<PAGE> 1
SCHEDULE 14A -- INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
<TABLE>
<S> <C> <C>
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
</TABLE>
JLG INDUSTRIES, INC.
----------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[x] No fee required.
[ ] 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:
------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing:
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
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</TABLE>
<PAGE> 2
JLG INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, NOVEMBER 19, 1998
Dear Fellow Shareholder:
It is my pleasure to invite you to attend the 1998 Annual Meeting of
Shareholders of JLG Industries, Inc. The meeting will be held at the Company's
headquarters in McConnellsburg, Pennsylvania on Thursday, November 19, 1998 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 1999 fiscal
year.
3. 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,
1998, as the record date for the determination of shareholders entitled to
notice of, and to vote at, this meeting or any adjournments thereof.
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.
/s/ CHARLES H. DILLER
Charles H. Diller, Jr.
Executive Vice President and
Chief Financial Officer and Secretary
<PAGE> 3
PROXY STATEMENT
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 1998 Annual Meeting of Shareholders of the Company
to be held at the Company's headquarters in McConnellsburg, Pennsylvania on
November 19, 1998.
A proxy may be revoked by the person giving the proxy at any time before it
is exercised by filing with the Secretary of the Company a written revocation or
a duly executed proxy bearing a later date. During the Annual Meeting, a proxy
may be revoked by filing a written revocation or a duly executed proxy bearing a
later date or by attending the Meeting and voting in person.
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 mailing envelope. If you hold shares in more than one account, then
you will receive more than one card. Please sign, date and mail each card
received to ensure that all of your shares will be represented and voted at the
Annual Meeting.
All expenses in connection with the solicitation of proxies will be borne
by the Company. In addition to soliciting proxies by mail, the officers,
directors, or other employees of the Company, as yet undesignated, and without
compensation other than their regular compensation, may solicit proxies in
person or by other appropriate means if authorized and if deemed advisable. The
Company has also engaged the proxy soliciting firm of D.F. King & Co., Inc. for
a fee not to exceed $5,000 plus out-of-pocket expenses.
As of October 1, 1998, the record date for the Annual Meeting as set by the
Board of Directors, there were 44,099,586 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.
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 majority of the votes cast.
NOMINEES FOR DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR BACKGROUND
NAME AGE SINCE INFORMATION
- ---- --- -------- -----------
<S> <C> <C> <C>
L. David Black................. 61 1990 Chairman of the Board, President and Chief
Executive Officer.
Charles H. Diller, Jr.......... 53 1984 Executive Vice President and Chief Financial
Officer and Secretary.
George R. Kempton.............. 64 1993 Retired Chairman of the Board and Chief Executive
Officer, Kysor Industrial Corporation; Director,
Simpson Industries Inc.
James A. Mezera................ 68 1984 President, Mezera and Associates, Inc., a
management consulting firm; prior to 1996, Vice
President, Komatsu Dresser Company.
Gerald Palmer.................. 53 1994 Vice President, Wheel Loaders and Excavators
Division, Caterpillar, Inc.; prior to 1998, Vice
President, Technical Services Division,
Caterpillar, Inc.
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
DIRECTOR BACKGROUND
NAME AGE SINCE INFORMATION
- ---- --- -------- -----------
<S> <C> <C> <C>
Stephen Rabinowitz............. 55 1994 Chairman of the Board, President and Chief
Executive Officer, General Cable Corporation; prior
to 1994, President, AlliedSignal Braking Systems,
AlliedSignal, Inc.
Thomas C. Wajnert.............. 55 1994 Chairman of the Board, President and Chief
Executive Officer, Payroll Transfers, Inc.; prior
to 1998, Chairman of the Board, AT&T Capital
Corporation; prior to 1997,
Chairman of the Board and Chief Executive
Officer, AT&T Capital Corporation.
Charles O. Wood, III........... 60 1988 President, Wood Holdings, Inc., a private
investment firm; Chairman of the Board, Boston
Private Financial Holdings, Inc.
</TABLE>
Each nominee for director listed above has been employed in the capacity
noted for more than five years, except as indicated. There are no family
relationships among any of the above-named nominees for director.
BOARD OF DIRECTORS
The Company's Board of Directors held six meetings during the 1998 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 three committees, Audit,
Compensation and Directors and Corporate Governance, 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 1998 fiscal year are described below.
The Audit Committee, currently consisting of Messrs. Kempton, Mezera,
Palmer (Chairman) and Wood, who are all outside directors, met two times during
the 1998 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 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. Kempton,
Palmer, Rabinowitz (Chairman) and Wajnert, 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 1998 fiscal year.
The Directors and Corporate Governance Committee, currently consisting of
Messrs. Mezera, Rabinowitz, Wajnert (Chairman) and Wood, who are all outside
directors, held three meetings during fiscal 1998. This committee is responsible
for identifying and recommending to the Board appropriate areas of expertise to
be represented on the Board; identifying qualified candidates to fill Board
positions; reviewing and recommending the slate of directors to be submitted for
election by the shareholders at each annual meeting; reviewing any such
shareholder nominations of directors to determine whether they comply with
substantive and procedural requirements; recommending to the Board staffing of
committees and reviewing the scope of each committees' responsibilities;
reviewing shareholder proposals for inclusion in the Company's proxy materials
and determining whether they comply with substantive and procedural
requirements; recommending to the Board appropriate levels of director
compensation and compensation programs; reviewing and advising the Board
regarding management succession plans; and evaluating the performance of current
directors.
3
<PAGE> 5
Director 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 that would be required
by Rule 14a-3 promulgated by the Securities and Exchange Commission if such
person had been nominated by the Board of Directors and stating that such person
consents to such nomination and consents to serve as director of the Company if
elected.
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 preceding year.
The Company has a Directors' Deferred Compensation Plan which entitles each
eligible director to defer the receipt of fees payable for services as a
director. Any director, who is not an employee of the Company, is eligible to
participate in the plan. Mr. Mezera elected to participate in the plan during
fiscal 1998. Payments deferred under the plan are credited with an investment
rate of return based upon investment indices available under the plan as
selected by the participant.
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION POLICIES
The Company's executive compensation programs are designed to retain or
attract qualified executives to develop and manage implementation of the
Company's business plans and to provide appropriate incentives, based
principally on objective criteria, that link compensation to individual and
Company performance. The Compensation Committee, which is composed entirely of
non-employee 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
an incentive bonus plan. The target cash bonuses are awarded on the basis of
individual performance objectives and the Company's achieving targeted levels of
earnings per share 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 estimated expected value of
such awards based on the Black-Scholes option valuation method. The Committee
believes the stock-based awards provide incentives for executive management to
promote intermediate-term and 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 roughly 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. As a
secondary comparative measure the Committee examines compensation practices of a
selected group of capital equipment manufacturers. However, the Committee
believes that the market for skilled senior management is not limited to capital
equipment manufacturers and that a broad industry comparison offers a better
basis for establishing annual compensation packages than comparison to executive
compensation paid by firms included in either the selected group of capital
equipment manufacturers examined by the Committee or the Peer Industry Group
identified in the Performance Graph included in this Proxy Statement.
4
<PAGE> 6
COMPENSATION FOR FISCAL YEAR 1998
Compensation paid to the Company's executive officers for fiscal year 1998
consisted of a base salary and a year-end cash bonus. The Committee also awarded
stock options under the Company's Stock Incentive Plan.
Despite the Committee's compensation philosophy to recommend base salaries
generally equivalent to survey medians, almost all officer base salaries for
fiscal 1998 were below the median of survey data provided by the Committee's
compensation consultant. Two factors contributed to this outcome. First, fiscal
1997 salaries were conservative relative to the Company's record performance in
that year. Second, at the time that fiscal 1998 salaries were established, the
Company saw softening market conditions and accordingly, base salaries for
executive officers were unchanged from fiscal 1997. Fiscal 1999 salaries have
been increased to a level that the Committee believes restores competitiveness
with median survey data.
At the outset of fiscal 1998 the Committee established under the management
incentive plan a cash bonus matrix based on various levels of fiscal 1998
earnings per share (EPS). This replaced a matrix used for fiscal 1997 based on
return on average shareholders equity (ROSE). The Company's record earnings of
$1.07 per share in fiscal 1998 exceeded the incentive plan's EPS distinguished
level. Accordingly, fiscal 1998 cash bonuses recommended by the Committee and
approved by the Board were higher than year-ago bonuses that were based on
achieving only threshold levels in the former ROSE plan.
For fiscal 1998, the Committee also awarded stock options that provide
long-term incentives and when combined with distinguished performance under the
management incentive plan, offer opportunities for officers to earn total
compensation generally at or exceeding the 75th percentile levels reflected in
survey data. Stock options were awarded on a basis similar to prior years.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee recognizes Mr. Black's leadership in guiding the Company to
achieve a fifth consecutive year of record earnings and top performance among
industrial and farm equipment manufacturers ranked by Fortune magazine.
As noted above, fiscal 1998 EPS exceeded the distinguished level under the
management incentive plan. Accordingly, the Committee recommended that the Board
award Mr. Black a $389,146 cash bonus for fiscal 1998, in accordance with his
achievement level of individual objectives and the EPS matrix set forth in the
management incentive bonus plan. This was substantially higher than Mr. Black's
fiscal 1997 bonus. Mr. Black's base salary for fiscal 1998 was $350,016,
unchanged from fiscal 1997. Mr. Black's base salary barely exceeded the first
quartile of survey data. For fiscal 1999, Mr. Black's salary has been increased
to $440,016 which approximates the median of survey data. With the bonus, Mr.
Black's total cash compensation for fiscal 1998 was above the 50th percentile,
but significantly below the 75th percentile of survey data.
The Committee also awarded Mr. Black options to acquire 55,500 shares of
Common Stock, with an exercise price equal to the closing market price on the
grant date. One third of the options become exercisable over each of the next
three years subject to Mr. Black's continuing employment with the Company. With
the options, Mr. Black's total direct compensation opportunity approximated the
75th percentile of the survey data. In determining the number of options, 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 of 1986 (the "Code"), precludes
a public corporation from taking a tax deduction in any year for compensation in
excess of $1 million paid to its chief executive officer or any of its four
other highest-paid executive officers. The $1 million annual deduction limit
does not apply, however, to "performance-based compensation" as that term is
defined in Code Section 162(m)(4)(C) and regulations promulgated thereunder.
The Committee believes that Company and executive performance are the most
determinative factors with respect to all components of executive compensation
other than base salaries. Both cash bonuses under the current Management
Incentive Plan and prior grants of restricted shares were determined by the
Committee based on performance criteria. However, none of these compensation
components meets the technical performance-based criteria required by Code
Section 162(m) for exclusion from the deduction limit. Compensation expenses
5
<PAGE> 7
in respect of stock options granted under the Company's Stock Incentive Plan
will generally be excluded from the deduction limit.
In fiscal 1998 the Company's highest-paid executive, Mr. Black, received
cash compensation totalling $402,432 and compensation of $128,231 in respect of
vesting of restricted shares granted for fiscal 1995 and 1996. Thus, in fiscal
1998 the deduction limit did not affect 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, depending on the Company's stock
price, there is the possibility that, vesting of restricted shares that do not
meet the requirements of Section 162(m) could cause the threshold to be exceeded
for fiscal years subsequent to fiscal 1998.
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 to maximize the Company's compensation related tax deductions.
This report is submitted by the Compensation Committee of the Board of
Directors.
Stephen Rabinowitz
Thomas C. Wajnert
George R. Kempton
Gerald Palmer
6
<PAGE> 8
SUMMARY OF CASH AND OTHER COMPENSATION
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 three most highly compensated executive officers (the
"Named Executive Officers") as of the end of the 1998 fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------- ----------------------
OTHER RESTRICTED ALL
NAME, AGE AND ANNUAL STOCK OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION(2) AWARDS(3) OPTIONS COMPENSATION(4)
- ------------------ ---- ------ --------- --------------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
L. David Black, 61 1998 $350,016 $389,146 $1,658,160 55,500 $53,336
Chairman of the Board, 1997 350,016 52,416 62,400 76,335
President and 1996 300,000 354,406 282,865 55,810 14,713
Chief Executive Officer
Charles H. Diller, Jr., 53 1998 196,008 205,850 599,306 21,200 36,205
Executive Vice President 1997 196,008 26,092 24,700 51,699
and Chief Financial Officer 1996 180,000 189,000 150,775 28,105 13,845
Raymond F. Treml, 58 1998 150,000 180,000 355,320 10,200 25,452
Senior Vice 1997 150,000 17,471 8,400 38,481
President--Operations 1996 133,008 122,200 97,495 7,605 14,998
Rao Bollimpalli, 60 1998 138,000 140,000 355,320 9,400 25,966
Senior Vice 1997 138,000 16,073 7,800 33,850
President--Engineering 1996 120,000 110,300 87,968 6,865 14,701
</TABLE>
- ---------------
(1) Reflects bonuses earned during the fiscal year, but paid during the
following fiscal year.
(2) Excludes the value of perquisites and other personal benefits. The
incremental cost to the Company of providing such perquisites and other
personal benefits did not exceed the lesser of $50,000 or 10% of annual
salary and bonus for any of the named executive officers.
(3) The 1998 restricted shares were awarded September 3, 1997 and may vest at
any time between two and five years following the date of grant if the
Company achieves a certain share price target, or at the end of five years
if the Named Executive Officer is then an employee of the Company. The
restricted shares for 1996 were awarded September 4, 1996 and vesting of
these awards is in three equal annual installments beginning one year
following the date of grant. Dividends are payable to the Named Executive
Officers on the restricted shares. Total restricted shares held and the
aggregate market value at July 31, 1998 for the Named Executive Officers
were as follows: Mr. Black, 155,194 shares valued at $2,405,507; Mr. Diller,
57,966 shares valued at $898,473; Mr. Treml, 34,706 shares valued at
$537,943; and Mr. Bollimpalli, 34,244 shares valued at $530,782.
(4) For fiscal 1998, 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 $1,192; Mr. Diller $1,077; Mr.
Treml $1,200; and Mr. Bollimpalli $1,585); payments pursuant to the
Company's Annual Physical Examination Plan (Mr. Black $2,133; Mr. Diller
$4,007; Mr. Treml $2,632; and Mr. Bollimpalli $3,543); contributions to the
Company's discretionary, defined contribution retirement plan (Mr. Black
$18,821; Mr. Diller $21,451; Mr. Treml $20,160; and Mr. Bollimpalli
$14,586); and contributions pursuant to the Company's Executive Deferred
Compensation Plan (Mr. Black $31,190; Mr. Diller $9,670; Mr. Treml $1,460;
and Mr. Bollimpalli $6,252).
7
<PAGE> 9
STOCK OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------- POTENTIAL REALIZABLE VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK PRICE APPRECIATION
OPTIONS FOR OPTION TERM(3)
OPTIONS/ GRANTED TO EXERCISE OR ----------------------------------------
SAR'S EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR PER SHARE DATE(2) 5% 10%
- ---- ---------- ------------ ----------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
L. David Black............. 55,500 24% $17.69 July 21, 2008 $419,462 $1,249,472
Charles H. Diller, Jr...... 21,200 9 17.69 July 21, 2008 160,227 477,276
Raymond F. Treml........... 10,200 4 17.69 July 21, 2008 77,090 229,633
Rao Bollimpalli............ 9,400 4 17.69 July 21, 2008 71,044 211,622
</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 22, 1999. To the extent not already exercisable, the options
generally become exercisable upon a change in control. A change in control
means either (i) any person or group becomes the beneficial owner of 25% or
more of the voting power of the Company's Capital Stock; or (ii) the
election within a twelve-month period of three or more directors whose
election is not approved by the majority of the Board of Directors; or (iii)
the incumbent directors cease to be a majority of the Board of Directors.
(3) The potential realizable value illustrates value that might be realized upon
exercise of the options immediately prior to the expiration of their term,
assuming the specified compounded rates of appreciation in the market price
of the Capital Stock over the terms of the options. The potential realizable
value to all shareholders using the specified 5% and 10% rates of
appreciation and the outstanding shares at July 31, 1998 would be
$333,268,365 and $992,723,701, 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.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE YEAR END(1) FISCAL YEAR END(2)
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L. David Black......... 464,611 136,503 $5,576,240 $242,336
Charles H. Diller, Jr.. 158,737 53,268 1,873,405 95,928
Raymond F. Treml....... 12,000 195,816 58,070 21,135 661,207 32,645
Rao Bollimpalli........ 48,179 19,488 574,348 30,264
</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, 1998, multiplied by the number of shares underlying the option. The
calculation omits options where the closing market price exceeds the
exercise price.
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. 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
8
<PAGE> 10
years of service, with full vesting after five years of service. Based on their
annual compensation through the end of the Company's 1998 fiscal year, with the
benefits identified in the plan and assuming normal retirement age has been
attained, the named executive officers would be entitled to projected annual
payments under the plan as follows: Mr. Black, $256,000; Mr. Diller, $34,000;
Mr. Treml, $56,000; and Mr. Bollimpalli $58,000. The Company also provides a
separate retiree medical plan for the officers, together with their spouse and
eligible dependents.
The Company has an Executive Deferred Compensation Plan which allows
officers to defer all or a portion of their base salary and/or cash bonus.
Provided that the officer elects to defer some portion of his base salary and/or
cash bonus, the Company will contribute to the officer's account an amount equal
to the amount that would have been contributed by the Company to the account in
the Company's Savings Plan in the form of matching and profit sharing
contributions, but for the various limitations in the Code. Payments deferred
and contributions received under the plan are credited with an investment rate
of return based upon investment indices available under the plan as selected by
the participant.
The Company also maintains an executive severance plan which will provide a
severance benefit of 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, 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 in certain other circumstances in connection
with a change of control and will be adjusted to gross-up for any excise tax
applicable to compensation in excess of limits presented in Section 280G of the
Code. No severance benefit is payable if the officer is entitled to a retirement
benefit under the supplemental executive retirement plan, except in connection
with a change of control. The severance benefit includes continuation of Company
provided life and medical insurance in the event of a change in control.
9
<PAGE> 11
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 Standard & Poor's 500 Stock and Diversified Machinery Group
indices. Cumulative total return is measured assuming an initial investment of
$100 on July 31, 1993 and the reinvestment of all dividends paid.
<TABLE>
<CAPTION>
S&P Diversified
Year Ended JLG Industries, Machinery Group
July 31, Inc. S&P 500 Index
- -------- ---- ------- -----
<S> <C> <C> <C>
1993 $ 100 $100 $100
1994 235 105 115
1995 482 133 145
1996 1,480 155 148
1997 886 235 240
1998 1,243 281 198
</TABLE>
10
<PAGE> 12
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth, as of September 11, 1998, 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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------
ACQUIRABLE
NAME OF PERSON CURRENTLY WITHIN PERCENT OF
OR GROUP(1) OWNED(2) 60 DAYS CLASS(3)
- ----------- -------- ------- ----------
<S> <C> <C> <C>
L. David Black......................................... 280,206(4) 485,411 1.7%
Charles H. Diller, Jr.................................. 222,577 166,970
Charles O. Wood, III................................... 221,900(5) 72,000
Raymond F. Treml....................................... 149,567 60,870
Rao G. Bollimpalli..................................... 86,919 50,779
George R. Kempton...................................... 42,000 36,000
James A. Mezera........................................ 37,000 33,000
Gerald Palmer.......................................... 12,000 52,992
Thomas C. Wajnert...................................... 12,000 24,000
Stephen Rabinowitz..................................... 6,000 53,064
All directors and executive officers as a group
(10 persons)......................................... 1,070,169 1,035,086 4.7%
</TABLE>
- ---------------
(1) The address of each of the named persons is in care of JLG Industries, Inc.,
1 JLG Drive, McConnellsburg, PA 17233.
(2) Each person listed has advised the Company that, except as otherwise
indicated, such person has sole voting and sole investment power with
respect to the shares indicated, except for certain shares as follows where
each person has voting but not investment power: Mr. Black, 161,424; Mr.
Diller, 77,695; Mr. Treml, 50,602; Mr. Bollimpalli, 48,737: and all
directors and executive officers as a group, 338,458.
(3) Percentages are not shown where less than 1.0%.
(4) Includes 3,600 shares owned by spouse.
(5) Includes 41,900 shares owned by a family trust.
The following table sets forth the name and address of each shareholder
known to the Company, as of September 11, 1998, to be beneficial owner of more
than five percent of the outstanding shares of the Company's Capital Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP CLASS
- ---------------- -------------------- ----------
<S> <C> <C>
Lazard Freres & Co. LLC 2,953,985(1) 6.6%
30 Rockefeller Plaza
New York, New York 10020
</TABLE>
- ---------------
(1) As of August 31, 1998, based on information supplied to the Company by
Lazard Freres & Co. LLC.
11
<PAGE> 13
SELECTION OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP served as the Company's
independent auditors throughout fiscal year 1998 and the Board of Directors, on
the recommendation of the Audit Committee, has selected the firm as the
Company's independent auditors for fiscal 1999. The Board of Directors
recommends ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year 1999. Representatives of the firm of
Ernst & Young LLP are expected to be present at the Annual Meeting, with the
opportunity to make a statement if they desire to do so, and to respond to
appropriate questions. If the selection is not ratified, the Board of Directors
will reconsider its action.
VOTING INSTRUCTIONS
The matters set forth in the Notice of Annual Meeting will be voted upon in
the order in which they are listed in the Notice. The proxy form accompanying
this Proxy Statement provides boxes by means of which shareholders executing the
proxy forms may vote for or withhold a vote on the election of all or any of
Board of Director's nominees for election as directors. Each of the nominees has
consented to serve as a director and the Board of Directors has no reason to
believe that any of the nominees will not be available to serve if elected.
Should any of the nominees cease to be available for election before the Annual
Meeting, the proxy will, unless authority to vote has been withheld by the
person giving the proxy, be voted for a substitute nominee designated by the
Board of Directors. A majority of the shares entitled to vote and either present
in person or represented by proxy will constitute a quorum for the transaction
of business at the Annual Meeting. Directors are elected by a plurality and the
eight nominees who receive the most votes will be elected. Each other matter
submitted for shareholder approval shall be approved upon the affirmative vote
of a majority of the votes cast by shareholders entitled to vote and either
present in person or represented by proxy at the Annual Meeting. Abstentions and
broker non-votes on any matter submitted to the shareholders for approval will
be counted in determining whether a quorum has been reached, but will be
excluded entirely from the vote and will not effect the vote. Broker non-votes
as to any matter are shares held by nominees which are present and voted at the
meeting on matters as to which the nominee has discretionary authority but which
are not voted on the matter in question because the nominee does not have
discretionary voting authority as to such matter.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1999 Annual Meeting
must be received in writing by the Company before June 16, 1999 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 matter that is to
be presented for action at the Annual Meeting other than those listed as items 1
and 2 in the Notice of Annual Meeting. As to any other business that may
properly come before the meeting, proxies will be voted in accordance with the
best judgment of the persons voting such proxies.
By order of the Board of Directors,
/s/ CHARLES H. DILLER
Charles H. Diller, Jr.
Executive Vice President
and Chief Financial Officer and
Secretary
October 3, 1998
12
<PAGE> 14
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 Thursday, November 19, 1998 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 PROPOSALS 1 AND 2.
The Board of Directors unanimously recommends a vote FOR its nominees and
proposal 2.
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. In their discretion, upon any other business that may properly come before
the meeting or any adjournment thereof.
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, all should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If as a corporation, please
sign in corporate name by president or other authorized officer. If as a
partnership, please sign in partnership name by authorized person.
Dated: , 1998
--------------------
- --------------------------
- --------------------------
PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY
Signature CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
