-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QlO6DlEwoy9/I8cxTm7EBE0s4ujdpbEUvrOU1QHTdtt55feY/RtadyYmm3xWtp5U cns6ZMYC2T0E8urLYBcclA== 0000216275-96-000027.txt : 19961018 0000216275-96-000027.hdr.sgml : 19961018 ACCESSION NUMBER: 0000216275-96-000027 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19961017 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JLG INDUSTRIES INC CENTRAL INDEX KEY: 0000216275 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION MACHINERY & EQUIP [3531] IRS NUMBER: 251199382 STATE OF INCORPORATION: PA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12123 FILM NUMBER: 96644852 BUSINESS ADDRESS: STREET 1: JLG DR CITY: MCCONNELLSBURG STATE: PA ZIP: 17233 BUSINESS PHONE: 7174855161 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended July 31, 1996 Commission file number 0-8454 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to JLG INDUSTRIES, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-1199382 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) JLG Drive, McConnellsburg, PA 17233 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (7l7) 485-5161 Securities registered pursuant to Section 12(b) of the Act: Capital Stock ($.20 par value) New York Stock Exchange (Title of class) (Name of Exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _________ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] At October 1, 1996, there were 43,544,034 shares of capital stock of the Registrant outstanding, and the aggregate market value of the voting stock held by nonaffiliates of the Registrant at that date was $800,121,625. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the 1996 annual meeting of shareholders are incorporated by reference into Part III. PART I ITEM 1. BUSINESS General The Company, organized in 1969, is the leading manufacturer, distributor and international marketer of aerial work platforms. Sales are made principally to independent distributors who rent and sell the Company's products to a broad customer base, which includes users in the industrial, commercial, institutional and construction markets. Products Aerial Work Platforms. Aerial work platforms are designed to permit workers to position themselves and their tools and materials easily and quickly in elevated work areas that otherwise might have to be reached by the erection of scaffolding, by the use of ladders, or through some other device. Elevating work platforms consist of self- propelled boom-type, scissor-type and vertical-type lifts. These work platforms are mounted either at the end of a telescoping and/or articulating lifting mechanism, which in turn are mounted on mobile, four-wheel chassis. The Company offers elevating work platforms powered by electric motors or gasoline, diesel, or propane engines. All of the Company's elevating work platforms are designed for stable operation in elevated positions and self-propelled models travel on grades of up to twenty-four degrees. Boom-type self-propelled aerial work platforms are especially useful for reaching over machinery and equipment that is mounted on floors and for reaching other elevated positions not easily approached by a vertical lifting device. The Company produces boom-type self- propelled aerial work platform models of various sizes with platform heights ranging up to 150 feet. The boom may be rotated up to 360 degrees in either direction, raised or lowered from vertical to below horizontal, and extended while the work platform remains horizontal and stable. Vehicles on which the booms are mounted may be maneuvered forward or backward and steered in any direction by the operator from the work platform. Boom-type models have standard-sized work platforms, which vary in size up to 3 by 8 feet, and the rated lift capacities range from 500 to 2,000 pounds. The distributor net price of the Company's standard models at July 31, 1996 ranged from approximately $18,735 to $325,000. Scissor-type self-propelled aerial work platforms are designed to provide larger work areas, and generally to allow for heavier loads than boom-type lifts. Scissor-type lift vehicles may be maneuvered in a manner similar to boom-type models, but the platforms may be extended only vertically, except for an available option that extends the deck horizontally up to 6 feet. The scissor-type models have maximum elevation capabilities of up to 50 feet and various platform sizes up to 6 by 14 feet. The rated lift capacities range from 500 to 2,500 pounds. The distributor net price of the Company's standard models at July 31, 1996 ranged from approximately $9,476 to $49,091. Self-propelled and push-around vertical lifts consist of a work platform attached to an aluminum mast that extends vertically, which in turn, is mounted on either a push-around or self-propelled base. Available in various models, these machines can be rolled in their retracted position through standard door openings. They have maximum elevation capabilities of up to 36 feet and rated lift capacities from 300 to 750 pounds. The distributor net price of the Company's standard models at July 31, 1996 ranged from approximately $3,397 to $8,619. The Company has eleven registered trademarks and nineteen patents and considers them to be beneficial in its business. Marketing The Company's products are marketed internationally primarily through a network of independent distributors. The North American distributor network approximates 100 companies operating through nearly 300 branches. In Europe, the Company's distribution base includes approximately 60 locations. The Company also has established a presence in eight countries in the Asia/Pacific region as well as Australia and Japan and has distributor locations in the major countries of Latin America. The Company's distributors sell and rent the Company's products and provide service support. The Company also sells directly through its own marketing organizations to certain major accounts as well as to customers in parts of the world where independent distribution is either not available or not commercially feasible. The Company supports the sales, service, and rental programs of its distributors with product advertising, cooperative promotional programs, major trade show participation, and distributor personnel training in both service and product attributes. The Company supplements domestic sales and service support to its international customers through its overseas facilities in the United Kingdom and Australia. The Company maintains a national rental fleet of elevating work platforms. The purpose of this fleet is to assist the Company's distributors in servicing large, one-time projects and in meeting periods of unanticipated rental demand, and to make available more equipment to distributors with growing markets, but limited financial resources. It also repairs and refurbishes equipment for its own use or for sale to its distributors. Product Development The Company invests significantly in product development and diversification, including improvement of existing products and modification of existing products for special applications. Product development expenditures totaled $6,925,000, $5,542,000, and $4,373,000 for the fiscal years 1996, 1995 and 1994, respectively. New products introduced in the past two years accounted for approximately 27% percent of fiscal 1996 sales. Competition In selling its major products, the Company experiences two types of competition. The Company competes with more traditional means of accomplishing the tasks performed by elevating work platforms, such as ladders, scaffolding and other devices. The Company believes that its elevating work platforms in many applications are safer, more versatile and more efficient, taking into account labor costs, than those traditional methods and that its elevating work platforms enjoy competitive advantages when the job calls for frequent movement from one location to another at the same site or when there is a need to return to the ground frequently for tools and materials. The Company competes principally with nine elevating work platform manufacturers. Some of the Company's competitors are part of, or are affiliated with, companies which are larger and have greater financial resources than the Company. The Company believes that its product quality, customer service, experienced distribution network, national rental fleet and reputation for leadership in product improvement and development provide the Company with significant competitive advantages. The Company believes it commands the largest share of the market for boom and scissor lift products and is one of the three largest producers of vertical lifts. Executive Officers of the Registrant Positions with the Company Name Age (date of initial election) L. David Black 59 Chairman of the Board, President and Chief Executive (1993); prior to 1993, President and Chief Executive Officer (1991). Charles H. Diller, Jr. 51 Executive Vice President and Chief Financial Officer (1990). Michael Swartz 51 Senior Vice President - Marketing (1990). Rao Bollimpalli 58 Senior Vice President - Engineering (1990). Raymond F. Treml 56 Senior Vice President - Manufacturing (1990). All executive officers listed above are elected to hold office for one year or until their successors are elected and qualified, and have been employed in the capacities noted for more than five years, except as indicated. No family relationship exists among the above named executive officers. Product Liability Because the Company's products are used to elevate and move personnel and materials above the ground, use of the Company's products involves exposure to personal injury as well as property damage, particularly if operated carelessly or without proper maintenance. The Company is a party to personal injury and property damage litigation arising out of incidents involving the use of its products. The Company's program for fiscal 1996 to insure against exposure to such litigation is comprised of a self-insurance retention of $5 million and catastrophic coverage of $20 million in excess of the retention. The Company has accrued as a reserve $8.9 million with respect to pending and potential claims for all years in which the Company is liable under its self-insurance retention. The number of product liability claims filed each year fluctuates significantly. The number of potential claims has been affected by the substantial growth in sales over the past several years which has dramatically increased machine population and number of users. This has exerted upward pressure on the number of claims, which the Company has countered through product design safety innovations. Product liability costs, based upon the Company's best estimate of anticipated losses, for years ended July 31, 1996, 1995 and 1994, approximated 0.9%, 1.4% and 2.6% of net sales, respectively. For additional information relative to product liability insurance coverage and cost, see Item 3 Legal Proceedings. Employees The Company had 2,705 and 2,222 persons employed as of July 31, 1996 and 1995, respectively. The Company believes its employee relations are good, and it has experienced no work stoppages as a result of labor problems. Foreign Operations The Company manufactures its products in the U.S. for sales throughout the world. Sales to customers outside the U.S. were 24%, 18% and 16% of net sales for 1996, 1995 and 1994, respectively. Export sales were up substantially in dollar terms, but the percentage gain was only modest due to the continued strong growth of domestic sales. ITEM 2. PROPERTIES The Company has manufacturing plants and office space at five sites in Pennsylvania totaling 571,000 square feet and situated on 108 acres of land. Of this, 497,000 square feet are owned, with the remainder under long-term lease. The Company has several international sales offices under short-term operating leases. The Company's McConnellsburg and Bedford, Pennsylvania facilities with a book value of $9.4 million have been encumbered as security for Company long-term borrowings aggregating $1.9 million. The Company's properties used in its operations are considered to be in good operating condition, well-maintained and suitable for their present purposes. ITEM 3. LEGAL PROCEEDINGS The Company is a party to personal injury and property damage litigation arising out of incidents involving the use of its products. The Company's program for fiscal 1996 to insure against exposure to such litigation is comprised of a self-insurance retention of $5 million and catastrophic coverage of $20 million in excess of the retention. Catastrophic coverage for fiscal year 1997 was increased to $25 million. The Company contracts with an independent insurance firm to provide claims handling and adjustment services. The Company's estimates with respect to claims are based on internal evaluations of the merits of individual claims and the reserves assigned by the Company's independent insurance carrier. The methods of making such estimates and establishing the resulting accrued liability are reviewed frequently, and any adjustments resulting therefrom are reflected in current earnings. Claims are paid over varying periods, which generally do not exceed five years. Accrued liabilities for future claims are not discounted. With respect to all claims of which the Company is aware, accrued liabilities of $8.9 million and $8.4 million were established at July 31, 1996 and 1995, respectively. While the Company's ultimate liability may exceed or be less than the amounts accrued, the Company believes that it is unlikely that it would experience losses that are materially in excess of such reserve amounts. As of July 31, 1996 and 1995, there were no insurance recoverables or offset implications and there were no claims by the Company being contested by insurers. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS The Company's capital stock is traded on the New York Stock Exchange under the symbol JLG. Prior to September 18, 1996, the Company's shares were traded on the NASDAQ National Market under the symbol JLGI. The table below sets forth the market prices and average shares traded daily for the past two fiscal years. Price per Share Average Shares 1996 1995 1996 1995 Quarter Ended High Low High Low October 31, $8.33 $5.67 $3.48 $2.83 261,809 164,289 January 31 $10.17 $7.67 $3.48 $2.83 219,170 248,763 April 30 $19.08 $8.83 $3.58 $2.83 397,375 270,300 July 31 $29.50 $12.00 $6.04 $3.21 916,362 321,744 All share and per share data in the table above has been adjusted for the two-for-one stock splits distributed in April and October 1995, and the three-for-one split distributed in July 1996. The cash dividend was also increased on the same dates on a pre-split basis by 20%, 33% and 50%, respectively. Combined, the three splits increased the number of shares outstanding twelve-fold and the cash dividend 140%. The Company's three consecutive years of record performance have contributed to a significant increase in its share price. When combined, the share price and dividend increases have provided shareholders a total return of 207% in 1996 and in excess of 100% for each of the prior two fiscal years. The Company's quarterly cash dividend rate is currently $.005 per share, or $.02 on an annual basis. The Company believes approximately 56% of the stock is held by about 140 institutions, mutual funds, banks, insurance and investment companies and pension funds. In addition, there are about 3,400 shareholders of record, including 1,800 employees. ITEM 6. SELECTED FINANCIAL DATA ELEVEN YEAR FINANCIAL SUMMARY (in thousands of dollars, except per share data)
Year ended July 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 RESULTS OF OPERATIONS Net sales $413,407 $269,211 $176,443 $123,034 $110,479 $94,439 $149,281 $121,330 $81,539 $59,827 $59,323 Gross profit 108,716 65,953 42,154 28,240 22,542 20,113 37,767 32,384 23,598 17,075 16,347 Selling, general and administrative expenses (44,038) (33,254) (27,147) (23,323) (22,024) (21,520) (21,834) (18,974) (14,117) (11,946) (12,910) Restructuring charges (4,922) (2,781) (1,015) Income (loss) from operations 64,678 32,699 15,007 4,917 (4,404) (4,188) 14,918 13,410 9,481 5,129 3,437 Interest expense (293) (376) (380) (458) (1,218) (1,467) (2,344) (1,375) (925) (1,039) (1,750) Other income (expense), net 1,281 376 (24) 180 (149) (707) 858 399 485 958 51 Income (loss) before taxes and extraordinary credit 65,666 32,699 14,603 4,639 (5,771) (6,362) 13,432 12,434 9,041 5,048 1,738 Extraordinary credit 1,063 Income tax (provision) benefit (23,558) (11,941) (5,067) (1,410) 2,733 3,122 (4,950) (4,882) (3,766) (3,008) (1,063) Net income (loss) 42,108 20,758 9,536 3,229 (3,038) (3,240) 8,482 7,552 5,275 2,040 1,738 PER SHARE DATA Net income (loss) 0.95 0.49 0.23 0.07 (0.07) (0.08) 0.20 0.18 0.13 0.05 0.04 Cash dividends 0.015 0.0092 0.0083 0.005 0.0208 0.0167 0.0125 0.0083 Shares used in computation (in thousands) 44,392 42,508 41,950 43,634 43,077 42,542 42,121 42,019 41,331 40,854 40,772 PERFORMANCE MEASURES Return on sales 10.2% 7.7% 5.4% 2.6% (2.8%) (3.4%) 5.7% 6.2% 6.5% 3.4% 2.9% Return on assets 28.5% 20.2% 12.1% 4.6% (4.0%) (4.2%) 10.4% 11.9% 10.8% 4.9% 4.1% Return on shareholders' equity 47.9% 37.1% 23.8% 8.5% (7.9%) (7.7%) 21.8% 23.5% 21.2% 9.8% 9.0% FINANCIAL POSITION Working capital 71,807 45,404 32,380 26,689 33,304 36,468 47,289 34,745 27,378 16,895 20,070 Current assets as a percent of current liabilities 226% 216% 208% 217% 268% 266% 304% 254% 250% 216% 369% Property, plant and equipment, net 34,094 24,785 19,344 13,877 13,511 13,726 14,402 11,343 8,677 7,975 8,422 Total assets 182,628 119,708 91,634 72,518 73,785 74,861 86,741 70,570 57,692 42,431 42,478 Total debt 2,194 2,503 7,578 4,471 12,553 14,175 18,404 13,799 11,805 5,513 12,238 Total debt as a percent of total capitalization 2% 4% 14% 10% 25% 27% 29% 28% 29% 20% 37% Shareholders' equity 113,208 68,430 45,706 38,939 37,186 38,596 44,109 35,331 28,465 22,582 20,512 Book value per share 2.61 1.60 1.09 0.89 0.86 0.90 1.05 0.84 0.68 0.55 0.50 OTHER DATA Product development expenditures 6,925 5,542 4,373 3,385 3,628 3,430 3,520 2,904 2,910 2,010 2,313 Capital expenditures, net of retirements 16,668 8,618 7,762 3,570 1,364 1,637 4,615 4,054 1,619 1,197 1,605 Depreciation and amortization 6,505 3,875 2,801 2,500 2,569 1,953 1,771 1,609 1,968 1,830 2,266 Employees 2,705 2,222 1,620 1,324 1,014 1,182 1,565 1,455 972 804 600
This summary should be read in conjunction with Management's Discussion and Analysis. All share and per share data have been adjusted for the two-for-one stock splits distributedin April and October, 1995 and the three-for-one stock split distributed in July, 1996. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information given below is intended to assist in understanding the Company's financial condition and results of operations as reflected in the Consolidated Financial Statements. The Company is the world's leading manufacturer, distributor and international marketer of mobile elevating work platforms used primarily in industrial, commercial, institutional and construction applications. Sales are made principally to independent equipment distributors that rent the Company's products and provide service support to equipment users. The Company also sells its products to large independent rental companies. Equipment purchases by end-users, either directly from the Company or through distributors, comprise a significant, but smaller portion of sales. The Company also generates a small, but growing amount of revenue from sales of used equipment and from equipment rentals and services provided by JLG's Equipment Services operations. Demand for the Company's products tends to be cyclical, responding historically to varying levels of construction and industrial activity, principally in the United States and, to a lesser extent, in other industrialized nations. During recessionary conditions, demand for rental equipment typically declines more sharply than demand for equipment purchased by end-users. Other factors affecting demand include the availability and cost of financing for equipment purchases and the market availability of used equipment. Due to the cyclical demand, the Company's financial performance and cash flows tend to fluctuate. However, the Company continually strives to reduce operating costs and increase manufacturing efficiencies. The Company also considers the development and introduction of new and improved products and expansion into underserved geographic markets to be important factors in maintaining and strengthening its market position and reducing cyclical fluctuations in its financial performance and cash flows. RESULTS OF OPERATIONS Net sales reached a new high in 1996, rising by 54% over 1995 and by 53% from 1994 to 1995. The growth in revenues for both years included increased demand across virtually all product classes. Strong U.S. and European demand for both 1996 and 1995 was the primary contributor to the record sales. Sales outside the U.S., as a percent of total sales, were 24%, 18% and 16% in 1996, 1995 and 1994, respectively. New and redesigned products introduced over a two-year period contributed 27%, 24% and 25% to sales in 1996, 1995 and 1994, respectively. Though the Company has a broad base of customers, each of whose purchases may vary significantly from year to year, the Company has recently experienced some consolidation among its largest customers, and sales to these customers are increasing in significance. Gross profit, as a percent of sales, increased to 26% in 1996 from 24% in 1995, primarily due to the effects of spreading fixed overhead expenses over a higher production base, lower product liability costs and higher selling prices. This improvement was partially offset by changes in product mix. Gross profit, as a percent of sales, was 24% for both 1995 and 1994. Lower manufacturing costs due to continued improvements in manufacturing processes, lower warranty and product liability costs, and higher selling prices offset increased material costs, a less profitable product mix and costs associated with outsourcing additional production as a result of the substantial increase in demand and capacity limitations. Selling, general and administrative expenses increased $10.8 million and $6.1 million for 1996 and 1995,respectively, but as a percent of sales decreased to 11% in 1996 from 12% in 1995 and 15% in 1994. The dollar increase for both years included higher personnel and related costs, increased consulting and advertising expenses and increased expenses from foreign operations, all of which primarily related to increased business levels. The increase in expenditures between 1996 and 1995 were partially offset by a reduction in bad debt expenses. The increase between 1995 and 1994 also included higher research and development spending. The effective income tax rate was 36% in 1996 compared to 37% and 35% in 1995 and 1994, respectively. The effective income tax rate for 1996 was lower than the rate in 1995, primarily due to a larger tax benefit associated with export sales in 1996, while the rate for 1995 was higher than the rate for 1994 due to the tax benefit from closing an overseas facility in 1994. FINANCIAL CONDITION The Company strengthened its financial position during 1996 through increased cash from operations and the sale of its Material Handling Division. Cash generated from operating activities improved by $3.8 million in 1996 and $6.0 million in 1995, principally due to the increased profitability of the Company. Working capital increased by $26.4 million in 1996 and $13.0 million in 1995 primarily due to higher business levels. The Company also invested an additional $9.9 million in 1996 and $1.5 million in 1995 to expand its JLG Equipment Services operation. Capital expenditures were $16.7 and $8.6 million in 1996 and 1995, respectively. At July 31, 1996, the Company had unused credit lines totaling $20 million and cash balances of $30.4 million. The Company considers these resources, coupled with cash expected to be generated by operations, adequate to meet its foreseeable funding needs, including about $55 million budgeted for capital-related projects in 1997. The major items budgeted are approximately $25 million to further expand the JLG Equipment Services fleet of rental machines, $7 million to complete the scissor lift plant expansion and $13 million to increase boom lift manufacturing capacity. The Company intends to finance about $3 million of these projects with borrowed capital. The Company's exposure to product liability claims is discussed in the Commitments and Contingencies note to the Consolidated Financial Statements. Future results of operations, financial condition and liquidity may be affected to the extent that the Company's ultimate liability with respect to product liability varies from current estimates. OUTLOOK This Outlook section and other parts of this Management's Discussion and Analysis contain forward-looking information and involve risks and uncertainties. Certain factors that could significantly impact expected results are described in "Cautionary Statements Pursuant to the Securities Litigation Reform Act" which is an exhibit to this Form 10-K. Demand for the Company's products continues strong and the level of unfilled orders remains high. Demand for the Company's new products and from increased distribution globally should contribute to additional sales growth. Rental fleet utilization also remains strong throughout the United States and used equipment available for resale is scarce. Additional manufacturing throughput, capacity and efficiency gains in both the McConnellsburg plant and the new Bedford facility should improve the Company's ability to satisfy customer demand and should improve product profit margins. Product mix also affects gross margins and is difficult to forecast. All of these factors bode well for another strong year in fiscal 1997, provided there is no unanticipated softening in customer demand. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following consolidated financial statements of JLG Industries, Inc. and its subsidiaries, are included herein as indicated below: Consolidated Balance Sheets - July 31, 1996 and 1995 Consolidated Statements of Income - Years Ended July 31, 1996, 1995 and 1994 Consolidated Statements of Shareholders' Equity - Years Ended July 31, 1996, 1995 and 1994 Consolidated Statements of Cash Flows - Years Ended July 31, 1996, 1995 and 1994 Notes to the Consolidated Financial Statements - July 31, 1996 Report of Independent Auditors JLG INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) July 31 1996 1995 ASSETS Current Assets Cash $30,438 $12,973 Accounts receivable, less allowance for doubtful accounts of $1,215 in 1996 and $1,325 in 1995 54,342 33,466 Inventories: Finished goods 12,925 7,630 Work in process 13,972 13,357 Raw materials 12,536 12,459 39,433 33,446 Other current assets 4,649 4,683 Total Current Assets 128,862 84,568 Property, Plant and Equipment Land and improvements 3,443 3,038 Buildings and improvements 14,119 11,524 Machinery and equipment 37,960 29,290 55,522 43,852 Less allowance for depreciation 21,428 19,067 34,094 24,785 Equipment Held for Rental 13,459 5,052 Other Assets 6,213 5,303 $182,628 $119,708 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $243 $243 Accounts payable 34,535 20,028 Accrued expenses 22,277 18,893 Total Current Liabilities 57,055 39,164 Long-Term Debt 1,951 2,260 Other Liabilities and Deferred Credits 10,414 9,854 Shareholders' Equity Capital stock: Authorized shares: 50,967 at $.20 par value Issued and outstanding shares: 1996 - 43,382 shares; 1995 - 42,825 shares 8,676 8,565 Additional paid-in capital 7,879 4,411 Equity adjustment from translation (2,060) (1,799) Retained earnings 98,713 57,253 Total Shareholders' Equity 113,208 68,430 $182,628 $119,708 The accompanying notes are an integral part of these financial statements. JLG INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Fiscal Years Ended July 31 1996 1995 1994 Net Sales $413,407 $269,211 $176,443 Cost of sales 304,691 203,258 134,289 Gross Profit 108,716 65,953 42,154 Selling, general and administrative expenses 44,038 33,254 27,147 Income from Operations 64,678 32,699 15,007 Other income (deductions): Interest expense (293) (376) (380) Miscellaneous, net 1,281 376 (24) Income before Taxes 65,666 32,699 14,603 Income tax provision 23,558 11,941 5,067 Net Income $42,108 $20,758 $9,536 Net Income per Share $.95 $.49 $.23 The accompanying notes are an integral part of these financial statements. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (in thousands except share data)
Equity Additional Adjustment Capital Stock Paid-in from Retained Treasury Shares Par Value Capital Translation Earnings Stock Balances at July 31, 1993 43,877 $8,775 $4,498 ($2,034) $27,700 Net income for the year 9,536 Dividends paid: $.0083 per share (352) Aggregate translation adjustment, net of deferred tax benefit of $1,032 135 Stock option transactions 203 41 282 Purchase of treasury stock (2,471) (3,500) Contribution to employee benefit plan 297 204 421 Balances at July 31, 1994 41,906 8,816 4,984 (1,899) 36,884 (3,079) Net income for the year 20,758 Dividends paid: $.0092 per share (389) Aggregate translation adjustment, net of deferred tax benefit of $837 100 Stock option transactions 553 111 985 Contribution to employee benefit plan 366 640 519 Retirement of treasury stock (362) (2,198) 2,560 Balances at July 31, 1995 42,825 8,565 4,411 (1,799) 57,253 Net income for the year 42,108 Dividends paid: $.015 per share (648) Aggregate translation adjustment, net of deferred tax benefit of $737 (261) Stock option transactions 557 111 3,468 Balances at July 31, 1996 43,382 $8,676 $7,879 ($2,060) $98,713
The accompanying notes are an integral part of these statements CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended July 31 1996 1995 1994 Operations Net income $42,108 $20,758 $9,536 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 6,505 3,875 2,801 Provision for self-insured losses 2,938 2,800 3,950 Deferred income taxes 502 (596) (1,233) Changes in operating assets and liabilities: Accounts receivable (23,748) (7,522) (4,686) Inventories (13,686) (9,867) (3,682) Other current assets (278) 1,412 21 Accounts payable 16,680 5,251 3,728 Accrued expenses 3,076 4,328 2,659 Changes in equipment held for rental (9,873) (1,548) (1,455) Changes in other assets and liabilities (3,406) (1,857) (601) Cash provided by operations 20,818 17,034 11,038 Investments Purchases of property, plant and equipment (16,690) (11,035) (7,963) Proceeds from sale of property, plant and equipment 22 2,417 201 Proceeds from sale of Material Handling Division 10,954 Cash used for investments (5,714) (8,618) (7,762) Financing Repayment of long-term debt (309) (5,081) (1,904) Issuance of long-term debt 5,000 Payment of dividends (648) (389) (352) Purchase of treasury stock (3,500) Exercise of stock options 3,579 915 326 Stock issued for employee benefit plans 1,159 625 Cash provided by (used for) financing 2,622 (3,396) 195 Currency Adjustments Effect of exchange rate changes on cash (261) (135) (231) Cash Net change in cash 17,465 4,885 3,240 Beginning balance 12,973 8,088 4,848 Ending balance $30,438 $12,973 $8,088 The accompanying notes are an integral part of these statements. JLG INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands except per share data) SUMMARY OF SIGNIFICANT ACCOUNTING POLICES Principles of Consolidation and Statement Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Certain prior year amounts in the consolidated financial statements have been reclassified to conform to the presentation used for 1996. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents and classifies such amounts as cash. Inventories Inventories are stated at the lower of cost or market. Cost is determined using the LIFO (last-in, first-out) method. Inventories at July 31, 1996 and 1995 would have been higher by $4,307 and $4,528, respectively, had the Company used FIFO cost, which approximates current cost, rather than LIFO cost for valuation of its inventories. Property, Plant and Equipment and Equipment Held for Rental Property, plant and equipment and equipment held for rental are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method, based on useful lives of 15 years for land improvements, 10 to 20 years for buildings and improvements, three to 10 years for machinery and equipment and three to seven years for equipment held for rental. Income Taxes Deferred income tax assets and liabilities arise from differences between the tax basis of assets or liabilities and their reported amounts in the financial statements. Deferred tax balances are determined by using the tax rate expected to be in effect when the taxes are paid or refunds received. Capital Stock In July 1996, the Company distributed a three-for-one stock split and in April 1995 and October 1995, the Company distributed two-for-one stock splits of the Company's then outstanding common stock. The splits were effected by stock dividends. All share and per share data included in this Annual Report have been restated to reflect the stock splits. Product Development The Company incurred product development and other engineering expenses of $6,925, $5,542 and $4,373 in 1996, 1995 and 1994, respectively, which were charged to expense as incurred. Fair Value of Financial Instruments The carrying values reported in the consolidated balance sheet for cash, accounts receivable, accounts payable, other assets and accrued expenses approximate their fair values. The fair value of the Company's long-term debt is estimated to approximate the carrying amount reported in the consolidated balance sheet based on current interest rates for similar types of borrowing arrangements. Stock-Based Compensation The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation." This new standard encourages, but does not require, companies to recognize compensation expense for grants of stock, stock options and other equity instruments based on the fair-value method of accounting. The Company is required to adopt SFAS No. 123 for its fiscal year 1997. The Company expects to continue to follow the accounting provisions of APB No. 25 for stock based compensation and to furnish the pro-forma disclosure required under SFAS No. 123, if material. Translation of Foreign Currencies The financial statements of the Company's Australian operation are measured in its local currency and then translated into U.S. dollars. All balance sheet accounts have been translated using the current rate of exchange at the balance sheet date. Results of operations have been translated using the average rates prevailing throughout the year. Translation gains or losses resulting from the changes in the exchange rates from year to year are accumulated in a separate component of shareholders' equity. The financial statements of the Company's European operation are prepared using the U.S. dollar as its functional currency. The transactions of this operation that are denominated in foreign currencies have been remeasured in U.S. dollars, and any resulting gain or loss is reported in income. Net Income per Share Net income per share for 1996 is computed by dividing net income by the weighted average number of common shares outstanding plus the incremental shares that would have been outstanding upon the assumed exercise of dilutive stock options. In 1995 and 1994, the dilutive effect of stock option shares was immaterial, and therefore, not considered in the calculation of net income per share. INCOME TAXES The income tax provision consisted of the following for the years ended July 31: 1996 1995 1994 Current: Federal $20,476 $10,641 $5,373 State 2,580 1,896 927 23,056 12,537 6,300 Deferred: Federal 435 (483) (833) State 67 (113) (400) 502 (596) (1,233) $23,558 $11,941 $5,067 The Company made income tax payments of $24,435, $11,858, and $5,700 in 1996, 1995, and 1994, respectively. The difference between the U.S. federal statutory income tax rate and the Company's effective tax rate is as follows for the years ended July 31: 1996 1995 1994 Statutory U.S. federal income tax rate 35% 35% 35% State tax provision, net of federal effect 3 4 4 Net tax effect of foreign operations (2) Other (2) (2) (2) 36% 37% 35% Components of deferred tax assets and liabilities were as follows at July 31: 1996 1995 Future income tax benefits: Contingent liabilities provisions $4,065 $3,811 Employee benefits 1,331 1,154 Translation adjustments 1,193 918 Inventory valuation provisions 649 887 Other 966 1,360 8,204 8,130 Deferred tax liabilities: Depreciation and asset basis differences 1,165 925 Other 153 145 1,318 1,070 6,886 7,060 Less valuation allowance (222) (234) Net deferred tax assets $6,664 $6,826 The current and long-term deferred tax asset amounts are included in other current and other asset amounts on the consolidated balance sheets. BANK CREDIT LINES AND LONG-TERM DEBT The Company has available a $20 million unsecured bank revolving line of credit with a term of two years, renewable annually, and at an interest rate of prime or a spread over LIBOR. The facility further provides for borrowings using bankers acceptances at prevailing discount rates. The Company also has the option to convert outstanding borrowings under the facility to an amortizing term loan with a repayment period of up to five years, and at an interest rate based on the yield of U.S. Treasury securities with the same maturity. There were no amounts outstanding under this facility at July 31, 1996 and 1995. Long-term debt was as follows at July 31: 1996 1995 Industrial revenue bonds due in 1999 with interest at 7% $1,000 $1,000 Industrial revenue mortgages due through 2004 with interest at 5.5% 601 677 State agency mortgages due through 2004 with interest averaging 3% 506 662 Other 87 164 2,194 2,503 Less current portion (243) (243) $1,951 $2,260 The bank revolving line of credit requires the maintenance of certain financial ratios. Borrowings aggregating $1.9 million under certain long-term loans are secured by $9.4 million in assets of the Company. Interest paid on all borrowings was $293, $378 and $461 in 1996 1995, and 1994, respectively. The aggregate amounts of long-term debt outstanding at July 31, 1996 which will become due in 1997 through 2001 are: $243, $159, $1,142, $143 and $144, respectively. EMPLOYEE BENEFIT PLANS The Company's stock incentive plan has reserved 5,617 common shares that may be awarded to key employees in the form of options to purchase capital stock, or restricted shares. The option price is set by the Company's Board of Directors. For all options currently outstanding, the option price is the fair market value of the shares on their date of grant. The directors stock option plan provides for annual grants to each outside director of a single option to purchase six thousand shares of capital stock, providing the Company earned a net profit, before extraordinary items, for the prior fiscal year. The option price shall be equal to the shares' fair market value on their date of grant. An aggregate of 1,968 shares of Common stock is authorized to be issued under the plan. Outstanding options and transactions involving the plans are summarized as follows: 1996 1995 Outstanding options at the beginning of the year 1,911 2,077 Options granted ($3.30 to $14.75 per share) 275 455 Options cancelled ($1.12 to 2.93 per share) (8) (44) Options exercised ($.43 to $5.64 per share) (473) (577) Outstanding options at the end of the year 1,705 1,911 Exercisable options at the end of the year ($.43 to $5.64 per share) 728 526 The Company has a discretionary, defined-contribution retirement plan covering all its eligible U.S. employees. The Company's policy is to fund the pension cost as accrued. Plan assets are invested in money market funds, government securities, mutual funds and the Company's capital stock. The aggregate expense relating to these plans was $4,355, $2,298 and $1,888 in 1996, 1995 and 1994, respectively. ACCRUED EXPENSES Components of accrued expenses were as follows at July 31: 1996 1995 Salaries, wages and related taxes $8,904 $6,609 Income taxes 2,111 2,718 Contingent liabilities, current portion 2,231 2,378 Employee benefits 1,491 1,563 Sales rebates 3,409 884 Other 4,131 4,741 $22,277 $18,893 INDUSTRY AND EXPORT DATA The Company operates in one dominant industry segment - the manufacturing and selling of mobile, hydraulically-operated equipment. The Company manufactures its products in the U.S. and its customers are principally U.S. based equipment rental firms. Additionally, its receivables from these customers are generally not collateralized. Sales to one customer, as a percent of total sales, were 13% for 1996 and 1995 and 12% for 1994. Export sales, as a percent of total sales, were 24%, 18% and 16% of net sales for 1996, 1995 and 1994, respectively. COMMITMENTS AND CONTINGENCIES The Company is a party to personal injury and property damage litigation arising out of incidents involving the use of its products. The Company's insurance program for fiscal year 1996 was comprised of a self- insured retention of $5 million and catastrophic coverage of $20 million in excess of the retention. Catastrophic coverage for fiscal year 1997 was increased to $25 million. The Company contracts with an independent insurance firm to provide claims handling and adjustment services. The Company's estimates with respect to claims are based on internal evaluations of the merits of individual claims and the reserves assigned by the Company's independent insurance carrier. The methods of making such estimates and establishing the resulting accrued liability are reviewed frequently, and any adjustments resulting therefrom are reflected in current earnings. Claims are paid over varying periods, which generally do not exceed five years. Accrued liabilities for future claims are not discounted. With respect to all outstanding claims of which the Company is aware, accrued liabilities of $8.9 million and $8.4 million were established at July 31, 1996 and 1995, respectively. While the Company's ultimate liability may exceed or be less than the amounts accrued, the Company believes that it is unlikely that it would experience losses that are materially in excess of such estimated amounts. As of July 31, 1996 and 1995, there were no insurance recoverables or offset implications and there were no claims by the Company being contested by insurers. The Company leases equipment under operating leases expiring in various years. These leases require the Company to pay all maintenance and general operating costs. Future minimum lease payments are: $1,387, $1,367, $143, $85 and $85 in 1997 through 2001, respectively. Rental expense for all operating leases was $1,408, $906, and $955 in 1996, 1995 and 1994, respectively. UNAUDITED QUARTERLY FINANCIAL INFORMATION Unaudited financial information was as follows for the fiscal quarters within the years ended July 31: Gross Net Net Income Net Sales Profit Income Per Share 1996 October 31 $86,701 $21,494 $7,780 $.18 January 31 87,558 22,458 8,268 .19 April 30 113,217 31,296 12,461 .28 July 31 125,931 33,468 13,599 .30 $413,407 $108,716 $42,108 $.95 1995 October 31 $53,724 $12,984 $3,863 $.09 January 31 52,175 13,449 3,752 .09 April 30 75,809 18,082 6,089 .14 July 31 87,503 21,438 7,054 .17 $269,211 $65,953 $20,758 $.49 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS To The Board of Directors and Shareholders JLG Industries, Inc. McConnellsburg, Pennsylvania We have audited the accompanying consolidated balance sheets of JLG Industries, Inc. as of July 31, 1996 and 1995, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended July 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of JLG Industries, Inc. at July 31, 1996 and 1995, and the consolidated results of its operations and its cash flows for each of the three years in the period ended July 31, 1996 in conformity with generally accepted accounting principles. Baltimore, Maryland September 3, 1996 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this Item 10 relating to identification of directors is incorporated herein by reference from pages 2 through 4 of the Company's Proxy Statement under the caption "Election of Directors." Identification of officers is presented in Item 1 of this report under the caption "Executive Officers of the Registrant." ITEM 11. EXECUTIVE COMPENSATION The information required by this Item 11 relating to executive compensation is hereby incorporated by reference from pages 3 through 4, under the caption "Board of Directors," and pages 5 through 11, under the caption "Executive Compensation," of the Company's Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this Item 12 relating to security ownership of certain beneficial owners and management is hereby incorporated by reference from pages 4 and 5 of the Company's Proxy Statement under the caption "Voting Securities and Principal Holders." There is no required disclosure regarding change in control. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this Item 13 relating to certain relationships and related transactions is hereby incorporated by reference from page 12 of the Company's Proxy Statement under the caption "Certain Transactions." PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) and (2) The following consolidated financial statements of the registrant and its subsidiaries are included in Item 8. Consolidated Balance Sheets - July 31, 1996 and 1995 Consolidated Statements of Income - Years ended July 31, 1996, 1995 and 1994 Consolidated Statements of Shareholders' Equity - Years ended July 31, 1996, 1995 and 1994 Consolidated Statements of Cash Flows - Years ended July 31, 1996, 1995 and 1994 Notes to Consolidated Financial Statements - July 31, 1996 The following consolidated financial schedule of the registrant and its subsidiaries is included in Item 14(d): Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. (a) (3) Listing of Exhibits Exhibit Number Exhibit 3.1 Certificate of incorporation of JLG Industries, Inc., which appears as Exhibit 1 (a) to the Company's Form 10 Registration Statement (File No. 0-8454 -- filed April 22, 1977), is hereby incorporated by reference. 3.2 Amendment to Section 5 of the Company's Articles of Incorporation effective as of June 14, 1966. 3.3 Amendment to Section 5 of the Company's Articles of Incorporation effective as of June 14, 1996. 3.4 Revised By-Laws of JLG Industries, Inc. 4.1 Trust Indenture between the Bedford County, Pennsylvania Industrial Development Authority and the Fulton County National Bank and Trust Company, as Trustee, which appears as Exhibit B5 to the Company's Form 10-K (File No. 0-8454 -- filed October 24, 1979), is hereby incorporated by reference. 4.2 Installment Sale Agreement between Bedford County, Pennsylvania Industrial Development Authority and JLG Industries, Inc. which appears as Exhibit B6 to the Company's Form 10-K (File No. 0-8454 -- filed October 24, 1979), is hereby incorporate by reference. 4.3 Agreement to disclose upon request. 10.1 Stock Redemption Agreement dated August 27, 1980, between JLG Industries, Inc. and Paul K. Shockey, which appears as Exhibit 25 to the Company's Form S-7 (Registration No. 2- 69194 -- filed September 18, 1980), is hereby incorporated by reference. 10.2 Directors' Deferred Compensation Plan dated July 29, 1986, which appears as Exhibit 10.5 to the Company's Form 10-K (File No. 0-8454 -- filed October 28, 1986), is hereby incorporated by reference. 10.3 JLG Industries, Inc. Stock Incentive Plan dated May 23, 1991 which appears as Exhibit 10.10 to the Company's Form 10-K (File No. 0-8454 -- filed October 27, 1992), is hereby incorporated by reference. 10.4 Credit Agreement dated December 21, 1989 among JLG Industries, Inc., the First National Bank of Maryland, and Philadelphia National Bank, which appears as Exhibit 4.1 to the Company's 10-Q (File No. 0-8454 -- filed March 12, 1990), is hereby incorporated by reference. 10.5 First Modification Agreement, dated January 29, 1990 to the Credit Agreement dated December 21, 1989 among JLG Industries, Inc., the First National Bank of Maryland, and Philadelphia National Bank, which appears as Exhibit 4.3 to the Company's 10-Q (File No. 0-8454 -- filed March 12, 1990), is hereby incorporated by reference. 10.6 Second Modification Agreement, dated September 17, 1993 to the Credit Agreement dated December 21, 1989 among JLG Industries, Inc., the First National Bank of Maryland, and Philadelphia National Bank, which appears as Exhibit 10.12 to the Company's 10-K (File No. 0-8454 -- filed October 20, 1993), is hereby incorporated by reference. 10.7 JLG Industries, Inc. Directors Stock Option Plan amended and restated as of September 7, 1995 which appears as Exhibit 10.12 to the Company's 10- K (File No. 0-8454 -- filed October 20, 1993), is hereby incorporated by reference. 10.8 JLG Industries, Inc. Supplemental Executive Retirement Plan effective June 1, 1995 10.9 JLG Industries, Inc. Executive Retiree Medical Benefits Plan effective June 1, 1995 10.10 JLG Industries, Inc. Executive Severance Plan effective June 1, 1995 22 Listing of subsidiaries. 23 Consent of independent auditors. 27 Financial Data Schedule (b) The Company was not required to file Form 8-K pursuant to requirements of such form in the fourth quarter of fiscal 1996. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JLG INDUSTRIES, INC. (Registrant) By: /s/ L. David Black Date: October 10, 1996 L. David Black, Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. By: /s/ Charles H. Diller, Jr. Date: October 10, 1996 Charles H. Diller, Jr., Executive Vice President, Chief Financial Officer, Secretary and Director By: /s/ George R. Kempton Date: October 10, 1996 George R. Kempton, Director By: /s/ Gerald Palmer Date: October 10, 1996 Gerald Palmer, Director By: /s/ Stephen Rabinowitz Date: October 10, 1996 Stephen Rabinowitz, Director SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS JLG INDUSTRIES, INC. AND SUBSIDIARIES (thousands of dollars)
Col. A Col. B Col. C Col. D Col. E Additions Balance at Charged to Charged to Balance at Beginning of Costs and Other Accounts Deductions- End of Classification Period Expenses Describe Describe(1)(2) Period Year ended July 31, 1996: Allowance for Doubtful Accounts $1,325 107 (217) $1,215 Year ended July 31, 1995: Allowance for Doubtful Accounts $965 360 $1,325 Year ended July 31, 1994: Allowance for Doubtful Accounts $664 644 (343) $965
Note: (1)Amounts written off and transferred to other accounts in the current year. (2)Adjustment resulting from conversion of foreign currencies. EX-3.2.ARTICLESOFINC 2 EXHIBIT 3.2 Section 5 of the Company's Articles of Incorporation shall be amended and restated to read in its entirety as follows: 5. The aggregate number of shares which the corporation shall have authority to issue is Fifty Million Nine Hundred Sixty-Six Thousand Eight Hundred Fifty-Six (50,966,856) shares $.20 par value capital stock with a total par value of Ten Million One Hundred Ninety-Three Thousand Three Hundred Seventy-One Dollars ($10,193,371). The Board of Directors is hereby authorized to issue, from time to time, in whole or in part, such shares, with such full, limited, multiple or fractional or non-voting rights and with such designations, preferences, qualifications, privileges, limitations, options, conversion rights and other special rights as may be adopted by the Board of Directors in the resolution provided for the issue of such shares. EX-3.3.ARTICLESOFINC 3 EXHIBIT 3.3 Section 5 of the Company's Articles of Incorporation shall be amended and restated to read in its entirety as follows: 5. The aggregate number of shares which the corporation shall have authority to issue is Fifty Million Nine Hundred Sixty-Six Thousand Eight Hundred Fifty-Six (50,966,856) shares $.20 par value capital stock with a total par value of Ten Million One Hundred Ninety-Three Thousand Three Hundred Seventy-One Dollars ($10,193,371.20). EX-4.3.AGREEMENTTODI 4 Exhibit 4.3 AGREEMENT TO DISCLOSE UPON REQUEST JLG Industries, Inc. (the "Company") hereby agrees that, with respect to any agreement relating to long-term debt of the Company that has not been filed as an exhibit to the Company's reports filed pursuant to the Securities Exchange Act of 1934 because such filing is not required pursuant to the provisions of S-K Item 601 (b) (4) (iii) (A), the Company will furnish a copy of any such agreement to the Securities and Exchange Commission upon request. Signed_______________________________ Charles H. Diller, Jr. Secretary EX-3.4.BY-LAWS 5 BY-LAWS OF JLG INDUSTRIES, INC. (A Pennsylvania Corporation) OFFICES 1. The registered office shall be at P.O. Box 695, McConnellsburg, Pennsylvania 17233. 2. The Corporation may also have offices at such other places as the Board of Directors may from time to time appoint or the business of the Corporation may require. SEAL 3. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Pennsylvania". SHAREHOLDERS' MEETING 4. All meetings of the shareholders shall be held at such place within or without the Commonwealth of Pennsylvania as the Board of Directors may designate from time to time and in the absence of such designation shall be held at the principal office of the Corporation in Ayr Township, Pennsylvania. 5. The annual meeting of the shareholders shall be held on the fourth Monday of November in each year, or at such other date as may be fixed by the Board of Directors, in order to elect the Board of Directors of the Corporation and transact such other business as may properly be brought before the meeting. If the annual meeting shall not be called and held within six months after the fourth Monday in November, any shareholder may call such meeting. 6. The presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by law, by articles of incorporation or by these by-laws. If however, such quorum shall not be present or represented at any meeting of the shareholders, those entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite number of shares shall be present. In the case of any meeting called for the election of directors, adjournment or adjournments may be taken only from day to day until such directors have been elected, and those who attend the second of such adjourned meetings, although less than a quorum, shall nevertheless constitute a quorum for the purpose of electing directors. 7. At each meeting of the shareholders every shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing subscribed by such shareholder and delivered to the Secretary at or prior to the meeting. No unrevoked proxy shall be valid after eleven months from the date of its execution, unless a longer time is expressly provided therein, but in no event shall a proxy, unless coupled with an interest, be voted on after three years from the date of its execution. In all elections for directors cumulative voting shall not be permitted. No share shall be voted at any meeting upon which any installment is due and unpaid. The original share ledger or transfer book, or a duplicate thereof kept in this Commonwealth shall be prima facie evidence of the right of the person named therein to vote thereon. 8. Written notice of the annual meeting shall be mailed to each shareholder entitled to vote thereat, at such address as appears on the books of the Corporation, at least five days prior to the meeting. 9. In advance of any meeting of shareholders, the Board of Directors may appoint judges of election, who need not be shareholders, to act at such meeting or any adjournment thereof. If judges of election be not so appointed, the chairman of any such meeting may, and on the request of any shareholders or his proxy, shall make such appointment at the meeting. The number of judges may be one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares present and entitled to vote shall determine whether one or three judges are to be appointed. On request of the chairman of the meeting, or of any shareholder or his proxy, the judges shall make a report in writing of any challenge or question or matter determined by them, and execute a certificate of any fact found by them. No person who is a candidate for office shall act as a judge. 10. Special meetings of the shareholders may be called at any time by resolution adopted by the Board of Directors. At any time upon adoption of a resolution by the Board of Directors to call a special meeting, it shall be the duty of the Secretary to call a special meeting of the shareholders, to be held at such time as the Secretary may fix, not less than 10 nor more than 60 days after receipt of the request. 11. Business transacted at all special meetings shall be confined to the objects stated in the call and matters germane thereto. 12. Written notice of a special meeting of the shareholders, stating the time and place and object thereof, shall be mailed, postage prepaid, to each shareholder entitled to vote thereat at such address as appears on the books of the Corporation, at least five days before such meeting, unless a greater period of notice is required by statute in a particular case. VOTING LIST 13. The officer or agent having charge of the transfer books shall make a complete list of the shareholders entitled to vote at the meetings, arranged in alphabetical order, with the address of and the number of shares held by each. Such list shall be produced and kept open at the time and places of the meeting, and shall be subject to the inspection of any such shareholder during the whole time of the meeting. The original share ledger or transfer book, or a duplicate thereof kept in this Commonwealth, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book, or to vote in person or by proxy, at any meeting of shareholders. DIRECTORS 14. The business of this Corporation shall be managed by its Board of Directors, which shall consist of such number of persons, not less than 3 and no more than 15, as may be determined from time to time by the Board of Directors; provided that no determination by the Board of Directors may reduce the term of office of any incumbent Director. Directors shall be elected by the shareholders at the annual meeting of shareholders of the Corporation. Any person to be eligible for election by the shareholders must meet the requirements of a "Qualified Nominee" as defined below in this section and must be nominated by either the Board of Directors or by a shareholder or group of shareholders that own, as reflected on the Corporation's share register, at least one share of the Corporation's stock that is then currently entitled to vote at a meeting called for the election of directors. Any such nominations by persons other than the Board of Directors must be received by the Secretary of the Corporation no later than the anniversary of the date which shall have been ninety (90) days prior to the date of the immediately preceding year's annual meeting accompanied by written statements signed by each person so nominated setting forth all information in respect of such person as would be required to be included in a proxy statement filed with the Securities and Exchange Commission pursuant to Rule 14(a) under the Securities Exchange Act of 1934, as amended, had such person been nominated, or intended to be nominated, by the Board of Directors, and stating that such person consents to such nomination and consents to serve as a Director of the Corporation if elected. The Secretary shall promptly refer all such proposed nominations to the Nominating Committee of the Board of Directors. Within fifteen (15) days following the receipt by the Secretary of a stockholder notice of nomination pursuant hereto, the Nominating Committee shall instruct the Secretary of the Corporation to advise the notifying stockholder of any deficiencies in the notice as determined by the Committee. The notifying stockholder shall cure such deficiencies within fifteen (15) days of receipt of such notice. No persons shall be eligible for election as a director of the Corporation unless nominated in accordance herewith. Nominations not made in accordance herewith may, in the discretion of the presiding officer at the meeting and with the advice of the Nominating Committee, be disregarded by the presiding officer and, upon his or her instructions, all votes cast for each such nominee may be disregarded. The determinations of the presiding officer at the meeting shall be conclusive and binding upon all stockholders of the Corporation for all purposes. A person will be a "Qualified Nominee" if such person (A)(i) beneficially owns at least one thousand shares of the Corporation's Common Stock, par value $.20 per share, such amount to be adjusted from time to time following September 5, 1996, by any stock split, stock dividend, reclassification or recapitalization by the Corporation (the "Minimum Shares"), or (ii) commits to the Corporation in writing to purchase the Minimum Shares within 18 months of being nominated as a director candidate, provided that any person who fails to acquire the Minimum Shares within 18 months of being nominated may not be considered a Qualified Nominee until such person beneficially owns the Minimum Shares, and (B) will not reach age 70 prior to the next scheduled annual meeting of shareholders. 15. In addition to the powers and authorities by these by- laws expressly conferred upon them, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not be statute or by the articles of incorporation or by these by-laws directed or required to be exercised or done by the shareholders. MEETINGS OF THE BOARD OF DIRECTORS 16. The meetings of the Board of Directors may be held at such place within this Commonwealth, or elsewhere, as a majority of the directors may from time to time appoint, or as may be designated in the notice calling the meeting. 17. Each newly elected Board may meet at such place and time as shall be fixed by the shareholders at the meeting at which such directors are elected, and no notice shall be necessary to the newly elected directors in order legally to constitute the meeting, or they may meet at such place and time as may be fixed by the consent in writing of all the directors. 18. Regular meetings of the Board shall be held without notice at such time and place as shall be determined by the Board. 19. Special meetings of the Board may be called by the Chairman of the Board on at least three days notice to each director, either personally or by mail or by telegram; special meetings shall be called by the Chairman of the Board of Secretary in a like manner and on like notice on the written request of two directors, or more. 20. A majority of the directors in office shall be necessary to constitute a quorum for the transaction of business, and the acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the Board of Directors. If all the directors shall severally or collectively consent in writing to any action to be taken by the Corporation, such action shall be as valid corporate action as though it had been authorized at a meeting of the Board of Directors. 21. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided by resolution of the Board of Directors, shall have and shall exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. In the absence or disqualification of any member of any such committee or committees, the member of members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may, by unanimous vote, appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. LIABILITY OF DIRECTORS 22. A director, as such, shall not be personally liable for monetary damages for any action taken, or any failure to take any action, unless the director has breached or failed to perform the duties of his or her office under 42 Pa. C.S. Section 8363 and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The provisions of this Section shall not apply to the responsibility or liability of a director pursuant to any criminal statue or the liability of a director for the payment of taxes pursuant to local, state or federal law. COMPENSATION OF DIRECTORS 23. Directors as such, shall not receive any stated salary for their services, but by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board PROVIDED, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. OFFICERS 24. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, a President, a Vice-President, a Secretary and a Treasurer. The Board of Directors may also choose additional Vice-Presidents, and one or more Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person. It shall not be necessary for the officers to be directors. 25. The Board of Directors shall fix the salaries of all officers of the Corporation. 26. The officers of the Corporation shall hold office for one year and until their successors are chosen and have qualified. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in their judgment the best interests of the Corporation will be served thereby. LIABILITY OF OFFICERS 27. An officer, as such, shall not be personally liable to the Corporation or its shareholders, for monetary damages, unless the officer has breached or failed to perform the duties of his or her office under the Corporation's articles of incorporation, these by-laws or applicable provisions of law, and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The provisions of this Section shall not apply to the responsibility or liability of an officer pursuant to any criminal statute or the liability of an officer for the payment of taxes pursuant to local, state or federal law. CHAIRMAN OF THE BOARD 28. The Chairman of the Board shall preside at all meetings of the stockholders and of the Board of Directors, and shall see that all orders and resolutions of the Board of Directors are carried into effect. He may sign certificates representing stock of the Corporation the issuance of which shall have been authorized by the Board of Directors. From time to time he shall report to the Board of Directors all matters within his knowledge which the interests of the Corporation may require to be brought to their notice. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall be ex-officio a member of all committees of the Board of Directors. He shall perform such other duties as are given to him by these by-laws or as from time to time may be assigned to him by the Board of Directors. PRESIDENT 29. The President shall be the chief executive officer of the Corporation, and subject to the direction of the Board of Directors, shall have general supervision over the business and affairs of the Corporation and over its officers and agents and general management and control of all of its properties. In the absence of the Chairman of the Board, he shall preside at all meetings of the stockholders or of the Board of Directors at which he is present. He may sign certificates of stock of the Corporation the issuance of which shall have been authorized by the Board of Directors. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. He shall perform such other duties as are given to him by these by- laws or as may from time to time be assigned to him by the Board of Directors. VICE-PRESIDENT 30. In the absence of the President to perform the duties of chief executive officer of the Corporation, or in the event of his inability to act, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall have all the powers of and be subject to all the restrictions upon the President. The Vice-Presidents, under the supervision of the President, shall perform such other duties and have such other powers as may be prescribed by the Board of Directors or the President. SECRETARY 31. The Secretary shall attend all sessions of the Board and all meetings of the shareholders and act as clerk thereof, and record all the votes of the Corporation and the minutes of all its transactions in a book to be kept for that purpose; and shall perform like duties for all committees of the Board of Directors when required. He shall give, or cause to be given, notice of all meetings of the shareholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, and under whose supervision he shall be. He shall keep in safe custody the corporate seal of the Corporation, and when authorized by the Board, affix the same to any instrument requiring it. 32. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary, under the supervision of the President, and shall perform such other duties and have such other powers as may be prescribed by the Board of Directors or President. TREASURER 33. The Treasurer shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall keep the moneys of the Corporation in a separate book account to the credit of the Corporation. 34. He shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation. 35. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurer in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer, under the supervision of the President, and shall perform such other duties and have such other powers as may be prescribed by the Board of Directors or President. VACANCIES 36. If the office of any officer or agent, one or more, becomes vacant for any reason, the Board of Directors may choose a successor or successors, who shall hold office for the unexpired term in respect of which such vacancy occurred. Vacancies in the Board of Directors shall be filled, by persons who are Qualified Nominees as defined in Section 14 of those By-Laws, by the vote of a majority of the remaining members of the Board though less than a quorum, and each person so elected shall be a director until his successor is elected by the shareholders, who may make such election at the next annual meeting of the shareholders or at any special meeting duly called for that purpose and held prior thereto. CORPORATE RECORDS 37. There shall be kept at the principal office of the Corporation an original or duplicate record of the proceedings of the shareholders and of the directors, and the original or a copy of its by-laws, including all amendments or alterations thereto to date, certified by the Secretary of the Corporation. An original or duplicate share register shall also be kept at the principal office, or at the office of a transfer agent or registrar within this Commonwealth, giving the names of the shareholders in alphabetical order, and showing their respective addresses and the number and classes of shares held by each. SHARE CERTIFICATES 38. The share certificates of the Corporation shall be numbered and registered in the transfer books of the Corporation, as they are issued. They shall be signed by either the Chairman of the Board or the President and by the Secretary and shall bear the corporate seal. Any or all signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. TRANSFERS OF SHARES 39. Assuming no conflict with valid share transfer restrictions, transfers of shares shall be made on the books of the Corporation upon surrender of the certificates therefor, endorsed by the person named in the certificate or by his attorney, lawfully constituted in writing. CLOSING TRANSFER BOOKS OR FIXING RECORD DATE 40. The Board of Directors may fix a time, not less than ten or more than ninety days, prior to the date of any meeting of shareholders, or the date fixed for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change, conversion or exchange of shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of any such dividend or distribution or to receive any such allotment of rights, or to exercise the rights in respect to any change, conversion or exchange of shares. In such cases, only such shareholders as shall be shareholders of record on the date so fixed shall be entitled to notice of, and to vote at, such meeting, or to receive payment of such dividend or distribution, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any record date fixed, as aforesaid. The Board of Directors may close the books of the Corporation against transfers of shares during the whole or any part of such period, and in such case written or printed notice thereof shall be mailed at least ten days before the closing thereof to each shareholder of record at the address appearing on the records of the Corporation or supplied by him to the Corporation for the purpose of notice. While the stock transfer books of the Corporation are closed, no transfer of shares shall be made thereon. If no record date is fixed for the determination of shareholders entitled to receive notice of, or vote at, a shareholders meeting, transferees of shares which are transferred on the books of the Corporation within ten days next preceding the date of such meeting shall not be entitled to notice of or vote at such meeting. LOST CERTIFICATE 41. Any person claiming a share certificate to be lost or destroyed shall make an affidavit or affirmation of that fact and advertise the same in such manner as the Corporation may require, and shall, if required by the Corporation, give the Corporation a bond of indemnity with sufficient surety to protect the Corporation or any person injured by the issue of a new certificate from any liability or expense which it or they may incur by reason of the original certificate remaining outstanding, whereupon a new certificate may be issued of the same tenor and for the same number of shares as the one alleged to be lost or destroyed, but always subject to the approval of the Corporation. CHECKS 42. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers as the Board of Directors may from time to time designate. FISCAL YEAR 43. The fiscal year shall begin the 1st day of August of each year. DIVIDENDS 44. Subject to the provisions of the statutes, the Board of Directors may declare and pay dividends upon the outstanding shares of the Corporation out of its surplus from time to time and to such extent as they deem advisable, in cash, property or in shares of the Corporation. Before payment of any dividend there may be set aside out of the net profits of the Corporation such sum or sums as the directors, from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation, and the directors may abolish any such reserve in the manner in which it was created. DIRECTORS' ANNUAL STATEMENT 45. The Chairman of the Board and Board of Directors shall present at each annual meeting a full and complete statement of the business and affairs of the Corporation for the preceding year. Such statement shall be prepared and presented in whatever manner the Board of Directors shall deem advisable and need not be verified by a certified public accountant. NOTICES 46. Whenever written notice is required to be given to any person, it may be given to such person, either personally or by sending a copy thereof through the mail, or by telegram, charges prepaid, to his address appearing on the books of the Corporation, or supplied by him to the Corporation for the purpose of notice. If the notice is sent by mail or by telegraph, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office for transmission to such person. Such notice shall specify the place, day and hour of the meeting and, in the case of a special meeting, the general nature of the business to be transacted. Any shareholder or director may waive any notice required to be given under these by-laws. INDEMNIFICATION 47.A. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer or member of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. B. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer or member of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation; provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to be which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the court of common pleas of the county in which the registered office of the Corporation is located or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court of common pleas or such other court shall deem proper. C. To the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraphs A or B of this Section 47 or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. D. Any indemnification under paragraphs A or B of this Section 47 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he had met the applicable standard of conduct set forth in such paragraph. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding; or (2) if such quorum is not obtainable, or, even if obtainable, a majority vote of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (3) by the shareholders. E. Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in paragraph D of this Section 47 upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Section 47. F. The indemnification provided by this Section 47 shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. 48.A. The Corporation shall indemnify any person who was or is an "authorized representative" of the Corporation (which shall mean for purposes of this Section a director or officer of the Corporation, or a person serving at the request of the Corporation as a director, officer, partner, trustee or fiduciary of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise) and who was or is a party (which shall mean for purposes of this Section any threatened, pending or completed action, suit, appeal or proceeding of any nature, whether civil, criminal, administrative, or investigative, whether formal or informal, including an action by or in the right of the Corporation or a class of its security holders) by reason of the fact that he or she was or is an authorized representative of the Corporation, against any liability (which shall mean for purposes of this Section any damage, judgment, penalty, fine, amount paid in settlement, punitive damages, excise tax assessed with respect to an employee benefit plan, or cost or expense of any nature including, without limitation, attorneys' fees and disbursements) including, without limitation, liabilities resulting from any actual or alleged breach or neglect of duty, error, misstatement or misleading statement, negligence, gross negligence or act giving rise to strict or products liability, except where such indemnification is for acts or failures to act constituting self- dealing, willful misconduct or recklessness. If an authorized representative is entitled to indemnification in respect of a portion, but not all, of any liabilities to which such person may be subject, the Corporation shall indemnify such authorized representative to the maximum extent for such portion of the liabilities. The termination of any proceeding by judgment, order, settlement, indictment or conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the authorized representative is not entitled to indemnification. B. Notwithstanding any other provision of this Section, the Corporation shall not indemnify under this Section an authorized representative for any liability incurred in a proceeding initiated (which shall not be deemed to include counter-claims or affirmative defenses) or participated in as an intervenor or amicus curiae by the person seeking indemnification unless such initiation of or participation in the proceeding is authorized, either before or after its commencement, by the affirmative vote of a majority of the directors in office. This paragraph does not apply to reimbursement of expenses incurred in successfully prosecuting or defending the rights of an authorized representative granted by or pursuant to this Section. C. Expenses (including attorneys' fees and disbursements) incurred in good faith shall be paid by the Corporation on behalf of an authorized representative in advance of the final disposition of a proceeding described in paragraph A of this Section upon receipt of an undertaking by or on behalf of the authorized representative to repay such amount if it shall ultimately be determined pursuant to paragraph F of this Section that such person is not entitled to be indemnified by the Corporation as authorized in this Section. The financial ability of such authorized representative to make such repayment shall not be a prerequisite to the making of an advance. D. To further effect, satisfy or secure the indemnification obligations provided herein or otherwise, the Corporation may maintain insurance, obtain a letter of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the Corporation, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board of Directors shall deem appropriate. Absent fraud, the determination of the Board of Directors with respect to such amounts, costs, terms and conditions shall be conclusive against all security holders, officers and directors and shall not be subject to voidability. E. An authorized representative shall be entitled to indemnification within 30 days after a written request for indemnification has been received by the Secretary of the Corporation. F. Any dispute related to the right to indemnification or advancement of expenses as provided under this Section, except with respect to indemnification for liability arising under the Securities Act of 1933 which the Corporation has undertaken to submit to a court for adjudication, shall be decided only by arbitration, to be conducted at the Corporation's executive offices (or such other location to which the Corporation has given its consent), in accordance with the commercial arbitration rules then in effect of the American Arbitration Association, before a panel of three arbitrators, one of whom shall be selected by the Corporation, the second of whom shall be selected by the authorized representative and the third of whom shall be selected by the other two arbitrators. In the absence of the American Arbitration Association or if for any reason arbitration under the arbitration rules of the American Arbitration Association cannot be initiated, or if the arbitrators selected by the Corporation and the authorized representative cannot agree on the selection of the third arbitrator within 30 days after such time as the Corporation and the authorized representative have each been notified of the selection of the other's arbitrator, the necessary arbitrator or arbitrators shall be selected by the presiding judge of the Court of Common Pleas of Fulton County, Pennsylvania (or of the court of general jurisdiction in the municipality in which the Corporation's executive offices are located). Each arbitrator selected as provided herein is required to be or have been a director of a corporation whose shares of common stock were listed during at least one year of such service on the New York Stock Exchange or the American Stock Exchange or quoted on the National Association of Securities Dealers Automated quotations Systems. The party or parties challenging the right of an authorized representative to the benefits of this Section shall have the burden of proof. The Corporation shall reimburse an authorized representative for the expenses (including attorneys' fees and disbursements) incurred in successfully prosecuting or defending such arbitration. Any award entered by the arbitrators shall be final, binding and nonappealable, and judgement may be entered thereon by any party in accordance with applicable law in any court of competent jurisdiction. This arbitration provision shall be specifically enforceable. G. An authorized representative shall be deemed to have discharged such person's duty to the Corporation if he or she has relied in good faith on information, advice or an opinion, report or statement prepared by: (1) one or more officers or employees of the Corporation whom such authorized representative reasonably believes to be reliable and competent with respect to the matter presented; (2) legal counsel, public accountants or other persons as to matters that the authorized representative reasonably believes are within the person's professional or expert competence; or (3) a committee of the Board of Directors on which he or she does not serve as to matters within its area of designated authority, which committee he or she reasonably believes to merit confidence. H. All rights to indemnification under this Section shall be deemed a contract between the Corporation and the authorized representative pursuant to which the Corporation and each authorized representative intend to be legally bound. Any repeal, amendment or modification hereof shall be prospective only and shall not affect any rights or obligations then existing. I. The indemnification and advancement of expenses provided by, or granted pursuant to, this Section shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any statute, certificate or articles of incorporation, by-law, agreement, vote of shareholders or directors or otherwise, both as to action in his or her official capacity and as to action in any other capacity, and shall continue as to a person who has ceased to be an authorized representative in respect of matters arising prior to such time and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person. J. Each person who shall act as an authorized representative of the Corporation shall be deemed to be doing so in reliance upon the rights of indemnification provided by this Section. AMENDMENTS 49 Except as otherwise provided by the Business Corporation Law, these by-laws may be amended (i) at any regular or special meeting of the Board of Directors by the affirmative vote of a majority of the members of the Board, or (ii) at any annual or special meeting of the shareholders by the affirmative vote of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast thereon, provided that in the case of any such meeting of the shareholders, notice of the proposed amendment shall have been contained in the notice of such meeting and provided further that the shareholders shall always have the power to change any such action by the Board. EX-10.8.SUPPLEMENTAL 6 EXHIBIT 10.8 JLG Industries, Inc. Supplemental Executive Retirement Plan Effective June 1, 1995 Section 1. Establishment and Purpose of the Plan. 1.1. Establishment. Effective June 1, 1995, the Company established the Plan for the benefit of the Participants and, in the case of Participants described in Section 0, for the purpose of replacing their benefits under the Prior Plan. 1.2. Purpose. The Plan is an unfunded plan maintained primarily for the purpose of providing deferred compensation to a select group of management and highly compensated employees. The Plan provides supplemental retirement income to Participants in excess of their employer-provided benefits under certain other plans and arrangements up to the maximum benefit specified in the Plan. The Plan also provides supplemental survivor's income to Participant's Bene- ficiaries. Section 2. Participation by Eligible Executives. 2.1. Eligible Executives on Effective Date. An employee who is an Eligible Executive on the Effective Date will become a Participant in the Plan beginning on the Effective Date if he agrees in writing to waive all rights he may have under the Prior Plan. 2.2. Eligible Executives After Effective Date. An employee who first becomes an Eligible Executive after the Effective Date will not become a Participant in the Plan unless the Compensation Committee, in its sole discretion, permits him to do so. If the Compensation Committee does permit him to participate in the Plan, the Eligible Executive will become a Participant in the Plan on the date specified by the Compensation Committee in its sole discretion. 2.3. Written Proof of Participation Required. No employee will become a Participant in the Plan unless he and the Company execute a copy of the Plan document recognizing his participation in the Plan. The executed copy will constitute an agreement between the Company and the employee that binds both of them to the terms of the Plan. Their agreement will be binding on their heirs, executors, administrators, successors, and assigns, both present and future. The executed copy must be signed on the Company's behalf by an authorized officer (other than the employee) and by the employee on his own behalf. In the case of an employee who becomes a Participant under Section 0, the executed copy will also constitute his written agreement to waive all rights he may have under the Prior Plan. Section 3. Accrued Benefit. 3.1. Definition. A Participant's Accrued Benefit under the Plan is a monthly benefit equal to the Applicable Percentage of his Final Average Compensation, payable in the form of a Ten-Year Certain Life Annuity beginning on his Normal Retirement Date, and reduced in accordance with Section 0. 3.2. Applicable Percentage. A Participant's Applicable Percentage is the percentage that is specified by the Compensation Committee with respect to the Participant for purposes of the Plan and that is reflected in the written agreement between the Company and the Participant executed in accordance with Section 0. 3.3. Final Average Compensation. A Participant's Final Average Compensation is one-twelfth the average of his Annual Compensation for the 2 consecutive or nonconsecutive calendar years during which the average of his Annual Compensation is the highest. The Annual Compensation of a Participant for a calendar year is the amount of base salary and cash bonus paid to him for the calendar year. Annual Compensation earned more than 10 years before the year in which the Participant's employment with the Company terminates is ignored. Annual Compensation does not include any amount realized as a result of the grant, modification, or exercise of a stock option. 3.4. Required Reductions. The monthly installments otherwise included in a Participant's Accrued Benefit will be reduced as follows: (a) First, each monthly installment will be reduced by the monthly amount of a benefit that is the Actuarial Equivalent of all employer-provided benefits the Participant has received, is receiving, or is expected to receive under any defined benefit plan (other than this Plan), regardless of whether the defined benefit plan is maintained by the Company or another employer, including an unrelated employer. Employer-provided benefits provided to an alternate payee under a domestic relations order will be treated as if they were provided to the Participant. (b) Second, each monthly installment will be further reduced by the monthly amount of a benefit that is the Actuarial Equivalent of all employer-provided account balances accumulated on the Participant's behalf under any defined contribution plan, regardless of whether the defined contribution plan is maintained by the Company or another employer, including an unrelated employer. Employer-provided account balances do not include any portion of an account balance attributable to salary reduction contributions made by the Participant, regardless of whether the contributions are made on a pre-tax or an after-tax basis. Account balances will be determined as of 30 days before the Participant's Benefit Starting Date. Distributions previously made from the Participant's accounts will be taken into account, plus interest from the date of distribution. Employer-provided account balances provided to an alternate payee under a domestic relations order will be treated as if they were provided to the Participant. (c) Third, after the preceding reductions have been made, each monthly installment that is scheduled to be made after the Participant reaches Social Security Retirement Age will be further reduced by one-half the monthly amount of the federal Social Security old-age benefit he is entitled to begin receiving on his Social Security Retirement Age. (d) Fourth, if the Participant elects to begin receiving benefits before his Normal Retirement Date, the monthly installment resulting after the preceding reductions have been made will be further reduced by one-half of one percent for each month during which benefits are scheduled to be paid before his Normal Retirement Date. (e) Fifth, after the preceding reductions have been made, the resulting monthly installment will be further reduced by multiplying it by the Participant's Vested Percentage. The Vested Percentage is 100 percent in the case of a Participant with 5 or more Years of Service, 75 percent in the case of a Participant with 4 but less than 5 Years of Service, 50 percent in the case of a Participant with 3 but less than 4 Years of Service, 25 percent in the case of a Participant with 2 but less than 3 Years of Service, and zero percent in the case of a Participant with less than 2 Years of Service. A Participant is deemed to have completed 5 Years of Service if he dies or becomes Disabled, or if a Change in Control occurs, before his Benefit Starting Date. (f) Sixth, after the preceding reductions have been made, each monthly installment made during a month for which the Participant receives benefits under a long-term disability plan maintained by the Company will be further reduced by the amount of the employer-provided long-term disability benefit he receives for that month. Section 4. Retirement Benefits. 4.1. Normal Retirement Benefit. A Participant who retires from service with the Company on his Normal Retirement Date is entitled to a Normal Retirement Benefit. Unless he elects otherwise, he will receive his Normal Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on his Normal Retirement Date. The monthly installments made under his Normal Retirement Benefit will be the same as the monthly installments under his Accrued Benefit. 4.2. Late Retirement Benefit. A Participant who retires from service with the Company after his Normal Retirement Date is entitled to a Late Retirement Benefit. Unless he elects otherwise, he will receive his Late Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on the first day of the month after he retires from service with the Company. The monthly installments made under his Late Retirement Benefit will be the same as the monthly installments under his Accrued Benefit, beginning with the monthly installment for the month that includes his Late Retirement Date. However, he will not receive any monthly installments that would have been made under his Accrued Benefit before his Late Retirement Date, and no adjustment will be made in his Late Retirement Benefit to reflect the loss of these installments. For purposes of calculating the Final Average Compensation of a Participant entitled to a Late Retirement Benefit, Annual Compensation paid after the Participant's Normal Retirement Date will be taken into account. 4.3. Early Retirement Benefit. A Participant who retires from service with the Company on or after age 55 but before his Normal Retirement Date is entitled to an Early Retirement Benefit. Unless he elects otherwise, he will receive his Early Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on his Normal Retirement Date. The monthly installments made under his Early Retirement Benefit will be the same as the monthly installments under his Accrued Benefit. However, he may elect to begin receiving his Early Retirement Benefit on the first day of any month before his Normal Retirement Date and on or after the date he retires from service with the Company. 4.4. Vested Retirement Benefit. A Participant whose employment with the Company terminates for any reason before age 55 following a Change in Control is entitled to a Vested Retirement Benefit. Unless he elects otherwise, he will receive his Vested Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on his Normal Retirement Date. The monthly installments made under his Vested Retirement Benefit will be the same as the monthly installments under his Accrued Benefit. However, he may elect to begin receiving his Vested Retirement Benefit on the first day of any month before his Normal Retirement Date and on or after age 55. 4.5. Disability Retirement Benefit. A Participant who becomes Disabled before his employment with the Company terminates and before he satisfies the requirements for another Retirement Benefit under this Section 0 is entitled to a Disability Retirement Benefit. Unless he elects otherwise, he will receive his Disability Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on his Normal Retirement Date. The monthly installments made under his Disability Retirement Benefit will be the same as the monthly installments under his Accrued Benefit. However, he may elect to begin receiving his Disability Retirement Benefit on the first day of any month before his Normal Retirement Date and on or after age 55. 4.6. Joint & Survivor Annuity Option. A Participant may elect to receive his Retirement Benefit in the form of a Ten-Year Certain Joint & Survivor Annuity rather than a Ten-Year Certain Life Annuity. The Ten-Year Certain Joint & Survivor Annuity may begin on the first day of any month on which the Participant is entitled to begin receiving his Retirement Benefit and will be the Actuarial Equivalent of the Retirement Benefit that would have been payable to him in the form of a Ten-Year Certain Life Annuity beginning on that day. Any election under this Section 0 must be made before the Participant's Benefit Starting Date and may not be changed or revoked after that date. 4.7. Lump Sum Option. Alternatively, a Participant may elect to receive his Retirement Benefit in the form of a lump sum rather than a Ten-Year Certain Life Annuity. The lump sum may be paid on the first day of any month on which the Participant is entitled to begin receiving his Retirement Benefit and will equal the Actuarial Present Value of the Retirement Benefit that would have been payable to him in the form of a Ten-Year Certain Life Annuity beginning on that day. Any election under this Section 0 must be made before the Participant's Benefit Starting Date and may not be changed or revoked after that date. Section 5. Preretirement Death Benefits. 5.1. Lump Sum Benefit. If a Participant dies before his Benefit Starting Date, his Beneficiary is entitled to a Preretirement Death Benefit, even if the Participant has not satisfied the requirements for a Retirement Benefit under Section 0 at the time of his death. Except as provided in Section 0, the Preretirement Death Benefit will be paid as soon as administratively feasible after the Participant's death in the form of a lump sum equal to the Actuarial Present Value of the first 120 monthly installments that would have been paid to the Participant under a Ten-Year Certain Life Annuity that began on the earliest date after his death on which he could have elected to begin receiving benefits under Section 0, had he not died. 5.2. Annuity Options Available to Spouse Beneficiaries. In lieu of the lump sum described in Section 0, a Beneficiary who is married to the Participant at the time of his death may elect to receive the Preretirement Death Benefit in the form of either a Single Life Annuity or a Ten-Year Certain Fixed Annuity. The Beneficiary may elect to begin receiving the Single Life Annuity or Ten-Year Certain Fixed Annuity on any date after the Participant's death on which the Participant could have elected to begin receiving benefits under Section 0, had he not died. Any election under this Section 0 must be made before the Beneficiary's Benefit Starting Date and may not be changed or revoked after that date. Section 6. Nature of Participant's Interest in Plan. 6.1. No Right to Assets. Participation in the Plan does not create, in favor of any Participant or Beneficiary, any right or lien in or againsy any asset of the Company. Nothing contained in the Plan, and no action taken under its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person. The Company's promise to pay benefits under the Plan will at all times remain unfunded as to each Participant and Beneficiary, whose rights under the Plan are limited to those of a general and unsecured creditor of the Company. 6.2. No Right to Transfer Interest. Rights to benefits payable under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance. However, the Administrative Committee may permit a Participant or Beneficiary to enter into a revocable arrangement to pay all or part of his benefits under the Plan to a revocable grantor trust (a so-called "living trust"). In addition, the Administrative Committee may recognize the right of an alternate payee named in a domestic relations order to receive all or part of a Participant's benefits under the Plan, but only if (a) the domestic relations order would be a "qualified domestic relations order" within the meaning of section 414(p) of the Code (if section 414(p) applied to the Plan), (b) the domestic relations order does not attempt to give the alternate payee any right to any asset of the Company, (c) the domestic relations order does not attempt to give the alternate payee any right to receive payments under the Plan at a time or in an amount that the Participant could not receive under the Plan, and (d) the amount of the Participant's benefits under the Plan are reduced to reflect any payments made or due the alternate payee. 6.3. No Employment Rights. No provisions of the Plan and no action taken by the Company, the Board of Directors, the Compensation Committee, or the Administrative Committee will give any person any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or discharge any Participant. 6.4. Withholding and Tax Liabilities. The amount of any withholdings required to be made by any government or government agency will be deducted from benefits paid under the Plan to the extent deemed necessary by the Administrative Committee. In addition, the Participant or Beneficiary (as the case may be) will bear the cost of any taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required. Section 7. Administration, Interpretation, and Modification of Plan. 7.1. Plan Administrator. The Administrative Committee will administer the Plan. 7.2. Powers of Committee. The Administrative Committee's powers include, but are not limited to, the power to adopt rules consistent with the Plan; the power to decide all questions relating to the interpretation of the terms and provisions of the Plan; and the power to resolve all other questions arising under the Plan (including, without limitation, the power to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision). The Administrative Committee has discretionary authority to exercise each of the foregoing powers. 7.3. Finality of Committee Determinations. Determinations by the Administrative Committee and any interpretation, rule, or decision adopted by the Administrative Committee under the Plan or in carrying out or administering the Plan will be final and binding for all purposes and upon all interested persons, their heirs, and their personal representatives. 7.4. Incapacity. If the Administrative Committee determines that any person entitled to benefits under the Plan is unable to care for his affairs because of illness or accident, any payment due (unless a duly qualified guardian or other legal representative has been appointed) may be paid for the benefit of such person to his spouse, parent, brother, sister, or other party deemed by the Administrative Committee to have incurred expenses for such person. 7.5. Amendment, Suspension, and Termination. The Board of Directors has the right by written resolution to amend, suspend, or terminate the Plan at any time. However, no amendment, suspension, or termination will apply to an employee who already is a Participant in the Plan without his express written consent. 7.6. Power to Delegate Board Authority. The Board of Directors may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan. 7.7. Headings. The headings used in this document are for convenience of reference only and may not be given any weight in interpreting any provision of the Plan. 7.8. Severability. If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity of that provision will not affect the remaining provisions of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had never been included in the Plan. 7.9. Governing Law. The Plan will be construed, administered, and regulated in accordance with the laws of the Commonwealth of Pennsylvania, except to the extent that those laws are preempted by federal law. 7.10. Complete Statement of Plan. This Plan supersedes the Prior Plan with respect to the Participants. This Plan contains a complete statement of its terms. The Plan may be amended, suspended, or terminated only in writing and then only as provided in Section 0. A Participant's right to any benefit of a type provided under the Plan will be determined solely in accordance with the terms of the Plan. No other evidence, whether written or oral, will be taken into account in interpreting the provisions of the Plan. Notwithstanding the preceding provisions of this Section 0, for purposes of determining benefits with respect to a Participant, this Plan will be deemed to include (a) the provisions of the written agreement between the Company and the Participant executed in accordance with Section 0, and (b) the provisions of any other written agreement between the Company and the Participant to the extent such other agreement explicitly provides for the incorporation of some or all of its terms into this Plan. Section 8. Terms Used in the Plan. 8.1. Gender and Number. Words used in the masculine gender in the Plan are intended to include the feminine and neuter genders, where appropriate. Words used in the singular form in the Plan are intended to include the plural form, where appropriate, and vice versa. 8.2. Definitions. When used in capitalized form in the Plan, the following words and phrases have the following meanings, unless the context clearly indicates that a different meaning is intended: "Accrued Benefit" means the benefit described in Section 0. "Actuarial Equivalent" means the following: an amount or benefit is the "Actuarial Equivalent" of, or is "Actuarially Equivalent" to, another amount or benefit as of a specified date, if the Actuarial Present Value as of the specified date of the first amount or benefit equals the Actuarial Present Value as of the specified date of the second amount or benefit, when calculated using the same actuarial assumptions. Actuarial Equivalence under Section 0 will be determined as of the Participant's Normal Retirement Date, and the resulting benefit will be expressed in the form of a Ten-Year Certain Life Annuity beginning on the Participant's Normal Retirement Date. Actuarial Equivalence under Section 0 will be determined as of the Participant's Benefit Starting Date, and the resulting benefit will be ex- pressed in the form of a Ten-Year Certain Joint & Survivor Annuity beginning on the Participant's Benefit Starting Date. Actuarial Equivalence under the definition of "Single Life Annuity" in this Section 0 will be determined as of the Beneficiary's Benefit Starting Date, and the resulting benefit will be expressed in the form of a Single Life Annuity beginning on the Beneficiary's Benefit Starting Date. "Actuarial Present Value" means the value as of a specified date of an amount or a series of amounts due before or thereafter, where each amount is multiplied by the probability that the condition or conditions on which payment of the amount is contingent will be satisfied, and where each amount so multiplied is then increased (if due before) or discounted (if due thereafter) according to an assumed rate of interest to reflect the time value of money. Unless the Plan specifies otherwise, the mortality table and interest rate - used to calculate the Actuarial Present Value of an amount or series of amounts will be the mortality table and interest rate in effect under section 417(e)(3)(A)(ii) of the Code 90 days before the Participant's Benefit Starting Date. "Administrative Committee" means the Administrative Committee appointed to administer the JLG Industries, Inc. Employees' Retirement Savings Plan. However, following a Change in Control, "Administrative Committee" means the trustee under the grantor trust maintained by the Company in connection with the Plan. "Annual Compensation" has the meaning assigned to that term in Section 0. "Applicable Percentage" has the meaning assigned to that term in Section 0. "Associate" has the meaning assigned to that term for purposes of Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act. "Beneficial Owner" means the following: a Person is deemed to be the "Beneficial Owner" of, to "Beneficially Own," and to have "Beneficial Ownership" of, any securities: (1) which such Person or any of such Person's Securities Law Affiliates or Associates beneficially owns, directly or indirectly; (2) which such Person or any of such Person's Securities Law Affiliates or Associates has (A) the right or obligation to acquire (whether such right or obligation is exercisable or effective immediately or only after the passage of time) pursuant to any agreement, arrangement, or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided that a Person shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own," or to have "Beneficial Ownership" of, securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Securities Law Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement, or understanding (whether or not in writing); providedthat a Person shall not be deemed the "Beneficial Owner" of, or to "BeneficiallyOwn," or to have "Beneficial Ownership" of, any security under this clause (B)if the agreement, arrangement, or understanding to vote such security (i)arises solely from a revocable proxy given in response to a public proxy orconsent solicitation made pursuant to, and in accordance with, the applicablerules and regulations of the Securities Exchange Act, and (ii) is not also then reported by such Person on Schedule 13D under the Securities Exchange Act (or any comparable or successor report); or (3) which are beneficially owned, directly or indirectly, by any other Person (or any Securities Law Affiliate or Associate thereof) with which such Person or any of such Person's Securities Law Affiliates or Associates has any agreement, arrangement, or understanding (whether or not in writing) or with which such Person or any of such Person's Securities Law Affiliates have otherwise formed a group for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (B)(i) of paragraph (2), above), or disposing of any securities of the Company. "Beneficiary" means the person designated in writing by a Participant to receive benefits under the Plan after the Participant's death. If a Participant dies before his Benefit Starting Date and he has failed to designate a Beneficiary or his designated Beneficiary fails to survive him, his Beneficiary will be the person to whom he is married at the time of his death, or if he is not married at that time, his Beneficiary will be the executor of his will or the administrator of his estate. If a Participant ho has elected a Ten-Year Certain Life Annuity dies on or after his Benefit Starting Date and he has failed to designate a Beneficiary or his Beneficiary fails to survive him, his Beneficiary will be the person to whom he is married at the time of his death, or if he is not married at that time, the Actuarial Present Value of the payments (if any) to be made after his death will be paid in an immediate lump sum to the executor of his will or the administrator of his estate. A Participant may revoke in writing a prior designation of a Beneficiary at any time before the earlier of the Participant's death or his Benefit Starting Date. In addition, a Participant may revoke in writing a prior designation of a Beneficiary under a Ten-Year Certain Life Annuity at any time before the Participant's death. A Beneficiary under a Ten-Year Certain Life Annuity or a Ten-Year Certain Fixed Annuity may designate in writing a person to receive any benefits due under the Plan after the Beneficiary's death (a "Beneficiary's Beneficiary"). The Beneficiary may revoke this designation in writing at any time before his death. "Benefit Starting Date" means the date on which a Participant or Beneficiary is scheduled to begin receiving benefits under the Plan. "Board of Directors" means the Board of Directors of the Company. "Change in Control" means the first to occur of the following events: (1) an acquisition (other than directly from the Company) of securities of the Company by any Person, immediately after which such Person, together with all Securities Law Affiliates and Associates of such Person, becomes the Beneficial Owner of securities of the Company representing 25 percent or more of the Voting Power; provided that, in determining whether a Change in Control has occurred, the acquisition of securities of the Company in a Non-Control Acquisition will not constitute an acquisition that would cause a Change in Control; or (2) three or more directors, whose election or nomination for election is not approved by a majority of the members of the Incumbent Board then serving as members of the Board of Directors, are elected within any single 12-month period to serve on the Board of Directors; provided that an individual whose election or nomination for election is approved as a result of either an actual or threatened Election Contest or Proxy Contest, including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, will be deemed not to have been approved by a majority of the Incumbent Board for purposes of this definition; or (3) members of the Incumbent Board cease for any reason to constitute at least a majority of the Board of Directors; or (4) approval by shareholders of the Company of: (A) a merger, consolidation, or reorganization involving the Company, unless (i) the shareholders of the Company, immediately before the merger, consolidation, or reorganization, own, directly or indirectly immediately following such merger, consolidation, or reorganization, at least 75 percent of the combined voting power of the outstanding voting securities of the corporation resulting from such merger, consolidation, or reorganization in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation, or reorganization; (ii) individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, or reorganization constitute at least a majority of the board of directors of the Surviving Corporation; and (iii) no Person (other than (1) the Company or any Subsidi- ary thereof, (2) any employee benefit plan (or any trust forming a part thereof) maintained by the Company, any Subsidiary thereof, or the Surviving Corporation, or (3) any Person who, immediately prior to such merger, consolidation, or reorganization, had Beneficial Ownership of securities representing 25 percent or more of the Voting Power) has Beneficial Ownership of securities re- presenting 25 percent or more of the combined voting power of the Surviving Corporation's then outstanding voting securities; (B) a complete liquidation or dissolution of the Company; or (C) an agreement for the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary of the Company). "Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time. "Company" means JLG Industries, Inc., and any successor to JLG Industries, Inc. Employment with the Company includes employment with any corporation, partnership, or other organization required to be aggregated with the Company under sections 414(b) and (c) of the Code. "Compensation Committee" means the Compensation Committee of the Board of Directors. "Disability Retirement Benefit" means the benefit described in Section 0. "Disabled" means entitled to receive benefits under a long-term disability plan maintained by the Company. "Early Retirement Benefit" means the benefit described in Section 0. "Effective Date" means June 1, 1995. "Election Contest" means an election contest described in Rule 14a-11 promul- gated under the Securities Exchange Act. "Eligible Executive" means an employee of the Company who is an officer of the Company or who holds any other key position designated by the Compensation Committee in its sole discretion. "Final Average Compensation" has the meaning assigned to that term in Section 0. "Incumbent Board" means individuals who, as of the close of business on the Effective Date, are members of the Board of Directors; provided that, if the election, or nomination for election by the Company's shareholders, of any new director was approved by a vote of at least 75 percent of the Incumbent Board, such new director shall, for purposes of the Plan, be considered as a member of the Incumbent Board; provided further that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened Election Contest or other actual or threatened Proxy Contest, including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest. "Late Retirement Benefit" means the benefit described in Section 0. "Late Retirement Date" means the first day of the month following the month in which a Participant retires from service with the Company, if he retires from service with the Company after his Normal Retirement Date. "Non-Control Acquisition" means an acquisition by (1) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any of its Subsidiaries, (2) the Company or any of its Subsidiaries, or (3) any Person in connection with a Non-Control Transaction. "Non-Control Transaction" means any transaction described in clauses (4)(A)(i) through (iii) of the definition of "Change in Control." "Normal Retirement Benefit" means the benefit described in Section 0. "Normal Retirement Date" means the first day of the month following the month in which a Participant reaches age 62, unless a Change in Control occurs, in which case Normal Retirement Date means the first day of the month following the month in which the Participant reaches age 60. In the case of a Participant who dies before reaching his Normal Retirement Date, Normal Retirement Date means the day on which the Participant would have reached his Normal Retirement Date had he not died. "Participant" means a member of a select group of management or highly com- pensated employees of the Company who has become a participant in the Plan under Section 0. "Person" means any individual, firm, corporation, partnership, joint venture, association, trust, or other entity. "Plan" means the JLG Industries, Inc. Supplemental Executive Retirement Plan as set forth in this document. "Preretirement Death Benefit" means the benefit described in Section 0. "Prior Plan" means an individual agreement (customarily denominated a "Deferred Compensation Benefit Agreement") between the Company and the employee that provides for unfunded deferred compensation benefits and certain other benefits specified in the agreement. "Proxy Contest" means a solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors. "Retirement Benefit" means a Normal Retirement Benefit, a Late Retirement Benefit, an Early Retirement Benefit, a Vested Retirement Benefit, or a Disability Retirement Benefit. "Section" means a section of this Plan. For example, a reference to Section 2 includes a reference to Sections 2.1 through 2.3, while a reference to Section 2.1 is intended as a reference to Section 2.1 only. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended and in effect from time to time. "Securities Law Affiliate" means an "affiliate" as defined for purposes of Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act. "Single Life Annuity" means an annuity payable in equal monthly installments to a Beneficiary, beginning with the calendar month in which the Beneficiary's Benefit Starting Date occurs and ending with the calendar month in which the Beneficiary dies. The Single Life Annuity payable to a Beneficiary will be the Actuarial Equivalent of the Preretirement Death Benefit that the Beneficiary could have elected to receive in the form of a Ten-Year Certain Fixed Annuity beginning on the same day. "Social Security Retirement Age" means the earliest age at which the Participant is entitled to begin receiving federal Social Security old-age benefits. In the case of a Participant who dies before reaching his Social Security Retirement Date, Social Security Retirement Date means the day on which the Participant would have reached his Social Security Retirement Date had he not died. "Subsidiary" of any Person means any corporation or other entity of which at least 80 percent (or such lesser percentage as the Administrative Committee may determine) of the voting power of the voting equity securities or voting interest therein is owned, directly or indirectly, by such Person. "Surviving Corporation" means a corporation resulting from a merger, consolidation, or reorganization described in paragraph (4)(A)(i) of the definition of "Change in Control." "Ten-Year Certain Fixed Annuity" means an annuity payable in 120 monthly installments that are equal to the first 120 monthly installments that would have been paid to the Participant (had he not died) under a Ten-Year Certain Life Annuity that began on the Beneficiary's Benefit Starting Date. The 120 monthly installments will be paid to the Beneficiary unless the Beneficiary dies before all 120 monthly installments have been paid, in which case the Actuarial Present Value of the remaining installments will be paid to the Beneficiary's Beneficiary in an immediate lump sum. "Ten-Year Certain Joint & Survivor Annuity" means an annuity payable in equal monthly installments to the Participant, beginning with the calendar month in which his Benefit Starting Date occurs and ending with the calendar month in which he dies, and thereafter in equal monthly installments of the same or a lesser amount to his surviving Beneficiary (if any), beginning with the calendar month following the calendar month in which he dies and ending with the calendar month in which the Beneficiary dies, provided that if the Participant and his Beneficiary both die before the end of the 120-month period that begins on the Participant's Benefit Starting Date, the Actuarial Present Value of the additional monthly installments that would have been paid to the last to survive of the Participant and his Beneficiary (had the last survivor not died until the end of the 120-month period) will be paid in an immediate lump sum to the executor of the last survivor's will or the administrator of the last survivor's estate. At the time he elects a Ten-Year Certain Joint & Survivor Annuity, the Participant must designate a named natural person as his Beneficiary and must specify whether the monthly amount payable to the Beneficiary will be 50 or 100 percent of the monthly amount payable to him under the Ten-Year Certain Joint & Survivor Annuity. After his Benefit Starting Date, the terms of his election may not be changed or revoked. "Ten-Year Certain Life Annuity" means an annuity payable in monthly install- ments to the Participant, beginning with the calendar month in which his Benefit Starting Date occurs and ending with the calendar month in which he dies, provided that if he dies before the end of the 120-month period that begins on his Benefit Starting Date, the monthly installments will be continued to his Beneficiary, beginning with the calendar month following the calendar month in which the Participant dies and ending with the calendar month in which the 120-month period ends. Except as required under Section 0(e) and (f), the monthly installments payable under a Ten-Year Certain Life Annuity will be equal in amount. "Year of Service" has the meaning assigned to that term under the JLG Industries, Inc. Employees' Retirement Savings Plan. "Vested Retirement Benefit" means the benefit described in Section 0. "Voting Power" means the voting power of all securities of the Company then outstanding generally entitled to vote for the election of directors of the Company. JLG INDUSTRIES, INC. Attest: By: Title: Title: EX-10.9-MEDICALRETIR 7 EXHIBIT 10.9 JLG Industries, Inc. Executive Retiree Medical Benefits Plan Effective June 1, 1995 Section 1. Establishment and Purpose of the Plan. 1.1. Establishment. Effective June 1, 1995, the Company established the Plan for the benefit of the Participants and to replace - their retiree medical benefits under the Prior Plan. 1.2. Purpose. The Plan is an unfunded plan maintained primarily for the purpose of providing medical benefits to a select group of management and highly compensated employees. Section 2. Participation by Eligible Executives. 2.1. Eligible Executives. An employee who has an agreement in effect on the Effective Date under the Prior Plan will become a Participant in the Plan beginning on the Effective Date if he agrees in writing to waive all rights he may have under the Prior Plan. Other key employees may become Participants in the Plan if selected by the Compensation Committee in its sole discretion. If selected for participation, an employee will become a Participant in the Plan on the date specified by the Compensation Committee in its sole discretion. 2.2. Written Proof of Participation Required. No employee will become a Participant in the Plan unless he and the Company execute a copy of the Plan document recognizing his participation in the Plan. The exe- cuted copy will constitute an agreement between the Company and the employee that binds both of them to the terms of the Plan. Their agreement will be binding on their heirs, executors, administrators, successors, and assigns, both present and future. The executed copy must be signed on the Company's behalf by an authorized officer (other than the employee) and by the employee on his own behalf. The executed copy will constitute the employee's written agreement to waive all rights he may have under the Prior Plan. Section 3. Coverage and Benefits. 3.1. Coverage. Medical coverage under the Plan will commence upon the date as of which the Participant's benefits under the SERP commence, regardless of the amount of benefit actually received under the SERP. If the Participant elects payment under the SERP in the form of a lump sum, medical coverage under the Plan will commence on the date as of which the lump sum is to be paid. If the Participant delays the commencement of benefits under the SERP, medical coverage under the Plan also will be delayed until SERP benefits commence. Subject to Sections 3.2 and 3.4, below, a Participant's medical coverage under the Plan will continue for the remainder of the Participant's life. 3.2. Benefits Provided. (a) General. Subject to subsection (b), below, the benefits provided under the Plan will be medical benefits equivalent to the medical benefits provided under the Company Medical Plan and the Company Medical Expense Reimbursement Plan. The benefits may be provided through insurance or otherwise at the discretion of the Company regardless of the method by which benefits are provided under the Company Medical Plan or the Company Medical Expense Reimbursement Plan. If benefits under the Company Medical Plan or the Company Medical Expense Reimbursement Plan are provided in a form other than payment of expense reimbursement amounts, Participants and Covered Dependents may be provided benefits in a like manner. If the Company is not providing medical benefits to any active employee of the Company, no benefits will be provided under the Plan. (b) Coordination of Benefits. The benefits provided under the Plan will be adjusted to take into account any coverage or benefits for which a Participant (or Covered Dependent) is eligible under other plans or arrangements as specified below; provided, however, that if a benefit has already been adjusted to reflect eligibility for coverage or benefits under a particular plan or arrangement in accordance with the terms of the Company Medical Plan or the Company Medical Expense Reimbursement Plan, the benefit under the Plan will not be adjusted again for the same coverage or benefit. (i) The benefits provided under the Plan will be secondary to the benefits that a Participant (or a Covered Dependent) is eligible to receive under any plan or arrangement sponsored by the Participant's subsequent employer. (ii) The benefits provided under the Plan will be secondary to the benefits that a Participant (or a Covered Dependent) is eligible to receive: (A) under any governmental program (including Part A and Part B of Medicare, regardless of whether the individual is in fact covered under Part B of Medicare, and Social Security); (B) under any coverage required or provided by any statute; and (C) as a recovery for an injury or illness caused by a third party (to the extent the recovery reimburses expenses covered by the Plan). 3.3. Coverage of Covered Dependents. (a) Period of Coverage. Subject to the limitations of subsection (b), and Section 3.4, below, a Participant's Covered Dependents are eligible for medical coverage under the Plan for the periods specified below. (i) During Participant's Life. A Participant's Covered Dependents are eligible for medical coverage under the Plan at the Participant's election while the Participant is receiving medical coverage under the Plan and for as long as the Covered Dependents remain Covered Dependents. (ii) Following Participant's Death After Commencement of Coverage. If the Participant dies after medical coverage under the Plan has commenced, the Participant's Covered Dependents are eligible for medical coverage under the Plan for either: (A) the remainder, if any, of the ten-year certain payment period of the SERP benefit, provided that the spouse (or if there is no spouse, a dependent child) is the beneficiary of such payments under the SERP; or (B) the remainder, if any, of the ten-year period that begins as of the date the Participant's lump sum is scheduled to be paid. Medical coverage under the preceding sentence shall commence as of the first of the month following the month of the Participant's death. (iii) Following Participant's Death Before Commencement of Coverage. If Participant dies before the commencement of medical coverage under the Plan, the Participant's Covered Dependents are eligible for medical coverage under the Plan for a period of up to ten years, provided that the spouse is the beneficiary of any payments under the SERP and that SERP benefits are paid in an annuity form of payment. Medical coverage under the preceding sentence will commence with the commencement of payments under the SERP. (b) Limitations on Coverage Period. (i) A Participant's Covered Dependents will not be eligible for medical coverage under the Plan during any period of time that the Participant's spouse is employed by an employer offering any medical benefits for which the spouse is eligible. (ii) A Participant's Covered Dependents will not be eligible for medical coverage under the Plan after they cease to be Covered Dependents. 3.4. Contribution Toward Cost of Coverage. (a) Commencement On or After Normal Retirement Date. If medical coverage begins on or after the Participant's Normal Retirement Date there will be no required contribution toward the cost of coverage. (b) Commencement Before Normal Retirement Date. If medical coverage begins before the Participant's Normal Retirement Date, the contribution toward the cost of coverage for that year, and for each year thereafter, will be a percentage of the Company's cost for providing the relevant coverage (individual or family), determined as follows: (i) The percentage will be determined in the year that medical coverage begins and will remain the same for each year of medical coverage thereafter. The percentage will be determined by multiplying six (6) times the number of years by which the beginning date precedes the Participant's Normal Retirement Date. For example, if the Participant's Normal Retirement Date is the first day of the month following the month in which the Participant reaches age 62, and if medical coverage begins when the Participant is age 60, the percentage for that year and for each year thereafter will be twelve percent (12%). Similarly, assuming the same Normal Retirement Date, if a surviving spouse begins medical coverage when the Participant would have reached age 55, the percentage for that year and for each year thereafter will be forty-two percent (42%). (ii) The Company's cost for providing the relevant medical coverage will be: (A) in the event that the Company Medical Plan is insured (or that medical coverage is otherwise provided by a third party under a contract), the amount of the premium (or other payment) paid by the Company to the insurance company (or other contractor) providing the medical coverage; or (B) in the event that the Company Medical Plan is self-insured, the amount of the applicable premium as determined by the Company for purposes of statutory continuation coverage under COBRA (as defined in section 4980B of the Code), or any successor continuation coverage provision, as specified in the Company Medical Plan. (iii) For purposes of determining the percentage in paragraph (i), above, medical coverage begins on the date as of which the Participant's benefits under the SERP commence, as provided in Section 3.1, above, whether or not the Participant makes the required contribution at that time. The amount of the contribution may be unrelated to any contribution that might be required from active employees under the Company Medical Plan. At the discretion of the Administrative Committee, the contribution may be made on a pre-tax basis if any plan of the Company so provides. (c) Failure to Make Required Contribution. If the Participant, or his Covered Dependent as appropriate, fails to make the required contribution when such contribution is due, no further medical coverage will be provided under the Plan for the year. If the Participant or the Covered Dependent fails to make the required contribution for a given year, the Participant (or, subject to the limitations of Section 3.3, above, the Covered Dependent) may obtain medical coverage in a later year by paying the required contribution for such later year. 3.5 Payment or Other Distribution of Benefits. Benefits under the Plan will be paid or otherwise made available in accordance with procedures established by the Administrative Committee. The Participant or Covered Dependents may be required to submit relevant bills, receipts or other documentation requested by the Administrative Committee as a condition of receiving benefits. 3.6 Procedures. The procedures for determining eligibility for benefits, claiming benefits, requesting review of denied claims, and making any required contributions will be as specified by the Administrative Committee. Section 4. Nature of Participant's Interest in Plan. 4.1. No Right to Assets. Participation in the Plan does not create, in favor of any Participant or Covered Dependent, any right or lien in or against any asset of the Company. Nothing contained in the Plan, and no action taken under its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person. The Company's promise to pay benefits under the Plan will at all times remain unfunded as to each Participant and Covered Dependent, whose rights under the Plan are limited to those of a general and unsecured creditor of the Company. 4.2. No Right to Transfer Interest. Rights to benefits under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance. 4.3. No Employment Rights. No provisions of the Plan and no action taken by the Company, the Board of Directors, the Compensation Committee, or the Administrative Committee will give any person any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or discharge any Participant. 4.4. Withholding and Tax Liabilities. The amount of any withholdings required to be made by any government or government agency will be deducted from benefits paid under the Plan to the extent deemed necessary by the Administrative Committee. In addition, the Participant or Covered Dependent (as the case may be) will bear the cost of any taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required. Section 5. Administration, Interpretation, and Modification of Plan. 5.1. Plan Administrator. The Administrative Committee will administer the Plan. 5.2. Powers of Committee. The Administrative Committee's powers include, but are not limited to, the power to adopt rules consistent with the Plan; the power to decide all questions relating to the interpreta- tion of the terms and provisions of the Plan; and the power to resolve all other questions arising under the Plan (including, without limitation, the power to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision). The Administrative Committee has discretionary authority to exercise each of the foregoing powers. 5.3. Finality of Committee Determinations. Determinations by the Administrative Committee and any interpretation, rule, or decision adopted by the Administrative Committee under the Plan or in carrying out or administering the Plan will be final and binding for all purposes and upon all interested persons, their heirs, and their personal representa- tives. 5.4. Incapacity. If the Administrative Committee determines that any person entitled to benefits under the Plan is unable to care for his affairs because of illness or accident, any payment due (unless a duly qualified guardian or other legal representative has been appointed) may be paid for the benefit of such person to his spouse, parent, brother, sister, or other party deemed by the Administrative Committee to have incurred expenses for such person. 5.5. Amendment, Suspension, and Termination. The Board of Directors has the right by written resolution to amend, suspend, or terminate the Plan at any time. However, no amendment, suspension, or termination will adversely affect an employee who already is a Participant in the Plan without his express written consent. 5.6. Power to Delegate Board Authority. The Board of Directors may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan. 5.7. Headings. The headings used in this document are for convenience of reference only and may not be given any weight in interpreting any provision of the Plan. 5.8. Severability. If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity of that provision will not affect the remaining provisions of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had never been included in the Plan. 5.9. Governing Law. The Plan will be construed, administered, and regulated in accordance with the laws of the Commonwealth of Pennsylvania, except to the extent that those laws are preempted by federal law. 5.10. Statutory Continuation Coverage. Statutory continuation coverage under the Plan will be provided as and to the extent required under section 4980B of the Code and section 601 et. seq. of ERISA, or any successor provisions thereto, in the manner specified in the Company Medical Plan. 5.11. Qualified Medical Child Support Orders. The Administrative Committee will establish a written procedure to determine the qualified status of medical child support orders and to provide for the administration of the Plan appropriately under such orders. Section 6. Terms Used in the Plan. 6.1. Gender and Number. Words used in the masculine gender in the Plan are intended to include the feminine and neuter genders, where appropriate. Words used in the singular form in the Plan are intended to include the plural form, where appropriate, and vice versa. 6.2. Definitions. When used in capitalized form in the Plan, the following words and phrases have the following meanings, unless the context clearly indicates that a different meaning is intended: "Administrative Committee" means the Administrative Committee appointed to administer the JLG Industries, Inc. Employees' Retirement Savings Plan. However, following a Change in Control, "Administrative Committee" means the trustee under the grantor trust maintained by the Company in connection with the SERP. "Board of Directors" means the Board of Directors of the Company. "Change in Control" means "Change in Control" as defined in the SERP. "Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time. "Company" means JLG Industries, Inc., and any successor to JLG Industries, Inc. "Company Medical Plan" means the Company's then current plan (or portion thereof) under which medical benefits, if any, are being provided to active employees of the Company. "Company Medical Expense Reimbursement Plan" means the Company's medical expense reimbursement plan in which the Participant was a participant, if any, as in effect on the earlier of the date as of which the Participant's benefits under the SERP commence or the date of a Change in Control. "Compensation Committee" means the Compensation Committee of the Board of Directors. "Covered Dependent" means (1) a Participant's spouse until the first to occur of the following: the spouse's death, the spouse's divorce from the Participant, or the spouse's remarriage following the Participant's death; and (2) a Participant's dependent child until the first to occur of the following: the child's death, or the child's ceasing to be a dependent as defined for purposes of the Company Medical Plan (as if the Participant were still alive and an active employee). "Effective Date" means June 1, 1995. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time. "Normal Retirement Date" means the first day of the month following the month in which a Participant reaches age 62, unless a Change in Control occurs, in which case Normal Retirement Date means the first day of the month following the month in which the Participant reaches age 60. In the case of a Participant who dies before reaching his Normal Retirement Date, Normal Retirement Date means the day on which the Participant would have reached his Normal Retirement Date had he not died. "Participant" means a member of a select group of management or highly compensated employees of the Company who has become a participant in the Plan under Section 0. "Plan" means the JLG Industries, Inc. Executive Retiree Medical Benefits Plan as set forth in this document. "Prior Plan" means an individual agreement (customarily denominated a "Deferred Compensation Benefit Agreement") between the Company and the employee that provides for unfunded deferred compensation benefits and certain other benefits specified in the agreement. "Section" means a section of this Plan. For example, a reference to Section 2 includes a reference to Sections 2.1 through 2.3, while a reference to Section 2.1 is intended as a reference to Section 2.1 only. "SERP" means the JLG Industries, Inc. Supplemental Executive Retirement Plan, as amended from time to time. JLG INDUSTRIES, INC. Attest: By: Title: Title: EX-10.10.EXECUTIVESE 8 EXHIBIT 10.10 JLG Industries, Inc. Executive Severance Plan Effective June 1, 1995 Section 1. Establishment and Purpose of the Plan. 1.1. Establishment. Effective June 1, 1995, the Company established the Plan for the benefit of the Participants and to replace their severance pay benefits under the Prior Plan. 1.2. Purpose. The Plan is an unfunded plan maintained primarily for the purpose of providing severance pay benefits to a select group of management and highly compensated employees. Section 2. Participation by Eligible Executives. 2.1. Eligible Executives. An employee who has an agreement in effect on the Effective Date under the Prior Plan will become a Participant in the Plan beginning on the Effective Date if he agrees in writing to waive all rights he may have under the Prior Plan. 2.2. No Other Participants. No employee other than an employee described in Section 0 will become a Participant in the Plan. 2.3. Written Proof of Participation Required. No employee will become a Participant in the Plan unless he and the Company execute a copy of the Plan document recognizing his participation in the Plan. The executed copy will constitute an agreement between the Company and the employee that binds both of them to the terms of the Plan. Their agreement will be binding on their heirs, executors, administrators, successors, and assigns, both present and future. The executed copy must be signed on the Company's behalf by an authorized officer (other than the employee) and by the employee on his own behalf. The executed copy will constitute the employee's written agreement to waive all rights he may have under the Prior Plan. Section 3. Severance Benefits. 3.1. Lump Sum Benefit. A Participant who is Dismissed from employment with the Company is entitled to a Severance Benefit. The Severance Benefit will be paid to the Participant in an immediate lump sum equal to the Applicable Percentage of his base salary and cash bonus for the final twelve calendar months of his employment with the Company. If the Participant dies after being Dismissed from employment with the Company but before receiving his Severance Benefit, the lump sum described in the preceding sentence will be paid to his Beneficiary. Notwithstanding any other provision of this Section 0, a Participant will not be entitled to a Severance Benefit if he is entitled to a retirement benefit under the SERP unless, at the time he is Dismissed from employment with the Company, a Change in Control has occurred. 3.2. Applicable Percentage. A Participant's Applicable Percentage is the percentage that is specified by the Compensation Committee with respect to the Participant for purposes of the Plan and that is reflected in the written agreement between the Company and the Participant executed in accordance with Section 0. 3.3. Dismissal from Employment. A Participant is Dismissed from employment with the Company if his employment with the Company is terminated involuntarily by the Company for any reason other than disloyalty, mismanagement, abdication of job responsibility, or conviction of a felony, any one of which results in significant injury to the business of the Company. A Participant also will be considered Dismissed from employment with the Company if his employment with the Company is terminated for Good Reason in connection with a Change in Control. For purposes of this Section 0, a Participant's employment with the Company is not considered terminated merely because there is a change in the ownership of the Company, or merely because all or part of the Company is merged, consolidated, spun off, liquidated, or otherwise reorganized, or merely because all or part of the tangible and intangible assets of the Company are sold or otherwise transferred to new ownership, if the Participant continues to be employed by the Company or a successor business immediately following any of the foregoing transactions. 3.4. Good Reason in Connection with Change in Control. A Participant's em- ployment with the Company is terminated for Good Reason in connection with a Change in Control if his termination occurs no earlier than six months before the Change in Control, no later than two years after the Change in Control, and no later than six months after any of the following triggering events: (a) A change in the Participant's status or position with the Company that, in his reasonable judgment, represents a demotion from his prior status or position with the Company; (b) The assignment to the Participant of duties or responsibilities that, in his reasonable judgment, are inconsistent with his status or position with the Company; (c) A reduction by the Company in the Participant's base salary; (d) A change in the terms of the compensation arrangements applicable to the Participant that represents a significant reduction in the value of such compensation arrangements to him; (e) A material increase in the Participant's responsibilities or duties without a commensurate increase in his base salary; (f) The imposition of any requirement that the Participant be based anywhere other than within 50 miles of where his principal office was located; (g) A material increase in the frequency or duration of the Participant's business travel; (h) The Company's failure to obtain the express assumption of this Plan with respect to the Participant by any successor to the Company; or (i) Any violation by the Company of any agreement with the Participant (including any violation of the Participant's rights under this Plan). In addition, a Participant's employment with the Company will be deemed terminated for Good Reason in connection with a Change in Control if the Participant is the Chief Executive Officer of the Company immediately preceding the Change in Control and his employment with the Company is terminated for any reason within six months after the Change in Control. For purposes of this Section 0, it is immaterial whether the Participant's employment with the Company is terminated voluntarily by the Participant or involuntarily by the Company (or its successor). Section 4. Nature of Participant's Interest in Plan. 4.1. No Right to Assets. Participation in the Plan does not create, in favor of any Participant or Beneficiary, any right or lien in or against any asset of the Company. Nothing contained in the Plan, and no action taken under its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person. The Company's promise to pay benefits under the Plan will at all times remain unfunded as to each Participant and Beneficiary, whose rights under the Plan are limited to those of a general and unsecured creditor of the Company. 4.2. No Right to Transfer Interest. Rights to benefits payable under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance. However, the Administrative Committee may permit a Participant or Beneficiary to enter into a revocable arrangement to pay all or part of his benefits under the Plan to a revocable grantor trust (a so-called "living trust"). In addition, the Administrative Committee may recognize the right of an alternate payee named in a domestic relations order to receive all or part of a Participant's benefits under the Plan, but only if (a) the domestic relations order would be a "qualified domestic relations order" within the meaning of section 414(p) of the Code (if section 414(p) applied to the Plan), (b) the domestic relations order does not attempt to give the alternate payee any right to any asset of the Company, (c) the domestic relations order does not attempt to give the alternate payee any right to receive payments under the Plan at a time or in an amount that the Participant could not receive under the Plan, and (d) the amount of the Participant's benefits under the Plan are reduced to reflect any payments made or due the alternate payee. 4.3. No Employment Rights. No provisions of the Plan and no action taken by the Company, the Board of Directors, the Compensation Committee, or the Administrative Committee will give any person any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or discharge any Participant. 4.4. Withholding and Tax Liabilities. The amount of any withholdings required to be made by any government or government agency will be deducted from benefits paid under the Plan to the extent deemed necessary by the Administrative Committee. In addition, the Participant or Beneficiary (as the case may be) will bear the cost of any taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required. Section 5. Administration, Interpretation, and Modification of Plan. 5.1. Plan Administrator. The Administrative Committee will administer the Plan. 5.2. Powers of Committee. The Administrative Committee's powers include, but are not limited to, the power to adopt rules consistent with the Plan; the power to decide all questions relating to the interpretation of the terms and provisions of the Plan; and the power to resolve all other questions arising under the Plan (including, without limitation, the power to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision). The Administrative Committee has discretionary authority to exercise each of the foregoing powers. 5.3. Finality of Committee Determinations. Determinations by the Administrative Committee and any interpretation, rule, or decision adopted by the Administrative Committee under the Plan or in carrying out or administering the Plan will be final and binding for all purposes and upon all interested persons, their heirs, and their personal representatives. 5.4. Incapacity. If the Administrative Committee determines that any person entitled to benefits under the Plan is unable to care for his affairs because of illness or accident, any payment due (unless a duly qualified guardian or other legal representative has been appointed) may be paid for the benefit of such person to his spouse, parent, brother, sister, or other party deemed by the Administrative Committee to have incurred expenses for such person. 5.5. Amendment, Suspension, and Termination. The Board of Directors has the right by written resolution to amend, suspend, or terminate the Plan at any time. However, no amendment, suspension, or termination will apply to an employee who already is a Participant in the Plan without his express written consent. 5.6. Power to Delegate Board Authority. The Board of Directors may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan. 5.7. Headings. The headings used in this document are for convenience of reference only and may not be given any weight in interpreting any provision of the Plan. 5.8. Severability. If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity of that provision will not affect the remaining provisions of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had never been included in the Plan. 5.9. Governing Law. The Plan will be construed, administered, and regulated in accordance with the laws of the Commonwealth of Pennsylvania, except to the extent that those laws are preempted by federal law. 5.10. Complete Statement of Plan. This Plan supersedes the Prior Plan with respect to the Participants. This Plan contains a complete statement of its terms. The Plan may be amended, suspended, or terminated only in writing and then only as provided in Section 0. A Participant's right to any benefit of a type provided under the Plan will be determined solely in accordance with the terms of the Plan. No other evidence, whether written or oral, will be taken into account in interpreting the provisions of the Plan. Notwithstanding the preceding provisions of this Section 0, for purposes of determining benefits with respect to a Participant, this Plan will be deemed to include (a) the provisions of the written agreement between the Company and the Participant executed in accordance with Section 0, and (b) the provisions of any other written agreement between the Company and the Participant to the extent such other agreement explicitly provides for the incorporation of some or all of its terms into this Plan. Section 6. Terms Used in the Plan. 6.1. Gender and Number. Words used in the masculine gender in the Plan are intended to include the feminine and neuter genders, where appropriate. Words used in the singular form in the Plan are intended to include the plural form, where appropriate, and vice versa. 6.2. Definitions. When used in capitalized form in the Plan, the following words and phrases have the following meanings, unless the context clearly indicates that a different meaning is intended: "Administrative Committee" means the Administrative Committee appointed to administer the JLG Industries, Inc. Employees' Retirement Savings Plan. However, following a Change in Control, "Administrative Committee" means the trustee under the grantor trust maintained by the Company in connection with the Plan. "Applicable Percentage" has the meaning assigned to that term in Section 0. "Associate" has the meaning assigned to that term for purposes of Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act. "Beneficial Owner" means the following: a Person is deemed to be the "Beneficial Owner" of, to "Beneficially Own," and to have "Beneficial Ownership" of, any securities: (1) which such Person or any of such Person's Securities Law Affiliates or Associates beneficially owns, directly or indirectly; (2) which such Person or any of such Person's Securities Law Affiliates or Associates has (A) the right or obligation to acquire (whether such right or obligation is exercisable or effective immediately or only after the passage of time) pursuant to any agreement, arrangement, or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided that a Person shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own," or to have "Beneficial Ownership" of, securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Securities Law Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement, or understanding (whether or not in writing); provided that a Person shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own," or to have "Beneficial Ownership" of, any security under this clause (B) if the agreement, arrangement, or understanding to vote such security (i) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the Securities Exchange Act, and (ii) is not also then reported by such Person on Schedule 13D under the Securities Exchange Act (or any comparable or successor report); or (3) which are beneficially owned, directly or indirectly, by any other Person(or any Securities Law Affiliate or Associate thereof) with which such Person or any of such Person's Securities Law Affiliates or Associates has any agreement, arrangement, or understanding (whether or not in writing) or with which such Person or any of such Person's Securities Law Affiliates have otherwise formed a group for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (B)(i) of paragraph (2), above), or disposing of any securities of the Company. "Beneficiary" means the person designated in writing by a Participant to receive his Severance Benefits under the Plan after he dies. If a Participant fails to designate a Beneficiary or his designated Beneficiary fails to survive him, his Beneficiary will be the person to whom he is married at the time of his death, or if he is not married at that time, his Beneficiary will be the executor of his will or the administrator of his estate. A Participant may revoke in writing a prior designation of a Beneficiary at any time before the Participant dies. "Board of Directors" means the Board of Directors of the Company. "Change in Control" means the first to occur of the following events: (1) an acquisition (other than directly from the Company) of securities of the Company by any Person, immediately after which such Person, together with all Securities Law Affiliates and Associates of such Person, becomes the Beneficial Owner of securities of the Company representing 25 percent or more of the Voting Power; provided that, in determining whether a Change in Control has occurred, the acquisition of securities of the Company in a Non-Control Acquisition will not constitute an acquisition that would cause a Change in Control; or (2) three or more directors, whose election or nomination for election is not approved by a majority of the members of the Incumbent Board then serving as members of the Board of Directors, are elected within any single 12-month period to serve on the Board of Directors; provided that an individual whose election or nomination for election is approved as a result of either an actual or threatened Election Contest or Proxy Contest, including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, will be deemed not to have been approved by a majority of the Incumbent Board for purposes of this definition; or (3) members of the Incumbent Board cease for any reason to constitute at least a majority of the Board of Directors; or (4) approval by shareholders of the Company of: (A) a merger, consolidation, or reorganization involving the Company, unless (i) the shareholders of the Company, immediately before the merger, consolidation, or reorganization, own, directly or indirectly immediately following such merger, consolidation, or reorganization, at least 75 percent of the combined voting power of the outstanding voting securities of the corporation resulting from such merger, consolidation, or reorganization in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation, or reorganization; (ii) individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, or reorganization constitute at least a majority of the board of directors of the Surviving Corporation; and (iii) no Person (other than (1) the Company or any Subsidi- ary thereof, (2) any employee benefit plan (or any trust forming a part thereof) maintained by the Company, any Subsidiary thereof, or the Surviving Corporation, or (3) any Person who, immediately prior to such merger, consolidation, or reorganization, had Beneficial Ownership of securities representing 25 percent or more of the Voting Power) has Beneficial Ownership of securities re- presenting 25 percent or more of the combined voting power of the Surviving Corporation's then outstanding voting securities; (B) a complete liquidation or dissolution of the Company; or (C) an agreement for the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary of the Company). "Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time. "Company" means JLG Industries, Inc., and any successor to JLG Industries, Inc. Employment with the Company includes employment with any corporation, partnership, or other organization required to be aggregated with the Company under sections 414(b) and (c) of the Code. "Compensation Committee" means the Compensation Committee of the Board of Directors. "Dismissed" has the meaning assigned to that term in Section 0. "Effective Date" means June 1, 1995. "Election Contest" means an election contest described in Rule 14a-11 promul- gated under the Securities Exchange Act. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time. "Good Reason" has the meaning assigned to that term in Section 0. "Incumbent Board" means individuals who, as of the close of business on the Effective Date, are members of the Board of Directors; provided that, if the election, or nomination for election by the Company's shareholders, of any new director was approved by a vote of at least 75 percent of the Incumbent Board, such new director shall, for purposes of the Plan, be considered as a member of the Incumbent Board; provided further that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened Election Contest or other actual or threatened Proxy Contest, including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest. "Non-Control Acquisition" means an acquisition by (1) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any of its Subsidiaries, (2) the Company or any of its Subsidiaries, or (3) any Person in connection with a Non-Control Transaction. "Non-Control Transaction" means any transaction described in clauses (4)(A)(i) through (iii) of the definition of "Change in Control." "Participant" means a member of a select group of management or highly com- pensated employees of the Company who has become a participant in the Plan under Section 0. "Person" means any individual, firm, corporation, partnership, joint venture, association, trust, or other entity. "Plan" means the JLG Industries, Inc. Executive Severance Plan as set forth in this document. "Prior Plan" means an individual agreement (customarily denominated a "Deferred Compensation Benefit Agreement") between the Company and the employee that provides for unfunded deferred compensation benefits and certain other benefits specified in the agreement. "Proxy Contest" means a solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors. "Section" means a section of this Plan. For example, a reference to Section 2 includes a reference to Sections 2.1 through 2.3, while a reference to Section 2.1 is intended as a reference to Section 2.1 only. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended and in effect from time to time. "Securities Law Affiliate" means an "affiliate" as defined for purposes of Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act. "SERP" means JLG Industries, Inc. Supplemental Executive Retirement Plan. "Subsidiary" of any Person means any corporation or other entity of which at least 80 percent (or such lesser percentage as the Administrative Committee may determine) of the voting power of the voting equity securities or voting interest therein is owned, directly or indirectly, by such Person. "Surviving Corporation" means a corporation resulting from a merger, consolidation, or reorganization described in paragraph (4)(A)(i) of the definition of "Change in Control." "Voting Power" means the voting power of all securities of the Company then out-standing generally entitled to vote for the election of directors of the Company. JLG INDUSTRIES, INC. Attest: By: Title: Title: EX-22.SUBSIDIARIES 9 EXHIBIT 22 JLG INDUSTRIES, INC. LISTING OF SUBSIDIARIES JULY 31, 1996 Percent of Voting Securities Jurisdiction of Owned by Subsidiary Incorporation the Company JLG Equipment Services, Inc. Pennsylvania 100% Fulton International, Inc. Delaware 100% Fulton International Foreign Sales Corporation Barbados 100% Zontess Pty. Ltd. Australia 100% The financial statements of the above listed subsidiaries are included in the Company's Consolidated Financial Statements incorporated herein by reference. EX-23.AUDITORSCONSEN 10 EXHIBIT 23 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statements on Form S-8, No. 33-60366, No. 2-87955, No. 33-75746 and No. 33-87955 of our report dated September 7, 1996, with respect to the consolidated financial statements and schedule of JLG Industries, Inc. included in the Annual Report (Form 10-K) for the year ended July 31, 1996. Ernst & Young LLP Baltimore, Maryland October 8, 1996 EX-99.CAUTIONARYSTAT 11 EXHIBIT 99 Cautionary Statements Pursuant to the Securities Litigation Reform Act of 1995 The Company wishes to inform its investors of the following important factors that in some cases have affected, and in the future could affect, the Company's results of operations and that could cause such future results of operations to differ materially from those expressed in any forward looking statements made by or on behalf of the Company. Disclosure of these factors is intended to permit the Company to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Many of these factors have been discussed in prior SEC filings by the Company. Though the Company has attempted to list comprehensively these important cautionary factors, the Company wishes to caution investors that other factors may in the future prove to be important in affecting the Company's results of operations. Cyclical Demand -- Demand for new equipment manufactured by the Company tends to be cyclical, responding historically to varying levels of construction and industrial activity, principally in the United States and, to a lesser extent, in other industrialized nations. Other factors affecting demand include the availability and cost of financing for equipment purchases and the market availability of used equipment. Company management continuously monitors these and other factors that affect demand for the Company's equipment. However, predicting levels of demand beyond a short term is necessarily imprecise and demand may at times change dramatically. Consolidating Customers Base; Rental Companies -- The principal customers for the Company's new equipment are independent equipment distributors that rent the Company's products and provide service support to equipment users. In recent years, growth in sales to equipment rental companies has outpaced growth in direct sales to end users, resulting in equipment rental companies comprising a larger share of total sales. At the same time there has been substantial consolidation in ownership among rental companies, resulting in a more limited number of major customers comprising a substantial portion of total sales. Unanticipated purchasing decisions by any of these major customers could materially affect overall demand for the Company's products and the Company's financial performance. More generally, during recessionary conditions, demand for equipment by equipment rental companies typically declines more sharply than demand for equipment purchased by end-users. Manufacturing Capacity -- Despite continuous improvement programs that have achieved substantial improvements in manufacturing efficiency and throughput, the Company's ability to meet additional growth in demand for new equipment is constrained by manufacturing capacity limits. Long lead-times required to fill customer orders is a negative factor in the Company's ability to compete for new business and subcontracting costs incurred to increase capacity affect profitability. The Company recently acquired an 109,000 square foot manufacturing facility which, when fully operational by year-end 1996, should alleviate capacity constraint for scissor lifts. However, capacity to manufacture boom lifts, which comprise a larger percentage of sales, is becoming increasingly limited. Given the cyclical nature of demand, this investment, or other capital investments to acquire additional lift manufacturing facilities involves significant risks. The Company is addressing capacity constraints by outsourcing certain production processes and relocating certain manufacturing operations to leased facilities. Ultimately, to service increasing international sales, the Company is considering establishing a manufacturing presence overseas. Product Liability -- Use of the Company's products involves risks of personal injury and property damage and liability exposure for the Company. The Company insures against this liability through a combination of a self-insurance retention and catastrophic coverage in excess of the retention. The Company monitors all incidents of which it becomes aware involving the use of its products that result in personal injury or property damage and establishes accrued liability reserves on its financial statements based on liability estimates with respect to claims arising from such incidents. Future or unreported incidents involving personal injury or property damage or unanticipated variances between actual liabilities for known incidents and Company estimates may adversely affect the Company's financial performance. Availability of Product Components -- The Company obtains raw materials and certain manufactured components from third-party suppliers. To reduce materials costs and inventories, the Company relies on supplier partnership arrangements with preferred vendors as a sole source for "just-in-time" delivery of many raw materials and manufactured components. Because the Company maintains limited raw materials inventories, even brief unanticipated delays in delivery by suppliers, including due to labor disputes, impaired financial condition of suppliers, weather emergencies or other natural disasters, may adversely affect the Company's ability to satisfy its customers on a timely basis and thereby affect the Company's financial performance. Foreign Sales -- A growing component of the Company's business has been export sales to Europe, Latin America and Asia. Maintenance and continued growth of this segment of the Company's business may be affected by changes in trade, monetary and fiscal policies, laws and regulations of the United States and other trading nations and by foreign currency exchange rate fluctuations and the ability or inability of the Company to hedge against exchange rate risks. Competition; Continued Innovation -- The Company faces substantial competition in the market for its products and some of the Company's competitors are, or in the future may be, owned by larger enterprises that may have greater financial resources and offer wider product lines than the Company. Throughout its history, the Company has devoted substantial resources to product development and has generally succeeded in being a market leader in introducing new high-reach products or incorporating new features and functions into existing products. New products introduced within the prior two years account for typically between 20 and 25 percent of product sales in current years. The Company also holds certain patents which it believes are valuable. Successful product innovation by competitors that reach the market prior to comparable innovation by the Company or that are amenable to patent protection may adversely affect the Company's financial performance. Unanticipated Litigation -- The Company occasionally has faced unanticipated intellectual property and shareholder litigation which has involved significant unbudgeted expenditures. The costs and other effects of any future, unanticipated legal or administrative proceedings may be significant. Dependence Upon Key Personnel -- The Company believes that it has developed a strong management team which intends to continue the Company's growth and profitability. However, the loss or unavailability of certain key management personnel, principally L. David Black, the Company's Chairman of the Board, President and Chief Executive Officer, could adversely affect the Company's business and prospects. EX-27 12
5 1000 12-MOS JUL-31-1996 JUL-31-1996 30438 0 55557 1215 39433 128862 55522 21428 182628 57055 0 8676 0 0 160089 182628 413407 413407 304691 348729 0 0 293 65666 23558 42108 0 0 0 42108 .95 .95
-----END PRIVACY-ENHANCED MESSAGE-----