SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Preliminary Proxy Statement
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to d 240.14a-11(c) or d 240.14a-12
JLG INDUSTRIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
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October 8, 1996
Dear Fellow Shareholder:
The Annual Meeting of Shareholders of JLG Industries, Inc. will be held on
Monday, November 18, 1996, at 4:30 p.m. at the Company's headquarters in
McConnellsburg, Pennsylvania. The Board of Directors and management urge you
to attend this Meeting to give us the opportunity to meet you personally, to
update you on recent developments, and to review the Company's operations and
financial performance for the 1996 fiscal year. In addition, we will present
our strategic plans for the future, share with you our outlook for fiscal
1997, and provide time to answer your questions.
At the Meeting you will be asked to elect eight directors and to ratify the
selection of independent auditors for the ensuing year. You will also be asked
to ratify an earlier amendment and consider a proposed amendment to the
Company's Articles of Incorporation to increase the Company's authorized
capital stock to one hundred million shares.
We hope that you will be able to attend the Meeting in person. Whether or not
you plan to attend, please promptly sign, date and mail the enclosed proxy card
in the postage-paid return envelope provided. It is important that your shares
are represented and voted at the Meeting.
On behalf of the Board of Directors, I wish to thank you for your cooperation
and continued support.
Sincerely,
JLG INDUSTRIES, INC.
L. David Black
Chairman of the Board,
President and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Monday, November 18, 1996
The Annual Meeting of Shareholders of JLG Industries, Inc. will be held at the
Company's headquarters in McConnellsburg, Pennsylvania, on Monday, November
18, 1996, at 4:30 p.m. for the following purposes:
1. To elect a board of eight directors of the Company to hold office until the
next Annual Meeting of Shareholders and until their successors shall be elected
and qualified.
2. To ratify the selection of independent auditors for the 1997 fiscal year.
3. To ratify an earlier amendment and consider a proposed amendment to the
Company's Articles of Incorporation to increase the Company's authorized
capital stock to one hundred million (100,000,000) shares.
4. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors has designated the close of business on October 1, 1996,
as the record date for the determination of shareholders entitled to vote at
the Annual Meeting and any adjournments thereof.
It is important that your shares are voted at the Annual Meeting. Whether or
not you plan to attend in person, we urge you to take a moment now to exercise
your right to vote by signing, dating and mailing the proxy card(s) found
in the address pocket of the mailing envelope. If you hold shares in more than
one account, then you will receive more than one card. Please sign, date and
mail each card received to assure that all of your shares will be represented
and voted at the Annual Meeting. Your proxy is revocable up to the time it is
voted, and you may vote in person at the Annual Meeting even though you have
previously submitted your proxy.
A copy of the Company's 1996 Annual Report to Shareholders is enclosed for
your review.
Charles H. Diller, Jr.
Secretary
JLG INDUSTRIES, INC.
JLG Drive
McConnellsburg, PA 17233
PROXY STATEMENT
FOR THE 1996 ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 18, 1996
GENERAL
This Proxy Statement is furnished in connection with the solicitation by and on
behalf of the Board of Directors of JLG Industries, Inc. (the "Company") of
proxies to be voted at the 1996 Annual Meeting of Shareholders of the Company
to be held at the Company's headquarters in McConnellsburg, Pennsylvania on
November 18, 1996.
A proxy may be revoked by the person giving the proxy at any time prior to the
close of voting. Prior to the Annual Meeting, a proxy may be revoked by filing
with the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date. During the Annual Meeting, a proxy may be revoked by
filing a written revocation or a duly executed proxy bearing a later date with
the Secretary of the Annual Meeting prior to the close of voting.
All expenses in connection with the solicitation of proxies will be borne by
the Company. In addition to soliciting proxies by mail, the officers,
directors, or other employees of the Company, as yet undesignated, and without
compensation other than their regular compensation, may solicit proxies in
person or by other appropriate means if authorized and if deemed advisable.
The Company has also engaged the proxy soliciting firm of D.F. King & Co.,
Inc. for a fee not to exceed $12,000 plus out-of-pocket expenses.
As of October 1, 1996, the record date for the Annual Meeting as set by the
Board of Directors, there were 43,544,034 shares of Capital Stock issued and
outstanding. Each share of Capital Stock entitles the holder to one vote at
the Annual Meeting. There are no other voting securities of the Company.
This Proxy Statement is dated October 8, 1996.
ELECTION OF DIRECTORS
The persons named in the following table have been nominated by the Board of
Directors for election as directors at the Annual Meeting to hold office until
the next Annual Meeting of Shareholders and until their successors shall be
elected and qualified. Directors are elected by a plurality of the votes cast.
Nominees for Directors
Director Background
Name Age Since Information
L. David Black 59 1990 Chairman of the Board, President and Chief
Executive Officer; prior to 1993,
President and Chief Executive Officer.
Director, Columbus McKinnon Corporation.
Charles H. Diller, Jr. 51 1984 Executive Vice President and Chief
Financial Officer.
George R. Kempton 62 1993 Chairman of the Board and Chief Executive
Officer, Kysor Industrial Corporation,
Director, Simpson Industries, Inc.
James A. Mezera 66 1984 Mezera and Associates, Inc., a management
consulting firm; prior to 1996, Vice
President, Komatsu Dresser Copmpany.
Gerald Palmer 51 1994 President, Technical Services Division,
Caterpillar, Inc.; Prior to 1992, Director
of technical Services, Technical Services
Division, Caterpillar, Inc.
Stephen Rabinowitz 53 1994 President and Chief Executive Officer,
General Cable Corporation; prior to 1994,
President, AlliedSignal Braking Systems,
AlliedSignal, Inc.; prior to 1993, Vice
President and Group Executive, GE
Electrical Distribution and Control,
General Electric Company.
Thomas C. Wajnert 53 1994 Chairman of the Board and Chief Executive
Officer, AT&T Capital Corporation.
Charles O. Wood, III 58 1988 President, Wood Holdings, inc., a private
investment firm. Chairman of the Board,
Boston Private Bancorp.
Each nominee for director listed above has been employed in the capacity noted
for more than five years, except as indicated. There are no family
relationships among any of the above-named directors.
Board of Directors
The Company's Board of Directors held six meetings during the 1996 fiscal year.
During that time, each director attended at least seventy-five percent of the
aggregate of (i) the number of meetings of the Board and (ii) the
number of meetings held by all committees of the Board on which he served.
The Board of Directors has established Audit, Compensation and Nominating
Committees to devote attention to specific subjects and to assist the Board in
the discharge of its responsibilities. The functions of those committees,
their current members and the number of meetings held during the 1996 fiscal
year are described below.
The Audit Committee, currently consisting of Messrs. Kempton (Chairman),
Palmer, Rabinowitz, and Wajnert, who are all outside directors, met two times
during the 1996 fiscal year. Its functions include recommending the selection
of the independent auditors; conferring with the independent auditors and
reviewing the scope and fees of the prospective annual audit and the results
thereof; reviewing the Company's annual report to shareholders and annual
filings with the Securities and Exchange Commission; reviewing the adequacy of
the Company's internal audit function, as well as the accounting and financial
controls and procedures; and approving the nature and scope of nonaudit
services performed by the independent auditors.
The Compensation Committee, currently consisting of Messrs. Mezera, Rabinowitz,
Wajnert and Wood (Chairman), who are all outside directors, principally
evaluates the performance of the Chief Executive Officer; reviews his
evaluation of the other officers' performance; recommends compensation
arrangements for all officers of the Company, including salaries, bonuses and
other supplemental compensation programs; administers the Company's stock
incentive plan; and reviews all other officer-related benefit plans. The
Compensation Committee held three meetings during the 1996 fiscal year.
The Nominating Committee, currently consisting of Messrs. Kempton, Mezera
(Chairman), Palmer, and Wood, who are all outside directors, held two meetings
during fiscal 1996. The Nominating Committee is responsible for identifying
and recommending to the Board appropriate areas of expertise to be represented
on the Board; seeking out qualified candidates to fill Board positions;
reviewing and recommending the slate of directors to be submitted for election
by the shareholders at each annual meeting; recommending to the Board
appropriate deadlines for receiving shareholder nominations of directors and
reviewing any such shareholder nominations to determine whether they comply
with substantive and procedural requirements; and evaluating the performance of
current directors. Nominations, other than those by or at the direction of the
Board, may be made pursuant to written notice received by the Secretary of the
Company at the principal executive offices of the Company no later than ninety
days prior to the anniversary date of the previous year's annual meeting.
Such notice must be accompanied by written statements signed by each person so
nominated setting forth all information in respect of such person required
that would be required by Rule 14a-3 promulgated by the Securities and Exchange
Commission if such person has been nominated by the Board of Directors and
stating that such person consents to such nomination and consents to serve as
director of the Company if elected.
Directors, who are not employees of the Company, receive compensation for their
services as directors. Each such director currently receives a $16,000 annual
retainer and each committee chairman a $1,000 annual retainer for service as a
committee chairman. In addition, each such director receives $1,000 and $850,
respectively, for each Board meeting or committee meeting attended. Directors
are also reimbursed for out-of-pocket expenses incurred in connection with
their attendance at meetings and for other services rendered as a director.
Directors, who are employees of the Company, do not receive additional
compensation for services as a director.
The JLG Industries, Inc. Directors Stock Option Plan provides for annual grants
to each non-employee director of an option to purchase 6,000 shares of the
Company's Capital Stock provided the Company earned a net profit, before
extraordinary items, for the prior year.
The Company has a Directors' Deferred Compensation Plan which entitles each
eligible director to defer the receipt of fees payable for services as a
director. Any director, who is not an employee of the Company, is eligible
to participate in the plan. Mr. Mezera elected to participate in the plan
during fiscal 1996. Payments deferred under the plan accrue interest at the
prime rate in effect from time to time.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth, as of September 27, 1996, the beneficial
ownership of the Company's Capital Stock by (i) each director or nominee for
director of the Company, (ii) each executive officer of the Company named in
the Summary Compensation Table set forth under the caption "Executive
Compensation", and (iii) all directors and executive officers of the Company as
a group. All ownership information is based upon filings made by such
persons with the Securities and Exchange Commission ("Commission") or upon
information provided to the Company.
Amount and Nature of Beneficial Ownership
Acquirable
Name of Person Currently Within 60 Percent of
or Group (1) Owned (2) Days Class (3)
Charles O. Wood, III 393,000 (4) 66,000 1.0%
Charles H. Diller, Jr. 173,838 55,200
L. David Black 140,154 (5) 197,802
Raymond F. Treml 132,121 29,400
Rao G. Bollimpalli 56,867 27,798
James A. Mezera 36,000 42,000
Michael Swartz 31,403 18,996
George R. Kempton 30,000 42,000
Stephen Rabinowitz 12,000 47,064
Thomas C. Wajnert 12,000 18,000
Gerald Palmer 12,000 46,992
All directors and executive
officers as a group (11 persons) 1,029,383 519,252 3.7%
(1) The address of each of the named persons is in care of JLG Industries,
Inc., 1 JLG Drive, McConnellsburg, PA 17233.
(2) Each person listed has advised the Company that, except as otherwise
indicated, such person has sole voting and sole investment power with
respect to the shares indicated, except for certain shares as follows where
each person has voting but not investment power: Mr. Black, 41,554; Mr.
Diller, 36,306; Mr. Swartz, 28,299; Mr. Treml, 26,429; Mr. Bollimpalli,
23,993: and all directors and executive officers as a group, 156,581.
(3) Percentages are not shown where less than 1.0%.
(4) Includes 33,000 shares owned by a family trust.
(5) Includes 3,600 shares owned by spouse.
The following table sets forth the only stockholders known to the Company, as
of September 27, 1996, to be beneficial owners of more than five percent of the
outstanding shares of the Company's Capital Stock, based solely upon
information supplied by such shareholders in filings with the Commission on a
Schedule 13D or a Schedule 13G.
Amount and
Nature of Percent of
Name and Address Beneficial Ownership Class
Dimensional Fund Advisors 2,306,400(1) 5.4
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(1) As reflected in a report on Schedule 13G dated February 7, 1996 filed by
Dimension Fund Advisors Inc., a registered investment advisor, which shares are
held in portfolios of DFA Investment Dimensions Group Inc. and the DFA
Investment Trust Company, registered open-end investment companies, or the DFA
Group Trust and the DFA Participating Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimension Fund Advisors Inc.
serves as investment manager.
EXECUTIVE COMPENSATION
Executive Compensation Policies
The Company's executive compensation programs are designed to retain or attract
qualified executives to manage implementation of the Company's business plans
and to provide appropriate incentives, based principally on objective criteria,
that link compensation to Company performance. The Compensation Committee,
which is composed entirely of non-employee directors, reviews executive
compensation levels annually and recommends for Board consideration an annual
compensation package for each executive officer comprised of base salary and
target cash bonuses pursuant to a management incentive plan. The target cash
bonuses are awarded on the basis of individual performance objectives and the
Company's achieving targeted levels of return on average shareholders' equity
and other performance objectives. The Committee also determines annually for
each executive officer appropriate levels of stock options or other stock-based
awards under the Company's Stock Incentive Plan. In granting stock options,
the Committee considers the cash value of such awards based on the
Black-Scholes valuation method. The Committee believes the stock-based awards
provide incentives for executive management to promote long-term shareholder
value.
Total compensation available in the combined package for each officer will
generally be set based on the Company's financial condition, performance
objectives correlated to the Company's annual business plan and comparisons to
the preceding year's package. The Committee also evaluates compensation levels
for comparable positions reflected in survey data provided by the Committee's
independent compensation consultant. The consultant seeks to compile survey
data drawn from a broad group of industrial companies of roughly comparable
revenue size, with approximately comparable officer positions and
responsibilities. In considering all of these factors, the Committee seeks to
set base salaries generally equivalent to median levels reflected in the
survey data. In setting performance-based compensation, the Committee seeks to
provide Company executives with the opportunity to earn total compensation
generally at or exceeding the 75th percentile levels reflected in the survey
data. The Committee believes that the market for skilled senior management is
not limited to capital equipment manufacturers and that a broad industry
comparison offers a better basis for establishing annual compensation packages
than comparison to executive compensation paid by firms included in the Peer
Industry Group identified in the Performance Graph included in this Proxy
Statement.
Compensation for Fiscal Year 1996
Compensation paid to the Company's executive officers for fiscal year 1996
consisted of a base salary and a year-end cash bonus. The Committee also
awarded stock options and restricted share awards under the Company's Stock
Incentive Plan.
In fiscal 1996, the Company reported record sales and profits for the third
consecutive year, and the Company's share price increased three-fold, adjusted
for the October, 1995 two-for-one stock split and the July, 1996 three-for-one
split. Based on this performance, the Committee recommended and the Board
approved the maximum cash bonuses allowable under the Company's management
incentive plan.The fact that the Company's return on average shareholders'
equity for fiscal 1996 substantially exceeded the top target contemplated for
that measure in the management incentive plan, also prompted the Committee to
consider and approve awards of restricted shares for executive officers. These
awards, together with stock options granted in fiscal 1996 brought total direct
compensation for Company executives to generally between the 50th and 75th
percentile of survey data.
In retrospect, however, the Committee found that fiscal 1996 base salaries for
Company executives were generally below the median of survey data compiled
from companies with revenues comparable to the Company's actual fiscal 1996
performance. When the Committee recommended these base salaries at the
beginning of fiscal 1996, it did so, in part, based on survey data that
compared companies with revenues approximately comparable to the Company's
fiscal 1995 performance, rather than its forecasted fiscal 1996 performance.
In recommending base salaries for fiscal year 1997, the Committee again
evaluated survey data for companies comparable to the Company's prior fiscal
year performance, but the Committee also considered the possible impact of
forecasted revenue growth. Within this framework the Committee also considered
Mr. Black's recommendation for other officers based on his assessment of those
officers' successes in meeting individual performance objectives and their
relative contributions to the Company's accomplishments.
Chief Executive Officer Compensation
The Committee continues to share great confidence in Mr. Black's leadership of
the Company. During fiscal 1996, apart from the Company's financial results,
Mr. Black spearheaded the largest roll-out of new products in the Company's
history, moved to acquire additional manufacturing capacity, focused energies
on expanding international markets, and successfully implemented the strategic
divestiture of the Company's Materials Handling Division.
In view of this performance, the Committee, recommended and the Board approved
a 17% increase in Mr. Black's salary for fiscal 1997 from $300,000 to $350,000.
The Committee also recommended and the Board approved payment to Mr. Black
of a $354,400 cash bonus for fiscal 1996 which was the maximum target under the
management incentive plan. In awarding the bonus, the Committee considered Mr.
Black's performance in relation to the criteria under the management incentive
plan. In setting the maximum bonus target, the Committee considered survey
data provided by the Committee's compensation consultant. With the bonus, Mr.
Black's total cash compensation was somewhat above the survey median. Without
the bonus, his cash compensation would have been substantially below the
median.
The Committee also awarded Mr. Black options to acquire 55,780 shares of Common
Stock, with an exercise price equal to the market price on the date the options
were granted, and a bonus of 15,290 restricted shares. The options become
exercisable and the restricted shares vest ratably over the next three years
subject to Mr. Black's continuing employment with the Company. With the
options and restricted shares, Mr. Black's total direct compensation somewhat
exceeded the 75th percentile of the survey data provided by the Committee's
compensation consultant. In determining the number of options and restricted
shares awarded Mr. Black, the Committee based its decision on Mr. Black's
performance.
Discussion of Corporate Tax Deduction for Compensation in Excess of $1 Million
a Year
Section 162(m) of the Internal Revenue Code Section of 1986 (the "Code"),
precludes a public corporation from taking a tax deduction in any year for
compensationin excess of $1 million paid to its chief executive officer or any
of its four other highest-paid executive officers. The $1 million annual
deduction limit does not apply, however, to "performance-based compensation" as
that term is defined in Code Section 162(m)(4)(C) and regulations promulgated
thereunder.
The Committee believes that the Company and executive performance are the most
determinative factors with respect to all components of executive compensation
other than base salaries. Both bonuses under the current Management Incentive
Plan and awards under the Company's Stock Incentive Plan of restricted shares
for fiscal 1995 and 1996 were determined by the Committee based on performance
criteria. However, neither of these compensation components met the technical
performance-based criteria required by Code Section 162(m) for exclusion from
the deduction limit. Compensation expenses in respect of stock options granted
under the Company's Stock Incentive Plan will be excluded from the deduction
limit.
In fiscal 1996, the Company's highest-paid executive, Mr. Black, received cash
compensation totalling $654,000. Thus, in fiscal 1996 the deduction limit did
not effect the Company, and as a general matter, the Committee does not
anticipate that cash compensation (including bonuses) paid to any of the five
highest-paid executive officers in any year in the near future will approach $1
million. However, there is the possibility that, if the Company's stock price
appreciates substantially, vesting of restricted shares that do not meet the
requirements of Section 162(m) could cause the threshold to be exceeded for
years subsequent to fiscal 1996.
Accordingly, the Committee will continue to monitor this matter and, if
warranted and consistent with compensation objectives, will consider
modifications to the Management Incentive Plan and/or future restricted share
awards under the Company's Stock Incentive Plan to maximize the Company's tax
deduction with respect to such compensation.
This report is submitted by the Compensation Committee of the Board of
Directors.
James A. Mezera
Stephen Rabinowitz
Thomas C. Wajnert
Charles O. Wood, III
September 4, 1996
The following tables and narrative identify the Company's executive officers
and set forth compensation information for the Company's Chief Executive
Officer and its four most highly compensated executive officers (the "named
executive officers") as of the end of the 1996 fiscal year.
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Name, age and Other Restricted All
Principal Annual Stock Other
Position (1) Year Salary Bonus (2) Compensation(3) Awards(4) Options Compensation(5)
<S> <C> <C> <C> <C> <C> <C>
L. David Black, 59 1996 $300,000 $354,406 $282,865 55,810 $14,713
Chaiman of the Board 1995 253,008 177,106 94,438 95,400 8,312
President and Chief 1994 230,016 120,750 46,000 13,806
Executive Officer
Charles H. Diller, Jr., 51 1996 180,000 189,000 150,775 22,105 13,845
Executive Vice 1995 165,000 99,000 36,104 28,800 12,249
President and Chief 1994 150,000 75,000 21,600 12,557
Financial Officer
Michael Swartz, 51 1996 145,608 152,900 122,008 8,335 14,749
Senior Vice 1995 133,608 66,804 24,369 13,800 16,233
President-Marketing 1994 126,000 50,000 14,400 10,556
Raymond F. Treml, 56 1996 133,008 122,200 97,495 7,605 14,998
Senior Vice 1995 122,016 61,008 22,276 12,600 12,358
President- 1994 115,008 42,996 13,200 13,292
Manufacturing
Rao Bollimpalli, 58 1996 120,000 110,300 87,968 6,865 14,701
Senior Vice 1995 110,016 55,008 20,070 11,400 13,888
President-Engineering 1994 105,000 32,732 6,000 7,636
</TABLE>
(1) Business background of Mr. Black and Mr. Diller is discussed above under
the heading "Election of Directors". Each of Mr. Swartz, Mr. Treml and
Mr. Bollimpalli has served in his present position with the Company for
more than five years.
(2) Reflects bonuses earned during the fiscal year, but paid during the
following fiscal year.
(3) Excludes the value of perquisites and other personal benefits. The
incremental cost to the Company of providing such perquisites and other
personal benefits did not exceed the lesser of $50,000 or 10% of annual
salary and bonus for any of the named executive officers.
(4) The restricted shares were awarded September 4, 1996 with respect to the
fiscal year ended July 31, 1996 and September 6, 1995 with respect to the
fiscal year ended July 31, 1995. Total restricted shares held and the
aggregate market value at July 31, 1996 for the Named Executive Officers
were as follows: Mr. Black, 30,290 shares valued at $560,365; Mr. Diller,
13,946 shares valued at $258,001; Mr. Swartz, 10,507 shares valued at
$194,380; Mr. Treml, 8,846 shares valued at $163,651; and Mr.
Bollimpalli, 7,977 shares valued at $147,575. Dividends are payable
on the restricted shares and vesting of the awards is in three equal
annual installments beginning one year following the date of grant.
(5) For fiscal 1996, includes payments pursuant to the Company's Supplemental
Medical Care Reimbursement Plan for its named executive officers to
reimburse medical expenses incurred by them or their dependents and not
paid by other employee benefit plans (Mr. Black $1,334; Mr. Diller
$1,807; Mr. Swartz $1,354; Mr. Treml $2,334; and Mr. Bollimpalli $793),
and contributions to the Company's discretionary, defined contribution
retirement plan (Mr. Black $9,395; Mr. Diller $9,204; Mr. Swartz $11,290;
Mr. Treml $9,214; and Mr. Bollimpalli $10,685).
<TABLE>
Stock Options/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term(3)
% of Total
Options
Options/ Granted to
SAR's Employees
Granted in Fiscal Base Price Expiration
Name (1) Year Per Share Date (2) 5% 10%
<S> <C> <C> <C> <S> <C> <C>
L. David Black 55,810 34% $14.75 July 23, 2006 $858,612 $1,854,803
Charles H. Diller, Jr. 22,105 13 14.75 July 23, 2006 340,075 734,643
Michael Swartz 8,335 5 14.75 July 23, 2006 128,230 277,007
Raymond F. Treml 7,605 5 14.75 July 23, 2006 117,000 252,746
Rao Bollimpalli 6,865 4 14.75 July 23, 2006 105,615 228,153
</TABLE>
(1) Consists solely of options to purchase shares of Capital Stock.
(2) Options become exercisable in equal amounts over a three year period
beginning July 24, 1996. To the extent not already exercisable, the
options generally become exercisable upon a change in control. A change
in control means either (i) any person or group becomes the beneficial
owner of 25% or more of the voting power of the Company's Capital Stock;
or (ii) the election within a twelve-month period of three or more
directors whose election is not approved by the majority of the Board
of Directors; or (iii) the incumbent directors cease to be a majority of
the Board of Directors.
(3) The potential realizable value illustrates value that might be realized
upon exercise of the options immediately prior to the expiration of
their term, assuming the specified compounded rates of appreciation in
the market price of the Capital Stock over the terms of the options.
The potential realizable value to all shareholders using the specified
5% and 10% rates of appreciation and the outstanding shares at
September 27, 1996 would be $669,616,262 and $1,446,528,339,
respectively. The Company's use of these hypothetical appreciation
rates specified by the Securities and Exchange Commission should
not be construed as an endorsement of the accuracy of this method of
valuing options. The value realized by the holders of the options
will depend upon the actual performance of the Capital Stock
over the term of the options.
<TABLE>
Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year End Option/SAR Values
<CAPTION>
Value of Unexercised
Number of Enexercised In-the-Money
Options Options
Shares Acquired At Fiscal Year End (1) At Fiscal Year End (2)
Name on Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
L.David Black 45,996 $275,056 197,802 285,412 $3,210,799 $3,829,035
Charles H. Diller, Jr. 45,600 316,208 55,200 110,905 876,888 1,500,358
Michael Swartz 26,400 429,332 18,996 55,939 283,313 790,948
Raymond F. Treml 61,200 487,856 29,400 53,205 468,096 759.187
Rao Bollimpalli 36,000 278,300 27,798 50,467 444,242 727,465
</TABLE>
(1) The Company does not have any outstanding stock appreciation rights.
(2) Value is calculated based on the difference between the option exercise
price and the closing market price of the Company's Capital Stock on July
31, 1996, multiplied by the number of shares underlying the option.
Compensation Pursuant to Plans
The Company maintains a non-qualified defined benefit plan that provides for
payments, following retirement or in other specified circumstances, equal to
the average of the officer's base salary plus cash bonus for the two calendar
years in which the sum is the highest, multiplied by 65% for Mr. Black, 60% for
Mr. Diller and 55% for Messrs. Swartz, Treml and Bollimpalli; offset, however,
by the actuarial equivalent of benefits provided to the officer in conjunction
with the Company's contribution to other employer sponsored retirement
plans, the actuarial equivalent of retirement benefits provided by previous
employers of the officer; and 50% of the officer's social security benefit.
The retirement benefit is payable in the form of a ten year certain life
annuity, with options for a joint and survivor annuity and an actuarial
equivalent lump sum payout. The officer may elect to receive a reduced
retirement benefit in the case of early retirement. The plan provides for 25%
vesting per year after two years of service, with full vesting after five years
of service. The plan also provides a separate retiree medical benefit to the
officers, together with their spouse and eligible dependents. Based
on their annual compensation through the end of the Company's 1996 fiscal year,
the offsetting benefits identified in the Plan and assuming normal retiremment
age has been attained,the named executive officers would be entitled to annual
payments under the plan as follows: Mr. Black, $357,000; Mr. Diller, $114,000;
Mr. Swartz, $89,000; Mr. Treml, $83,000; and Mr. Bollimpalli $76,000.
The Company also maintains an executive severance plan which will provide a
severance benefit of three times the aggregate of base salary and cash bonus
for Mr. Black and two times the aggregate of base salary and cash bonus for
Messrs. Diller, Swartz, Treml and Bollimpalli, with base salary and cash bonus
being the amounts paid the officer for the final twelve calendar months of
employment. The severance benefit is payable in the form of a lump sum upon
involuntary termination of employment by the Company, unless the termination is
for one of the specified reasons which includes disloyalty or conviction of a
felony. The severance benefit is also payable upon certain terminations in
connection with a change of control. No severance benefit is payable if the
officer is entitled to a retirement benefit under the supplemental executive
retirement plan, except in connection with a change of control.
Performance Graph
The following graph compares the cumulative return on the Company's Capital
Stock over the past five years with the cumulative total return on shares of
companies comprising a NASDAQ market index and a peer industry group consisting
of companies manufacturing machinery for use in the construction, material
handling, farm and mining industries. Both indices are prepared by Media
General Financial Services and contain only those companies that were public as
of July 31, 1996 and have been public for the timeframe of the performance
graph. Cumulative total return is measured assuming an initial investment of
$100 on July 31, 1991 and the reinvestment of all dividends paid.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG JLG INDUSTRIES, INC., A NASDAQ MARKET INDEX
AND A PEER INDUSTRY GROUP
Year Ended July 31, 1991 1992 1993 1994 1995 1996
JLG Industries, Inc. $100 $81 $129 $302 $620 $1,903
Media General Industry Index $100 $90 $135 $171 $208 $217
Media General NASDAQ market Index $100 $102 $127 $139 $170 $186
CERTAIN TRANSACTIONS
During fiscal 1996, the Company purchased wire harness from General Cable
Corporation aggregating $78,203. Mr. Rabinowitz is President and Chief
Executive Officer of General Cable Corporation purchases were in the ordinary
course of business and at competitive prices and terms. The Company anticipates
that additional purchases will occur in fiscal 1997.
SELECTION OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP served as the Company's independent
auditors throughout fiscal year 1996 and the Board of Directors, on the
recommendation of the Audit Committee, has selected the firm as the Company's
independent auditors for fiscal 1997. The Board of Directors recommends
ratification of the selection of Ernst & Young LLP as the Company's independent
auditors for the fiscal year 1997. Representatives of the firm of Ernst & Young
LLP are expected to be present at the Annual Meeting, with the opportunity to
make a statement if they desire to do so, and to respond to appropriate
questions. If the selection is not ratified, the Board of Directors will
reconsider its action.
PROPOSAL TO AMEND ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
Background
The recent past has been a period which Company shareholders have enjoyed
superior returns on their investment. In recognition thereof, and
for other reasons on May 23, 1996, the Board of Directors declared a three-for-
one stock split on the Company's capital stock par value $.20 per share (the
"Capital Stock") which was effected in the form of a 200 percent stock
dividend. As a result, the number of outstanding shares of Capital Stock
increased to in excess of forty million. To provide sufficient authorized
shares to effectuate the stock split and corresponding adjustments in
the Company's Compensation Plans (defined below), the Board of Directors
approved a resolution to amend Section 5 of the Company's Articles of
Incorporation (the "Articles") to increase the number of authorized shares of
Capital Stock from approximately seventeen million shares to approximately
fifty-one million shares. This amendment, referred to herein as the "Prior
Amendment", was adopted pursuant to Section 1914(c) of the Pennsylvania
Business Corporation Law ("BCL"), which permits the Board of Directors,
without shareholder approval, to amend the Articles to authorize additional
shares to the extent necessary to accomplish a stock split by means of a stock
dividend.
After giving effect to the stock split as of September 27, 1996, the Company
has forty-three million five hundred thirty-one thousand four hundred and
forty (43,531,440) shares of Capital Stock issued and outstanding. In
addition, seven million four hundred thirty-five thousand and four hundred
sixteen (7,435,416) shares of Capital Stock are reserved for issuance
collectively under the Company's Stock Incentive Plan and Directors' Stock
Option Plan (the "Compensation Plans") with respect to outstanding options or
options or other awards that may be granted in the future. Thus, the Company
currently has no authorized but unissued shares of Capital Stock that are not
reserved for issuance.
Discussion of Proposed Amendment of Articles
Accordingly, on September 5, 1996, the Board of Directors unanimously adopted
resolutions approving and recommending that the shareholders adopt an
additionalamendment to the Articles to increase the Company's authorized
Capital Stock to one hundred million (100,000,000) shares.
Reasons for Proposed Amendment
The proposed increase in authorized shares would generally restore the capacity
of the Board of Directors that existed prior to the recent stock split
to authorize the issuance of additional shares for general corporate
purposes without shareholder approval. The Board of Directors believes that
having capacity to issue shares will provide the Company greater flexibility
for future growth and provide the opportunity for enhanced marketability of the
Company's shares. The additional authorized shares would be available for
equity-based acquisitions, public or private offerings of shares or securities
convertible into shares, employee benefit plans, and other proper corporate
purposes that might be proposed. In light of the present limitations of the
BCL, the additional authorized shares also would permit the Board of Directors
to declare future limited stock splits or stock dividends without unduly
diminishing the Company's capacity to issue shares for other proper purposes.
Legislation has been introduced in the Pennsylvania Legislature to amend the
BCL in a manner that would permit the Board of Directors, in connection with
a stock split or stock dividend and without shareholder approval, to amend the
Articles and increase the Company's authorized shares in proportion to the
stock split or stock dividend. There can be no assurance that this proposed
legislation will be enacted.
Although the Company does not have any present plans to issue additional shares,
apart from shares to be issued from time to time pursuant to the Compensation
Plans, the current lack of authorized but unissued shares will impede the
Company's ability to evaluate or seek to consummate certain business
combinations or other transactions which might enhance shareholder value. If
additional shares are available, certain transactions dependent upon the
issuance of shares would be less likely to be undermined by delays and
uncertainties occasioned by the need to obtain shareholder authorization prior
to the consummation of such transactions. The capacity to issue shares in
these and other appropriate circumstances also would permit the Company in the
future to avoid the expenses and delay associated with holding special
shareholders' meetings.
Effects of Proposed Amendment
If the proposed amendment is adopted, the newly authorized shares would be
unreserved and available for issuance, and no further shareholder authorization
would be required before the issuance of the shares by the Company unless such
issuances relate to a merger, consolidation or other transaction which under
the BCL or otherwise requires shareholder approval. New York Stock Exchange
rules require prior shareholder approval for the issuance in any transaction or
series of related transactions, other than a public offering for cash, if the
number of shares to be issued will equal or exceed 20% of the number of shares
outstanding before such issuance. All of the additional shares resulting from
the increase in the Company's authorized Capital Stock would be of the same
class, with the same dividend, voting and liquidation rights, as the shares
of Capital Stock presently outstanding. The Capital Stock is the only class of
shares authorized by the Articles; no class of preferred stock is presently
authorized. Shareholders have no preemptive rights to acquire shares issued by
the Company under the Articles, and shareholders would not acquire any such
rights with respect to the additional shares under the proposed amendment to
the Articles. Under some circumstances, the issuance of additional shares of
Capital Stock could dilute the voting rights, equity and earnings per share of
existing shareholders.
The additional authorized but unissued shares could be used by the Board of
Directors to make a change in control of the Company more difficult. Under
certain circumstances, if determined by the Board of Directors to be in the
best interests of the Company, these shares could be used to create voting
impediments or frustrate persons seeking to effect a takeover or otherwise
gain control of the Company.
The Company already is subject to provisions of the BCL that impose certain
restrictions and procedures that deter, or affect the ability of a person or
entity to initiate or complete, an unsolicited acquisition of control of
the Company. Among other things, the BCL (i) negates the voting power of
"control shares" (i.e., with certain exceptions, shares acquired by a person
or group with the intent of, or within 180 days of, acquiring voting
power for the first time over at least 20 percent of the Company's voting
shares) until voting power is restored at a shareholders' meeting by a
favorable vote of a majority of all shares and a majority of all "disinterested
shares" (i.e., generally shares not owned by the acquiring person or group or
the Company's executive officers), (ii) requires persons who publicly announce
an intention to acquire control of the Company to disgorge to the Company any
profits obtained from the disposition, within 18 months following the
announcement, of Company shares acquired within two years prior to the
announcement or 18 months following the announcement, (iii) specifies certain
severance benefits payable to eligible employees that may be terminated within
24 months following a change in control, and (iv) requires generally any person
who acquires at least 20 percent of the Company's voting shares (a "Controlling
Person") to pay all shareholders, upon demand, fair value for their shares
which value shall not be less than the highest price per share paid
by the Controlling Person within the 90-day period ending on the date the
Controlling Person first becomes a Controlling Person.
In addition, the Company's Bylaws establish procedures that regulate the timing
and manner in which shareholders may propose director nominees and the Articles
of incorporation do not provide for cumulative voting. Without cumulative
voting, in order to be ensured of representation on the Board, a shareholder
must control the votes of a majority of the shares present and voting at a
shareholders' meeting at which a quorum is present. The lack of cumulative
voting requires an entity seeking a takeover to acquire a substantially
greater number of shares to ensure representation on the Board than would be
necessary were cumulative voting available.
The proposed increase in authorized shares is not the result of the Board's
knowledge of any specific effort to accumulate the Company's securities or
to obtain control of the Company by means of a merger, tender offer, proxy
solicitation in opposition to management or otherwise. Although there may be
future circumstances in which the Board may determine it to be in the best
interests of the Company to oppose efforts by another party to acquire a
controlling interest in the Company, the Company has no present intention of
issuing shares for any such purpose.
Resolutions to be Considered and Text of Proposed Amendment
The formal resolutions to be considered by the shareholders for approval are as
follows:
RESOLVED, that the Prior Amendment is hereby ratified and approved; and
FURTHER RESOLVED, that Article 5 of the Company's Articles of Incorporation is
hereby amended and restated in its entirety as follows:
5. The aggregate number of shares which the corporation is authorized to
issue is One Hundred Million (100,000,000) shares $.20 par value capital
stock with a total par value of $20,000,000.
FURTHER RESOLVED, that the appropriate officers of the Company shall be and
each is authorized and directed to take all such further actions as shall be
necessary and appropriate to effectuate the foregoing resolutions, including
but not limited to, making such filings on behalf of the Company as shall be
required to make the proposed amendment to the Company's Articles of
Incorporation effective with the Commonwealth of Pennsylvania.
Vote Required
The affirmative vote of the holders of a majority of the shares cast by all
shareholders entitled to vote at the Annual Meeting is required to approve the
proposed resolutions, including the amendment to the Company's Articles. For
the purpose of counting votes on this proposal, abstentions effectively will
constitute a "no" vote. Shares held in a "street name" by a broker or nominee
trust that are not voted due to the absence of discretionary authority of
the holder to vote such shares ("broker nonvotes") will not be counted as
shares entitled to vote.
Recommendation of the Board of Directors
The Board of Directors believes that the proposed amendment to the Articles is
in the best interests of the Company. Accordingly, the Board of Directors
recommends a vote FOR the proposal.
VOTING INSTRUCTIONS
The matters set forth in the Notice of Annual Meeting will be voted upon in the
order in which they are listed in the Notice. The proxy form accompanying this
Proxy Statement provides boxes by means of which shareholders executing the
proxy forms may vote for or withhold a vote on the election of all or any of
Board of Director's nominees for election as directors. Proxies will be voted
in accordance with such direction or, if no such direction is indicated, will
be voted in favor of the election of each of the nominees. Each of the
nominees has consented to serve as director and the Board of Directors has no
reason to believe that any of the nominees will not be available to serve if
elected. Should any of the nominees cease to be available for election before
the Annual Meeting, the proxy will, unless authority to vote has been withheld
by the person giving the proxy, be voted for a substitute nominee designated
by the Board of Directors. Duly executed proxies will be voted as directed on
the other questions specified on the proxy and, in the absence of such
direction, will be voted for each proposal.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1997 Annual Meeting must
be received in writing by the Company before June 16, 1997, in order to be
considered for inclusion in the Company's proxy materials relating to that
meeting.
OTHER BUSINESS
The Board of Directors of the Company knows of no other matters that may come
before the Annual Meeting. As to any other business that may properly come
before the meeting, proxies will be voted in accordance with the best judgment
of the persons voting such proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Charles H. Diller, Jr.
Secretary
Dated October 8, 1996
JLG INDUSTRIES, INC.
1 JLG DRIVE
MCCONNELLSBURG, PA 17233-9533
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, and does hereby appoint L. David Black and
Charles H. Diller, Jr., and each of them, or such person or persons as they or
any of them may substitute and appoint as proxy or proxies of the undersigned
to represent the undersigned and to vote all shares of JLG Industries, Inc.
Capital Stock which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders of JLG Industries, Inc. to be
held on Monday, November 18, 1996 at 4:30 p.m., and at all adjournments of
such meeting.
THE PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, PROXIES WILL
BE VOTED FOR ALL THE PROPOSALS.
The Board of Directors unanimously recommends a vote FOR its nominees and
proposals 2, 3 and 4.
1. ELECTION OF DIRECTORS
FOR all nominees listed (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for nominees listed
Nominees: L.D. Black; C.H. Diller,Jr.; G.R. Kempton; J.A. Mezera; G. Palmer; S.
Rabinowitz; T.C. Wajnert; and C.O. Wood, III.
Instructions: To withhold authority to vote for any nominee, write that
nominee's name on the space provided below.
2. Ratify the appointment of Ernst & Young LLP as independent auditors for the
ensuing year.
FOR AGAINST ABSTAIN
3. Ratification and approval of amendments to the Articles of Incorporation to
increase authorized Capital Stock, par value $.20, to 100,000,000 shares.
FOR AGAINST ABSTAIN
4. In their discretion, upon any other business that may properly come before
the meeting or any adjournment thereof.
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, all should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. corporation, please sign
in corporate name by president or other authorized officer. If as a
partnership, please sign in partnership name by authorized person.
Dated: , 1996
PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY
Signature CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
