his principal office was located;
(g) A material increase in the frequency or duration of the Participant's
business travel;
(h) The Company's failure to obtain the express assumption of this Plan with
respect to the Participant by any successor to the Company; or
(i) Any violation by the Company of any agreement with the Participant
(including any violation of the Participant's rights under this Plan).
In addition, a Participant's employment with the Company will be deemed
terminated for Good Reason in connection with a Change in Control if the
Participant is the Chief Executive Officer of the Company immediately preceding
the Change in Control and his employment with the Company is terminated for
any reason within six months after the Change in Control. For purposes of
this Section 0, it is immaterial whether the Participant's employment with the
Company is terminated voluntarily by the Participant or involuntarily by the
Company (or its successor).
Section 4. Nature of Participant's Interest in Plan.
4.1. No Right to Assets. Participation in the Plan does not create, in favor
of any Participant or Beneficiary, any right or lien in or against any asset of
the Company. Nothing contained in the Plan, and no action taken under its
provisions, will create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and a Participant or any other
person. The Company's promise to pay benefits under the Plan will at all times
remain unfunded as to each Participant and Beneficiary, whose rights under the
Plan are limited to those of a general and unsecured creditor of the Company.
4.2. No Right to Transfer Interest. Rights to benefits payable under the
Plan are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, or encumbrance. However, the Administrative Committee may
permit a Participant or Beneficiary to enter into a revocable arrangement to
pay all or part of his benefits under the Plan to a revocable grantor trust (a
so-called "living trust"). In addition, the Administrative Committee may
recognize the right of an alternate payee named in a domestic relations order
to receive all or part of a Participant's benefits under the Plan, but only if
(a) the domestic relations order would be a "qualified domestic relations
order" within the meaning of section 414(p) of the Code (if section 414(p)
applied to the Plan), (b) the domestic relations order does not attempt to give
the alternate payee any right to any asset of the Company, (c) the domestic
relations order does not attempt to give the alternate payee any right to
receive payments under the Plan at a time or in an amount that the Participant
could not receive under the Plan, and (d) the amount of the Participant's
benefits under the Plan are reduced to reflect any payments made or due the
alternate payee.
4.3. No Employment Rights. No provisions of the Plan and no action taken by
the Company, the Board of Directors, the Compensation Committee, or the
Administrative Committee will give any person any right to be retained in the
employ of the Company, and the Company specifically reserves the right and
power to dismiss or discharge any Participant.
4.4. Withholding and Tax Liabilities. The amount of any withholdings
required to be made by any government or government agency will be deducted
from benefits paid under the Plan to the extent deemed necessary by the
Administrative Committee. In addition, the Participant or Beneficiary (as the
case may be) will bear the cost of any taxes not withheld on benefits provided
under the Plan, regardless of whether withholding is required.
Section 5. Administration, Interpretation, and Modification of Plan.
5.1. Plan Administrator. The Administrative Committee will administer the
Plan.
5.2. Powers of Committee. The Administrative Committee's powers include, but
are not limited to, the power to adopt rules consistent with the Plan; the
power to decide all questions relating to the interpretation of the terms and
provisions of the Plan; and the power to resolve all other questions
arising under the Plan (including, without limitation, the power to remedy
possible ambiguities, inconsistencies, or omissions by a general rule or
particular decision). The Administrative Committee has discretionary authority
to exercise each of the foregoing powers.
5.3. Finality of Committee Determinations. Determinations by the
Administrative Committee and any interpretation, rule, or decision adopted by
the Administrative Committee under the Plan or in carrying out or administering
the Plan will be final and binding for all purposes and upon all interested
persons, their heirs, and their personal representatives.
5.4. Incapacity. If the Administrative Committee determines that any person
entitled to benefits under the Plan is unable to care for his affairs because
of illness or accident, any payment due (unless a duly qualified guardian or
other legal representative has been appointed) may be paid for the benefit of
such person to his spouse, parent, brother, sister, or other party deemed by
the Administrative Committee to have incurred expenses for such person.
5.5. Amendment, Suspension, and Termination. The Board of Directors has the
right by written resolution to amend, suspend, or terminate the Plan at any
time. However, no amendment, suspension, or termination will apply to an
employee who already is a Participant in the Plan without his express written
consent.
5.6. Power to Delegate Board Authority. The Board of Directors may, in its
sole discretion, delegate to any person or persons all or part of its authority
and responsibility under the Plan, including, without limitation, the authority
to amend the Plan.
5.7. Headings. The headings used in this document are for convenience of
reference only and may not be given any weight in interpreting any provision of
the Plan.
5.8. Severability. If any provision of the Plan is held illegal or invalid
for any reason, the illegality or invalidity of that provision will not affect
the remaining provisions of the Plan, and the Plan will be construed and
enforced as if the illegal or invalid provision had never been included in the
Plan.
5.9. Governing Law. The Plan will be construed, administered, and regulated
in accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent that those laws are preempted by federal law.
5.10. Complete Statement of Plan. This Plan supersedes the Prior Plan with
respect to the Participants. This Plan contains a complete statement of its
terms. The Plan may be amended, suspended, or terminated only in writing and
then only as provided in Section 0. A Participant's right to any benefit
of a type provided under the Plan will be determined solely in accordance with
the terms of the Plan. No other evidence, whether written or oral, will be
taken into account in interpreting the provisions of the Plan. Notwithstanding
the preceding provisions of this Section 0, for purposes of determining
benefits with respect to a Participant, this Plan will be deemed to include (a)
the provisions of the written agreement between the Company and the Participant
executed in accordance with Section 0, and (b) the provisions of any other
written agreement between the Company and the Participant to the extent such
other agreement explicitly provides for the incorporation of some or all of its
terms into this Plan.
Section 6. Terms Used in the Plan.
6.1. Gender and Number. Words used in the masculine gender in the Plan are
intended to include the feminine and neuter genders, where appropriate. Words
used in the singular form in the Plan are intended to include the plural form,
where appropriate, and vice versa.
6.2. Definitions. When used in capitalized form in the Plan, the following
words and phrases have the following meanings, unless the context clearly
indicates that a different meaning is intended:
"Administrative Committee" means the Administrative Committee appointed to
administer the JLG Industries, Inc. Employees' Retirement Savings Plan.
However, following a Change in Control, "Administrative Committee" means the
trustee under the grantor trust maintained by the Company in connection with
the Plan.
"Applicable Percentage" has the meaning assigned to that term in Section 0.
"Associate" has the meaning assigned to that term for purposes of Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act.
"Beneficial Owner" means the following: a Person is deemed to be the
"Beneficial Owner" of, to "Beneficially Own," and to have "Beneficial
Ownership" of, any securities:
(1) which such Person or any of such Person's Securities Law Affiliates or
Associates beneficially owns, directly or indirectly;
(2) which such Person or any of such Person's Securities Law Affiliates or
Associates has (A) the right or obligation to acquire (whether such right or
obligation is exercisable or effective immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided that a Person shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," or to have "Beneficial
Ownership" of, securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Securities Law Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement, or
understanding (whether or not in writing); provided that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own," or to have
"Beneficial Ownership" of, any security under this clause (B) if the agreement,
arrangement, or understanding to vote such security (i) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and regulations
of the Securities Exchange Act, and (ii) is not also then reported by such
Person on Schedule 13D under the Securities Exchange Act (or any comparable or
successor report); or
(3) which are beneficially owned, directly or indirectly, by any other
Person(or any Securities Law Affiliate or Associate thereof) with which such
Person or any of such Person's Securities Law Affiliates or Associates has any
agreement, arrangement, or understanding (whether or not in writing) or with
which such Person or any of such Person's Securities Law Affiliates have
otherwise formed a group for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (B)(i) of paragraph (2),
above), or disposing of any securities of the Company.
"Beneficiary" means the person designated in writing by a Participant to
receive his Severance Benefits under the Plan after he dies. If a Participant
fails to designate a Beneficiary or his designated Beneficiary fails to survive
him, his Beneficiary will be the person to whom he is married at the time of
his death, or if he is not married at that time, his Beneficiary will be the
executor of his will or the administrator of his estate. A Participant may
revoke in writing a prior designation of a Beneficiary at any time before the
Participant dies.
"Board of Directors" means the Board of Directors of the Company.
"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 then serving
as members of the Board of Directors, 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:
(A) a merger, consolidation, or reorganization involving the
Company, unless
(i) 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;
(ii) 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
(iii) no Person (other than (1) the Company or any Subsidi-
ary thereof, (2) any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, any Subsidiary thereof,
or the Surviving Corporation, or (3) 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 re-
presenting 25 percent or more of the combined voting power of
the Surviving Corporation's then outstanding voting securities;
(B) a complete liquidation or dissolution of the Company; or
(C) 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 of the Company).
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time.
"Company" means JLG Industries, Inc., and any successor to JLG Industries,
Inc. Employment with the Company includes employment with any corporation,
partnership, or other organization required to be aggregated with the Company
under sections 414(b) and (c) of the Code.
"Compensation Committee" means the Compensation Committee of the Board of
Directors.
"Dismissed" has the meaning assigned to that term in Section 0.
"Effective Date" means June 1, 1995.
"Election Contest" means an election contest described in Rule 14a-11 promul-
gated under the Securities Exchange Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.
"Good Reason" has the meaning assigned to that term in Section 0.
"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 Contest or other actual or
threatened Proxy Contest, including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest.
"Non-Control Acquisition" means an acquisition by (1) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) the Company or (B)
any of its Subsidiaries, (2) the Company or any of its Subsidiaries, or (3) any
Person in connection with a Non-Control Transaction.
"Non-Control Transaction" means any transaction described in clauses
(4)(A)(i) through (iii) of the definition of "Change in Control."
"Participant" means a member of a select group of management or highly com-
pensated employees of the Company who has become a participant in the Plan
under Section 0.
"Person" means any individual, firm, corporation, partnership, joint
venture, association, trust, or other entity.
"Plan" means the JLG Industries, Inc. Executive Severance Plan as set forth
in this document.
"Prior Plan" means an individual agreement (customarily denominated a
"Deferred Compensation Benefit Agreement") between the Company and the employee
that provides for unfunded deferred compensation benefits and certain other
benefits specified in the agreement.
"Proxy Contest" means a solicitation of proxies or consents by or on behalf
of a Person other than the Board of Directors.
"Section" means a section of this Plan. For example, a reference to
Section 2 includes a reference to Sections 2.1 through 2.3, while a reference
to Section 2.1 is intended as a reference to Section 2.1 only.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time.
"Securities Law Affiliate" means an "affiliate" as defined for purposes of
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act.
"SERP" means JLG Industries, Inc. Supplemental Executive Retirement Plan.
"Subsidiary" of any Person means any corporation or other entity of which at
least 80 percent (or such lesser percentage as the Administrative Committee may
determine) of the voting power of the voting equity securities or voting
interest therein is owned, directly or indirectly, by such Person.
"Surviving Corporation" means a corporation resulting from a merger,
consolidation, or reorganization described in paragraph (4)(A)(i) of the
definition of "Change in Control."
"Voting Power" means the voting power of all securities of the Company then
out-standing generally entitled to vote for the election of directors of the
Company.
JLG INDUSTRIES, INC.
Attest: By:
Title: Title:
EXHIBIT 22
JLG INDUSTRIES, INC.
LISTING OF SUBSIDIARIES
JULY 31, 1996
Percent of
Voting
Securities
Jurisdiction of Owned by
Subsidiary Incorporation the Company
JLG Equipment Services, Inc. Pennsylvania 100%
Fulton International, Inc. Delaware 100%
Fulton International Foreign
Sales Corporation Barbados 100%
Zontess Pty. Ltd. Australia 100%
The financial statements of the above listed subsidiaries are included in
the Company's Consolidated Financial Statements incorporated herein by
reference.
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statements on Form S-8, No. 33-60366, No. 2-87955, No. 33-75746 and No.
33-87955 of our report dated September 7, 1996, with respect to the
consolidated financial statements and schedule of JLG Industries, Inc.
included in the Annual Report (Form 10-K) for the year ended July 31,
1996.
Ernst & Young LLP
Baltimore, Maryland
October 8, 1996
EXHIBIT 99
Cautionary Statements Pursuant to the Securities
Litigation Reform Act of 1995
The Company wishes to inform its investors of the following important
factors that in some cases have affected, and in the future could
affect, the Company's results of operations and that could cause such
future results of operations to differ materially from those expressed
in any forward looking statements made by or on behalf of the Company.
Disclosure of these factors is intended to permit the Company to take
advantage of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Many of these factors have been
discussed in prior SEC filings by the Company. Though the Company has
attempted to list comprehensively these important cautionary factors,
the Company wishes to caution investors that other factors may in the
future prove to be important in affecting the Company's results of
operations.
Cyclical Demand -- Demand for new equipment manufactured by the Company
tends to be cyclical, responding historically to varying levels of
construction and industrial activity, principally in the United States
and, to a lesser extent, in other industrialized nations. Other factors
affecting demand include the availability and cost of financing for
equipment purchases and the market availability of used equipment.
Company management continuously monitors these and other factors that
affect demand for the Company's equipment. However, predicting levels of
demand beyond a short term is necessarily imprecise and demand may at
times change dramatically.
Consolidating Customers Base; Rental Companies -- The principal
customers for the Company's new equipment are independent
equipment distributors that rent the Company's products and provide
service support to equipment users. In recent years, growth in sales to
equipment rental companies has outpaced growth in direct sales to end
users, resulting in equipment rental companies comprising a larger share
of total sales. At the same time there has been substantial
consolidation in ownership among rental companies, resulting in a more
limited number of major customers comprising a substantial portion of
total sales. Unanticipated purchasing decisions by any of these major
customers could materially affect overall demand for the Company's
products and the Company's financial performance. More generally,
during recessionary conditions, demand for equipment by equipment rental
companies typically declines more sharply than demand for equipment
purchased by end-users.
Manufacturing Capacity -- Despite continuous improvement programs that
have achieved substantial improvements in manufacturing efficiency and
throughput, the Company's ability to meet additional growth in demand
for new equipment is constrained by manufacturing capacity limits. Long
lead-times required to fill customer orders is a negative factor in the
Company's ability to compete for new business and subcontracting costs
incurred to increase capacity affect profitability. The Company
recently acquired an 109,000 square foot manufacturing facility which,
when fully operational by year-end 1996, should alleviate capacity
constraint for scissor lifts. However, capacity to manufacture boom
lifts, which comprise a larger percentage of sales, is becoming
increasingly limited. Given the cyclical nature of demand, this
investment, or other capital investments to acquire additional lift
manufacturing facilities involves significant risks. The Company is
addressing capacity constraints by outsourcing certain production
processes and relocating certain manufacturing operations to leased
facilities. Ultimately, to service increasing international sales, the
Company is considering establishing a manufacturing presence overseas.
Product Liability -- Use of the Company's products involves risks of
personal injury and property damage and liability exposure for the
Company. The Company insures against this liability through a
combination of a self-insurance retention and catastrophic coverage in
excess of the retention. The Company monitors all incidents of which it
becomes aware involving the use of its products that result in personal
injury or property damage and establishes accrued liability reserves on
its financial statements based on liability estimates with respect to
claims arising from such incidents. Future or unreported incidents
involving personal injury or property damage or unanticipated variances
between actual liabilities for known incidents and Company estimates may
adversely affect the Company's financial performance.
Availability of Product Components -- The Company obtains raw materials
and certain manufactured components from third-party suppliers. To
reduce materials costs and inventories, the Company relies on supplier
partnership arrangements with preferred vendors as a sole source for
"just-in-time" delivery of many raw materials and manufactured
components. Because the Company maintains limited raw materials
inventories, even brief unanticipated delays in delivery by suppliers,
including due to labor disputes, impaired financial condition of
suppliers, weather emergencies or other natural disasters, may adversely
affect the Company's ability to satisfy its customers on a timely basis
and thereby affect the Company's financial performance.
Foreign Sales -- A growing component of the Company's business has been
export sales to Europe, Latin America and Asia. Maintenance and
continued growth of this segment of the Company's business may be
affected by changes in trade, monetary and fiscal policies, laws and
regulations of the United States and other trading nations and by
foreign currency exchange rate fluctuations and the ability or inability
of the Company to hedge against exchange rate risks.
Competition; Continued Innovation -- The Company faces substantial
competition in the market for its products and some of the Company's
competitors are, or in the future may be, owned by larger enterprises
that may have greater financial resources and offer wider product lines
than the Company. Throughout its history, the Company has devoted
substantial resources to product development and has generally succeeded
in being a market leader in introducing new high-reach products or
incorporating new features and functions into existing products. New
products introduced within the prior two years account for typically
between 20 and 25 percent of product sales in current years. The
Company also holds certain patents which it believes are valuable.
Successful product innovation by competitors that reach the market prior
to comparable innovation by the Company or that are amenable to patent
protection may adversely affect the Company's financial performance.
Unanticipated Litigation -- The Company occasionally has faced
unanticipated intellectual property and shareholder litigation which has
involved significant unbudgeted expenditures. The costs and other
effects of any future, unanticipated legal or administrative proceedings
may be significant.
Dependence Upon Key Personnel -- The Company believes that it has
developed a strong management team which intends to continue the
Company's growth and profitability. However, the loss or unavailability
of certain key management personnel, principally L. David Black, the
Company's Chairman of the Board, President and Chief Executive Officer,
could adversely affect the Company's business and prospects.
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